Family philanthropy has proven resilient throughout the pandemic and grew to nearly Rs 12,000 crore in fiscal year 2020, accounting for almost two-thirds of the rise in private sector funding since FY19, says a report.
According to the India Philanthropy Report 2021, co-created by Bain and Company and Dasra, funding from family philanthropy has tripled its corpus, growing to nearly Rs 12,000 crore in FY 2020.
As per the report, in FY 2020, private-sector funding which stems from four sources including foreign, corporate, retail, and high-net-worth individuals (HNIs) or families totalled about Rs 64,000 crore and 20 per cent of this came from family philanthropy.
While foreign contributions account for a quarter of all funding, domestic corporation donations also known as Corporate Social Responsibility (CSR) account for 28 per cent and retail investors account for another 28 per cent.
Despite this growth in funding, the social sector remains underserved.
In addition, the pandemic-induced setback to the social sector clearly indicates that India will continue to face a significant annual funding deficit in the near term, the report noted.
Family philanthropy, however, has proven resilient throughout the pandemic and has the potential to grow, the report noted.
"It is indeed heartening to see that something that is integral to Indian culture -- 'giving' to those who need it -- is coming of age. 2020 has been a year of hard truths.
"This is a wake-up call to reimagine our approach towards strategic and collaborative philanthropy and the impact it can have.
"The case for family philanthropy is clear and so is its transformational potential," said, Dinkar Ayilavarapu, partner, Bain & Company.
According to the report, at its full potential, family philanthropy can unlock an investible corpus that can nearly double the entire philanthropic space in India.
"Family philanthropy can collectively shape India's development agenda.
"Having partnered closely with over 300 family givers in the last 22 years, Dasra has seen the pivotal role that families play in addressing some of India's most complex challenges.
"Nurturing the nascent family giving ecosystem with enhanced support can be transformational for India." said Neera Nundy, co-founder of Dasra, a strategic philanthropic organisation.
The report further noted that education and health-focused funding dwarf other causes, and continue to receive a higher share of family giving at 47 per cent and 27 per cent, respectively.
The India Philanthropy Report 2021 indicates that the depth of India's wealth is expanding, with an increasing number of Indian ultra-high-net-worth families.
"If these families start giving in line with their global peers (2 to 3 per cent of their wealth), family philanthropy could generate an additional annual investible corpus of Rs 60,000 to 100,000 crore for the non-profit sector," the report noted.