New Delhi: Wealthy Indians, including salaried individuals, are not only offering more money for philanthropic activities but also contributing in terms of time and expertise, according to a new study.
The eighth edition of the India Philanthropy Report 2018 by management consulting firm Bain and Co. India Ltd, in collaboration with Mumbai-based philanthropy consultancy Dasra, and shared exclusively with Mint, ahead of its formal release on Saturday as part of the annual Dasra Philanthropy Week.
The report focuses on 33 high net-worth individuals (HNIs) joining the ranks of philanthropists who want to give in a structured and strategic manner, and looks at their motivations for giving, how often they review their philanthropic portfolios and their engagement with stakeholders, among other things.
Among the key findings of the report is that 35% of the interviewed donors contribute between Rs10-50 lakh per annum. “In our conversations with this group what is clear is that at present most are just dipping their toes in the water. In the next 18 months to 2 years, they hope to increase their giving by 5 to 10 times,” says Deval Sanghavi, co-founder of Dasra, and co-author of the report.
About 55% of respondents had been giving for less than five years and among those interviewed 19% were salaried professionals, 38% self-employed and 33% were engaged in family businesses.
Anant Bhagwati, partner at Bain & Co. and a co-author of the report, said most are looking to increase their engagement not just in terms of money but also to find ways to contribute their time and expertise.
When it comes to rating their philanthropic goals, less than 50% were willing to rate their ambitions and among those that did, 73% rated their goals as average or below. “Most at this point are looking to participate in big ideas, not necessarily lead them or come up with them,” said Sanghavi.
This indicates that bold and ambitious philanthropic objectives are not something most of HNIs are geared towards right now. Their approach is cautious and incremental rather than path-breaking. “Perhaps they do not want to over-promise and then under-deliver. And they seem to be more focused on inputs—how much money to give, how the NGOs are working—rather than outcomes. By outcomes I mean how exactly is the beneficiary being impacted. At present most have a ‘today forward’ approach rather than a ‘future back’,” said Bhagwati.
“Today forward” approach starts with a status quo and builds incrementally from there, while “future forward” starts with a mission or an end goal and works backwards.
To solve India’s multiple problems, a future forward approach is the need of the hour because that brings in the balance between heart and mind. However, the heart seems to find more favour than the mind at present when it comes to philanthropic decisions. The report indicates that 40% of the respondents decide where and when to give based on their personal experiences or areas of interest while only about 37% either do an analysis of the areas of greatest need or discuss with other philanthropists.
“This report has helped us to understand why philanthropists must concentrate on setting goals and not be reactive in their approach. The problem is not so much lack of focus when it comes to giving but understanding what needs to be solved,” said Sanghavi.
Another lacuna in the philanthropists’ approach that the report highlights is a reticence to conduct regular reviews of their philanthropic portfolio. Though about 70% said that reviewing their philanthropy portfolio helps them to make corrective changes to their approach, only 15% indicated that they review their portfolios once a year, 33% said they do it more than once a year, while the rest don’t assess it actively.
“Among the interviewees, a lot of passion exists but there is also a belief that the rigour that one needs to apply is not the same as in business. Doing philanthropy should be no different from doing business. Ideally one needs to have a vision statement for your philanthropy which is ambitious and once it is clear, one will adopt a future back approach,” said Bhagwati.
HNIs looking to solve India’s problems at a time when one of the biggest scams to ever rock the banking system unfolds may seem like a misnomer, but as Sanghavi says, “Unfortunately, bad seeds exist among all communities, including business leaders. Hopefully, though, those who consider themselves custodians of wealth with a deep focus on societal change will significantly outnumber those who are engaged in fraudulent activities.”livemint