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Exploring new ways to solve old problems

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January 17, 2011
Cordelia Jenkins

Vikram Utamsingh, executive director and national head of markets at KPMG India, is by his own admission, relatively new to charitable giving. "It's only really since 2009 that I have been giving a meaningful sum rather than Rs 50,000 or a lakh rupees in a year," he said. However, over the past three years, Utamsingh has become steadily more involved in philanthropy. Starting with funding an English language course for adolescents in the chawl behind his alma mater, the Cathedral and John Connon School in Mumbai, he has expanded his giving to include funding for girls' education in Bihar through World Vision and is now looking at donating to old people's homes through GiveIndia.

"My goal is to reach 10% of my annual salary," he said. "I haven't got there yet, but that's my aim."

Exploring New Ways

Utamsingh is one of a growing number of Indian philanthropists channelling money toward causes that hold a personal interest. Over the past decade, the emergence of the so-called facilitator organizations-dedicated to connecting philanthropists with compatible non-governmental organizations (NGOs)-marks a trend toward "interested giving", where donors can choose exactly how and where to spend their money. According to such agencies, channelling funds this way results in a more sustained and involved relationship between philanthropist and recipient.

Neera Nundy, a managing partner at Dasra, one such bridge organization that has been in operation since 1999, attributes the change to a new demographic among philanthropists.

"There is this new wealth and the second generation of older wealth coming now, and there's a lot more interest in engaging in communities and feeling passionate about a certain cause," she said.

Although a growing presence on the philanthropic scene, this kind of focused giving by individuals is still in the minority, according to an April 2010 report by Bain and Co. Inc. While individual and corporate donations make up only 10% of charitable giving in India, the rest comes from foreign organizations and the government. By comparison, the report noted, nearly three quarters of all philanthropy in the US is undertaken by individuals.

This contrast is borne out by the number of Indian givers who were educated or have spent time in the US. Nundy says that recent years have seen a surge of interest from expatriates and those who have studied abroad in giving back to their communities. "Because of the spirit of positivity in India now, people are starting to stay in their own country and wanting to do things here," she said.

With new emphasis on giving to Indian NGOs, attention inevitably turns to which sector a donor should support, said Dhaval Udani, chief information officer (CIO) of GiveIndia. "Ten years back, you had to convince people to give," he said."Today, I don't see anyone saying, '˜Why should I give?' The question they typically ask is, 'How much should I be giving and where shall I give it?'"

Udani and his fellow aid workers report that the scales are weighted overwhelmingly in favour of the education and health sectors, an unsurprising bias given the immediate and overwhelming need in these areas. As a result, charities that focus on the most fundamental tasks-feeding the poor, immunizing children or setting up schools-gain disproportionately compared with the arts or culture.

"It becomes a trade-off in a philanthropist's mind," said Nundy. "Does he spend to feed a child or to help one play sports?" But, she pointed out, there is often a false dichotomy in that kind of choice. "It's not about choosing one over the other,"  she said. "Philanthropists give because they love to give, they feel passionate about a certain cause."

Unfortunately, there are still areas that attract little or no funding, with research and development topping the list of unpopular sectors. "People won't support organization build-up," said M. Moijuddin Ansari, a programme officer at facilitating organization Sampradaan Indian Centre for Philanthropy, which directs funds toward various community foundations in India.

"They'll not sponsor electricity or rent for the organization, and it's hard to fund emerging research," he said. Sampradaan has relied on the Ford Foundation in the past to help bolster its funding in these areas.

This reluctance to fund organization build-up and research and development is a particular hurdle for Indian NGOs. Given that such funding has played a significant role in philanthropic organizations in the US and Europe, it's harder for Indian charitable organizations to create professional business models, reinforcing the distrust some donors feel.

Donors with an eye on getting the best results for their money are reluctant to give to areas that seem risky or intangible, especially as many NGOs are found to be fraudulent, according to Udani. "Is the money really going to go where they are saying it's going to go? Will it go to the beneficiaries or be spent in administration costs?-these are the fears we see," he said.

The solution, for now, seems to be for organizations like GiveIndia and Dasra to endorse certain NGOs and calm donor fears by checking for transparency and efficiency on behalf of givers.

Most NGO workers agree that if donors are personally engaged with a programme they will be more likely to stick with it, continuing to fund it year after year in a more sustainable way. With greater engagement comes the opportunity for scalability and long-term investment in riskier projects-a boon for a growing NGO. And this engagement can be as specific as connecting with a single recipient of philanthropy: for example, a particular child in a school or family in a village.

"If I'm sponsoring a child, I want to see pictures, to know which child I'm sponsoring," said Ansari. Increasingly, NGOs and facilitators are able to provide such details.

Like many of his fellow givers, Utamsingh feels it is important to know exactly where his money is going. For that, he is a member of the advisory board for Yuva Foundation, the NGO through which he funds the courses in Mumbai. "I know how they manage the money and how much goes on administration," he says. "It's very transparent and I get to see a report every quarter, and that is reassuring."

The growing tribe of givers together with super-rich donors such as Azim Premji are defining the new ethos of Indian philanthropy. A small, yet important shift from what the country has seen for most of the last 150 years.

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