India@75 | Social causes that business families need to address in the next 75 years

Zerodha co-founder and CEO Nithin Kamath. Zerodha’s $100 million commitment to support grassroots organizations and individuals with a focus on afforestation, ecological restoration, and livelihood through the Rainmatter Foundation is one example of businesses contributing to climate action.

On the eve of India’s independence, the economy was in a state of devastation. The colonial rule led to a massive drain of India’s wealth, stagnated the agriculture sector, and left bleak prospects for industrial growth due to systematic de-industrialization. However, 75 years later, India has become one of the world’s biggest economies, a journey filled with numerous milestones and reforms.

Philanthropy has been deeply ingrained in the fabric of Indian society throughout the pre and post independence periods. Over the decades, old industrial families have given back to society and played a pioneering role in endowing institutions and setting up foundations and trusts. Their focused efforts to support quality education and healthcare have been critical to India’s growth story.

Trends in family giving

India Philanthropy Report 2022, published by Bain & Company and Dasra, highlights that education continues to be the top cause families give to. From FY2018 to FY2021, funds garnered by education have increased from 60 percent to 77 percent. Healthcare has been a distant second with 11-12 percent of funds until FY2019. However, disaster relief has surpassed healthcare, garnering 15 percent of family philanthropic funds in the most recent year due to rising Covid-19-related donations.

While education and healthcare funding dwarf other causes, families often play a critical role in supplying risk capital to underrepresented areas within the broader health and education sub-sectors. Their support for innovation helps make interventions more effective and enables NGOs to scale intersectional themes such as gender in healthcare and horizontals such as data, technology, and talent to enable more significant impact and efficiency.

The rise of Indian startups and young tech entrepreneurs continues to be a good sign for India. Technology accounts for about 8 percent of family net worth, but ultra-high-net-worth individuals (UHNIs) from the technology sector have been donating more generously than others at 35 percent. The pandemic created an inflection point that accelerated the transition of startup founders to engage in philanthropy. Initiatives such as the Young India Philanthropic Pledge, started by the Kamath brothers of Zerodha, and ACT Grants, are good examples to back this trend.

The next 75 years

Given India’s size and population, most issues manifest at a vast scale and with significant variety and complexity. Family giving needs to focus on solving systemic issues by adopting a long-term funding view vs. a short-term one. Families are uniquely positioned to impact under-resourced causes, regions, and communities, which can further attract institutional funding and play a catalytic role in driving change. For the next 75 years, family philanthropy needs to think holistically, with an approach that accounts for interdependencies and a GEDI lens (Gender, Equity, Diversity, and Inclusion).

While climate change is a universal problem, due to the high density of economic activity, reliance on natural resources for livelihoods, and dependence on rainfall, the World Bank has categorized India among the countries most vulnerable to climate change. Adverse effects of climate change hamper socio-economic progress and disproportionately threaten marginalized communities, especially women and adolescent girls. A report by ClimateWorks Foundation noted that climate change mitigation philanthropy accounts for less than 2 percent of the total philanthropic giving worldwide, revealing that philanthropy needs to step up in response to the growing intensity of climate change.

Indian philanthropy’s efforts to combat climate change are noteworthy but more needs to be done urgently. For example, Zerodha’s $100 million commitment to support grassroots organizations and individuals with a focus on afforestation, ecological restoration, and livelihood through the Rainmatter Foundation. Another example is the India Climate Collaborative – a collective working to accelerate climate action in India – supported by leading philanthropies of Ratan Tata, Anand Mahindra, Rohini Nilekani, Aditi and Rishad Premji, Nadir Godrej, Vidya Shah, and Hemendra Kothari among others. Many of these philanthropists are also supporting GivingPi, India’s first and exclusive invite-only network focused on family giving to solve India’s biggest development challenges.

Another area of focus that philanthropy needs to address is mental health. According to the estimate by WHO, India accounts for 36.6 percent of suicides globally, and 7.5 percent of Indians suffer from some mental health disorder. The pandemic, lack of awareness, and high levels of stigma have further compounded mental health issues in the country. Family philanthropy can play a critical role in levelling the playing field.

NowGen philanthropists, in particular, are increasingly engaging in newer concepts and deeper focus areas. Vidhi Shanghvi anchored and launched “Mann Talks”, an initiative under Shantilal Shanghvi Foundation, to impact the lives of 10 million Indians belonging to underserved sections of society, directly or indirectly affected by depression and anxiety. Raj Mariwala’s Mariwala Health Initiative works on accessible, affirmative, rights-based, and user-centric mental health care with a gender-lens approach as another example.

To create effective solutions for India’s development challenges, adopting a gender intentional approach will be critical. Such an approach helps uncover interlinkages and gaps, given that women and adolescent girls are disproportionately impacted by most of the issues facing the country today. This focus can be adopted in terms of funding decisions with grantee partners and increased incorporation of the GEDI lens within the culture and principles of grant-making institutions for various causes being supported. The following 75 years call for philanthropy to be bolder, think holistically, and explore newer focus areas with a GEDI lens to transform India where a billion-plus thrive with dignity and equity.