India has maintained a strong philanthropic momentum with the social sector funding growing steadily at 11% in the last 5 years, between 2014 and 2018. Private funding grew at a rate of 15% per year in India during the same period while public funding increased at a pace of about 10% per year, as per the latest India philanthropy report 2019 released by consulting firm Bain & Company. The report, in its ninth edition this year and prepared in association with Dasra, finds that funding by individual philanthropists grew the most- by 21% between 2014 and 2018.
The report, also highlights that India’s social sector requires a significant funding ramp up if it is to achieve the 2030 Sustainable Development Goals (SDGs). The SDGs 2030 are global goals, locally owned by 193 countries across the world, including India. According to the report, even if India sustains its current funding growth rate and channels all philanthropic capital into these SDGs it will face an annual shortfall of Rs 4.2 lakh crore ($60 billion) if it is to achieve even 5 of the 17 SDGs by 2030.
While the government continues to be the largest contributor to social sector funding in India, hovering at about 6% of GDP, private philanthropy is expanding and has outpaced public funding growth. Despite a slowdown in foreign funding in recent years, private funding grew at a rate of 15% per year between FY2014 and FY2018, while public funding increased at a pace of about 10% per year.
Foreign contributions declined by about 40% according to the period during the period under review amid a government crackdown on non-governmental organisations (NGOs) for violation of the Foreign Contribution Regulation Act (FCRA) of 2010. According to data from the Ministry of Home Affairs, more than 13,000 NGO licences have been cancelled under the FCRA in the past three years, including approximately 4,800 in 2017 alone. NGOs need to comply with government regulations, including timely filing of annual returns and validation of bank accounts receiving foreign funds, to allow for a larger influx of foreign funds and thereby increase the social sector’s wallet size.
Corporate Social Responsibility (CSR) budget outlays of the domestic corporations and contributions of corporate charitable trusts, combined, have grown at a rate of 12% between financial year 2014 and 2018, and they contributed approximately Rs 13,000 crore to social sector funding in financial year 2018.
Philanthropic funding from individuals remained the brightest spot as per the report, growing at 21% per year in the past five years. According to the report, these individuals currently contribute about 60% of the total private funding, estimated at Rs 43,000 crore. A significant portion of this comes from a few established figures who continue to lead individual giving, as they have in the past.