Of all the categories of private philanthropy, the government mandated Corporate Social Responsibility (CSR) spend by Indian companies has shown the most consistent growth and reaches out to most social sectors, the just released India Philanthropy Report 2022 says.

The CSR, driven by the 2% (of the net profit) mandate, has grown from ₹10,066 crore in fiscal year (FY) 2015 to ₹23,665 crore in FY21, a 15% annual growth in the past seven years, the annual report brought out by global consultancy Bain & Co and strategic philanthropy organisation Dasra points out. CSR's share in the overall private donations – which includes family philanthropy and community (retail) donations – has grown from approximately 12% in fiscal year (FY) 2015 to 23% in FY 2021, the report says. "Riding on rapid economic growth, formalisation, and more companies coming under its umbrella, CSR contributions are expected to grow at 19% annually, with its share expected to reach about 32% of total private giving by FY 2026," the report estimates.

The CSR funds have been donated toward more than 20 causes and 70% of the total spending during FY 2018-21 went to education, healthcare, rural development, environment sustainability, and poverty, the report notes. It also says that CSR spend scored above other private philanthropy spends as approximately 60% of family philanthropy and retail (community donations) went to education and healthcare alone during this period.

Despite growth in their net wealth, ultra-high-net-worth individuals (UHNI) and high net worth individuals (HNIs) contributed less towards philanthropy as a percentage of their total wealth in 2021. Total HNI donations grew at a CAGR of 6%, from around ₹16,000 crore in FY15 to approximately ₹22,000 crore in FY21, the Bain-Dasra report said.

Meanwhile, the total retail (community level, unorganised) donations grew at a CAGR of 5%, from ₹21,000 crore in FY15 to ₹28,000 crore in FY21. "Growth has been driven by upward mobility among households toward higher income groups between 2005 and 2018, with the majority of retail giving undertaken by high-income and upper-middle-income groups, both of which grew at 10% CAGR between FY 2006 and FY 2019. Generally, an increase in retail donations is a function of rising income and the number of donors," the report points out.

According to the report, a major reason for the decline in the philanthropic contribution of UHNIs as a percentage of net wealth (excluding Azim Premji) is the steep increase in the wealth of UHNIs following Covid-19. "The number of individuals with wealth of more than ₹1,000 crore increased by approximately 20%, from 828 in FY 2020 to more than 1,000 in FY 2021, while their cumulative net worth increased by approximately 50%, from approximately ₹60 lakh crore to approximately ₹90 lakh crore in the same period. This trend was even more evident within the top wealth bracket, as the cumulative wealth of UHNIs in the more than ₹50,000 crore bracket rose by approximately 80% compared with an approximately 45% and approximately 30% rise in the ₹10,000 to ₹50,000 crore and ₹1,000 to ₹10,000 crore brackets," the report points out.

The philanthropic contributions of Indian UHNIs and HNIs have been in the range of 0.08 to 014 % of their net worth, lower than Chinese (1.41%), UK (1.82%) and the US (1.19%). The report said that Indian UHNIs could potentially increase their donations by 8 times, to ₹90,000-₹100,000 crore, if they can spend the same percentage of wealth as that of their UK and Chinese counterparts, and by 13 times, to ₹160,000-₹170,000 crore, if they can match their US counterparts.

"Family philanthropy is becoming more visible and slowly shifting away from charitable work in the form of funding food, education, and scholarships to newer concepts and deeper focus areas. This shift is the result of the higher risk appetite of NowGen philanthropists, who are more entrepreneurial, socially aware, and innovative in their approach. It is critical to provide hands-on support to this promising cohort so that they can spearhead India's journey to achieve United Nations' Sustainable Development Goals (SDG)," Arpan Sheth, partner, Bain & Company, said.

Overall, the report estimates that the total private philanthropic giving in India will grow 12% annually to touch ₹1.8 lakh crore by FY26.

Follow us on Facebook, X, YouTube, Instagram and WhatsApp to never miss an update from Fortune India. To buy a copy, visit Amazon.