Candid and the Center for Disaster Philanthropy (CDP) released a new report, Philanthropy and COVID-19: Examining giving in 2021, in May 2022 that details COVID-19-related philanthropic funding in 2021. To understand how the pandemic impacted the philanthropic sector and civil society organizations around the world, we reached out to local experts who shared their observations and experiences over the past two years. The following case study from India reveals how the social sector responded and adapted to the challenges and opportunities created by COVID-19.
Private philanthropy in India stems from four sources: foreign contributions, corporate funding, individual donors (also called retail donors), and high-net-worth individuals or families residing in and outside of India. During the pandemic, family philanthropy grew significantly, tripling in FY2020 compared to FY2019. Despite this rise in funding, several hurdles remain for philanthropy to achieve its potential and meet the growing needs of nonprofit organizations across India.
We spoke with Ingrid Srinath, founder and director of the Centre for Social Impact and Philanthropy (CSIP) at Ashoka University, to learn more about the impact of COVID-19 on India’s social sector, the role philanthropy and nonprofits played in disaster relief, and her hopes for the future.
Setting the context for the gravity of the situation in India, Srinath noted, “Before the pandemic, economic and development indicators like nutrition, employment, and GDP growth were already declining. Then, COVID-19 exacerbated all of them. We are still a long way away from being where we were economically and socially even in 2019.” She described how human rights abuses, such as child labor and violence against women, increased especially among marginalized society in India—lower castes, LGBTQIA+ communities, people with disabilities, artisans, and others.
Throughout the pandemic, the nonprofit sector played a critical role in alleviating stresses across a range of needs. Organizations leveraged their existing grassroots networks and expertise to mitigate health, economic, and social crises in their communities. According to a CSIP study, 63% of surveyed organizations across the country experienced a rise in demand for their services between February 2020 and February 2021. Many nonprofits also engaged in disaster relief efforts out of necessity, despite having no previous experience in relief work.
At the same time, financial insecurity has been one of the biggest challenges for nonprofits during the pandemic. Srinath noted that, “Indian nonprofits are already functioning close to the margins—often operating with no endowment, or large reserves, or committed multiyear funding.”
India’s civil society indisputably stepped up to take on vital work in the face of crisis, but the enabling environment has worsened. Civil society organizations found themselves competing for funding with the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund or PM CARES Fund which garnered US $1.88 billion of India’s COVID-19 relief philanthropy. Donors of all kinds, including but not limited to individuals, private business, government agencies, and foreign funders, received generous tax incentives. But many have criticized the fund for its lack of transparency and accountability, with little information available publicly on where and how the money collected has been spent.
As the government incentivized contributions to the PM CARES Fund, it also constrained international support to local organizations and further limited how those funds can be used. UN bodies and others have criticized new amendments to India’s Foreign Contribution Regulation Act (FCRA) for inhibiting civil society’s ability to develop financial sustainability and resilience, intensifying challenges during an already distressing time.
On the bright side, foundations and individuals in India and the diaspora gave generously during the pandemic, providing support in cash, kind, and advocacy. Family foundations, having stronger connections with the organizations they support, remained loyal to their existing grantees. Corporations increased support for cash transfers, shifting from funding ongoing programs to supporting direct relief, medical hardware, and livelihoods.
The pandemic was an eye opener for donors of all kinds, who got a “behind the scenes” look at what organizations they support do, and under what circumstances they operate. For example, donors became more aware of the gaps in access to technology and transportation for nonprofit staff. “In some cases, this has led to more investment in building organizational capacity, rather than focusing solely on program expenses,” shared Srinath. The Grassroots Resilience Ownership and Wellness (GROW) Fund is one philanthropy collaborative that came out of the pandemic, working to scale civil society and build resiliency, and Srinath hopes more efforts like this will sprout.
Optimistically, philanthropy and civil society have responded with creativity and flexibility. Funders have learned that they can reduce the bureaucracy involved in grantmaking and that they can trust their nonprofit partners to know what the best solutions for their communities are. New philanthropists emerged during this time, providing civil society organizations with hope for a wider diversity of financial support and sustainability. Overall, Srinath hopes that the growing appreciation for a support ecosystem builds the foundation for a stronger, more connected civil society in India.