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Indian social sector funding has seen 12% annual growth over last 5 years

Indian social sector funding

Indian social sector funding see 12% annual growth

CSR: Over the last five years, Indian social sector funding has increased by 12% every year. In actuality, the fiscal year 2021 saw a significant increase, with a 20 percent increase, the majority of which was due to higher government spending. However, there are still some holes. 
 
With total funding at an average of 7% of GDP in previous years (8.3% in 2021), India is still short of the entire annual amounts required to meet its UN SDG goals by 2030, according to the NITI Aayog. 
 
Furthermore, the Covid-19 pandemic has driven over 200 million Indians into poverty. With state finances being badly impacted by the epidemic and government debt rising, the report emphasises the significance of utilising the full potential of private charity to help bridge the gap. If it realises its full potential, private philanthropy can solve and support India’s development difficulties by providing long-term capital for novel concepts and deeper emphasis areas. 
 
Foreign and domestic benefactors are the two main sources of private-sector funding. Corporations (corporate social responsibility and corporate trusts) and individuals are both domestic benefactors. Domestic individuals can be divided into two categories: family philanthropy (ultra–high-net-worth individuals and HNIs) and retail philanthropy (individuals with less than $1 million in net worth or income).

CSR Funds

The paper highlights previous patterns for each of these funding sources, suggesting that overall private giving (both domestic and international) has remained essentially steady in recent years. Private domestic giving increased at a moderate rate of 8 to 10% year over year [YOY] in FY2021, whereas private foreign giving decreased. CSR has increased in both absolute numbers and as a percentage of total private donations. 
 
In the next five years, total private philanthropic funding in India is expected to expand at a rate of around 12% per year, owing to strong development in the three primary areas of CSR, family philanthropy (UHNI and HNI), and retail. The paper goes deeper into these three primary segments, which are projected to dominate India’s private philanthropy in the future, in the context of the general trends. 
 
It emphasizes the CSR requirement, which began in 2014 and is unique in the world, as India is the only country that requires corporations to fulfil their social responsibilities. CSR donations are predicted to expand at a 19 percent annual rate, reaching around 32 percent of total private giving by FY 2026, thanks to significant economic growth, formalization, and the addition of additional companies to its umbrella.

Indian social sector funding

This cohort has the potential to play a critical role in meeting the country’s social sector fund requirement, thanks to a disproportionate increase in wealth during the pandemic and a possible increase in relative giving (giving as a percentage of net wealth) as more tech entrepreneurs and NowGen philanthropists enter the fray. However, when compared to other countries such as China, the United Kingdom, and the United States, Indian HNIs donate significantly less across all wealth levels. 
 
However, with the rise of Indian start-ups and young tech entrepreneurs, this trend may shift. In fact, UHNIs from the technology industry have donated more generously than those from other sectors, as we observed in IPR 2021. 
 
Now, the next generation of Indian philanthropists is emerging as the promising torchbearers. It is vital to provide hands-on assistance to this potential group in order for them to lead India’s efforts to accomplish the SDGs. In addition, Indian NGOs must invest in institutional competencies in order to engage donors more effectively and maintain stronger feedback loops. As a result, more funders should consider including institutional support in their grants. 
 
Finally, all funder segments must become more knowledge-driven and flexible in their giving, and they must collaborate with their grantee partners as equal partners. Private philanthropy has the potential to close India’s financial deficit and serve as a stimulus for government and innovation in the post-Covid era. This emphasises the importance of investing in philanthropic infrastructure and launching an inspirational, bold effort to make giving a social norm in the country. 

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