Growth of Private Philanthropy in India 2025

Private funding in India’s social sector is projected to grow annually by 10% to 12%. This growth is primarily driven by family philanthropy from high-net-worth individuals (HNIs). As of the fiscal year 2024, the total size of social sector funding in India is approximately Rs 25 lakh crore, which is about $300 billion. Public funding constitutes 95% of this total, while private funding accounts for around Rs 1.3 lakh crore, or $16 billion.

Current Landscape of Philanthropy in India

The India Philanthropy Report 2025 reveals that family giving makes up 40% of private philanthropy. This includes personal donations and corporate social responsibility (CSR) initiatives from family-owned businesses. The report indicates that ultra-high-net-worth individuals (UHNIs) contribute less to philanthropy compared to their counterparts in other nations. UHNIs in India give only 0.1% to 0.15% of their wealth, while similar individuals in the United States give between 1.2% to 2.5%.

Role of High-Net-Worth Individuals

HNIs and affluent givers are expected to drive the increase in private philanthropy. The report predicts an addition of over 100 million upper-middle and high-income households by 2030. This demographic shift will likely result in a modest rise in funds from the UHNI segment. Notably, the top four family-owned firms—Tata, Ambani, Adani, and Birla—account for around 20% of CSR spending by family-run businesses.

Trends in Corporate Social Responsibility

The CSR landscape is also evolving. Companies with a net worth of Rs 500 crore or more are mandated to allocate at least 2% of their average net profit to CSR activities. Compliance has increased, with CSR-compliant firms rising from approximately 12,000 in FY22 to about 15,000 in FY23. The report marks that 40% of family donations support gender equity, diversity, and inclusion initiatives, while 29% focus on climate action.

Growth of Family Offices

Family offices, which manage the wealth of HNIs, have seen growth. Their numbers surged from 45 in 2018 to 300 in 2023. These entities can play important role in channeling funds into the nonprofit sector. Structured services for family philanthropy can potentially unlock an additional Rs 50,000 to 55,000 crore, or $6 to $7 billion, in family donations over the next five years.

Future Projections

The future of private philanthropy in India appears promising. With a growing population of wealthy individuals and families, the potential for increased private funding is substantial. The report suggests that strategic services for family philanthropy could enhance contributions .

Questions for UPSC:

1. Critically analyse the impact of family philanthropy on social development in India.
2. What are the key differences in philanthropic practices between India and the United States? Comment on their implications.
3. Explain the role of corporate social responsibility in enhancing corporate reputation in India.
4. What are family offices? How do they influence philanthropic trends among high-net-worth individuals in India?

Answer Hints:

1. Critically analyse the impact of family philanthropy on social development in India.

1. Family philanthropy constitutes 40% of private funding in India, impacting sectors like education and healthcare.
2. It fills gaps left by public funding, especially in social issues like gender equality and climate action.
3. High-net-worth individuals (HNIs) are increasingly engaging in structured giving, enhancing strategic impact.
4. The growth of family offices indicates a trend towards organized philanthropy, potentially unlocking funds.
5. However, the overall contribution remains low compared to global standards, limiting its full potential for social change.

2. What are the key differences in philanthropic practices between India and the United States? Comment on their implications.

1. UHNIs in India contribute only 0.1% to 0.15% of their wealth, while their American counterparts give 1.2% to 2.5%.
2. Philanthropy in the US is often institutionalized with a long tradition of charitable foundations, unlike in India.
3. American billionaires like Buffett and Gates have public commitments to give away large portions of their wealth.
4. In India, family philanthropy is more personal and less formalized, affecting the scale and impact of donations.
5. The disparity in giving practices indicates a need for cultural shifts in India to enhance philanthropic engagement.

3. Explain the role of corporate social responsibility in enhancing corporate reputation in India.

1. CSR mandates require firms to spend 2% of average net profit, enhancing accountability and transparency.
2. Companies engaging in CSR can improve public perception and brand loyalty among consumers.
3. Effective CSR initiatives can differentiate companies in competitive markets, attracting talent and investment.
4. CSR activities addressing social issues can encourage community goodwill and mitigate negative publicity.
5. Growing compliance among firms indicates a shift towards responsible business practices in India.

4. What are family offices? How do they influence philanthropic trends among high-net-worth individuals in India?

1. Family offices are private firms managing the wealth and investments of high-net-worth families.
2. They provide structured support for philanthropy, helping families identify causes and manage donations effectively.
3. Growth from 45 to 300 family offices from 2018 to 2023 indicates increased organized giving among HNIs.
4. Family offices can unlock additional funds for philanthropy, estimated at Rs 50,000 to 55,000 crore.
5. They facilitate a shift towards strategic philanthropy, enhancing the impact of charitable activities in India.