Donate Wisely

The unexpected GDP growth While the country’s economy is

experiencing a slump, donations made to NGOs are growing

at 0.2 to 0.4 per cent of GDP

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Download PDF The unexpected GDP growth While the country’s economy is experiencing a slump, donations made to NGOs are growing at 0.2 to 0.4 per cent of GDP 
October 07, 2013
Pune Mirror
Gouri Agtey Athale

There’s been gloom and doom around for some time now; the economy slowing down, the rupee falling against the dollar (although that has halted somewhat now), food inflation, unemployable youth... a long and depressing list. Yet, against thisbackdropthereissomecheer.Growthishappening in a totally unexpected sector, that of giving. Strangely enough, despite the economic slowdown and other indicators of stagnating incomes, people are parting with more of their money, not advice, please note.

There is no accurate or complete data available on the amounts people hand over to NGOs or their favourite charities, since not all of it falls within the Charity Commissioner’s or Income Tax department’s net. Yet, one educated guess pegs giving, in India, at around 0.2 - 0.4 per cent of GDP and growing faster than GDP. Despite that happy bit of information, Indians fall far short when compared to others.

Dhaval Udani, CEO, Give India, an organisation which raises funds and then channels them to NGOs, pointed to the US, where people give upto 2 per cent of their incomes to charity while HNIs in that country give between 8-10 per cent of their incomes. In India, Udani said, HNIs and others are not “giving up to their potential,” while paradoxically some Indians who earn aroundRs5-6,000permonthgiveRs50amonth, amounting to 1 per cent of their incomes.

“Giving to charity is increasing in India, as people are earning better. We have seen a 30-40 per cent year- on- year growth over the last five years. Yes, there are pockets of people who tend to give more: like a BPO employee who is probably the first in his or her family to have such a job giving that 1 per cent of his/her monthly salary,” Udani said.
That is the evolution of the donor. And it is happening in other income levels, too, specially among those who have been giving to charity for two-three years. These are the people who now want to move up to the next level, get more involved in the work their donation is being used for and want to simultaneously increase their giving with greater involvement. Udani said they like it when donors question them because it indicates their involvement.

This culture of giving is not new to our society but it now faces some challenges. People have traditionally given to their village or community. With greater urbanisation and job mobility, they have moved away from these rural roots yet want to do “something” for folks back home.

Withmoredisposableincomes,itispossibleto do more for others, something that seemed unthinkable for the vast majority of middle class people just a couple of decades ago.

This, too, is regarded as a natural progression, wherethefamilycomesfirst,thenthecommunity, and onwards and outwards to the city, the country...

There’s another kind of giving that is also gaining momentum at least in urban areas. NGOsarecollectinggoods,betheyclothesorany other household items, selling them and raising theircorpus.Thepractice,byNGOs,ofcollecting unwanted items from homes and raising their funds strikes a chord with middle class housewives used to selling such items at the doorstep, anyway. With NGOs collecting from them, giving comes easily even though they are not going to get the few rupees they would otherwise have got.

Indians have been less open-handed for another reason: the persistent question in their minds of how much will be retained by the NGO and how much will go to the intended beneficiary. There are estimates that the peak retention by an agency ranges between 30- 50 per cent which supports the natural suspicion of the Indian donor. 

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