Wealthy Indians Increased Charitable Giving In 2011, Plan To Give More This Year [DO NOT EDIT]

Tom Burroughes

23 March 2012

Charitable giving among wealthy Indians rose in 2011 to 3.1 per cent of total income, compared to 2.3 per cent in the previous year, with more than half pledging to give even more in 2012, according to Bain & Company’s 2012 India Philanthropy Report.

The firm’s third annual report of charitable giving in India surveyed 400 wealthy individuals with more than $400,000 in assets, excluding primary residence, consumables and collectibles. Overall, more than 60 per cent of the survey group was under 40 years of age—more than one-third were 30 years or younger.

Though donations by India’s affluent, as a percentage of their income, still lag their Western counterparts - the US, at 9.1 per cent, is among the highest - the survey showed significant charitable momentum building in India among all age groups.

Almost four out of five of those surveyed said they were “novices” at charitable giving, with less than three years of philanthropic experience, versus only 13 per cent of high net worth individuals in the US. In India, more than half (52 per cent) planned to give more in 2012, and of that group, about two in five planned to increase their giving by 10 per cent or more.

“India’s young and wealthy have an especially strong commitment to giving back,” said Arpan Sheth, a Bain & Company partner in Mumbai and the report’s author.

Younger wealthy Indians, the Bain survey found, give a smaller proportion of their income—two percent, compared to 3.9 for their older peers. But almost 60 percent of the younger group plans to increase donations in 2012. Two-thirds of all surveyed expect to increase donations in the next five years, with two in five saying they will increase giving by over 20 percent in that period.

The 2012 Bain canvass again showed that education remains the most popular cause for giving in India, but it registered a sharp increase in the second most popular category, food and clothing. Housing and shelter rounded out the top three.

Obstacles to giving remain but were cited less than in previous years. Half of this year’s survey respondents said lack of accountability among charitable organizations held them back from increasing contributions, down from 70 percent last year. Other main obstacles—an unsupportive tax system and lack of awareness regarding charitable options—saw similar declines.