It’s good to talk about philanthropy, more so because for many years, it existed off the beaten track as something the media rarely reported on, and those giving resources being mostly reticent about. Philanthropy wasn’t something that made for boardroom conversation. This changed with liberalisation, when many new business leaders openly embraced the idea of giving back. This accelerated with globalisation when international philanthropists began looking at India for their projects, which also inspired Indian businesses. And today, the concept of the triple bottom line further galvanises the trend. This mainstreaming of philanthropy has had a positive cascading effect.
Family-based philanthropy, part of India’s cultural traditions, frequently provided for social and humanitarian needs like relief measures distributed during a natural calamity.
However, this has now taken on a new role, with resources invested towards long-term targets linked to the achievement of India’s Sustainable Development Goals (SDGs). The potential is huge. The number of Indians with a net worth of over Rs 1,000 crores has grown exponentially over the past decade, fuelled in part by a dynamic startup boom which expanded from about 100 inpiduals in 2012 to over 830 in 2019.
Funding from family philanthropy now touches about Rs 12,000 crores (FY20). While this is good in itself, what is even better is that many of the younger, newer entrepreneurs and startup leaders are also seeking to actively contribute to society — this is the cascading effect.
The question is, can philanthropy expand its ambit to become a catalyst that contributes more effectively to India’s growth story? Of course more funding will help achieve that goal but there’s also the crucial question of approach. As an example, we’ve seen sizeable philanthropic contributions made during 2020’s Covid-19 outbreak. This has continued as India battles the pandemic’s second wave. Most of this involves transferring funds to NGOs. But that has its own challenges.
During disasters, there is often a deluge of funds flowing into institutions located at the forefront of providing relief. These small frontline organisations frequently don’t have the capacity to manage this flow as effectively as larger, more institutionalised entities. They often lack the processes, systems and human resources to create better efficiencies or lasting impacts.
An ideal way forward here is for private philanthropic organisations to focus on capacity building efforts with small NGOs to bring them up to scale.
People working in the NGO sector are driven by passion and empathy — if private philanthropic set-ups train them with the right skill sets, they can help create a large pool of professionals who will drive long-term, sustainable impacts across thematic segments, from education and rural development to healthcare and disaster mitigation. Some specific skills philanthropists can help grow are building organisational processes to develop governance and monitoring, report writing and grant applications and fund management.
This is one way for philanthropists to do good — forge partnerships with the best service providers, train them with key skills, capacity build with the right institutional frameworks and fund them. Here, the implementation is managed by experts and the philanthropist gets access to a huge repository of existing domain knowledge, sectoral insights and swift, well-defined outcomes.
The other more organic but timeconsuming approach is where the philanthropist decides to build things ground-up or manage the implementation directly. This needs patience and resources, bringing in the right people and investing in domain knowledge to create everything from scratch. Only once that is done does the actual development work begin. This approach borrows from a managementdriven phi losophy, focused on creating deeper impact. The aim here isn’t immediate or piecemeal change — it’s driving deep pockets of change to empower more sustainable socioeconomic effects. In India, the Shiv Nadar Foundation follows this approach. Globally, the Rockefeller Foundation and the Carnegie Foundation have built reputed institutions ground-up.
While both approaches differ, there is a common factor too. Both need to leverage technology as a force multiplier — many of our philanthropists have made their fortune in the tech sector. They could help frontline organisations leverage tech innovations for better project implementation, greater transparency and spreading more social awareness.
(The author is Chief strategy officer, HCL Corporation and the Shiv Nadar Foundation.)