Sandeep Sharma & Puja Biswas
Founder/NGO Partnership Officer
The simple act of ‘giving’ has been with humankind since the dawn of time. As far back as recorded history of human civilization, many ancient cultures had the practice of levying a tax to help out the impoverished. The word ‘philanthropy’, however, first appeared 2500 years ago in a Greek play. The word is a combination of two Greek roots: Phil (to love) and Anthropos (Human). From ancient Greek and Roman civilizations through the evolution of cultures across the globe the interpretation of the word has varied over time. But throughout this evolutionary journey it has always retained at its core the idea of believing in human potential and investing in that. Fundraising can be conceptualized as harnessing philanthropy for a certain cause. The first recorded fundraiser was organized by Harvard University in 1643 in America.
The history and evolution of fundraising in India can be defined as a shift from ‘charity’ to ‘change’. From ancient times it has gradually made its way through changes in cultural contexts to now represent the backbone of delivery of essential social services to as well as advocacy for underprivileged population. Now we see it moving toward a direction of becoming catalyst for social change.
Giving in India stems from the charitable impulses intrinsic to all religions practiced in the country. Thus fundraising has been concentrated around places of worship, offering support to those who need since ancient times. Subsequently, Christian missionaries and Buddhist monks have to an extent, organized and institutionalized such charitable efforts in alleviating suffering and poverty. Fundraising has also been part and parcel of the freedom movement in our country where people have known to contribute material wealth for the cause of independence. Especially Gandhian philosophy introduced the idea that giving funds, or philanthropy, not just for immediate relief to alleviate suffering but a revolutionary contribution to create change. Later, industrialization had brought in its own colours to the way organized giving was shaping up. Especially with large industrialist families like the Tatas, Birlas Godrej etc taking part in organized giving to specific causes.
Post-independence days saw the emergence of the social sector as a third sector working in collaboration with the government and the private sector. The voluntary sector was creating a mechanism to address the needs of the underprivileged. USA based and European philanthropic organizations also came forward to enrich a budding social sector in a new democracy, and established a major avenue for fundraising that the social sector is vastly dependent on even today. With the economic liberalization in the 90s India also witnessed an unprecedented proliferation of charitable organizations.
The late 90s and early 2000s also saw a variety of technological advances that ultimately led to a wave of online fundraising. The first ‘Donate Now’ button was introduced in 1999 in a project by the Tides Foundation. Other significant technological advances also contributed to a shift in nonprofit management and progress in online fundraising, for example email marketing tools were introduced in 2001, something still heavily used for fundraising from individuals today. Launch of WordPress (a platform 57% non-profits still use today to manage and display their content) as well as different social media platforms increased the reach for nonprofits. Globalization also meant best practices around the world in technology for fundraising were being adapted to India; Crowd Funding platforms for example, having gained the popularity in USA in the 2000s, first made its appearance in India in 2012.
Further down history, a relatively recent milestone in the sector of philanthropy in India is the Companies Act (Amendment), 2013 which mandates corporates, that fulfil certain criteria, to spend 2% of their net profit for public good. Before this corporate houses like Tatas, Birlas etc have been implementing Corporate Social Responsibility activities and funding the NGO sector, but this is the first time this was mandated and codified, opening up opportunities for fundraising from corporates for the voluntary sector.
Thus, the current picture of fundraising in India is as diverse as it is dynamic. The shift towards high impact projects that bring in real change has led to more formalization and professionalization in the sector, especially when it comes to raising funds from institutes. Subsequently, the advent of the digital revolution has brought in transparency, easier tracking of donors as well as data analysis in the picture. In the same vein it has widened the reach of fundraising for any social sector project and has opened the doors for more individual funders through retail fundraising. Causes have been diversified to include many systemic problems and a solution based approached has slowly been adapted instead of immediate response.
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Type of Funding |
What |
How |
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Institutional Funding |
Grants made by philanthropic foundations and trusts; they usually have specific thematic focus under which they fund projects that are usually extensive, spanning 3 to 5 years.
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To effectively fundraise for and implement a project under an institutional grant, a nonprofit would need a project proposal writer who understands their program and its value proposition very well. They would also ideally need to:
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CSR Funding |
Grants under Corporate Social Responsibility that usually span a shorter time period (1 to 2 years on an average) Another thing to emphasize is that this type of funding more often than not focuses on service delivery and demonstrable and quantitative impact that can be calculated short-term
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To find the right companies to approach for CSR funding, nonprofits need to map out the landscape of corporations that they can approach and the sectors that they typically support.
CSR funding works well for programs (or program aspects) that are flexible in terms of geography
Corporates often look for volunteering opportunities for their employees
They favour programs that can demonstrate, very simply, the change made at an individual/on ground level.
A lot of corporates like to set up programs in the vicinity of their own site offices or factories
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Family Foundations |
Grants from family foundations are also aimed at longer projects
But these collaborations go beyond grants, these contributions often show great flexibility. Additionally, these funders often come with extensive technical knowledge in their respective fields |
It helps to map out such wealthy and philanthropically inclined families (with existing foundations) for the initial outreach
Further, it is good to keep in mind that such grants are often concentrated in and around a few cities
More importantly, it is imperative to align the projects and the funding ask to the causes and values held dear in the families
Potential for growth in family philanthropy is huge, if unlocked it can transform the overall picture of fundraising |
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Grants from High Net Worth Individuals |
Funding that takes the form of moderate to large donations from one individual who is convinced about the cause, the project and the people involved.
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The key aspect here is to map HNIs (preferably, offline via referrals), understand their interests and funding priorities, and try and get a meeting with them.
Building trust and forging a deep relationship is time consuming but once it’s done, these funders could be convinced to fund innovation within the organization thus the development of new projects and systems could benefit from such funding.
Cultivating relationships with HNIs needs is usually done by the head of the organization with support from people with excellent interpersonal skills and a deep understanding of the programs
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Retail Fundraising |
Relatively small sums of money from a large number of people; it is done by speaking to several people a day and convincing them to join a particular community of givers. (This usually requires a certain level of investment on human resources)
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This kind of fundraising, the way it has been practiced so far in India, has been resource heavy.
Nonprofits usually employ:
The size of the team needed depends on the investment that is possible for any particular nonprofit. Traditionally, bigger organizations with the resources would have about 10 street fundraisers spread across 5-6 cities, along with a communications and data team to support them.
Given the large investment required, the way to estimate the value of retail fundraising is not through the return on investment but instead, through the Life Time Value (number of donors x average gift size) it provides. While expensive initially, the cost to set up this kind of fundraising is often recovered.
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Digital Fundraising |
Fundraising that happens by leveraging technology and digital mediums. This works with the assumption that the organization is able to create powerful campaigns that tell moving stories that can get people to take action
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In terms of resources, it usually requires a creative content writer who can write engaging copy and a digital marketing team that can push these messages out on platforms like social media. |
This image of the fundraising landscape presented above, however, has been through a churning in recent years. International funders who had once supported advocacy and right based newer thematic areas are being asked to roll back their contributions. On the other hand, the trickling down of funds to smaller grass root NGOs from midsized NGOs within the development sector had been halted with the FCRA amendments. In general, single donor dependency among many organizations have been long observed. Uncertainties and restrictions around FCRA has since opened up the discussion regarding the sustainability of many NGOs. There is an undeniable need for nonprofits to diversify their domestic funding sources.
On the other hand, the pandemic has created funding crisis for NGOs globally. The economic crisis triggered by the pandemic limited donors’ capacity, causing NGOs to experience dwindling voluntary income. Primarily it had also meant a large chunk of CSR funding being directed to immediate relief work.
When it comes to individual giving, the pandemic seemingly has had a different impact. According to India giving report 2021, published in September, individual donations went up 43% during the pandemic. The report however points out that whereas till 2019, religious donations stood as the most common method of giving, during the pandemic the informal way of making direct donations to friends and acquaintances has appeared to take precedence, exceeding donations to NGOs and CBOs. Individual giving thus in recent years have been intrinsically tied up in emotional reaction to the wreckage caused by the pandemic. At the outset it shows an extended display of compassion in people, but on the other hand it also means individual funding for long term projects or for organizational sustainability of non-profits have ultimately taken a hit. In fact, this has created a double edged sword. On one hand the severe effects of the pandemic dims the urgency of many other social sector projects in public perception, and on the other hand, donor fatigue is setting in when it comes to giving for direct pandemic response causes.
Unarguably, digital media is a huge opportunity to be tapped when it comes to fundraising but it has also created ‘have’s and ‘have not’s among NGOs in terms of the digital know how. Online donation is currently effectively captured and dominated by a select few organisations and majority of civil society organizations are seeing a lack of success.
The tumultuous nature of the fundraising landscape in recent years makes it clear that there are no ‘one-size-fits-all’ solutions for fundraising. It essentially calls for a diversified but necessarily customized fundraising plan based on an organization’s nature of work, projects, thematic areas, internal systems and resources, geographic locations etc. But it also highlights the need for constant innovations and adaptability to changes.
The near future of fundraising is moving towards an even more dynamic space. The discourse around fundraising has already shifted towards an ‘investment in social good’ as opposed to ‘giving away’ money. This is demonstrated through novel ideas like the Social Stock Exchange. While concepts of impact investment have been around for quite some time, we are finally starting to see its real world application within the context of the development sector in India. For instance, we are seeing a multitude of livelihood NGOs moving towards creating entrepreneurship and small business models involving beneficiaries to fund livelihood projects. On the flipside, this also opens up the floor for a more donor driven CSR sector with NGOs working as social contractors delivering quick and easily quantifiable and demonstrable short term outcomes in exchange of CSR ‘investment’. For individual donors, the prolonged pandemic has opened us up to the potential of community led giving where it is not just HNIs but regular people getting inspired to ‘give’ at an unprecedented level. Giving in this context has evolved beyond material gifts to mean mobilizing information and sharing access within virtual spaces.
In the coming years, it is up to the Civil Society Organization and the voluntary sector at large to leverage this changing landscape to create funding opportunities for their work.
