When Marico founder Harsh Mariwala decided to step down from day-to-day operations in 2014, he was already running Marico Innovation Foundation and Ascent to support entrepreneurship. His next goal was involvement in basic education and healthcare. Around this time, his daughter, Raj Mariwala, was also looking to enter philanthropy. She, however, was not interested in healthcare or education but mental health, having dealt with the stigma of learning disability during her student life. "I struggled through school not knowing I had learning disability," says Raj Mariwala, director, Mariwala Health Initiative. Though the idea of supporting mental health causes didn't excite her father much, he was not opposed to it either. "He acknowledged mental health was hardly getting funding and Indians were increasingly facing mental health issues," she says.
But the biggest challenge for those who work in this space is to get people to accept that they are facing a mental health issue. That is why she decided to be hands-on instead of merely signing cheques for NGOs. Not only did she talk to people from various sections of the society (sex workers, farmers, LGBTQ community members, gender-violence victims) and helped them accept their mental health concerns, she also decided to spend time with companies and government bodies to convince them to implement policies around mental well-being. She is also helping NGOs in the space raise funds and providing them technical know-how and marketing support. Mariwala Health Initiative has partnered with 33 NGOs for 37 projects in 20 states over past seven years.
Raj Mariwala represents the new generation of philanthropists who are moving away from traditional cheque-book philanthropy of the earlier generation. For example, it's no longer about building a school but also ensuring that the children learn from latest teaching methods. Not just that. It's also about collaborating with governments and NGOs to ensure that the initiative impacts as many children as possible. "New-age giving is all about making a change as opposed to just giving back to society," says Rishi Agarwal, managing director, FSG, which partners with foundations and companies to make a difference in people's lives.
"Earlier, givers were focused on building schools and hospitals, as access was critical. New-age givers have realised that access is not an issue any more and it's the quality of delivery that has to be improved. They are letting governments take care of access," says Deval Sanghvi, partner and co-founder, Dasra, which partners with family foundations and philanthropists to shape their vision.
These new-age givers are not necessarily part of legacy family foundations. While the group includes the likes of Mariwala or Rumana Hamied of Cipla Foundation, it also has start-up founders such as Zerodha's Nikhil Kamath and Nithin Kamath, Zomato's Deepinder Goyal, Ola's Bhavish Agarwal and Sirona Hygiene's Deep Bajaj. So, while Zerodha brothers' Rainmatter Foundation funds impact-driven start-ups by supporting NGOs and organisations that support climate change initiatives and create livelihoods, Goyal of Zomato intends to educate children of delivery partners through Zomato Foundation. Sirona Hygiene's Deep Bajaj is looking to alleviate 'period poverty' and get rid of gender inequalities. Agarwal's Ola Foundation is focusing on economic empowerment of women and financial literacy.
The Trigger
There has been considerable action in the social sector in the Covid-19 era. One reason is economic inequality created by the pandemic, which pushed close to 200 million Indians into poverty, but at the same time made the rich richer. Number of individuals with wealth of more than ₹1,000 crore rose 20% from 828 in FY20 to 1,000-plus in FY21 as their cumulative net worth rose 50% from ₹60 lakh crore to ₹90 lakh crore. Cumulative wealth of UHNIs in ₹50,000 crore-plus net worth bracket rose 80% compared with 45% and 30% rise in number of people in ₹10,000-50,000 and ₹1,000-10,000 crore brackets, respectively. Number of affluent households rose from 280,000 to 391,000, and number of HNI households from 5,000 to 8,000, between 2015 and 2021.
However, the good news is that a large number of rich want to give back to society. This is behind the popularity of initiatives such as Living My Promise (enables people with income of ₹1 crore and above to contribute to charity) and Young India Philanthropy Pledge (it encourages people with a net worth of over ₹1,000 crore to pledge money for charity). The net result is massive build-up of social capital. India's social sector expenditure has grown at 12% a year over past five years from ₹10 lakh crore to ₹17.5 lakh crore, as per Bain Capital-Dasra India Philanthropy Report 2022. It rose 20% in FY21. Most of this rise is due to government expenditure —public funds (Central and state) account for 93% spending, up from 90% five years ago. Past two years have also seen four times growth in ultra high net-worth individual (UHNI) donations outside the mandated corporate social responsibility (CSR) commitments.
The biggest problem in the world, says Nithin Kamath, CEO, Zerodha, is wealth concentration. "If wealth is concentrated with a few people, it won't be sustainable. We said wherever there is concentration, people have to do a lot more to give back. The society has to feel that wealth creation is for greater good. It's not right for us to keep money in bank in a country like ours where so many earn less than ₹100 a day."
Newer Strategies
But donating money is just a start. What sets new-age givers apart is their desire to make real change. Unlike the legacy givers, who signed cheques for causes (often for communities where they lived), the newcomers are more involved in decision-making. Indian philanthropists have started differentiating between outcomes and outputs, says Gaurav Gupta, partner and Asia head, Dalberg. "Instead of saying I have funded 100 meals, I am looking at nutritional outcomes for 100 children. There is more maturity in giving today." Dalberg is an advisory firm that enhances social impact of companies.
"Most new-age foundations have two-three staff members. They are agile and are, therefore, able to do much more," says Sanghvi. The focus is on creating playbooks for giving and replicating them across geographies. "The new-age funders are looking at smarter and economical solutions as well as new models such as mixing of grants with lending," says Naghma Mulla, CEO, EdelGive Foundation.
They are also taking up causes that are broader in scope. For instance, Kamath brothers' Rainmatter Foundation first started investing in impact-driven start-ups such as Solar Square (solar power), Zero Circle (trying to turn seaweed into plastic), Akshayakalpa (organic farming) and Organic Mandi. Kamath says he has never asked the founders about return on investment. The foundation also supports not-for-profit farming collectives such as Swayam and finds ways to showcase their produce on platforms of investee companies Akshayakalpa and Organic Mandi. The idea is to be cause- and platform-agnostic for supporting livelihoods across geographies. "One of our investments is open-source platform Frappe. Most not-for-profits don't have a tech stack for internal purposes. We customised it in such a way that it can be used free of cost," says Kamath.
Sanghvi of Dasra compares new-age givers with private equity players that invest in multiple businesses. When Amira Shah Chhabra, director, Harish and Beena Shah Foundation, took over her family (former owners of Signet Excipients) foundation some years ago, she preferred investing in Giving Circles (which covers livelihood generation, gender equality, health, education), created by Dasra, as she first wanted to understand how the development sector works. "We were able to work with 50 non-profits. We gave grants from ₹10 lakh to crores," says Shah. The wide range of causes she supported taught her that most issues are connected. "In education, you need toilets in school, and that, in turn, improves both sanitation and menstrual hygiene," she says. The Harish and Beena Foundation, started in '80s to fund education of children of employees, is creating a fund for taking up multiple causes.
Rumana Hamied, managing trustee, Cipla Foundation, says multi-cause approach is the future. "Givers have to overlook scale and measurement to make a real impact. Philanthropic capital is more flexible and subject to less scrutiny," she adds. While Cipla Foundation focuses on palliative care, Hamied also heads her family's foundation through which she supports vulnerable children. Her work includes getting girls back to school, mainstreaming disabilities and protecting children from violence and trafficking.
There are also philanthropists such as Deep Bajaj of Sirona, who focus their giving around their business. The company contributes ₹1 from sale of each unit to its foundation, which focuses on menstrual hygiene and gender equality.
Collaborative Approach
While new-age givers want to have skin in the game, they have no qualms about admitting they don't know much about the development sector and are happy to collaborate with NGOs and industry partners such as Dasra or EdelGive Foundation. "They are willing to look at multiple models such as running own projects or joining an NGO or a collaborative like Giving Circles. There is a lot of discussion around changing the system and more openness to partnering with governments and thinking about where policy can be impacted," says Neera Nundy, partner and co-founder, Dasra.
So, for an issue like mental health, which comes with a lot of societal stigma, Mariwala found it more effective to collaborate with organisations already working in the space. "Our first partner, for instance, was a national helpline, iCall, which was giving counselling in nine different languages. We helped them publicise. We also advised them to change to a toll-free number. We help partners with technical and marketing support. My top priority is to ensure they are well-funded."
EdelGive Foundation has launched a ₹100 crore Grow Fund to support 100 NGOs in 12 different domains. Mulla claims it has already managed to raise more than ₹70 crore from new-age philanthropists. "We told funders to be shareholders and monitor it the way they would track a mutual fund's performance."
However, Bajaj of Sirona says finding the right collaborators is a challenge. "If there are funders who want to support a cause like menstrual hygiene, I don't know where to find them. I go to the big ones already working on education and poverty."
The Big Guns
Larger foundations such as Tata Trusts, Adani Foundation or Reliance Foundation have also adopted an implementation approach as opposed to the traditional cheque-book philanthropy that many of them did earlier. Reliance Foundation, for instance, has contributed close to ₹1,200 crore in FY21-22 towards causes such as rural transformation, healthcare, sports, art and culture. The foundation not just gives grants but is also closely involved in implementation of the projects. The Adani Group has also committed ₹60,000 crore towards its foundation. "Most larger foundations are also trying to build best practices around philanthropy," points out Dalberg's Gupta.
While Reliance Foundation is the conglomerate's CSR arm, Tata Trusts is independent of the Tata Group's various CSR initiatives (every Tata company has its own CSR arm). According to the India Philanthropy Report 2022, family philanthropy is poised to grow 12-14% till 2026. But Indian givers still have a long way to go before they are able to rub shoulders with their counterparts in the US, UK and even China. Contributions (as percentage of wealth) by Indian UHNIs range from 0.1% to 0.15% compared with 1.2-2.5% in US, 0.5-1.8% in UK, and 0.5-1.4% in China.
Still, the rich have started taking giant steps towards systematic giving.