Ultra-high networth individuals’ (UHNIs) philanthropic giving eroded substantially to Rs 4,230 crore in FY22, compared to Rs 11,811 crore in FY21, according to the recent Dasra-Bain Philanthropy Report.

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The drop in donations was largely influenced by the Azim Premji factor. His contribution fell by Rs 9,000 crore because of the share buyback in 2021, which directly benefited the foundations.

Talking about the Dasra-Bain Philanthropy Report, Jishnu Batabyal, Partner at Bain & Company, said, "If you look at the overall ultra-high net individual and high net individual spending, it has kind of contracted from about Rs 11,000 crore to 4,000 crore this year. But that's a little bit misleading, because Azim Premji has actually enabled giving by enabling share buybacks which have benefited the foundations directly."

Leaving aside Premji, "the funding has actually come down by 5 percent. It was about Rs 4,050 crore last year, it's about Rs 3,800 crore this year, and that despite a 9 percent growth in the cumulative wealth of the HNI segment this year, he said.

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The cumulative UHNI net wealth in India increased by 9.2 percent last fiscal, with the top level of greater than Rs 50,000 crore wealth, which witnessed a 19 percent jump, the report stated.

Indian UHNIs donate substantially less across all wealth levels compared to the UK, US and China.

"As highlighted in the India Philanthropy Report 2022, Indian UHNIs could boost their total contribution by 8-13 times if they matched their counterparts in China, the UK, and the US. Amid the rising wealth of UHNIs in India, more individuals must step up their giving," the report said.

Neera Nundy, Co-Founder & Partner, Dara, said the biggest concern is that UNHI, high net-worth and affluent givers may not be really taking advantage of all the wealth creation that has happened this year.

"So they have gained riches on the back of right coming out of COVID. So one would hope that their philanthropy will match. But I think it's a lag, to be honest. Because if we look at our giving pie network, we are starting to speak to the network of 200 families that are actually telling us they can give more but they don't know where to give, they are underutilised by the end of the year. So there is a mismatch with where they want to give… so there's a role for us to play to unlock it," he said.

Growth in contributions by top donors has been moderate over the years, with a 7 percent compound annual growth rate (excluding Azim Premji) from FY20 to FY22. In comparison, the top donors' wealth has increased 24 percent and the Nifty50 has growth 25 percent, the report added.

"Given the decline in total donations and the overall increase in wealth in the last year, UHNIs’ giving as a percentage of net wealth declined," the report stated.

Looking at sectoral trends for the past three years, allocation has traditionally skewed towards education, with Azim Premji giving about Rs 16,000 crore towards education over FY20 and FY21, the report stated. "Even excluding Azim Premji’s contribution, healthcare and education made up 49 percent of UHNI giving in FY2021. In FY2022, too, education and healthcare accounted for 58 percent of total giving, while contributions to sectors such as art, culture, and heritage and rural development and livelihood enhancement dropped," it added.

Talking about where the philanthropic giving is going, Batabyal said, it is primarily still education and healthcare.

"Again one must remember that this was also partly a COVID year. So giving towards healthcare and disaster relief was actually quite natural. However, having said that, what we calling the now Gen givers, essentially, they have actually broaden their horizon. Apart from education and healthcare, which they will continue to fund, they are looking at avenues such as climate change, gender equality, diversity and inclusion, arts and culture as well," he said.

(Edited by : Shoma Bhattacharjee)

First Published:Mar 2, 2023 8:46 PM IST