India's Private Philanthropy Witnesses Remarkable Growth, Surpassing CSR Contributions

India's philanthropic landscape is experiencing a paradigm shift, with private philanthropy emerging as a potent force for social change and development. According to the latest findings from the India Philanthropy Report 2024 (IPR), jointly released by Bain & Company and Dasra, private philanthropy in India has witnessed a remarkable 10% growth in Fiscal Year (FY) 2023, reaching a staggering INR 1.2 lakh crore ($15 billion). This surge in private giving marks a significant acceleration from the 5% annual growth observed between 2018 and 2023, underlining the growing momentum and impact of philanthropy in the country.

India's social sector spending has surged over the last five years, experiencing a robust annual growth rate of 13%, with the total expenditure reaching approximately INR 23 lakh crore ($280 billion) in FY 2023, equivalent to 8.3% of the GDP. Despite this substantial investment, India still falls short of the NITI Aayog's estimated spending target of 13% of GDP to achieve the UN Sustainable Development Goals (SDGs) by 2030, indicating the critical role that private philanthropy can play in bridging the funding gap and driving sustainable development.

Private philanthropy is poised to play a pivotal role in strengthening resilience and building capacity at the grassroots level, complementing public spending in the social sector. The IPR forecasts a continued expansion of private philanthropy at an annual rate of 10%–15% over the next five years, driven by robust growth in three key segments: Corporate Social Responsibility (CSR), family philanthropy, and retail donations. This growth trajectory underscores the increasing recognition of philanthropy as a catalyst for social change and the growing commitment of individuals and organizations to give back to society.

"The growing prominence of private philanthropy is instrumental in addressing complex societal challenges and driving sustainable development," remarked Radhika Sridharan, Partner at Bain & Company and co-author of the report. "Private philanthropy not only provides critical funding but also offers the flexibility and long-term vision needed to catalyze transformative change in the social sector."

In FY 2023, family philanthropy emerged as a major driver of private giving, witnessing an impressive 15% growth and outpacing CSR contributions. Family philanthropy, which accounts for 28% of private domestic contributions, amounted to INR 33,000 crore, reflecting a strong commitment to philanthropic causes among India's affluent families. Ultra-high-net-worth individuals (UHNIs) played a significant role in driving this growth, with UHNI giving surging by 60% to reach INR 6,850 crore in FY 2023. Notable philanthropists such as Azim Premji and Shiv Nadar made substantial contributions, signaling a growing culture of giving among India's wealthiest individuals.

However, while family philanthropy flourished, CSR spending and contributions from high-net-worth individuals (HNIs) witnessed more moderate growth rates of 7% in FY 2023. CSR spending, estimated at INR 28,000 crore for FY 2023, saw its share of domestic private giving increase to 30%, up from 22% in FY 2018, driven by increased compliance and profit growth among corporate entities. The regulatory landscape surrounding CSR has evolved, with a higher proportion of companies complying with the CSR mandate (2% of profits) and a shift towards multi-year initiatives aimed at delivering long-term impact.

Looking ahead, CSR is projected to experience a higher annual growth rate of 9% over the next five years, as companies increasingly prioritize strategic philanthropy and sustainable development initiatives. Meanwhile, contributions from HNIs and affluent individuals, which totaled INR 26,000 crore in FY 2023, are expected to maintain steady growth, with opportunities to unlock significant philanthropic capital by addressing barriers such as awareness, transparency, and impact measurement.

"The philanthropic landscape in India is undergoing a profound transformation, with private giving playing an increasingly pivotal role in driving social change and development," said Neera Nundy, Co-founder and Partner at Dasra. "As philanthropy continues to evolve, there is a growing emphasis on collaboration, strategic giving, and impact measurement, signaling a positive shift towards more effective and sustainable philanthropic practices."

In addition to traditional philanthropic channels, retail giving has emerged as a powerful tool for addressing urgent community needs, with donations growing by 12% in FY 2023 to reach INR 37,000 crore. The rise of digital platforms and the adoption of Unified Payments Interface (UPI) have facilitated formal giving through NGOs, enabling individuals to contribute to a diverse range of causes and organizations.

Philanthropy has the potential to drive positive change and foster inclusive growth in India, addressing pressing social and environmental challenges while reinforcing India's position as a global leader in philanthropy and impact investing. By embracing collaborative approaches, prioritizing gender equity, diversity, and inclusion, and leveraging innovative philanthropic models, India can harness the full potential of philanthropy to build a more equitable and sustainable future for all.