Indian Philanthropy Evolving: Climate Action Gaining Momentum

By Sangeeta Waldron

It is becoming clear that equity is needed for India’s fight against climate change and its transition to a green economy. The human element cannot be ignored, especially now as the country’s economic priorities are becoming more aligned with principles of a just transition, which will ensure that no one is left behind as businesses and organisations move towards climate-resilient approaches. This outlook is reinforced with the publication of the latest edition of the India Philanthropy Report (IPR) 2024, which makes for interesting reading. Now in its 14th edition, it gives an insight into the trends across different funder types from corporate social responsibility (CSR), retail givers, Ultra High Net Worth Individuals (UHNI) and affluent givers.

The report produced in collaboration with Dasra, India’s leading strategic philanthropy foundation and Bain & Company, a global management consultancy, presents data and insights regarding giving and the trends coming through in India. Below are some of the findings that caught my attention:

Social sector spending has had a robust annual growth of 13 percent over the last five years.
There is good news for climate matters, and that funders are keen to incorporate an environmental and climate lens into their existing portfolios and invest more deliberately in climate solutions. Where now generational and inter-generational donors are prioritizing interconnected issues such as climate action, and this is especially true for donors under the age of 40, who now focus even more on climate action (50 percent).
There is more collaboration happening, particularly to tackle underfunded issues, which has been on the up since 2020, with approximately 53 percent of partnerships focused on climate action and ecosystem strengthening.

Indian Philanthropy Evolving: Climate Action Gaining Momentum

Taking action to mitigate the impacts of climate change and build resilience among communities is vital for India to sustain its developmental plans while simultaneously tackling climate change. According to the Global Climate Risk Index 2021, India ranked 7th out of 180 countries affected by climate change, implying extremely high exposure and vulnerability. More than 75 percent of Indian districts are hotspots for extreme climate events. The IPR shows that funders have not forgotten that solutions are desperately needed to help tackle the climate crisis.

India’s CSR Law Is Winning

The report states that ‘regulatory changes have significantly increased the number of companies complying with the mandated two percent contribution requirement.’ These regulatory amendments prioritize disclosure (e.g., the reason for failure to spend the prescribed amount) and mitigate accumulating unused funds. India’s CSR law has improved transparency and increased CSR spending. Compliance is expected to continue to improve due to higher penalties for non-compliance.

Further, CSR started witnessing a shift in the types and durations of projects it supports, moving away from traditional needs-based initiatives like donation drives and blood donation camps, for example. Now more environmental and sustainability initiatives are gaining a larger share of CSR spending. I think this also shows that CSR spending in India has become more visionary and innovative, going beyond the tried and tested.

Women Philanthropists Investing In Change

Another positive surprise is that Indian philanthropy has evolved tremendously. Now the country is seeing more women investing in change, even though they are a minority within the UHNI wealth and philanthropic contributions. The IPR drills down to show that women philanthropists have greater accountability through their funding initiatives. Where they lead with high involvement, preferring “own and operate” initiatives to directly impact outcomes. Early insights from the report based on a limited dataset suggest women contribute more as a percentage of their net worth toward philanthropy than men. Similar trends have been captured through studies in the US. Women philanthropists prioritize adopting a Gender, Equality, Diversity, and Inclusion (GEDI) lens in their giving approach and are reshaping funding narratives and institutions by this push to their giving.

India still has much to draw on for philanthropic collaboration

Collaborative philanthropy in India holds promise, but faces hurdles, such as insufficient long-term funding, trust barriers, operational efficiencies, and building consensus among stakeholders with differing objectives. Complexities arise when trying to demonstrate and measure the impact of collaborative efforts, plus uncertainties in defining roles and responsibilities among partners. These issues can be addressed through transparent communication, providing unrestricted long-term funding, establishing strong governance structures, and being open to adaptability. There are untapped opportunities for domestic philanthropy – including CSR initiatives and wealthy families to step up. There is room for improvement and India still has much to draw on from philanthropic collaboration.

The philanthropic community plays an important role in advancing climate action and will continue to shape the entire sector and amplify India’s social outcomes over the next decade.

The findings of this report are set against the Indian economy, which continues to be one of the fastest-growing major global economies, with a GDP growth rate of 7.5 percent in the financial year 2023, despite global headwinds such as high interest rates, geopolitical tensions, and subdued demand. Inequalities persist in India despite its strong GDP growth, and its burgeoning middle class, and a goal to become a $5 trillion economy by 2025. Therefore, as India emerges as a significant player in global development, philanthropists, and corporate donors have an opportunity to make big investments and long-term commitments. This can strengthen India’s role as a problem solver and a hub for impact, and as this report puts it perfectly, ‘positioning it at a distinctive vantage point where India is for the world, and the world is for India.’