India’s social and development sectors have seen a surge in funding over the last few years. There are several reasons for this, but among the most prominent are the increasing number of philanthropists looking to create impactful investments in our country. If there’s anything India’s young philanthropists will tell you, it’s that providing funds to organisations simply isn’t enough. Philanthropy is often mistaken for charity, but in truth it is an immersive, even riveting experience for those hoping to make a difference in the fields they are investing in.

Aditya Nataraj, CEO of Kaivalya Education Foundation and one of the country’s foremost philanthropists, began his journey of giving when Gujarat’s soil was strewn with debris from an earthquake that destroyed several schools in 2001, disrupting the education of hundreds of children. Nataraj worked to rebuild the schools, repairing the damage the earthquake had done, and working to restore the school’s facilities. In an interview with Wendy Kopp for Teach For All Talks, Nataraj cites this experience as being one that prompted him to place his resources in the education sector. While it may seem like Nataraj’s experiences are exceptional, this year’s Bain report puts philanthropists in four broad categories ( “the striving seeker,” “the professional partner,” “the capital contributor” and “the enlightened evangelist”) that all reflect the same firm resolve to improve the country’s development, and all work intimately with communities on the ground to achieve these goals.

The numbers are encouraging. A recent McKinsey report suggests India’s impact investments are likely to rise even further, hitting an estimated six to eight billion US dollars by 2025. The swell in funds has partly been prompted by government schemes such as the Swachh Bharat, and laws like the Companies Act 2013, which mandate that large firms donate 2% of their annual net profits to Corporate Social Responsibility. Even though the government continues to be the largest contributor to the development sector, Livemint says, “its share in the funding pie is declining steadily and its profile is being renegotiated as philanthropic foundations take on a greater role in driving development initiatives”. The rising number of High Net Worth Individuals (whose contributions to the sector have grown six fold) combined with this generation’s philanthropists is likely to translate the funds into actionable results, too.

In fact, consultants from the Global Impact Investing Network are positive that they will yield results that bring about change to the faces of poverty, gender inequality, mental health, the environment and the other multitude of causes that make India a favorable market for this kind of investment.

From start to finish, impact investing is a collaborative project that brings stakeholders from various rungs of society together. What this means is thinking and acting across political, economic, social and cultural spheres, and working with individuals and organisations outside of the corporate set up. Veteran philanthropists have observed that while funds are a problem, one of the larger, more urgent issues is the lack of effective management and strategy in not-for-profit organisations. While capital is useful to non-profits who seek aid, what is even better is management skills that corporates can offer to these ventures so that they can scale up and gain the attention they deserve. What results is a symbiotic relationship that bridges the gap between the corporate world and non-profits, mutually benefitting each party as they achieve their goals.

It involves a considerable amount of risk and tremendous courage, but returns (especially non-financial) have proven to be deeply rewarding to givers. The Bain report quotes Rati Forbes, director of Forbes Marshall Ltd saying, “I’ve hugely grown and developed as a human being through my philanthropy journey, and it’s very satisfying to witness the impact of it”. It becomes hard to measure returns that are not purely numerical, but what is tangible is the growth that these collaborative efforts nurture. Forbes’s philanthropic work has resulted in the creation of over 180 self-help groups for women and enrollment of 100 municipal schools in a programme that helps children enhance their reading and learning.

The reasons for taking part in such a venture are innumerable: it only takes a few steps outside of our homes to see that too much of our country is steeped in poverty and inequality. Several givers believe philanthropy is an obligation that the wealthy have towards those who are less fortunate. But perhaps another compelling reason is the challenge it brings, demanding that skills you may very well possess be applied to a context outside of your expertise. It is humbling to be in an environment that is constantly working to improve the state of affairs in the country, making decisions that have political, social and economic implications. And when the combination of investment, strategy and compassion is just right, it could yield results that transform the lives of thousands across the country.

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