Making every penny count

Donors are giving more thought to selecting worthy causes and organisations to donate to

On the face of it, giving may seem simple — that is, if you are willing to do so. But walking the talk may not be a breeze for discerning donors who want to make every penny they give, count.

Donors are moving away from ad hoc giving. The well-to-do are now bringing more thought and structure into philanthropy.

Why give?

“Philanthropy is now creeping into conversations between HNI clients and their wealth managers. Many of the families want to stand up for something. They want to set up family foundations and consider giving as part of succession planning”, says Vidya Shah, CEO, EdelGive Foundation. She adds that examples set by corporate leaders, such as Mihir Doshi, Managing Director and Country Head at Credit Suisse and a Board Member in United Way, who are actively involved, is helping raise awareness.

The thought is more pronounced in the young who are more vocal says Shiv Gupta, Founder and CEO, Sanctum Wealth Management. “They want to be more involved, and do it on a larger scale”, he notes. “There are role models such as Azim Premji, Shiv Nadar, N R Naryana Murthy and many others now. They create aspirational objectives and stand as symbols for others to follow”, he says.

What causes to support?

Often, donors are happy to give to a wide variety of causes that may not be linked. Disaster relief is a topical one and there are big cheques written in times of need. Education and skill development are usually high on donor’s list. Healthcare and issues relating to children also feature as popular causes.

“Raising funds for spiritual and religious purposes are considered easier; people are convinced more easily to give”, says A L Rangarajan,Program Manager - India Literacy Project, a non-profit organisation. Gupta notes that lately, driven by topicality and media attention, there is good interest in sanitation, with many contributing to build toilets in schools.

Often, donors may be motivated to give back to the town they came from. The charitable trust run by P N C Menon, founder of property development firm Sobha, has adopted two villages in Palakkad district in his home State of Kerala. About 2,500 poor families in these places are given education and medical facilities.

It may be good to go beyond the popular themes, says Pradeep Mahtani, CEO, HelpYourNGO. “Issues relating to the elderly, patronising art, support for people with disability and focusing on governance are some themes that would be worthy”, he suggests.

Who to give?

HNIs that run a foundation may have staff to evaluate individual beneficiaries or non-profit organisations before funding. Individuals are turning to family offices, organisations such as Dasra and online platforms to widen their reach. Participants say that larger NGOs such as Akshaya Patra, Magic Bus and Teach for India attract funds while smaller ones are unable to reach out cost effectively to donors.

“Family offices can play a role in identifying worthy cash-strapped NGOs. It is sort of like picking a good small-cap stock”, says Rajmohan Krishnan, MD, Entrust Family Office Investment Advisors. He says that Entrust works with a network of non-profits, social venture funds and individuals active in philanthropy to identify organisations and build a relationship before it is recommended to clients.

“HNIs are going beyond references from their friends to reach out to NGOs”, says Mahtani. The organisation has a list of 650 NGOs and recommends 170 based on their assessment and comfort in working with them. Donors can short-list based on their criteria and HelpYourNGO arranges visits and helps with feedback report. Other facilitation platforms include GuideStar, Sattva and GiveIndia.

“Finding market based solutions in areas such as education, health and sanitation is a thought that is emerging”, says Shah. She cites Aravind Eye Care as an example of a good social enterprise model.

How to give?

Donors may limit their giving to cash or also be generous with their time. Krishnan says that some HNIs are very involved and either have their own trust or take up Board position in the ones they are actively working with.

Once a year donations are a good way to give regularly. “We work with clients to allocate funds systematically and give say 10 per cent of the annual returns”, he says. Rangarajan says that the non-profit does local fund-raising through annual banquets in cities such as Bengaluru, Hyderabad and Chennai. Many of the donors also actively participate in scholarship and other programmes, he notes.

Those who want to give regularly, without the hassle of having to remember, have many new avenues. For instance, HDFC Debt Fund for Cancer Cure, started in 2011, is a three-year closed ended scheme that allows investors to donate either half or the entire dividend proceeds to the Indian Cancer Society (ICS). The donations are used by ICS for the treatment costs of needy cancer patients, after thorough due diligence by a team of doctors and approved by Governing Advisory Council.

Organisations such as HelpYourNGO help create fund utilisation report for individual donors. “In the initial years, donors stopped with writing a cheque. But now HNIs do not mind travelling to see and understand the work”, says Mahtani.

Read the rest of this article by Signing up for Portfolio.It's completely free!

What You'll Get





MORE FROM BUSINESSLINE


 Getting recommendations just for you...
This article is closed for comments.
Please Email the Editor