NEW DELHI (India CSR): Amidst India’s escalating social sector expenditure, which has seen a substantial 13% yearly increase over the past five years, reaching about INR 23 lakh crore ($280 billion) in FY 2023, the landscape of private philanthropy, particularly Corporate Social Responsibility (CSR), is undergoing significant transformation. Despite the remarkable growth, India’s social sector spending, which constitutes 8.3% of its GDP, still falls short of the NITI Aayog’s recommended 13% GDP allocation to meet the UN Sustainable Development Goals (SDGs) by 2030.
The Ascendance of Private Philanthropy
The India Philanthropy Report 2024, jointly published by Bain & Company and Dasra, forecasts a promising trajectory for private philanthropy, expecting it to burgeon at a rate of 10% to 15% annually over the next half-decade. This anticipated growth, spurred by notable advancements in CSR, family philanthropy, and retail contributions, represents a marked acceleration from the modest 5% annual growth recorded between 2018 and 2023.
Radhika Sridharan, a Partner at Bain & Company and co-author of the report, underscores the vital role of burgeoning private philanthropy in narrowing the funding chasm, enhancing the social sector’s capacity, and effectively addressing the confluence of challenges faced by government, businesses, foundations, and communities.
The Role of CSR in Philanthropic Expansion
In FY2023, the realm of private philanthropy flourished, with a 10% increase totaling INR 1.2 lakh crore ($15 billion). This expansion was predominantly propelled by a 15% increase in family philanthropy and a 12% rise in retail donations. Concurrently, CSR and contributions from high-net-worth individuals (HNIs) and affluent donors experienced a moderate 7% growth, albeit from an expanding donor base.
CSR spending itself scaled to INR 28,000 crore in FY 2023, capturing a larger slice of the domestic private giving pie, which soared to 30% from 22% in FY 2018. This upswing, fueled by heightened compliance and profit growth, alongside legislative changes, has significantly broadened the corporate giving landscape. The report highlights a strategic pivot in CSR initiatives towards long-term, impact-focused projects, moving away from traditional, immediate needs-based contributions.
Future Outlook for CSR
Looking ahead, CSR is poised for an even more pronounced annual growth rate of 9% over the forthcoming five years. This optimistic projection is rooted in structured regulatory amendments, such as the provision to carry forward excess credit, which have empowered corporations to stagger their CSR expenditures over extended periods, thereby facilitating long-term, impactful interventions.
This evolving CSR paradigm, characterized by a shift towards sustained, outcome-oriented projects, not only amplifies the strategic value of corporate philanthropy but also aligns with the broader trajectory of India’s philanthropic sector. As India strides towards realizing its social and developmental objectives, the pivotal role of CSR in shaping a resilient, inclusive, and sustainable future cannot be overstated.
(CopyRight@IndiaCSR)
