Funding landscapes in India Part I: Introduction

1. Introduction

The one key element for social change is resources. They form a crucial part of the inputs for activities in interventions designed to fuel change. This has been a constant over decades across the development (aka social change) spectrum. All solutions designed to address social issues have resources as a key component for stakeholders to engage with. Education has been an area which has seen a rising need for resources as the solutions are designed for scale. This in turn entails a need for rise in funding to develop and deliver the resources. Of course, there are narratives around comparative cost advantages between – digital and physical resources. It is essential to understand the role of funding in the ecosystem to evaluate solutions. We will explore the ecosystem by deep diving into the existing landscape, sources of funding and its evolution to start with, followed by domain-wise, geography-wise and solution approach-wise in the upcoming blog.

2. Landscape

2.1 CSR

The role of Corporate social responsibility (CSR) has been evident in the last decade. The image below shares the introduction and adoption of the CSR narrative in India.

The CSR being a relatively new phenomenon in the funding landscape is probably most talked about though. The regulatory framework has played a key role to increase adherence and associated impact. The process has been gradual with entities developing innovative and evolving strategies to create impact. The industry has been responding through multiple avenues as singular entities to collective groupings and forums to engage with the social landscape. These have brought about a big role to Indianise the solution design as the source of funding is within India. The ability to engage with the sources, pitch innovative solutions and build local synergies is a plus.

2.2 Philanthropy

Individual philanthropy has been part of the Indian cultural and religious landscape for centuries. Each religion has its own set of codified and uncodified rules. These rules have influenced the giving practices of individuals all along. These practices led to individuals, family, cultural groups, religious groups coming together to perform activities that involved giving for social good and change. As these practices evolved, it got fragmented into institutional giving as well. The definition of cultural, regional and community institutions was indigenous to India. 

A major breakthrough came along when, in the 19th century, it led to formation of philanthropic trusts. The first among its kind philanthropic trust was the J N Tata endowment in 1892. Post the independence a large number of Trusts and foundations were established for individual, community and NGOs. In the early days the larger focus was on infrastructural impact as – schools, colleges, hospitals etc.

The image below showcases the grants for activities in India; since 2006 to present where the funding source is within India.

The image below gives interesting insights into the giving patterns by individual donors across India. Interesting observations can be drawn from the data shared. The share of religious organisations as receivers still counts as one among the highest for individual giving. The “nobody approached for support” stood at 31% which in effect means that despite an inclination to donate people were unable to do so as they were not reached by anyone.

2.3 Others

As part of the funding landscape we safely assume that CSR and Philanthropy are the drivers for the larger ecosystem. Though we also need to articulate that there are other sources or fine prints within the above two that are developing and should be looked at. These sources can be – incubations for ideas solving social problems, academic research as a tool, government supported programs with a niche focus. There is a rising need to understand how an ecosystem can be enabled for such opportunities to be accessible to the larger audience in a targeted manner.

3. Realities

The funding landscape is evolving with a need to better engage with the current socio economic realities leading to social issues in need of redressal. The funding contributions from CSR, Philanthropy, Individual giving, Grants etc have been increasing with each passing year.

Looking at the numbers from 2014-15 till 2020- 21, based on the filings made, the education domain received nearly Rs. 47187.68 crores, which amounts to approximately 37% of the total CSR expenditure. The health domain got 30% of the CSR expenditure amounting to Rs. 38011.49 crores. Rural development projects received Rs. 12,300 crores which accounted for 9.6% of the total CSR expenditure. Collectively the three domains got nearly 76.6% of the total CSR expenditure.. [Ministry of Corporate Affairs. June 2023.]

Private philanthropy grew 10% in FY 2023, to INR 1.2 lakh crore ($15 billion). This faster growth (vs. FY 2018–2023’s 5% annual growth) was driven by growth in family philanthropy (15%) and retail (12%). [India Philanthropy Report. 2024]

The understanding of the funding landscape has to be developed as we come up with –

1. Innovative solutions
2. Enhancing existing efforts

to solve the issues that we are facing as society. Over the next blog we will introduce the funding spread, rising interest areas and ecosystem enabling efforts.

Annexure

• Philanthropy in India (Candid)
• Corporate Social Responsibility. Government of India
• India Development Review. CSR
• Issuelab. 2021
• Social Impact
• Ministry of Corporate Affairs
• Indian Philanthropy Report. 2024