Are Indians charitable?

Are Indians charitable? My answer to this question is yes, as much as any other, contrary to what international surveys may maintain. I believe India comes out poorly on the generosity index because the focus is on aggregated giving and no distinction is being made between philanthropic giving and charitable giving. My contention is that charity is alive and well in India, and Indians are as charitable as any other nation. But philanthropy is another story.

Charity is the voluntary giving of money to those in need; it is palliative not curative in nature. It is purely impulsive, aims to provide immediate relief, not to root out the cause of the distress, and takes a short not a long term view of a problem. Charity makes no claim that it is given in order to reduce inequality or to promote social justice.

Philanthropy on the other hand, is the planned use of wealth for transforming society for the good of all.  It implies the use of a scientific spirit and method in giving for the purpose of social advancement. It is not limited to alleviation of poverty but includes giving to bring beauty and refinement to society. Further, it assumes that social ills such as poverty, educational failure, or criminal behaviour can be identified, attacked and cured.

If one analyses the charitable giving, one will find that it is largely charitable not philanthropic in nature.

Indian charitable giving is also underestimated because most sample surveys focus only on the urban segments, and capture the more formal giving. Most charitable giving in India is of the informal kind, given as alms, given to dependents, friends, employees and  others in need, or through informal channels. It therefore goes unreported, or is grossly underestimated, especially giving by rural givers who are themselves at the bottom of the pyramid. But undoubtedly they too give, especially in times of disaster, to their fellow sufferers.

Anecdotal evidence too backs the conclusion that, though not reflected in surveys, Indians are as charitable as any other nation. Just two examples will suffice. A day after the Times of India reported on the financial constraints which prevented figure skater Rajkumar Tiwari from participating in the Asian Open Figure Skating Trophy in Bangkok, people from across the country came forward to fund his trip. It was the same for the two slum boys who came out tops in the entrance exams for the prestigious Indian Institutes of Technology (IIT), but could not avail of the opportunity because of lack of funds. Funds poured in when people read their story.

Such surveys as exist (and there are very few in India), indicate that the bulk of the charitable giving is to religious institutions – temples, mosques, churches and gurus of all kinds. It is estimated that if the famous Venkateswara temple at Tirupati, donated its annual earnings, it would become the country’s second largest philanthropist.

Meanwhile, philanthropy is in short supply in India. Very few of the religious organizations which receive huge donations use this money for transformative social change. Other small giving does not get added up into collective philanthropy for transformative change, because it does not flow in large amounts to organizations who are involved in developmental work. But most importantly, those who can afford to take risks on supporting large projects for transformative change and innovation do not give enough.

The number of “high net worth individuals” in India has grown exponentially, by any count, possibly at the fastest pace in the world. According to the Hurun Report 2016 , published by a China based luxury and events group, the world’s billionaires grew by 99 to 2188 individuals, 50% more than in 2013. Of this India’s tally is 111 billionaires, giving it the 3^rd place in the list. Their combined wealth is estimated at US$ 308bn.

Moreover, the number of new wealth builders is expected to grow fastest in India over the next 5 years. While the new rich Indians will grow by 47% in 2020, the growth globally is expected to be only 7% and in Asia 10%. The total value of their wealth is expected to be $879 billion, double what it was a decade ago.

However the distribution of wealth is highly unequal in India. According to the Global Wealth Databook, 58.4% of India’s wealth is with the top 1% of the country’s population. Only  57 billionaires control 70% of India’s wealth. At the other end of the scale are an estimated 363 million living below the poverty line of Rs. 32 a day in villages, and Rs. 47 in cities. This by itself makes a persuasive case for philanthropy to share wealth more liberally with the rest of the population.

Unfortunately, today’s rich are indulging in ostentatious living and spending lavishly to flaunt their wealth. According  to the Bain and Co.’s Annual Philanthropy Report for 2011, the wealthiest social class as a whole has the lowest level of giving, just 1.6 percent of household income. The class below the top gives 2.1% and the middle class 1.9% of household income, giving a median of 2.1% of household income.

Though the figure of giving as a proportion of household income of the Indian rich has increased to around 3.1, it  is still well below the potential for giving, or compared to the 9% given by the wealthy in the USA.

The silver lining however, is that philanthropic giving is steadily increasing. According to the Bain and Co.’s latest report, philanthropic funding from private individuals has grown from Rs 6000 crs. in 2011 to Rs. 36,000 crs. in 2016, and funding from individual philanthropists is reportedly even outpacing contributions from foreign sources and funds from companies.

Hopefully, if the philanthropy’s ecosystem improves, Indians of the future will be reckoned both charitable and philanthropic.

Featured image credit: Money in hand. CC0 Public Domain via Pixabay.