As someone who spends their working days (and the hours either side) thinking about India or directing strategic capital to high-potential social entrepreneurs in the sub-continent, I feel I have to respond, albeit a little tardily, to the rhetoric in the press over the last few weeks about the UK government’s international development budget for India. No matter what we think about the cuts and the comparative spend on a country with ‘countless millionaires’, at the end of the day doesn’t this have to come down to human lives?
We can dig up the ‘social versus the materially poor’ argument – ‘weren’t the UK rioters last summer all running around in £100 trainers and organizing their crimes over smartphones, despite claiming to be deprived?’ But I personally believe that we have to think beyond the comparisons, beyond our social services and our cuts, and try and position ourselves as global citizens. On Radio 4 the other morning a businessman was described as ‘passionately pro globalization’ – if we are going to call ourselves that, we have to be passionately pro a global approach to human welfare, human development and human survival and think beyond our national borders.
72% of the world’s poor live in middle-income countries, not the poorest states – a major shift that has happened in the last 20 years. Does that mean that we should abandon them? How can the Indian government, which has one of the worst track records in the world for successfully collecting tax revenues, be expected to spend that much more on its poverty alleviation programmes? I don’t pretend to support India’s space programme. However I can see why as a country they have to remain globally competitive and be taken seriously on the global stage – hence their own increased international aid budget. Everyone has been pretty open about how closely linked the UK’s DFID budget is to soft power. India has to demonstrate its own soft power.
The solution, as I see it is, that we continue with development assistance within a strict timeframe, and invest in developing philanthropy within India. If we are working to a tight timescale in terms of reducing international funding, we need an exit strategy (because, let’s be honest, we won’t have come even close to solving the issues). That exit strategy should be a large, nimble, strategic flow of capital from within the country. And how will this be possible? Investing NOW in developing philanthropy.
I took part in a fascinating series of discussions a few weekends ago at Ditchley Park, and one of the key things addressed was the role of private philanthropy in the future. I was there to give the India perspective, and I know first-hand from 10 years working in India what the role of private philanthropy should be, and how different it is from corporate and government engagement. The Indian government is not in a position to allocate funding to innovation, risk-taking pilots, demonstration of effectiveness, etc. It can only ever engage when a programme has demonstrated its effectiveness at scale – and scale in India means big numbers! Private philanthropists have the flexibility, nimbleness and risk-taking appetite to support social development at a critical stage when government is too huge and corporates are too slow or self-interested to engage on the right terms.
If a proportion of the millions of dollars and pounds heading to India was allocated to organizations working to build local philanthropy, then the outlook for critical programs looking at things like malnutrition, sanitation, clean water and child trafficking would be far more positive. Many of these issues are still very reliant upon international funding. However, we are seeing that India’s HNWI community are now hungry to learn more about how their funding can play a role in equitable growth. Dasra’s Indian Philanthropy Forum in Mumbai (20-21March) will bring a number of previously underfunded, culturally sensitive and internationally dependent areas in front of a crowd of 200 of India’s wealthy business leaders, and the discussion will be about how a collaborative approach can be deployed to unlock substantial funding and social capital to address such problems.
Indian philanthropy has been knocked in the past as too little and too religiously driven. However, role models such as the Tatas have been around since the Rockefellers, Carnegies and Rowntrees. Such substantial philanthropy is, however, perhaps off-putting to would-be philanthropists who see the Tatas as unattainable role models. The majority of foundations are set up as operational entities, delivering their own, often duplicative, small-scale programmes. Social entrepreneurs have found it hard to raise local funding, and a key barrier has been the lack of trust in the non-profit sector. A strengthened intermediary sector is working hard, and could do more if supported, to improve the efficiency and effectiveness of NGOs and broker improved relations and funding flows to the best in class organizations.
Shiv Nadar, a high-profile philanthropist in India, spoke to students at LSE a couple of weeks ago about his philanthropy – he mentioned that he, like many of his contemporaries, felt that when they first made their money post-liberalization, it was too early for them to give. ‘We were not confident in our own wealth’, he said, and felt that it may disappear as quickly as it was made. But the fact that philanthropy is in the news in India – not just once but many times a week – leads me to believe that we are at one of those tipping points; the tide has changed and confident wealth is now more confident about philanthropy.
If we can persuade some of the development assistance coming India’s way to be invested in building private philanthropy, then we can pacify the fears of Daily Mail readers and allow the UK government to reduce its funding in India a little sooner. As it stands, however, that assistance is still required and the burgeoning intermediary sector requires more support!
Alison Bukhari is director of investor relations at Dasra