An Article Based on Insights from a Fireside Chat at GRAAM's Decennial Celebration Program with:
Shri. Amit Chandra: Cofounder, A.T.E. Chandra Foundation & Chairperson, Bain Capital India Advisors Private Limited
Shri. Arjun Ranga: N. Ranga Rao & Sons Pvt. Ltd. and Chairperson - Grassroots Research and Advocacy Movement (GRAAM)
Dr. Basavaraju R Shreshta: Executive Director, Grassroots Research And Advocacy Movement (GRAAM)
As India celebrates the evolution of philanthropy and Corporate Social Responsibility (CSR) over the past decade, new dynamics are emerging in how non-profit organizations (NPOs) engage with philanthropy to drive social change. This transformation of the philanthropic sector has brought both challenges and opportunities, highlighting the need for innovation, collaboration, and reimagined approaches in the sector. Amid rising expectations for impact measurement, many wonder whether grassroots organizations are better positioned to leverage these shifts and thrive in FY 2025.
Notably, India has reduced multidimensional poverty from 29.17% to 11% over the last nine years, as reported by NITI Aayog in 2024. However, with a target of just 1%, significant work remains. Social sector spending as a share of GDP grew from 8.6% in FY 2021 to 9.6% in FY 2022, and despite a 35% increase in public spending, NITI Aayog estimates a 13% funding gap to meet Sustainable Development Goals (SDGs). Private philanthropy is thus crucial in bridging this deficit.
A Shifting Landscape
In recent years, the philanthropic environment in India has experienced a notable shift, marked by increased restrictions on international funding and evolving government regulations, especially around compliance. The evolving landscape is seen as an opportunity for domestic philanthropy and CSR to assume a more significant role in supporting NPOs, particularly those focused on tackling multidimensional poverty and social inequality.
Private donations in India are now overwhelmingly domestic, with corporate social responsibility (CSR), family foundations, and retail contributions making up over 86% of this funding. Although recent FCRA amendments caused a 3% decline in foreign funding between FY 2021 and FY 2022, CSR has continued its steady growth, increasing 13% over five years to reach INR 27,000 crore in 2022. Projections suggest this could rise to INR 52,000 crore by 2027. This evolving landscape encourages NPOs to innovate and collaborate in addressing India’s critical social challenges.
Notably, India has reduced multidimensional poverty from 29.17% to 11% over the last nine years, as reported by NITI Aayog in 2024. However, with a target of just 1%, significant work remains. Social sector spending as a share of GDP grew from 8.6% in FY 2021 to 9.6% in FY 2022, and despite a 35% increase in public spending, NITI Aayog estimates a 13% funding gap to meet Sustainable Development Goals (SDGs). Private philanthropy is thus crucial in bridging this deficit.
Golden Era for Indian Philanthropy?
India may be experiencing a “golden age of philanthropy,” with structural changes—such as the steady increase in CSR funding—creating a more predictable and substantial pool of capital than ever before. CSR funding has become a significant and consistent contributor to social causes, providing Indian non-profits with resources previously unavailable at this scale.
Moreover, there is a noticeable rise in private giving by wealthy Indians, with efforts led by families like the Premji’s demonstrating a renewed commitment to social welfare and philanthropy among India’s affluent. Retail giving now also rivals foreign funding, generating nearly 30,000 crore rupees through individual contributions. Despite the challenges posed by compliance and transparency requirements, this growing domestic support signals a promising era for addressing some of India’s longstanding social issues.
Reimagining the Role of NPOs
For grassroots organizations to fully benefit from this “golden era,” a rethinking of the role of NPOs is essential. They must prioritize the social cause over organizational interests, focusing on pioneering solutions rather than replicating existing efforts. NPOs are increasingly encouraged to collaborate with government programs to drive large-scale impact. A notable example of this approach is the 17,000 ft. Foundation in Ladakh, which introduced innovative educational solutions for remote regions, showcasing the power of impactful partnerships.
This advice emphasizes the importance of non-profit organizations (NPOs) positioning themselves as complementary partners to government initiatives rather than as competitors. By leveraging their strengths—such as the ability to experiment with new methodologies, create community-specific solutions, and develop innovative delivery models—NPOs can fill gaps in areas where government agencies may face challenges. This collaborative approach allows NPOs to expand their reach and enhance their impact, leading to more effective solutions for critical social issues.
Moreover, there is a noticeable rise in private giving by wealthy Indians, with efforts led by families like the Premji’s demonstrating a renewed commitment to social welfare and philanthropy among India’s affluent. Retail giving now also rivals foreign funding, generating nearly 30,000 crore rupees through individual contributions. Despite the challenges posed by compliance and transparency requirements, this growing domestic support signals a promising era for addressing some of India’s longstanding social issues.
The Role of Collaboration and Capacity Building
The philanthropic sector in India is witnessing remarkable growth, but effective collaboration remains at the core of addressing complex social challenges. NPOs must actively engage in partnerships across a variety of sectors, including private donors, CSR initiatives, and government programs, to create holistic solutions that can tackle multifaceted societal issues.
A key component in this effort is the emphasis on capacity building, and a prime example of this is the A.T.E. Chandra Foundation. Fifteen years ago, the foundation took the foresighted step of establishing a dedicated capacity-building vertical, focusing on leadership development and creating training platforms for NPOs. The foundation, along with other major donors, has played a pivotal role in training thousands of NPO leaders. This has significantly enhanced the capability of grassroots organizations to meet growing expectations related to impact measurement, data transparency, and compliance.
It has now become transparent and essential that NPOs themselves to take an active role in seeking capacity-building support. This means integrating capacity-building needs into funding proposals and advocating for resources that extend beyond financial aid, ensuring that the organizational development necessary for long-term success is prioritized. By doing so, NPOs can build the infrastructure and expertise needed to maximize their impact and sustain their efforts.
Corporate Philanthropy and Long-Term Impact
Corporate philanthropy has significantly evolved over the past decade, with many companies now embracing long-term commitments to social welfare. This shift highlights how corporate brands are increasingly aligning their identity with purpose-driven missions, rather than focusing solely on profitability. Such alignment creates a valuable opportunity for NPOs to build sustainable, long-term partnerships with corporations by aligning their projects with corporate goals, thereby achieving mutual impact.
A cautionary tale from N. Ranga Rao & Sons’ philanthropic work highlights how a lack of community engagement can undermine the long-term success of an environmental project. One of the larger initiatives undertaken about six to seven years ago involved water management in Mysuru. The project aimed to revive two major lakes, given the abundance of lakes in the region. An investment of 40 lakhs was made, with 20 lakhs allocated for each lake. The lakes were beautifully renovated, with walkways constructed around them, and fishing was introduced to enhance the ecosystem. However, the local NGO overlooked the importance of integrating the project with the local community. As a result, within six months, the local tahsildar connected the area’s drainage pipe to the water, and so the entire initiative went for a toss. This example emphasizes that NPOs must move beyond short-term solutions and develop initiatives that foster sustained community involvement. The insight underscores the importance of adopting a long-term perspective in project development. While pilot projects can demonstrate immediate impact, NPOs should prioritize initiatives that ensure lasting community benefits. This approach not only ensures greater sustainability but also enhances the potential for NPOs to have a lasting and meaningful impact.
The Path Forward: Building a Collaborative Philanthropic Ecosystem
India’s philanthropic sector is at a crucial juncture. By focusing on capacity building, embracing collaboration, and prioritizing impactful, long-term projects, NPOs can position themselves to capitalize on the growing opportunities within domestic philanthropy. With the collective efforts of corporations, HNIs, retail donors, and government agencies, a robust ecosystem can emerge—one that supports sustainable development and social welfare.
In conclusion, this transformative period in Indian philanthropy offers immense potential for NPOs. However, realizing this potential will require strategic adjustments, innovative approaches, and a steadfast commitment to collaboration. As NPOs, corporations, and private donors forge stronger partnerships, India moves closer to addressing its most pressing social challenges and creating a brighter, more equitable future for all.
