What is the impact of philanthropy in India, and how can its effectiveness be increased to create a more equitable society? That is the focus of a recent study by the Centre for Emerging Market Solutions (CEMS) at the Indian School of Business, Hyderabad, and FSG Social Impact Consultants, a global nonprofit consulting firm.
Titled, “Catalytic Philanthropy in India: How India’s Ultra-high Net Worth Philanthropists are Helping Solve Large-scale Social problems,” the study looks at the patterns and trends among India’s big philanthropists like Azim H. Premji, Shiv Nadar, Rohini Nilekani, Hemendra Kothari and others. “Catalytic philanthropy” is a term coined by FSG and refers to “innovative practices that have the potential to catalyze social impact at scales that far eclipse the amount of financial resources invested. Just as in chemistry, the addition of a small amount of catalyst causes or accelerates a much larger chemical reaction,” according to the study. “While there are exemplary cases of highly strategic and catalytic philanthropy in India, most philanthropic activity among India’s [ultra-high net worth individuals] reflects the infancy of the field.”
According to the study, 60% of survey respondents said the main force behind their philanthropy was “giving back to society.” Only 25% cited “effecting meaningful and measureable social change” as their main motivation. “We found that while India’s largest givers are driven to philanthropy by a heightened sensitivity to social inequities in the country, it is only a minority whose giving is aimed at solving social problems,” says Nidhi M. Reddy, associate director at CEMS and co-author of the study.
The study points out that the choice of philanthropic activities is reflective of philanthropy’s nascency in the country. Philanthropy in education is a case in point. Education is seen as having a multiplier effect and being a social equalizer. It finds strong support among India’s big givers: 45% of the study’s survey respondents fund education. But there is very little focus on systemic issues. Instead, most of the funding is targeted around building, operating or providing support services to educational institutions. The study notes that “the current approach, even if done at scale, falls well short of reaching the over 100 million children enrolled in the country’s government schools.”
Lalitha Vaidyanathan, managing director of FSG India, adds: “We need to look at the gaps that exist in the ecosystem of philanthropy and plug those to create maximum impact. For example, if ‘quality of education’ could be defined and measured in one way, it will help give a more meaningful direction to the different philanthropy efforts in this domain.”
Based on their findings, the authors suggest that the evolution of catalytic philanthropy in India can be accelerated by addressing a few key issues. These include shifting philanthropic orientation from “giving back” to “solving social problems”; considering a broader set of critical social issues for primary funding focus; building the capacity and professionalization of the NGO sector; promoting more donor-friendly policies; and creating philanthropy associations to accelerate learning and advance the field.
Laura Donovan, chief executive of Partners in Change, a nonprofit, says: “Going [forward], the philanthropic capital may move from traditional sectors to address a whole new set of challenges, such as water and sanitation and also issues related to renewable energy, maternal health and affordable housing. Public pressure is likely to push the well-to-do section of society to become more proactive in giving. It will also drive accountability in terms of project impact.”
Donovan emphasizes the need for a network that facilitates better engagement and collaboration among donors — “one that will look at collective impact systems which lead to a common agenda, continuous communication and mutually reinforcing activities among donors.”