India's social sector calls for more corporate funding and tax incentives for giving

MUMBAI, India, Aug. 29, 2024 -- The Centre for Asian Philanthropy and Society (CAPS), GuideStar India and the Centre for Advancement of Philanthropy (CAP) collaborated to present India's performance on the Doing Good Index 2024 report. The biennial study highlights the policies and incentives that can maximize philanthropic giving and foster a thriving and effective social sector. In 2024, India maintained its position in the 'Doing Okay' cluster, unchanged since 2018, revealing areas of strength as well as opportunities for India to further nurture its social sector.

"There is a profound trust deficit, and it is getting more serious," said Dr. Ruth Shapiro, CEO and Co-Founder of CAPS, "In fact, 44% say they are trusted by society, which is down from 2022 when 55% felt that way. Additionally, only 26% say they are trusted by government, which helps us to understand the increasingly stringent regulatory environment. We need to do more to build trust."

"Wealth in India is growing, and encouragingly, we are seeing private philanthropy – especially family philanthropy, retail giving and CSR – growing alongside it," said Pushpa Aman Singh, Founder of GuideStar India, "Domestic philanthropy has a real potential to help tackle social problems in India, and the social sector wants to see continued support from the government through enabling regulations. The Social Stock Exchange is a good step by the government to promote domestic private philanthropy, but it needs continued nurturing."

"The regulations governing India's social sector have seen a number of changes in the past few years, including changes to the income tax regime, which have made sub-granting increasingly difficult for grantmaking foundations," said Noshir Dadrawala, CEO of Centre for Advancement of Philanthropy (CAP), "For social sector organizations in India, keeping up with the changing regulatory landscape is not easy."

India's performance on the Doing Good Index 2024

1.  The role of social sector organizations remains important

  • 69% of organizations in India report that the number of beneficiaries they reach and demand for their services has increased in the past 12 months, while 76% report increased demand for their services or products.
  • 76% of social sector organizations in India feel optimistic about their organization's future, and 69% feel optimistic about the social sector as a whole.

2.  The use of digital technology by the social sector in Asia is on the rise, but some organizations need more support

  • Social sector organizations in India are increasingly utilizing digital technology. 81% use digital technology to carry out their work, with 99% intending to increase their use of digital technology in the next two years.
  • While 89% of organizations in India have sufficient access to the Internet (above the Asian average of 84%), just 52% report having sufficient access to computers and tablets for their staff.
  • Social sector organizations are insufficiently protected against digital threats. Just 23% of surveyed organizations in India have a cybersecurity plan, and only 21% have undertaken staff training to help prevent cyber-attacks.

3.  Government continues to send mixed messages on social sector regulations 

  • India's registration process for social sector organizations requires two clearances and takes around 125 days, comparable to the Asian average of three clearances and 123 days.
  • However, laws pertaining to the social sector are not easy to understand, with 67% of organizations in India finding it difficult, higher than the Asian average of 55%.
  • On a positive note, 72% of social sector organizations in India believe that social sector laws are generally enforced, above the Asian average of 63%.

4.  Funding to the social sector has remained mostly unchanged 

  • Funding from domestic sources—individuals, foundations, and companies—remains the most important source of funding, making up 48%, by proportion, of an Indian organization's budget, compared to the Asia average of 42%. Nevertheless, most social sector organizations in India (80%) believe domestic funding is low.
  • India's Foreign Contribution (Regulation) Act (FCRA) continues to place significant pressure on social sector organizations that receive foreign funding. Obtaining the necessary approvals to receive foreign funding takes an average of two years, with increased scrutiny making it more difficult for applications to be approved.

5.  Companies are engaged but there is room to do more 

  • In India, 55% of organizations receive corporate funding, on par with the Asian average. Corporate funding makes up 23% of an average organization's budget, up from 16% in 2022.
  • 67% of social sector organizations in India work with corporate volunteers, slightly higher than the Asia average of 63%.
  • India stands out for its progressive CSR requirements. Qualifying companies must allocate 2% of pre-tax profit to CSR, resulting in a significant uptick of corporate funding for social good.

Download the Doing Good Index 2024 here and visit the interactive microsite.

The Doing Good Index 2024 

The Doing Good Index studies the regulatory and societal environment in which private capital is directed toward doing good in Asia. Now in its fourth iteration, the Index identifies the policies and incentives that can drive private capital to the social sector and considers how stakeholders can build stronger, more trusting connections. It is an evidence-based resource for policymakers, philanthropists, academics and nonprofit leaders, offering in-depth insights and best practices to increase and enhance philanthropic giving. The Doing Good Index 2024 surveyed 2,183 social sector organizations and 140 experts across 17 economies: Bangladesh, Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Chinese Taipei, Thailand and Vietnam. This iteration of the report also includes a special thematic section on the impact of digital technology on Asia's social sector.

About the Centre for Asian Philanthropy and Society (CAPS) 

Established in 2013, the Centre for Asian Philanthropy and Society (CAPS) is a uniquely Asian, independent, action-oriented research and advisory organization, committed to improving the quality and quantity of philanthropic giving throughout Asia. Our mission is to improve the social investment sector in Asia by researching and advising best practices, models, policies, and strategies that can contribute to positive system change. More information on CAPS research and services is available at: http://caps.org/ 

About GuideStar India

GuideStar India enables greater giving by enhancing trust and transparency. It is India's most exhaustive source of NGO information with its NGO information repository http://www.guidestarindia.org, illuminating the work of India's civil society and serving as the backbone for India's philanthropy ecosystem. GuideStar India enhances the discovery, visibility and credibility of Non-Governmental Organisations (NGOs) by making information on more than 12,000 NGOs accessible in the public domain. GuideStar India's certification of NGOs is considered the gold standard for NGO due diligence in India. Its Platinum, Gold and Silver Certified NGOs cover diverse thematic areas and work across India. GuideStar India equips policy makers, regulators and changemakers with information and insights to drive social impact. Learn more: https://guidestarindia.org/

About Centre for Advancement of Philanthropy

Centre for Advancement of Philanthropy (CAP) is a Mumbai-based support organization, established in 1986 with a mandate to be a credible and comprehensive resource on charitable activity in India. CAP's vision is to build a legally compliant, well-governed, empowered philanthropic sector in India. CAP offers complete compliance advisory to nonprofit organizations, enabling them to be compliant in every respect, in the following areas – Legal, Fundraising, Board Governance, Human Resources, Volunteer Management, Strategy, Communication & CSR Compliance. Learn more: https://capindia.in/about-us/

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