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NGOs help the rich to be more charitable

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April 26, 2013
Times of India
Namrata Singh

MUMBAI: The increase in the number of high net worth individuals (HNIs) in the country has had a positive impact on charity donations. What's pushing HNIs into opening their accounts with charity organizations, albeit in a more structured manner, are efforts by a section of NGOs which have tailored donation programmes to specifically target this segment.

So when GiveIndia Foundation came up with an initiative called 'First Givers Club (FGC)' in Mumbai, it didn't envisage it would collect Rs 10 crore in three years. In the first year itself, GiveIndia, which has over 150 NGOs listed with it, collected Rs 2.5 crore. Looking at the pace of growth in the HNI segment, GiveIndia plans to expand FGC to other metro cities, targeting a collection of Rs 30 crore in the next three years.

The type of HNIs the club enrolls are typically CEOs, partners in PE firms, investment bankers, CXOs and promoters or small industrialists earning Rs 2-10 crore per annum. It is mostly the first-generation HNIs that NGOs are roping in as steady donors. GiveIndia has enrolled 75 HNI families already under FGC. Even as it explores the country's vast HNI database, the NGO has set itself a target of enrolling 250 families in the next three years.

"Under FGC, HNI donors typically give Rs 5 lakh per annum. The club comprises over 60 such donors who together give Rs 10 crore per annum today. These HNIs may have earlier given in some other way (for example, they would have given Rs 1-2 lakh to multiple charities) before, but this may not have amounted to the quantum of Rs 5 lakh per annum, or towards a single project through a structured manner," says Dhaval Udani, CEO, GiveIndia, which is a not-for-profit organization that carries out due diligence on NGOs to help in a philanthropic exchange from donor to NGO.

Leading strategic philanthropy forum Dasra, on the other hand, engages with givers at varying stages of philanthropic giving, working closely with philanthropists through the Dasra Giving Circle (DGC), which was set up in 2010. Through DGC, philanthropists join efforts and give collaboratively to scale a non-profit initiative, thereby maximizing the impact of their individual commitments.

"DGC members provide approximately Rs 10 lakh a year for a period of three years. They either provide these funds on an individual basis or in collaboration with others. In addition to providing financial support, DGC members have the opportunity to offer strategic guidance to the organization. Dasra simultaneously provides the organization with capacity-building support, ensuring that the organization makes the most progress with these funds, and meets its goals," says Radhika Nayar, head of Indian philanthropy forum, Dasra.

NGOs have a reason to believe why HNI giving in India has good potential. A joint report by Kotak Wealth Management and Crisil estimates there are over 81,000 ultra-HNIs in India (based on a consideration of a household with a minimum net worth of Rs 25 crore). This is expected to more than triple to over 2,86,000 households in the next three-four years. Metros account for more than half of the ultra-HNI households.

Chief executive of Charities Aid Foundation in India (CAF India), Meenakshi Batra, agrees this is a growing trend, but the NGO typically approaches the professional category as it believes many industrialists run their own programmes through their foundations or personal trusts. "We do not have a lower limit (of charity by HNIs). However, the kind of support we provide to HNIs would depend upon the level of their funding. For example, a higher grant often requires us to undertake comprehensive work on design, monitoring, delivery and reporting, while smaller grants often go to the pre-designed programmes," says Batra.

Clearly, giving in India, which was hitherto done in a more random manner, is becoming highly structured and this has a lot to do with an increase in the amount of philanthropic giving, especially at the top of the pyramid.

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