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Do Indians donate enough?

Do Indians donate enough?

Recent surveys such as the “World Giving Index” and Bain Consultancy’s report on charity indicate that per-capita, Indians are among the least likely to donate. Given the fact that India is still a deeply poor nation, this fact by itself does not indicate much. Another fact however, is likely to have larger implications: Charitable giving amounts to between 0.3%-0.4% of the GDP, comparing unfavourably with the United Kingdom at 1.3% and the United States at a generous 2.2%. Several facts are put forth for Indian’s reluctance to donate. For many, credibility is an issue. India has an extremely large number of NGOs, and transparency and accountability are not always on the agenda for these. Another reason put forth indicates that many Indians like to donate to religious shrines. Business communities specially like to donate heavily to religious institutions. Though some of that money subsequently gets invested in charitable activities such as schools and medical care, a large portion of such donations are also diverted to the operational and capital expenses of the temple complex itself.

Other explanations indicate that many are put off by what they perceive to be inefficient charities. For example, Oxfam India is known to spend 8% of its total income on fundraising and administrative expenses. This figure is much larger for some other charities. Lack of transparency in this regard can also act as a disincentive. The Bain report points out however, that Indians donate informally as well. These informal donations do not show up on income tax returns or government records; they may include giving away clothes to the domestic help or other such small informal donations that could add up to a substantial amount at the national level.

While there are incentives in place to encourage formal cash donations (tax exemptions), there is still a lot that can be done with regard to informal non-cash donations. Traditionally, these goods are given to the domestic help or to the poor in the neighbouring area. However, this may not perhaps be the best usage of these resources. Larger charities generally do a more efficient job of allocating these scarce resources among those who would need them the most. This is essentially because they have access to a larger pool of both resources and the needy who require these, thus allowing for a better match-up between the two.

To encourage the channeling of these informal donations to the charities that can utilise them efficiently, CareforBharat presents an information and logistic channel that allows a prospective donor to browse through charities anddonate at the click of a buttom from the comfort his/her home!

Browse through our website for more details.

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