Indians not stingy but donors have a narrow vision problem

Earlier this month, the American Civil Liberties Union (ACLU) joined other civil society organisations in suing a US state that had banned abortion clinics. In the recent past, the ACLU has sued various US governments on issues ranging from the use of helicopters to monitor protests to social media surveillance of immigrants. ACLU uses over half of its substantial $200 million annual budget to fund litigation related to civil liberties.

Many Americans find organisations like the ACLU unnecessarily anti-establishment. But their very presence enriches the democratic process, leading to robust discussions about the country’s policies — in courts, in the media, and on the streets. They ask difficult questions, compel governments to provide answers, and —in the process — improve the quality of governance in the country.

While India has many noteworthy organisations on both the left and right that fight these battles, they do not have the supportive ecosystem that similar American non-profits have. To the contrary, they often face aggressive questions about their purpose, motivations and efficiency. This scepticism prevents them from raising adequate funding which, in turn, keeps them trapped in a low-level equilibrium.

To be clear, Indians are not stingy donors. A study estimates that individuals contributed over Rs 33,000 crore to philanthropy in FY22, with high-net-worth individuals contributing another Rs 29,000 crore. In addition, Indian companies spent over Rs 25,000 crore as corporate social responsibility grants. However, Indian philanthropy focusses on a narrow set of issues. Almost all individual donations go to either religious institutions or to beggars, whereas over 60% of corporate donations go to education, healthcare and rural development.

It is worth asking whether Indian philanthropy should focus this heavily on areas where governments are the primary service providers? In doing so, are we inadvertently condoning poor service by government departments? Instead, should private wealth fund those who are working on issues that are unlikely to see government funding? Asking such questions might help us broaden the scope of philanthropy in our country. For example, nearly 10% of all philanthropy in the US goes to research and civil rights organisations, with it being one of the fastest-growing sub-segments within philanthropy.

In contrast, Indian NGOs that work on these issues remain under-funded. India’s leading digital rights non-profit, for example, has a budget that is a measly 0.05% of ACLU’s. The primary reason for this is the extent of deprivation in basic healthcare, education, and incomes in India. It is difficult to convince donors to give money for civil liberties when they can instead educate a poor child or feed our homeless co-citizens. Understandably, all of India’s largest NGOs — some of which have budgets in the hundreds of crores per year — focus on these needs.

Moreover, many surveys have shown that Indians trust NGOs less than they trust governments or businesses. Consequently, we prefer to donate to causes whose impact is immediate, visible and verifiable. In comparison, research and advocacy organisations’ impact is long-term, not measurable, and often subjective. Critics accuse them of funding a ‘five-star lifestyle’ for their management. Hence, even the little funding they get is often tied to specific projects, rather than as unrestricted funds that they can invest in their long-term growth. While a US think-tank typically receives 40%-60% of its funds unrestricted, the corresponding number for India is usually 10%-30%.
There are also more structural reasons for the narrow focus in Indian philanthropy. For example, the government’s own Economic Survey in 2021 noted that our economy is over-regulated. The stroke of a bureaucratic pen can make or break commercial destinies. When government action is so central to their financial interests, India’s business elites are reluctant to risk antagonising governments, irrespective of the party in office. Why incur the wrath of regulatory gods when you can donate to religious institutions and earn divine blessings instead?

Their caution stands in stark contrast with the US, where large donors such as the Koch brothers on the right and George Soros on the left are able to freely fund research and advocacy organisations without fear of economic reprisal from governments of a different political shade.

As the early gains from our economic reforms start petering out, the urgency with which India needs to explore new ideas has never been higher. We are also entering a few decades of tectonic societal changes, with technology and AI poised to transform our society irreversibly. It will throw up many complex questions to which we have no answers today. Only a broader vision of philanthropy — which supports those at the forefront of these debates, irrespective of their political leaning — will equip us to answer the big questions of nation-building.



Views expressed above are the author’s own.


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