India is a secular country, that has fostered myriad religion and community based charity organizations for centuries. Although the scenario of charity has undergone a massive overhaul over the years, most giving at the ground level still takes place through the country’s temples, mosques, gurdwaras and churches − and many Indians still give in accordance with the tenets of their religion.
In the 19th and early 20th centuries, more organised forms of giving began to appear. The Sir Ratan Tata Trust, one of the country’s first grant-making public foundations, was established in 1919. Other family foundations – including the Godrej, Birla and Bajaj foundations – were set up before the country’s independence in 1947. (Source)
According to Bain’s Philanthropy Report 2017, Individual philanthropists are on the rise in the billion population country. The total funds for development sector have grown at a healthy rate of approximately 9% over the past five years, increasing from approximately INR 150,000 crore to approximately INR 220,000 crore.
While the government remains the largest contributor (INR 150,000 crore in 2016), its share in total funding has been declining steadily. Private contributions primarily accounted for the INR 70,000 crore five-year growth. Private donations made up 32% of total contributions to the development sector in 2016, up from a mere 15% in 2011.
Where Does The Charity Money Go?
The Indian voluntary sector is large, including over 1.2 million non-governmental organisations (NGOs). Based on the annual reports of some of the most renowned charitable and non-profit organisations in India, it can be observed that 80% of the funds raised are utilised for the programs and development modules designed by them and remaining 20% go into operations, admin activities and fund raising activities. While this is true for a few prominent charities, same cannot be said about others due to low levels of disclosure of fund usage. But the question still looms – is this solving the problem?
Charitable organisations spend most of their money on continuous donations to mitigate a social issue. Individual philanthropists and citizens donate money in the temple donation boxes or to NGOs or give it directly to the poor/impoverished. Popularly known as ‘chanda’, unorganised donations do not question the utility of the same. The donor does not investigate as to where the money goes. India as a nation still grapples with development level issues because the problem does not get solved. It just gets subdued. For instance, lack of basic necessities is a deeper problem which cannot be solved by just providing food and clothes in one instance. Instead, creating sustainable employment opportunities could create a livelihood for the affected people thereby taking care of their basic necessities. Similarly, lack of access to healthcare, water and sanitation issues cannot be addressed through repeated donations. They need a sustainable solution.
Funding Social Enterprises Over Charity
The Bain Philanthropic Report, 2017 marks year 2017 as the year of the rise of Individual Philanthropist, where individuals, young and old, irrespective of their spending powers, want to do something in their capacity to improve the socio-economic situation of those in BOP sectors.
Charities periodically donate large sums of money to fuel social work related activities that are continuously dependent on financial aid. On the other hand, Social Good brands, Social Incubators, and change makers create movements for a sustainable and long-term impact. Charitable organisations could channelize their funds to fuel path-breaking social innovations that uproot a socioeconomic issue rather than just subdue it.
Social entrepreneurship has taken the center stage in terms of all-round growth and sustainable development, creating job opportunities, giving livelihood, fellowships, education and better health care while keeping the ‘for-profit’ factor intact. Charities can fund these problem solvers instead of just providing large sums of money to donation-hungry NGOs. Individual donors can be a part of this impact movement by showing their support to social impact projects on crowdfunding projects, where the utility of the money raised is transparently declared.
India ranked 130 on the Human Development Index in 2014 and 110 on the Sustainable Development Goals (SDGs) Index in 2016, lagging behind its peers on both readings. Conservative estimates indicate that India will face a financial shortfall of approximately INR 533 lakh crore ($8.5 trillion) if it is to achieve the SDGs by 2030. It needs significant additional funds, along with systemic changes in the policy and service-delivery levels, to achieve these goals.
Charities and individual philanthropists have emerged as the prime sections of donors, with large funding capacity. They should support social enterprises which create permanent and sustainable solutions to socio-economic issues thus boosting our efforts in achieving our Sustainable Development Goals by 2030.
While the Govt. has rolled out schemes and policies tackle socio-economic issues, it is the social entrepreneurs and changemakers who implement it at ground zero, ultimately eliminating the need for themselves. Social enterprises like iKure, Janitri Innovations, and incubators like Villgro, Upaya Social Ventures are working towards achieving these Sustainable Development Goals through innovative products and sustainable models to impact people from the BoP at the grassroots levels.