India – Indicators of International Philanthropy from Asia

India – Indicators of International Philanthropy from Asia

This is the eighth in a series of twelve articles looking at factors influencing international philanthropy across ten Asian countries, paying particular attention to giving in the areas of international aid and education.

The study identifies nine country specific factors affecting the propensity of people to give offshore funds to these two causes. By using nine general indicators and adding the aid or education indicator, organisations working in either sector can assess background issues determining their ability to raise philanthropic gifts in a particular country. For a full explanation of indicators used, please refer to Article 1: Introduction to the series.

 

Assessment of international philanthropy from India

 

Political & Economic Security

Rating: 3

Comments: India is a developing country with a very high growth economy. Democratic government but considered to have very high levels of corruption. [1]Euromoney Country Risk

 

Capital Accumulation

Rating: 4

Comments: 8,200 ultra high net worth individuals with collective wealth of $945 billion. [2]Wealth-X. 2011. World Ultra Wealth Report 2011: Uncovering Pockets of Opportunities

Incentives

Rating: 4.5

Comments: High level of incentives available for charitable giving. Tax Exemption over recent years has gained the favour of government in India. The government uses differential levels of tax deductions to steer contributions. Contributions to rural development programs are deductible at 100%, while contributions to the scientific or educational sectors are weighted at 125% and 175%, respectively. In general, donors receive a 100% tax deduction for contributions to government funds. [3]Asia Pacific Philanthropy Consortium. 2002. Investing in Ourselves: Giving and Fund Raising in Asia [4]UBS Insead. 2011. Study on Family Philanthropy in Asia

 

Trust in NGOs

Rating: 1

Comments: High level of distrust NGO sector in India. Other large, experienced NGOs have found it extremely difficult to establish in-country fundraising in India. [5]UBS Insead. 2011. Study on Family Philanthropy in Asia

Priority of Human Development

Rating: 4

Comments: Indians give a large amount to development organisations but the giving rate is only 2 percent. Research suggests that 19 percent of giving from family philanthropies goes to poverty alleviation and development. The social class system is still a major barrier to giving to the poor and needy. [6]Asia Pacific Philanthropy Consortium. 2002. Investing in Ourselves: Giving and Fund Raising in Asia [7]UBS Insead. 2011. Study on Family Philanthropy in Asia

Propensity to Give Internationally

Rating: 2

Comments: Low level of philanthropy overall and research suggests that the donations that are given primarily go to needy individuals and domestic religious causes. [8]Sampradaan Indian Centre for Philanthropy. 2003. Investing in Ourselves: Giving and Fundraising in India.

Overall Level of Philanthropy

Rating: 2

Comments: Despite long history of philanthropy in India, giving to charitable causes is low. Research into this area suggests this is due to the level of fundraising practice in the country and issues with the public’s mistrust of the charity sector. India ranked 134 out of 153 in the World Giving Index for 2010, with 14 per cent of the population donating to charity. [9]Sampradaan Indian Centre for Philanthropy. 2003. Investing in Ourselves: Giving and Fundraising in India. [10]Charities Aid Foundation. 2010. The World Giving Index: 2010.

Fundraising Practice

Rating: 2

Comments: Low level of fundraising practice in India. Research suggests that many NGOs lack the skills and knowledge to effectively fundraise from local communities. Organisations do not know how to effectively ask and donors lack knowledge about causes and the need to give. NGOs do not have country and culturally specific resources to use in fundraising. NGOs have become dependent on government funding and foreign aid and have overlooked the potential of private donors. There is a high level of distrust of charity sector by the public which has also impacted fundraising development.
Studies suggest there is high potential for fundraising in India if these areas are addressed. A recent Study of 8 INGOs raising funds in India pointed to reliance on mass-marketing methods (direct mail, face-to-face, telemarketing) with very little use of major gift fundraising — the result being very low average gift levels, with low donor retention levels.
The South Asian Fundraisers Group offers basic courses in fundraising to support an emerging profession. [11]Sampradaan Indian Centre for Philanthropy. 2003. Investing in Ourselves: Giving and Fundraising in India. [12]Menon, Usha. 2011. “Fundraising’s Passage to India.” Fundraising and Philanthropy, Dec

Development of Giving Foundations

Rating: 2

Comments: Low development of giving foundations in India. Money given by private foundations and trusts to NGOs is small compared to funds received by government and foreign aid. [13]Sampradaan Indian Centre for Philanthropy. 2003. Investing in Ourselves: Giving and Fundraising in India. [14]Asian Philanthropy Forum. “State of Indian Philanthropy.

Financial Openness

Rating: 1.5

Comments: India received a score of -1.14 in the Chinn-Ito (KAOPEN) index for financial openness, with the lowest score being -1.83 and the highest +2.50. This score indicates a very low score for capital account openness and a high level of control for cross-border transactions. [15]Chinn, Menzie D and Hiro Ito. 2008. “A New Measure of Financial Openness.” Journal of Comparative Policy Analysis: Research and Practice 10 (3): 309-322. [16]Chinn, Menzie D and Hiro Ito. 2010. “Notes on the Chinn-Ito Financial Openness Index 2008 Update.”

 

Giving to Education

Rating: 3.5

Comments: There is a moderate to high focus on giving to education in India. A study by UBS-Insead showed that 35% of giving from family philanthropies in 2010 was directed towards education. [17]UBS Insead. 2011. Study on Family Philanthropy in Asia

 

 

The total scores for India are:

  • Index of International philanthropy for aid from Asia 26

  • Index of international philanthropy for education from Asia 25.5

Jacqueline Cameron

Jacqueline Cameron

Consultant & Research Manager at AskRIGHT
Jacqueline is a dedicated, motivated and results oriented fundraising professional. She enjoys the variety in fundraising, and brings broad experience to clients on all aspects: from identifying prospects to liaising with donors, advising on collateral, writing case statements and bequest brochures, data mining and analytics, and developing fundraising strategies.

To find out how Jacqueline can help your organisation, email j.cameron@AskRIGHT.com.
Jacqueline Cameron
Dr Daniel McDiarmid

Dr Daniel McDiarmid

Principal Consultant at AskRIGHT
Daniel is a highly experienced and innovative fundraising professional with more than 30 years of success raising funds for higher education, research, religious and other organisations in Australia and New Zealand.

To find out how Daniel can help your organisation, contact d.mcdiarmid@AskRIGHT.com.
Dr Daniel McDiarmid

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