Overview
Philanthropy in India is guided by religion and the demands of caste, clan, family and community. Giving is primarily directed towards religious organizations like temples and churches. However, philanthropy has also extended to corporate involvement and the rise of non-profit organizations working towards the country’s development.
Indian philanthropy has always been strongly linked to religion since ancient times. Concepts such as daana (giving) and dakshina (giving to a teacher or priest) in Hinduism and bhiksha (giving to a monk) in Buddhism are rooted in the idea of philanthropy.
In India, philanthropy also evolved into volunteerism. Individual volunteering has had a tremendous potential in India, with most volunteers serving religious organizations.
History
The primary motivation behind giving was the belief that charitable activities lead to one's salvation. In later years, through interaction with other civilizations and the resulting ideas of equality, human rights, and other related causes, social action groups started to emerge, fighting for women's empowerment, removal of untouchability, promotion of education and others. These were initiated by well-known social reforms, many of which had close links with the freedom movement of the country.
Volunteerism also found a new meaning in the wake of India’s struggle for freedom, with Mahatma Gandhi giving India a vision of Swaraj (self-rule), Ahimsa (nonviolence) and Seva (service).
Corporate philanthropy. In the Indian corporate scenario, different business communities like Parsis, Marwaris, Khatris, Reddys and Chettiars were in the forefront in philanthropic activities. Institutionalized philanthropy also received an impetus with the industrial revolution in India, as corporate wealth began to be channeled towards welfare and development work.
Jamshedji Tata is considered as the father of modern Indian philanthropy. The J N Tata Endowment Scheme was launched in 1892, much before the first major foundation was formed in the US. His biggest contribution was the establishment of the Indian Institute of Science. (www.tata.com)
J R D Tata, one of the first few people to alert the nation of the dangers of uncontrolled population, was joined by SP Godrej, Dr. Bharat Ram and others in a campaign for population control. They together set up the Family Planning Foundation in Delhi for research and funding of family planning activities.
Corporate giving in India during the year 2000 was estimated to be Rs. 200 millions. Companies operating in India are increasingly recognizing the fact that the best way for their business to grow is by aligning themselves with the nation's development objectives. These objectives have gone beyond the prevailing practice of giving to individuals in need who belong to one's own caste, community or religion.
Modern corporate foundations like the Azim Premji Foundation and the Infosys Foundation support education initiatives in various states. Other industrial houses such as Bajaj, Birla, Reddy laboratories etc., have also started their own foundations to support an array of development initiatives.
Faith-based giving. Different socio-religious denominations and sects have been responsive to the social and developmental demands of society. Institutions like the Satya Sai Sewa Trust, the Swaminarayan Movement, the Chinmaya and the Ramakrishna Missions, Radhasami Satsang, Missionaries of Charity all depend on charity by Hindus.
Likewise Islam directs its followers to give in the form of sadaqah (voluntary charity), and zakat (obligatory charity). Zakat is paying of 2.5%, 5%, and 10% of annual savings, income from agriculture produce, or other products, depending on certain conditions of the payer and or the process of income. This is necessary to purify the remainder of the wealth, and paid during the month of ramadhan (fasting). This typically involves supporting the causes of literacy and education through schools and colleges, healthcare and homes for the aged and the destitute. These religious institutions are also increasingly beginning to venture into sectors such as rural development, livelihoods and specialised healthcare.
Organisations like the Chinmaya Mission, the Swaminarayan Movement and Satya Sai Trust have likewise extended their service spheres from religion-oriented activities into other areas such as rural development, environment, income generation and women's empowerment.
Christian missionaries have been active in India for nearly two centuries and have contributed greatly in the spheres of education, health delivery and backward groups' development in remote areas. A well-known example is the service of Mother Theresa and Missionaries of Charity.
Muslim institutions and Wakf boards are also involved in social welfare and developmental activities and also run madrashas (religious schools), providing education to Muslim students.
Diaspora philanthropy. The Indian Diaspora has been one of the larger global migrant movements in the world, with estimated numbers at 20 million. In 2005, remittances have been recorded at USD 21.7 billion. As reported, this is 4 times higher than India’s Foreign Direct Investment.
In the United States, 24 of the high-tech firms in the Silicon Valley with annual sales turnovers of over USD 3.6 billion are owned by Indians; in Hong Kong, though the Indian Diaspora numbers only about 23,000, it accounts for almost 10% of the island’s international trade, which is estimated to be around USD 400 million. (Viswanath, 2003). A High Level Committee has been formed to deal with diaspora isseus, enabling Indian migrants to advise the Prime Minister on India’s development.
As noted in the 2003 Global Equity Initiative Study on Indian and Chinese Diaspora Philanthropy, there is a large incidence of Indians giving back to the country, mostly in the community level and through informal channels. The giving patterns have recently shifted to individual giving to institutional giving, with migrants supporting causes of Indian NGOs such as Asha, CRY and IDS, as well as Indian educational institutions. There has also been a noted shift from supporting traditional causes such as religion and culture to more development related areas such as education and health. The willingness and availability of support by Indian migrants for development projects in India is hoped to encourage better reporting and regulation in the Indian NPO sector, and further strengthening support from the diaspora.
Reasons for giving, as described in 2004 study “Mapping for Diaspora Investment in the Social Development Sector in India”, can go beyond an emotional bond to a desire to change the image of the country that has long been synonymous with poverty, illiteracy and hunger.
Policy Environment
The proactive approach of the government towards non-profit organizations is evident in its recognition of the sector and encouraging more activity and progress.
The federal government in independent India started promoting and regulating NPOs seriously. It continued the two legislations of British regime: the Indian Trust Act and Indian Societies Act to provide legal status to NPOs. Over a period of time, The Indian Companies Act, The Trade Union Act, and The Multi State Cooperative Act followed providing greater legal space for NPOs. Further provisions were made in the Indian Income Tax Act to accord tax exemptions to those donating funds to the registered NPOs and the Foreign Contribution Regulation Act was passed to oversee international funding.
Government support. The state perceived NPOs as the catalysts of development. They were asked to channel government's welfare packages through to people. This perception culminated in two important support systems:
· The central government made financial provisions to support voluntary organisations right from the First Five Year Plan (FYP) with a financial outlay of 40 million rupees (GOI, 1951). Beginning from 7th FYP state financial support to voluntary sector increased (the 7th and 8th FYPs earmarked Rupees 2000 million and Rupees 7500 million respectively to support the voluntary organisations - Dinesh Shah, 1985).
· Policy makers in India have always taken the NPOs into confidence, by consulting them while devising various policies (Kochanek, 1974).
The Five Year Plan programme of the state has been prioritizing and addressing different development issues. From the seventh five-year plan (1985 – 1990) onwards the planning commission of India began to acknowledge the role of NPOs in development and advocacy. The ninth five-year plan (1997-2002) has laid greater stress on the involvement of NPOs in the development programme of the country on partnership basis.
With the establishment of Council for Advancement of People's Action and Rural Technology (CAPART), NPOs are able to work on rural development themes. CAPART is an autonomous body set under the aegis of the Ministry of Agriculture and registered as a Society under the Societies Registration Act. The proactive state support to voluntary organisations has also brought in the element of reporting and regulation. The constitutional provision for right to association also ensures that voluntary organisations enjoy adequate autonomy in terms of their management and governance.
The agricultural development policies of the government and its implementing mechanisms provide scope and space for NPOs. Due to the fact that the policy implementation calls for a deep insight of the grassroots realities, the role of NPOs in this area has been more pronounced. The implementation of a watershed development programme has initiated the growth of TSOs for rural development in India. Their role is also acknowledged in the Tenth Five Year Plan (2002-2007).
The Planning Commission has set up a separate Voluntary Action Cell (www.planningcommission.nic.in). The federal government in consultation with NPOs has also prepared a draft national policy on voluntary sector, which is likely to be announced in 2006.
Local self-government. Panchayats are the age-old institutions in rural India. Historically, these bodies, used to control the local affairs and dispense justice. Although these panchayats were dominated by the upper caste people and had no 'legal' sanction' in the modern sense of the term, these used to enjoy the support of the people.
The revival of the panchayat system to strengthen local self government, through the passing of the 73rd and 74th amendment of the Constitution is one of the important developments that has a bearing on the way social development projects are implemented in the future. Under this system, increasing powers and responsibilities, including financial, are being transferred to the local self-governments. This system involves the establishment of a three tier form of local self government, at the district, block and village levels, while decentralization through the establishment of municipalities and corporations within towns and cities are also envisaged.
India is currently going through a change in its institutional structure in all fields, which includes the developmental field also. While in the industrial and service sectors, the government is privatizing and assuming the role of a regulator, in the developmental scenario, the trend is to decentralize down to the lowest level (subsidiary). This means that increasingly, the panchayat institutions at the district, block and village levels will assume increasing powers to decide the developmental path and also have control over financial resources to meet the objectives.
This development offers both opportunities and challenges for the third sector. Voluntary agencies have the huge task of facilitating this process and also, building capacities within the panchayat institutions so that they can function effectively. The involvement of voluntary organisations in implementing development programs in partnership with the government has become central to this new agenda- this has already started in the country and is only likely to increase in the future.
Taxation
The government is increasingly looking at voluntary organisations to implement social development projects. However, on the other hand, the rules and regulations governing the voluntary sector are not simplified enough to help them function effectively. In fact, there are many instances where, the government machinery goes to scuttle the good work done by voluntary organizations. In the words of Amartya Sen, the relationship between the two is one of 'cooperative conflict' (Kothari, 2002).
In addition, the state tried to control the activities of Voluntary organisations through various other means, namely:
· Promulgation of the Foreign Contribution Regulation Act (FCRA) of 1976
· Financial Act of 1983
· Removal of tax exemptions from all income generating activities of voluntary agencies
· Proposed National Council and State Councils for voluntary agencies (1986)
· Code of ethics
The tax exemption given to corporate organizations for charitable donations was curtailed by the Financial Act of 1983, which resulted in a decline in the corporate donations. As an alternate policy, the government established the National Fund for Rural Development to channel corporate funding for development activities. Although, the provisions of tax exemptions to the corporate bodies, which contributed money to this fund, existed, the fund did not pick up due to a lack of patronage by the corporate. Corporate houses preferred setting up their own trusts and Voluntary organisations to donate to and undertake development activities.
Through cooption, the state offered increased funding, allowed more activity areas in which the voluntary organisations can be involved and reduced bureaucratic hurdles. Through this, the voluntary organisations would be dependent on the funding from the state, which would reduce the scope to criticize the state's policies and action. These policies did have their impact and increasing number of voluntary organisations moved away from 'activism' and adopted 'development orientation' with liberal funding both from government as well as international funding agencies, which in many cases routed their resources through the government of India.
Charity is a matter of state control, so different states in India have different legislations (i.e. trusts or endowment Acts) to govern and regulate public charitable voluntary organizations, for example:
· Bombay Public Trusts Act in the state of Maharashtra regulates all public charitable trusts. The Act also operates in the state of Gujarat.
· Rajasthan has a Trusts Act of 1959, and Madhya Pradesh has its own (1951) Act.
· In certain southern states (e.g., Andhra Pradesh) there are Endowment Acts, whereas a number of Southern, northern and Northeastern states in India do not have Public Trusts Act at all.
· The capital of India, New Delhi, does not have trusts act to specifically cover the trusts formed for the public causes. In such states, NPOs are registered under societies act (passed by the concerned states) or Section 25 of the companies act (under the Companies Act of 1956) or under the Indian Trust Act.
There is no single law catering to all NPOs in India. The multiplicity of legislations and the web of restrictive provisions in these laws is also an indication of state's desire to regulate the activities of NPOs.
Data and resources
A 2001 survey by Sampradaan, Indian Centre for Philanthropy covering around 28% of urban India concluded that 96% of upper and middle class households in urban India donate to a charitable cause (ICP, 2001). This charity amount is reported to be around Rs. 16billion (US$34 million) annually. Other major findings of the survey are:
· In terms of average annual donation, Christians in India take the lead, followed by Hindus/Jains; Sikhs; and Muslims. The Christians also give the highest average annual donations to other (non-religious) organizations
· The most popular purpose for which money is donated is to relieve distress of victims of calamity, 21% donating for this purpose.
The most important reason given for donating was a feeling of compassion (68%). The second most important reason was that the giver feels good (48%). Religious beliefs and practices (46%) are the third most important reason. Twenty-nine percent respondents donated because they believed in the cause of the organization. The survey shows that for the donors reduction of taxes as the least important reason (Dadrawala, 2001).
Another study on individual giving in five southern cities (Dongre, 2003) has also recorded a high incidence of giving, both in terms of size and frequency, among particular income groups. The study shows that the sample of 200 individuals donated an amount of Rs. 0.5 million in one year. The study indicates that in urban high salaried class giving has become more rationalized and people are willing to give to big foundations that can channel the funds more effectively rather than to governmental and religious institutions.
In the 2001 APPC study, Investing In Ourselves, noted giving behavior by Indians include:
· In India, while there is a natural capacity to philanthropy, this is more informal and ad hoc. Thus informal charity takes precedence over giving for long term change and development. The new wealth created by Information Technology and other new industries, coupled with a large overseas connection through relations and friends overseas, but who continue to maintain links with the home state, has more for a more dynamic gift market in Southern India.
Among the 4 countries studied, India gave the highest proportion to religion, followed by Indonesia, the Philippines and Thailand.
· On the giving rate, India’s is lower than the other three countries, while Indonesia, Philippines and Thailand, the giving rate is as high or even higher than in northern countries.
· India has the lowest numbers of those who gave to relatives and friends. These figures suggest that high income Indians have few ties with poorer people, whether relatives or friends. This is perhaps because the growth of a large middle class happened earlier in India than in the Southeast Asian countries, or perhaps because the financial crisis, which India avoided, impoverished many of the new middle class.
The role of NPOs in addressing the social service issues and empowerment related advocacy efforts has been increasing. The study conducted by PRIA also supports this fact when it notes that every fifth NPO in India works on the issues of community and social service (PRIA: 2002). The favourable disposition of the governments and the political will to involve NPOs is more pronounced in implementation of the welfare schemes addressing to the women and child development.
Intermediaries
In the post independent India Gandhi's followers chose his path and kept away from active politics and focused on social service. Many of them started Third Sector Organizations (TSOs) with focus on social reforms, spread of Khadi movement, redistribution of land and rural development. Since the voluntary sector came to be associated with Gandhi's followers the federal government had to patronize such initiatives. These organizations initially played the role of filling the gaps in the development process. The volunteers organized handloom weavers in villages to form co-operatives through which they could market their products directly in the cities. Similar co-operatives were set up later in areas like marketing of dairy products and fish. In almost all these cases, the volunteers helped in other areas of development like running literacy classes for adults at night.
In 1946, a group of farmers in Kaira district, Gujarat, formed a co-operative to overcome the pernicious influence of middlemen and won the right to collect and sell milk to the government. The co-operative successfully adapted to changes in the market and in 1964-65, it expanded its facilities in order to meet increasing demand. It also invested in improving the quality of cattle and research in manufacturing dairy products. By 1970, the rapid growth and success of this co-operative encouraged the national government to adopt it as a model for a structured attempt to develop the dairy industry across the country in a programme titled 'Operation Flood'.
The emergence of NPOs and the scope of voluntary action in India are largely determined by the particular idea of public good. During different periods of history there have been diverse definitions of public good has operating. "The roots of voluntary action in early India, as we saw, lie in religious inspiration and thereby the definition of public good partook the spiritual thought. The focus of public good was on social reform in the 19th and 20th centuries. In the early part of the 20th century political struggle became the primary public good in the form of independence from colonial rule. National reconstruction was the primary focus of public good in the independent India. After the period of (national) emergency, a broader, much more diverse and heterogeneous notion of human development and societal development became the prime focus of public good" (Tandon, 2002).
Throughout the Indian history the manner of expression of voluntary action, the nature and structure of NPOs and the primary activities of these initiatives were driven by the sense of public good prevalent at that time. The wide and diverse mosaic of NPOs in India today reflects this feature vividly.
Volunteerism
Gandhian voluntarism of the early 20th century stemmed from Gandhi's belief that India's development lay in the development of her villages. He introduced a constructive programme to make the village self sufficient by encouraging people to use the spinning wheel (charka), hand-woven cloth (khadi) and village industries (gramodyog). Gandhi's voluntarism was a major shift from the voluntarism practiced in traditional Indian society. It emphasized empowerment and transformation of society and acquired a political content. However, these voluntary initiatives had none of the organizational characters to classify them as modern.
After the country won independence, the Gandhian Voluntary Organisations attained a lot of prominence due to their leader’s support. These voluntary organisations were involved in the training of government officials implementing developmental activities. Other organizations followed the welfare approach in providing relief during times of famines and floods. The Government took initiatives during this period to promote voluntary agencies. The view held then was that social work should be the domain of the voluntary organizations while the state should only provide technical and financial support. To this end, the Central Social Welfare Board (CSWB) set aside funds to finance the voluntary sector.
In the 60s and 70s, other volunteer organizations cropped up, including Indian organizations formed by international voluntary groups, organizations by middle class professionals, non-party action groups, community-based organizations, corporate philanthropy organizations, and government-formed voluntary organisations. Such organizations grew due to the prevailing middle class mindsets, compassion for the poor, tax incentives and need to develop appropriate technology. The need for welfare grew during this period due to the increased occurrence of famines and floods and also the refugee problem due to the 1971 war.
In the 1980s and 90s, voluntary organisations acted as intermediaries between donors and the poor, worked on empowerment and helped form CBOs to campaign for more rights from the state, and provide training and consulting services.
In recent years India has seen a surge in volunteerism from within and outside India. Several organisations in India accept international volunteers for short-term assignments. Corporate volunteering is also on the rise. The GE Elfun Movement promoted by General Electric is committed to improving their local communities through volunteerism, leadership and camaraderie. The India Movement has over 1,800 members and has grown to five chapters since its inception in 1999.
Organisations like i-Volunteer, for example, help build linkages between and the volunteers from both within and outside India. Religious organisations in India help create alternative employment for people. Organisations like Swaminarayan Movement, Ramakrishna Mission, Sri Satya Sai Sewa Trust are some examples where volunteers work on a wide range of socially relevant initiatives.
Grantmaking Foundations
Foundations are a major category of third sector organizations in India. Generally registered under the Indian Trust Act or Bombay Public Trust Act, foundations in India may be classified into two types: Grant making foundations and Operating or Service delivery foundations. The main objective of grant making foundations is to make grants from the funds raised for different purposes and the operating service foundations have their own funds to provide services and also raise funds to be given to different organisations working on the themes decided by the funding organisations. The dividing line between the grant making and operating foundations some times are very thin. Many foundations both raise money and disburse it- for example Child Relief and You (CRY website). It works towards the basic rights of underprivileged Indian children. CRY also provides non financial inputs to its partners in different projects. Concern India Foundation (CIF website) offers support to working on the lines of their chosen fields of activity like empowerment, environment and development programmes. United Way of Baroda, India Foundation for the Arts (IFA website) are the examples of independent national grant making organisations in the field of Arts. Foundations like GIVE Foundation raise funds through the Internet for the benefit of listed organisations. It features 88 organisations on its website, selected through a stringent selection procedure and listed online to enable them to solicit funds from individuals across the world. The Ratan Tata Foundation, Birla Foundations, Nanndi Foundation, Reddy Foundation, Godrej Foundation, Azim Premji Foundation, etc. are a few other major foundations operating in India. There is a new and large foundation, Infosys, but it is interested mainly in undertaking its own programs. Foundations may also be classified as corporate funded foundations and individual funded foundations. Many corporate entities create foundations by earmarking a part of their surplus and using it both for grant making and for providing specific services. Infosys foundation is one such foundation. Individual funded foundations are generally created out of the personal endowments made by individuals. Azim Premji Foundation and Ratan Tata Foundation represent such foundations. Many individual funded foundations are also recognized as Endowments through a court monitored scheme.
It is held that there are approximately 80,000 and more grant-making organisations in India. Trusts have been established for a wide range of purposes - education, health, feeding the poor, promotion of arts and culture and so on. In recent years several foundations have been established by groups of community leaders to serve a cause. Examples of such trusts are National Foundation for India (NFI), Rashtriya Gramin Vikas Nidhi, Rajiv Gandhi Foundation, Helpage India, Diwaliben and Mohanlal Mehta Charitable Trust. These foundations have their own resources and are involved in extensive grant making.
There are also community foundations like the Bombay Public Trust and the government sponsored foundations like the Council for Advancement of People's Action and Rural Technology (CAPART).
There are numerous grant making foundations of different sizes in India. No survey of these organizations has been undertaken. This site provides brief information about some well-known foundations in India. More information is available in the following to recent publications:
1. Murray Culshaw Advisory Services (Complied), PROFILE 500 Selected Voluntary Organisations in India, Center for Advancement of Philanthropy, Mumbai, 2003.
2. Sampradhaan, Directory of Donor Organisations, Sampradaan Indian Center for Philanthropy, New Delhi, 1999.