New Delhi: The Covid-19 pandemic wrecked economies around the world, devastating people’s livelihoods across sectors. But a new report points out that while some of India’s richest people made huge gains in their wealth during the period — like their counterparts across the world — the rise didn’t keep pace with their philanthropy.
Had they been as generous as their Chinese counterparts, India’s super-rich would have donated as much as Rs 1 lakh crore in FY 2021 — compared to the estimated Rs 12,000 crore they did give — according to the ‘Indian Philanthropy Report 2022’, published Monday by global consultancy firm Bain and Co. and strategic philanthropy foundation Dasra.
The analysis is broadly based on the statistics available at the HURUN donor database. Established in 1998, Hurun is a London-based company known for evaluating the wealthiest individuals of the world.
The richest people in India fund a variety of social causes such as education, healthcare, and poverty reduction, but the proportion of their philanthropy compared to their total wealth fell during the pandemic, the report states.
In the 2019 report, discussing ultra high net worth individuals (UHNIS) — with a net worth higher than Rs 226 crore — it was stated that the top bracket, with a net worth higher than Rs 50,000 crore, gave about 1.4 per cent of their wealth in donations. By 2021, this had shrunk to just 0.1 per cent, says the report. There are 23 people in this top bracket in India.
Across other UHNIs, in the brackets of Rs 10,000-50,000 crore and Rs 1,000-10,000 crore, philanthropy as a percentage of total net worth fell to about half of the 2019 figure of 0.1 per cent, the report adds.
In terms of absolute numbers, there are no figures for 2019-20, but the report states that the total donations by UHNIs and high net-worth individuals (HNIs) — those with a net worth above Rs 5 crore — rose to Rs 35,000 crore in 2020-21, from Rs 32,000 crore in 2014-15.
However, within these sections of affluent Indians, there are varying trends. The donations by UHNIs fell to Rs 12,000 crore in 2020-21, from Rs 16,000 crore in 2014-15, but the HNIs’ donations rose to Rs 23,000 crore from Rs 16,000 crore during the same time period.
According to the report, both the number of rich individuals and their wealth saw phenomenal gains in the period covered, which could explain why the proportion of donations became smaller.
The report also points to a fall in the US — in 2019, the Rs 50,000 crore+ bracket in the country donated 3.52 per cent of their wealth, which fell to 2.52 per cent in 2021.
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Growth in number of rich people, and their wealth
The number of individuals with wealth of more than Rs 1,000 crore increased to over 1,000 in 2020-21, from 828 in 2019-20, the report states. Moreover, the cumulative net worth of these individuals also shot up by about 50 per cent to Rs 90 lakh crore, from Rs 60 lakh crore.
The donations by those with a net worth of more than Rs 50,000 crore may have decreased in proportion to their wealth as a result of these individuals alone reporting an 80 per cent growth in their wealth.
In comparison, those in the Rs 10,000-50,000-crore bracket reported 45 per cent growth, and the figure was 30 per cent for those in the Rs 1,000-10,0000-crore bracket, the report states.
Low philanthropy in India
India is home to 140 billionaires according to Forbes’ 2021 list — the third highest number in the world after the US (724) and China (626). However, the share of wealth donated by the ultra-rich in the US and China is considerably higher than the figure for those in India, the report states.
The average philanthropic contribution by those with a net worth of more than Rs 50,000 crore was 0.09 per cent in India, while the corresponding figure was 1.48 per cent in China and 2.52 per cent in the USA.
In the Rs 10,000-50,000 crore bracket, the average share of donations was only 0.08 per cent in India, compared to 0.54 per cent in China and 1.14 per cent in the US.
The report states that if wealthy Indians contributed the same share as their Chinese counterparts, they would have donated as much as Rs 90,000 crore-1,00,000 crore in total. Matching the philanthropy levels of wealthy Americans would have meant donations of as much as Rs 1.6 lakh crore-1.7 lakh crore.
However, the report estimates that wealthy Indians (UHNI) donated only about Rs 12,000 crore. (It does not take into account donations by those whose wealth was below Rs 1,000 crore when making comparisons with other countries.)
This means that individual donations for social sectors still have a huge potential to grow, the report states.
“We see immense potential for family philanthropy over the next decade — unlocking it will need increased transparency and collaboration, evidence-based knowledge on credible giving opportunities, and stories of impact to inspire new givers,” the report quoted Radhika Jain, director, Philanthropy Advisory, at the Foundation for Accelerating Philanthropy (AIP), as saying.
(Edited by Rohan Manoj)
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