New Delhi: Private philanthropy is set to play an increasingly significant role in India’s development financing, according to a new report by Bain & Company and Dasra. But the momentum in funding growth must be matched by a stronger institutional infrastructure.
The report states that private philanthropy can reach up to Rs 1.43 lakh crore ($16 billion) in FY25. And it will continue to grow between 9 and 11 per cent from FY25 to FY30. This growth is majorly driven by the donations from ultra-rich, wealthy and affluent families. With rising wealth, the number of large donations is growing.
However, the pace of donation remains insufficient to match India’s development financing needs.
India’s social sector funding has grown at a sharp 13 per cent CAGR since FY20. In FY25, it was Rs 27 lakh crore and is projected to cross Rs 50 lakh crore ($570 billion) by FY30.
Even after the growth, the sector is facing a shortfall of Rs 16 lakh crore in FY25. The shortfall is expected to widen to Rs 18 lakh crore ($210 billion) within the next five years.
Government spending continues to lead. Almost 95 per cent of total funding in the social sector comes from the government. It is particularly in healthcare, where there is a push to raise public spending to 2.5 per cent of GDP.
“The real question is not whether capital is available, but whether it is structured to solve at scale,” said Bhavini Malhotra, partner at Bain & Company, noting that philanthropic capital must be matched by stronger institutional infrastructure to deliver sustainable impact.
Families drive nearly half of private giving
According to the report, 42 per cent of total private philanthropy comes from Indian families through personal donation and Corporate Social Responsibility (CSR) spending of family-owned businesses.
The report states that family philanthropy is evolving beyond legacy charity models to ecosystem-focused approaches. From combining in-house programme implementation with scaled grantmaking portfolios, families are adopting blended operating systems.
Women are leading in this field and emerging in growing leadership roles. A total of 63 per cent of families reported that women are shaping their philanthropic priorities. The report also cites 49 per cent inter-generational participation. Those who are first-generation wealth creators are also influential donors.
Neera Nundy, co-founder and partner at Dasra, said that family philanthropy holds an additional Rs 1.25-Rs 1.35 lakh crore upside potential by FY30, provided infrastructure keeps pace with wealth creation.
Also read: Tamil roots drew Booker longlister Padma Viswanathan to Brazilian literature
CSR growth steady
CSR spending can rise to 8-10 per cent as the economy grows, and more companies will come under the mandatory contribution rules.
Family-owned businesses alone account for 65-70 per cent of private-sector CSR spending. But most of this money comes from the top 2-3 per cent of families who contribute nearly half of all family-led CSR funds.
CSR spending is also uneven across states. A large share goes to wealthier states, like Maharashtra, Gujarat and Delhi, leaving poorer and less-funded states with fewer resources.
(Edited by Saptak Datta)