Family philanthropy is uniquely positioned to affect social change in India owing to its ability to provide risk and patient capital that has the potential to solve for systemic challenges.
Illustration: Chaitanya Dinesh Surpur
India’s growth journey over the past 75 years has been a tale of both triumphs and challenges. Despite these, the country’s growth remains steadfast, with a real GDP growth rate of 8.7 percent in FY22. This is due in no small part to the role of family philanthropy in nation-building thus far. As India nears the centennial year of Independence, she is on the brink of significant transformation. However, there remains a challenging journey to overcome persistent economic and social inequalities. To address these challenges, there is a critical need for family philanthropy to step up with increased propensity and ambition.
A New Dawn of Social Progress
Family philanthropy is uniquely positioned to affect social change in India owing to its ability to provide risk and patient capital that has the potential to solve for systemic challenges. It can carry the torch of India’s philanthropy movement and play a role in pushing forward the country’s development by supporting social innovation, shaping public policy for inclusive development, building institutional capacity, and bridging the gap between the government and the private sector.
Compared to other types of philanthropic capital such as CSR (corporate social responsibility), retail giving, and foreign giving, family philanthropy has fewer constraints and is well-positioned to complement these pools of capital by supporting underserved causes, sectors, regions and communities. Moreover, it has the ability to support non-profits beyond grant-making as many funders bring with them diverse networks and can exert influence on key change-makers across levels to drive impact. They can also provide other resources such as their time, skills or voice.
When unlocked, family philanthropy can be truly transformational for India. According to the India Philanthropy Report 2023 (by Bain & Company and Dasra), family philanthropy is expected to grow at a robust ~18 percent compound annual growth rate from FY22 to FY27 (Percentage includes Azim Premji). The report also highlights that the depth of India’s wealth is expanding, with a 9.2 percent rise in cumulative net wealth of UHNI (ultra-high-net-worth individuals) in FY 2022, particularly in the top wealth bracket of >Rs50,000 crore, which experienced a 19 percent increase.
If Indian families were to give as per global benchmarks, it could unlock additional funding of approximately Rs160K crore – Rs170K crore for social causes in India and can be a significant force to bridge inequities in the country. The growth of UHNI wealth is paralleled by the rise of startup wealth creation in India, as more unicorn and gazelle founders accumulate wealth at younger ages. For the first time in a decade, the IIFL Wealth Hurun India Rich List 2022 featured 100 start-up founders with a cumulative wealth of Rs5 trillion.
Despite notable growth in wealth, India continues to confront complex development challenges, making the role of family philanthropy even more critical. It is imperative for philanthropic families to not only increase their giving, but also channel it in a more catalytic manner to create an even greater impact.
Emerging Trends in Family Giving
Having worked closely with over 300 families over the last two decades on their philanthropy, one sees the following positive directional shifts shaping the future of family philanthropy in India:
Increased focus on climate action and sustainability:
Families are becoming more aware that climate change has a cross-sectoral impact and are incorporating a climate lens into their giving portfolios. Philanthropic families, such as Nithin and Nikhil Kamath
, Rohini Nilekani
and Leena Dandekar are investing more deliberately in climate solutions as well as narrative building for adaptation and community resilience.
Next-generation increasingly shaping philanthropy:
Within family philanthropy, first-generation wealth creators and current generation of traditional family philanthropists are ushering in a promising new wave of philanthropy in India owing to their disruptive mindsets, high-risk appetite and tech-savvy approach. They are reshaping the landscape of philanthropy by expanding their focus beyond historically preferred sectors such as education and health care, and beginning to focus on emerging themes like climate action, GEDI (gender, equity, diversity and inclusion) and investing in strengthening philanthropic infrastructure.
Newer areas of focus:
A defining feature of family philanthropists is their willingness and conviction to walk the path less travelled. Their philanthropy is becoming more visible, and they are gradually moving away from traditional forms of funding food, education and scholarships to newer themes and deeper focus areas. Examples include Raj Mariwala’s work through the Mariwala Health Initiative to make mental health care more accessible and supportive for marginalised communities, Abhishek Poddar’s efforts to democratise art, and preserve Indian culture and heritage through the Art and Photography Foundation, and Radhakrishnan and Usha Sundar’s unique approach at Hi5 Youth Foundation to leverage basketball to improve the lives of underprivileged children.
Also read: Can India's ultra-rich families step up and give more?
More openness to collaborate:
Whether partnering with the government to scale programmes, joining formal funder collaboratives or joining forces with other peer philanthropists, families are increasingly becoming open and eager to collaborate with other stakeholders and bring the power of many to the table. This is exemplified by initiatives like ACT Grants, Young India Philanthropic Pledge and collaboratives anchored by Dasra such as 10to19 Dasra Adolescents Collaborative, National Faecal Sludge and Septage Management Alliance, Social Compact, and Transform Collective.
Increasing trust-based philanthropy:
Families are showing a greater intent to be more flexible in their giving, allowing the realities of local contexts to shape their giving decisions instead of relying on top-down approaches. They are also engaging in more open communication and listening to their non-profit partners as equal stakeholders in the journey to create a lasting impact. This approach is championed by Rati and Riah Forbes through their family philanthropy and by the Harish and Bina Shah Foundation, amongst an increasing number of families adopting it.
Adopting a systems-change mindset: Family philanthropists have begun to make big bets and long-term commitments to influence issues at a systems level. They are increasingly adopting a mindset that thinks holistically and works with multiple stakeholders to tackle root causes instead of just addressing symptoms.
Unlocking Family Philanthropic Capital at Scale
Despite these emerging positive shifts, there remains a significant gap between the giving potential of families and the needs of the most vulnerable communities in India.
In order to bridge this gap, there is a critical need to invest in strengthening the philanthropy infrastructure, which can help address existing information-expectation-priority asymmetry in the sector, and unlock greater and more equitable family philanthropic capital at scale. As more capital is unlocked, it is equally important to provide formalised support that family givers are bound to need as they shape and accelerate their family philanthropy. Also read: Shiv Nadar is India's most generous philanthropist; donated Rs3 crore per day in FY22
The role of intermediaries and private wealth managers becomes critical as family philanthropy can be complex and demands patience and competence, requiring diverse services to enhance its strategic nature.Like the subject of “ease of doing business”, the “ease of doing family philanthropy” needs to be enhanced significantly if we want to see greater capital flowing into the social sector.
To harness the full potential of family philanthropy in India, in July 2022, leading philanthropists and Dasra launched GivingPi—India’s first and exclusive family philanthropy network, with the intent of enabling learning, sharing and collaboration between philanthropic families in India. This invite-only network has, in just seven months, brought together over 150 philanthropic families from over 21 cities. With 61 percent female representation in GivingPi, one sees the growing role of women’s leadership in philanthropy. By 2030, the network aims to be India’s largest family philanthropy network, annually giving $1 billion to social causes in India. The GivingPi network is backed by the likes of Ashish and Manisha Dhawan, Nikhil Kamath, Nisa Godrej, Rajan Navani, Rohini Nilekani, Sunny Gurpreet Singh and Tara Singh Vachani.
Along with a robust philanthropy infrastructure, India needs a cohesive and audacious nationwide narrative that champions family philanthropy and inspires greater giving at a large scale. Such a narrative can make giving aspirational and establish philanthropy as a social norm in the country. To strengthen this narrative, it is necessary to build the case for family philanthropy and create momentum by producing relevant thought leadership and research, showcasing champions and their giving approaches, and celebrating philanthropy to encourage families to give more effectively and cultivate a stronger culture of giving among wealthy families.
It is also crucial to provide families with a range of shovel-ready and fully designed vehicles and platforms, making it easier for them to give at different stages of their philanthropic journey and make a significant, systemic impact.
Building on India’s family values, a deep sense of community, and nation-building ethos, scaling up domestic family philanthropy is critical to shaping the future of India and building a more inclusive and sustainable society. In this critical decade, philanthropic families must come together, be bold and ambitious in their giving, to truly shift the needle around complex social issues. They must unleash a revolution that transforms the landscape of philanthropy to enable a billion Indians to thrive with dignity and equity and make India the “social innovation” capital of the world.
Now is the moment for India to embrace a golden era of philanthropy, towards India@100, with families assuming the mantle and redefining the very fabric of India’s social contract.
(Nundy is co-founder and partner, Dasra; Chatterji is head, GivingPi, and associate director, Dasra)
(This story appears in the 10 March, 2023 issue of Forbes India. To visit our Archives, click here.)