What has been the impact of family philanthropy in India?

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Asia’s richest man celebrated his birthday a little differently this year. To mark his 60th birthday, Adani Group Chairman Gautam Adani and his family, whose net worth is estimated at $98.1 billion by Forbes, have pledged to donate Rs 60,000 crore or 7, $7 billion to a range of social causes. The donation will be managed by the Adani Foundation, which is led by his wife Priti Adani.

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With that, Adani joins the ranks of billionaires like Mark Zuckerberg and Warren Buffett, who have committed much of their wealth to philanthropy.

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Philanthropist Azim Premji said it should set an example that entrepreneurs can try to live Mahatma Gandhi’s guardianship of wealth principle at the height of their business success. Indeed, the average age of donation in India is falling every year and now stands at 66 years.

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In FY21, Premji donated $1.3 billion or Rs 9,713 crore to charity. His foundation has an endowment estimated at $21 billion. The family of HCL Technologies founder Shiv Nadar was the second largest donor according to a 2021 Hurun India report.

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Adani’s pledge represents nearly half of what Bill Gates and Melinda French Gates donated to their foundation in 2021, while the former couple’s total donations are valued at $74.6 billion.

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Jamsetji Tata, who established Tata Trusts, is the most generous person of the last century, with total donations of over $102 billion in present value.

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Private donations in India come from four sources: foreigners, companies, individuals and families.

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CSR, family philanthropy and retail giving account for about 84% of all private giving, with foreign contributions making up the rest, according to the India Philanthropy Report 2022 by Dasra and Bain & Company.

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Family philanthropy globally accounts for approximately one-third of total private giving and is expected to grow at a steady rate of 13% per year through FY26, driven by rising wealth and an increase in the number of tech entrepreneurs .

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Family philanthropy has fewer constraints than other sources, allowing for a broader impact on the social sector. These donors have a greater capacity to innovate, influence public policy, build institutional capacity and experiment with new forms of financing.

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They can also go well beyond grantmaking, as most funders have deep, technical knowledge in their respective fields and have deep networks across functions and industries.

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But family philanthropy has its biases. Among the top three sources of private giving, CSR is the most widely distributed across all sectors, while family giving is mostly concentrated in education and health, although India lags behind in several other sectors. . India also lags behind on gender equality indicators than on indicators related to health and education.

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Similarly, funding is concentrated in Tier 1 cities.

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Adani’s donation will be used in the areas of health, education and skills development, with a particular focus on rural areas.

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India’s ultra-wealthy could potentially increase their donations by 8 to 13 times if they can match the donations as a percentage of wealth of their British, Chinese and American counterparts.

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Anant Bhagwati, Partner, The Bridgespan Group, says that over the next 5 years, family philanthropy could reach 40% of total private giving. Unlike CSR or retail, family giving can support causes that yield long-term results, he says.

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How the Adani family deploys its massive $7.7 billion gift is also key. While a good number of family philanthropists engage with NGOs through grantmaking, not all NGOs can absorb large-scale funding of the type offered by these families.

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Gautam Adani said three expert committees will be formed to formalize the strategy and decide on the allocation of funds, with a plan to add one or two more focus areas in the coming months. The Adani Foundation will need to nurture the right talent, further strengthen its institutional capacities, and develop strategies to drive change in targeted areas.

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