Philanthropic trend suggests NRIs more inclined to donate to religious trusts than NGOs, educational or health institutes

nrisPhilanthropy is considered part of corporate social responsibility (CSR), which is going to become increasingly important for NGOs operating in India as time passes. A recent law passed by Parliament in August 2013 makes it mandatory for companies to spend every year at least 2 per cent of their average net profit over the preceding three years on CSR works. But will CSR also follow the trend of NRIs who have refused to donate majority of their funds on social sector? A recent study gives some indication. A counterview.org analysis:

A recent study, “Migrants’ Private Giving and Development: Diasporic Influences on Development in Central Gujarat, India”, by Puja Guha, for the National Institute of Advanced Studies, Bangalore, and Amsterdam Institute for Social Science Research, University of Amsterdam, has highlighted a worrying trend on how funds, sent in the name of philanthropy, are channelized in India. Released in August 2013, the study, carried out in the backdrop of Anand and Kheda districts of Gujarat, has found that religion, and not education, poverty alleviation, health or charitable work, appear to be the main priority of the non-resident Indians (NRIs), sending donations to India as “philanthropy.”

Based on its survey, the study has found that 48.5 per cent of all the funds sent by NRIs are meant for religious purpose, while other purposes such as building schools and colleges is the next important priority, NGOs, helping the poor and building hospitals, are not considered as important. The author, Puja Guha, describes “philanthropic donations” as “social transfers which have a direct impact on the sector that receives the money”, and suggests how important religious donations are to the NRIs. Philanthropic donations, she underscores, are different from remittances, which are generally meant as satisfying the needs of relatives at home. “Of the migrants surveyed, only 10 per cent had made philanthropic donations”, she points out.

This survey, carried out between October to December 2011, followed the sampling technique in the two Gujarat districts – Anand and Kheda – with a total sample size of 416 households. “These 416 sample households were selected by a random sampling method, with the restriction that every household should have at least one migrant member”, the scholar points out, adding, “A random sample of migrant households was taken… because the objective of the survey was to study the pattern of different types of private giving by migrants to the region. To accomplish the objectives, information was collected from the 416 selected households across 19 villages/ towns in the two districts.”

Arguing why Anand and Kheda were taken for study, the scholar gives thee major reasons:

• Central Gujarat is one of the important migrant-sending regions in Gujarat. The National Sample Survey’s 64th Round Survey on “Employment,Unemployment and Migration Particulars” suggests that the proportion of the migrant population from the central Gujarat region is “higher than the state average as well as the country average.”

• Central Gujarat has a century-old history of international migration, with the earliest known migrants moving to East Africa during the British colonial period. The next stage witnessed migration to Britain during the 1960s, followed by migration to North America from the early 1970s. “Given their long history of migration, Gujaratis came to be the largest group among the Indian migrants settled abroad. Among the Gujaratis, the Patel or the Patidar community is one of more prominent migrant groups. Though Patels have been settled abroad for several generations, they continue to maintain ties with their families and villages in India.

• More recently, central Gujarat has seen changes in the migration pattern. While Patels have historically been one of the most important migrant groups, economic contributions made by the Patels to their home region have not only facilitated fellow Patel members to migrate, but have also paved the way for migration by members of other communities and (non-Hindu) religions. This has resulted in the emergence of a new trend of migration from central Gujarat – temporary migration.

Purpose and proportion of philanthropic donations by NRIs

Purpose of donation  Percentage
 Towards religious contributions

48.5

 Building schools/colleges, etc.

12.1

 To NGOs

10.6

 Helping poor

7.6

 Building hospital

6.1

 Others

7.6

Pointing towards how most of the donations are directed towards religious organizations, Guha says, “Central Gujarat hosts several prominent religious trusts with international branches, such as the Swaminarayan Trust”. Even as pointing out that it is quite possible these donations to may not be always spent on building religious institutions and they may be “directed towards social welfare and developmental activities run by the religious trusts such as in providing health and education facilities, helping the poor, and so on”, she concedes, “But since migrants donate directly to religious trusts, it is difficult, on the basis of the survey data, to segregate the amount spent on religious institutes.”

In fact, Guha points out that it is even contributions to NGOs cannot be identified properly. She says, “It is difficult to track the exact purpose for which such donations were used. Further, while donations made to religious trusts or NGOs are usually well documented and accounted for in government records, there are also many private donations made through informal channels.” She adds, “It is likely that official statistics on migrant donations do not capture the whole picture, and there are significant contributions which remain undocumented and are difficult to measure.”

Even while asking respondents to identify the purpose of their donations (religious, NGOs, poverty alleviation, health etc), they were also asked about the channels through which the migrants make their donations. Even here, religious institutes account for about 45.5 per cent of the funds directly sent to as donations. Guha explains, “The responses indicated that donations made to religious trusts and NGOs are made through the respective institutions and so are accounted for under the Foreign Exchange Management Act of India.”

Important channels of philanthropic donations

Channels of donations  Percentage
 Directly to religious institution

45.5

 Through family members

28.8

 Directly to charitable organisations, NGOs or trusts

10.6

 Through village panchayat/ municipal corporation

1.5

 NRI associations

1.5

 Others

6

Even then, she points out, “A significant proportion, close to 30 per cent of the total donations, was made through family members. Instead of channelling the donations through an officially registered organisation, migrants often prefer to donate personally when they are visiting the country, or by sending money through family members in the region.” She adds, “These are private donations, often made for a specific purpose. Such transfers neither form a part of household remittances nor are they accounted for in official records.”

Guha underlines, “While one may argue about the importance of such flows, it is likely that the volume of money that is donated through such informal channels does have a significant impact on the social, economic, and infrastructural development of the region. The data show that the pattern and nature of migration to a large extent determine the nature of private giving. While remittances are mostly transferred by recent and temporary migrants residing in the newer destinations, philanthropy flows from both recent migrants and older generation permanent migrants.”

The author says, “In terms of destination, we find that while the Gujarati migrants in the UK have been building bonds with their home country through remittances and philanthropy, the remittance channel seems weak compared to Gujaratis in newer destinations. Given that they have a long history of migration, the Gujaratis in the UK may no longer have close family ties in India, but nonetheless continue to maintain their bonds with their home region through philanthropy. Although the proportion of migrants in the UK making philanthropic donations is small, the total amount of donations made by UK Gujaratis is the highest.”

Guha points out, “The relative importance of both these flows is further highlighted by looking at the volume of received flows and the purposes for which they are utilised. Within remittances, there is a sub-category of financial gifts. While remittances are sent by a larger proportion of migrants (20 per cent) compared to migrants making philanthropic donations (10 per cent), the average volume of philanthropic donations far exceeds household remittances. Thus, while the number of migrants sending remittances is twice the number of those making philanthropic donations, the average amount of donations received is almost twice the amount received as household remittances.”

“Based on the nature of private giving, the channels of transfer also differ”, Guha says, adding, “Household-level remittances usually come through formal banking or money transfer channels, whereas philanthropic donations are made either through formal channels – registered religious trusts or NGOs (in which case the transfers are documented in official records), or through informal channels. In the latter case the amount donated often is not recorded or may be incorrectly recorded as family-level remittances in official government documents.”

The result is that, the scholar says, “the government data measuring diasporic philanthropy often underestimate the actual amount donated and overestimate the actual remittances received. These findings from the survey data are important on two counts. First, even though there are official data on remittances and philanthropic donations by migrants, usually these figures are underestimations or overestimations of the actual amount received. Moreover, there are hardly any data on the utilization pattern of these different types of flows.”

And “second, and more importantly, remittances are given more attention than other forms of private giving because they are treated as economic transfers and as a lens through which the returns of migration may be examined. Philanthropy, on the other hand, has primarily been the concern of sociologists, who examine the nature of kinship networks and changes in the social structure linked to migration.”

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One thought on “Philanthropic trend suggests NRIs more inclined to donate to religious trusts than NGOs, educational or health institutes

  1. We are running a school for the last 26 yes and purchased 4 plus acres of land for school but can not make school building due to fund. We welcome person, organisations to help us in this Nobel work. Thanks

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