With increasing incomes, a large number of high net worth individuals (HNWIs) in India are donating a larger proportion of their wealth to charitable causes. The majority of these donors are under 40 years, mostly first time donors, and willing to contribute in some way for the upliftment of society.
A survey by Bain & Company of 400 HNIWs in Delhi, Mumbai, Hyderabad and Pune shows that charitable giving has continued to rise over the last one year and the average contribution was 3.1% of total income in 2011, which is up from 2.3% last year. More than half of the HNWIs surveyed are expected to increase their donations again this year.
India is a leader in private charitable giving among developing nations, with donations totalling between 0.3% and 0.4% of GDP. India is also home to one of the fastest-growing HNWI populations in the world as the demographic group grew 21% between 2009 and 2010. In contrast, it grew 12% in China, 8% in the US and 6% in Brazil.
The report says that, when compared with US donors, India?s HNWIs are newcomers to philanthropy. Nearly 80% of the HNWIs in the survey view themselves as novice donors while 74% of their counterparts in the US consider themselves experienced. This, the report underlines, has profound implications for the work that non-profits and others in the field must undertake to win confidence and raise the awareness of potential philanthropists in India.
Across all groups, the survey found that charitable projects that address basic needs are the most popular with donors. Education remained the top charitable cause followed by food and clothing. As an educated and skilled workforce is critical for India?s continued economic growth, philanthropic activities will help to train the workforce and reduce poverty. Estimates suggest that creating a more employable workforce could also reduce poverty by as much as 70% and increase per capita income from $1,212 to $4,100 by 2025.
