India Philanthropy Report 2010

To understand the challenge before us, we need to look at the three major factors that constrain giving in India. The first factor: We believe that the relatively recent accumulation of wealth by individuals inhibits philanthropy. The number of wealthy individuals in India started growing rapidly only after the economic reforms of the 1990s. Normally, it takes 50 to 100 years for philanthropic markets to mature. Today in India, many of those with hard-earned new wealth are noteager to part with even a small amount of their money. As a society, charitable donations do not necessarily win social recognition. Instead, many of the newly wealthy view increased material wealth as the key to improving their social standing. A Bain analysis of 30 high-net-worth individuals in India showed that they contribute, on average, just around one-fourth of 1 percent of their net worth to social and charitable causes. But remember, even the great philanthropists—John D. Rockefeller, Andrew Carnegie and J.P. Morgan—did not give away their riches until toward the end of their lives. Another factor impeding contributions is a belief by donors that supportnetworks are not professionally managed, and as a result, their contributions won't be put to good use—or are at risk of being misappropriated. Finally, for some, the lines may be blurred between personal giving and corporate social responsibility initiatives. Much of corporate India is run byfamily-owned groups. Among the top 40 business groups, nearly 70 percent are family-owned or -controlled enterprises. It is likely that some families and individuals view corporate responsibility initiatives as extensions of their own giving. And that may curb their interest in making personal donations. These reasons notwithstanding, we should be able to give more as our nation'seconomy—and the number of wealthy individuals—continues to surge. But to increase the number of individual donors, nonprofits must earn their confidence by becoming larger and more professional