March 16, 2021

Private philanthropy in India up by 23 percent in FY20: Dasra-Bain report

Philanthropy & CSR: Funding by individual philanthropists increased by 42 percent from INR 21,000 crore in financial year (FY) 2019 to INR 30,000 crore in FY 2020. According to the India Philanthropy Report 2021, co-created by Bain & Company and Dasra, the bulk of this increase came from family philanthropists whose contributions nearly tripled over the year to INR 12,000 crore in 2020.

In FY 2020, private-sector funding—which stems from four sources including foreign, corporate, retail, and high-net-worth individuals (HNIs) or families—totalled INR 64,000 crore, and 20 percent of this came from family philanthropy. Nearly 47 percent of family giving went to education and 27 percent went to healthcare, while rural development received just four percent.

Foreign funding—especially post amendments to the Foreign Contribution Rules Act (FCRA) in 2020—has shown no growth at INR 16,000 crore; its share of overall funding falling from 31 percent in FY19 to 25 percent in FY20. In the case of corporate social responsibility (CSR), at INR 18,000 crore, the share of domestic companies in total private philanthropy declined by a percentage point to 28 percent.

The report also points out that the corpus available for CSR is likely to decline by five percent following a reduction in profits earned by corporates due to COVID-19. What will compound this situation is the shift in CSR money moving away from traditional nonprofits to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM-CARES) Fund. Between 2014 and 2019 CSR giving had grown by 17 percent.

Read this study that offers big philanthropy a framework to understand the risks and unintended consequences of their funding decisions.


May 20, 2021

Home Ministry extends validity period of FCRA registration certificates

Fundraising & Communications: The Ministry of Home Affairs (MHA) has issued a circular extending the validity of FCRA registration certificates to September 30th, 2021. This applies to all FCRA licences that have expired or will expire between September 29th, 2020 and May 31st, 2021. The decision to extend the deadline has been driven by the exigencies arising from the COVID-19 situation.

FCRA refers to the Foreign Contribution (Regulation) Act 2010, which permits charitable organisations based in India to raise funds from foreign sources.

The order also clarified that nonprofits that have already opened an account and have the requisite permission to receive foreign aid, can henceforth receive it only in these newly-opened accounts.

The FCRA law was amended in September 2020 to include a clause that mandated that all nonprofits receiving foreign aid must necessarily open an account in State Bank of India’s New Delhi Main Branch. The government had initially set the deadline for this account opening as March 31st, 2021; it later extended it to June 30th, 2021 after several nonprofits argued in court that there had been delays because necessary approvals from MHA had not been received.

Several organisations have not been able to receive foreign funds during the crisis caused by the second wave, and this has impacted their COVID-19 relief efforts. Relaxing the foreign funding rules could significantly help organisations ramp up their operations to help individuals, supply critical healthcare equipment, and respond to communities in rural areas.

Read this article to know how amending the FCRA can have unforeseen implications.


May 20, 2021

Corporate spending on oxygen support and medical equipment now counts as CSR

Philanthropy & CSR: The Ministry of Corporate Affairs (MCA) has issued a circular that allows corporate spending on health infrastructure for COVID-19 care to qualify as corporate social responsibility (CSR) expenditure.

This includes setting up medical oxygen generation and storage plants, manufacturing and supply of oxygen concentrators, ventilators, cylinders, and other medical equipment to counter COVID-19.  

The announcement comes at a time when all efforts are being directed towards expediting efforts to support the country’s healthcare infrastructure.

According to the circular, companies can now undertake projects and activities in collaboration with other companies using CSR funds. Additionally, they can contribute to specified research and development projects, as well as publicly funded universities and certain organisations that conduct research in science, technology, engineering, and medicine.

The government had earlier clarified that setting up makeshift hospitals and temporary COVID-19 care facilities would also be considered a CSR activity. Rajesh Verma, the Corporate Affairs Secretary, has requested businesses to consider converting vacant office buildings into COVID-19 facilities to cater to the rapidly increasing caseload.

Read this article to understand why media attention on COVID-19 deaths due to lack of oxygen in big cities has skewed donor priorities.