Wealthy Indians shell out over 3% of income on donations
New Delhi: Wealthy Indians shelled out 3.1 percent of their total income on charitable donations in 2011 and more than half pledged to give even more this year, says a study by global business consultancy Bain & Company.
According to Bain & Company's 2012 India Philanthropy Report, charitable giving among wealthy Indians jumped last year to 3.1 percent of their total income, compared to 2.3 percent in 2010, with more than half pledging to give even more in 2012.
Donations by India's affluent as a percentage of their income, are however far behind their Western counterparts. In the United States, affluent residents give as much as 9.1 percent of their income (among the highest in the world) in donations. The survey showed significant charitable momentum building in India among all age groups.
"Two-thirds of all surveyed expect to increase donations in the next five years, with two in five saying they will increase giving by over 20 percent in that period," the report said.
The report noted that nearly four out of five of those surveyed said they were "novices" at charitable giving, and have less than three years of philanthropic experience.
Younger wealthy Indians, give a smaller proportion of their income at 2 percent, compared to 3.9 for their older peers. But almost 60 percent of the younger group plans to increase donations in 2012.
"India's young and wealthy have an especially strong commitment to giving back. We are encouraged by the emergence of the next generation of donors, who are even more committed to supporting this charitable culture as their wealth grows," Bain & Company partner in Mumbai and the report's author Arpan Sheth said.
Education remained the most popular cause for giving in India, followed by food and clothing and housing and shelter in the second and third positions respectively.
However, lack of accountability among charitable organisations, are one of the major hindrances that held back philanthropers from increasing their contributions. Other main obstacles include, an unsupportive tax system and lack of awareness regarding charitable options.
The global business consultancy's third annual report of charitable giving in India surveyed 400 wealthy individuals with more than USD 0.4 million in assets, excluding primary residence, consumables and collectibles. Overall, more than 60 percent of the survey group was under 40 years of age, more than one-third were 30 years or younger.