Individual giving in India
Thoughts on India Giving Benchmark Report 2019 by Morry Rao Hermon and Samhita
In 2018 Indian NGOs raised an average of INR 48.88 lakhs from individual giving.
“35% of Indian nonprofit annual revenue comes from individual donors (the largest single source), followed by government (18%) and companies/CSR (13%). The responses varied quite a bit by the size of the organization and by their location,” says The India Giving Benchmark Report - results of 2019 on Indian NGO Survey on fundraising from individuals.
The report further highlights that: “Smaller nonprofits rely on individuals more extensively than the biggest NGOs (60% compared to 10%); large organizations receive significantly more from CSR (35% of their income). They also receive much bigger gifts from wealthy individuals.”
The report is an in-depth survey of Samhita GoodCSR’s network of 2,800 nonprofit organizations about their funding sources, resource development methods, donor engagement strategies, and efforts to build a base of life-long donors.
We received a total of 682 responses for an overall response rate of 24%. 281 NGOs completed all 40 questions in the survey, and 300 completed the majority of questions.
This report is part one of a two-part research project by UC Berkeley Director of Philanthropy and Fulbright Scholar Morry Rao Hermón, in collaboration with the Collective Good Foundation, to help fill a gap in the knowledge base about what NGOs are doing, and what is working, in the individual donor fundraising space in India.
Even though the report has been surveyed in a Pre-COVID19 world but not much would have changed for medium and small nonprofits. With extended lockdowns, CSR, and foreign funds in lumber, either nonprofits stopped asking or communicating via digital with individuals and in the same breath asked for a donation.
Hence the report becomes a valid argument why nonprofits shouldn’t ignore individual donors. Like it has been doing in the Pre-COVID19 world.
Why don’t Indians give?
Morry shares his important lessons about the Indian fundraising landscape, which is quite distinct from the U.S. in terms of its history and culture. He writes:
Nonprofit work is not as valued as a career path. Salaries are low, and fundraising is not recognized as a profession. Plus there are few academic programs in nonprofit management;
There is a deep mistrust of nonprofits-a suspicion that the money is not being used the way the NGOs say (due, in part, to a history of corruption). Perhaps as a result of this trust gap, middle class giving in India is not as robust as could or should be (although this is changing);
There is a scarcity of research on individual donors and giving trends in India (a data gap that I also discovered when trying to find country-specific content for the workshop). Without individual donor benchmark studies, it is impossible to compare your NGO's performance;
Large organizations are very successful in the CSR and High-Net-worth Individual (HNI) fundraising arenas, but they are reluctant to share their 'secret sauce' with others. Smaller organizations are hungry for tips on what is working elsewhere in India that they could apply.
I agree with most of his learnings but except the trust factor - the inability of considering individual giving an important aspect and hence the failure to communicate has diminished the trust further. While it is changing it is also due to the times we are living in.
In a recent conversation with a CEO of an Indian product company focused on the social impact sector, shared that he was happy to see a lot of nonprofits coming on digital and asking for money.
Nonetheless, he also remarked that most of them have gone silent, their communication has been dead and they are no more asking.
Effective and continuous communication has been an ongoing battle and with digital playing a big role going forward this will haunt nonprofits. The 2021 Nonprofit Communications Trends Report highlighted similar challenges.
In 2018 Indian NGOs raised an average of INR 48.88 lakhs (~ $68,000); the median amount raised from individuals was INR 3.5 lakhs($4,860).
A huge leap from the previous year FY17 informs the report. On average the individual donors contributed INR 27,322 and the median gift size was INR, 6000. The range of the gift size was from INR 50 to INR 700,000.
The report highlighted that the average and the median number of donors were on the rise with a 13% increase from FY17 to FY18.
Donor acquisition methods
According to the report, 72% of nonprofits find new donors through their founder’s networks.
The use of social media and friends of board members are also common methods for attracting new donors.
The state might have slightly improved considering the pandemic forcing nonprofits to go digital. Because most of them were caught off guard.
The Impact of COVID-19 on India’s Nonprofit Organizations - a snapshot report added:
“Most organisations shared that they had been procrastinating on digital technology adoption in their operations and the sudden lockdown caught them completely unprepared to handle the crisis. Organisations are lamenting that due to the lack of skills of the program team, they are struggling to work remotely.”
Fundraising strategies for asking money
When it came to strategies used to solicit gifts from the individuals - Face-to-face or in-person ask was the most favoured and trusted way. No surprise that 68% of respondents said in-person ask was the most effective way for raising money.
But with the strategy now on hold due to the current pandemic situation, the next favorite was Email Appeals.
According to the report, 51% of respondents found email solicitations to potential givers effective fundraising methods but only 20% were expecting good results. 34% tried but found it not effective and 15% never tried it.
By now marketers are aware of the value of email communication but the majority of them fail to get any results. This isn’t just an Indian nonprofit problem.
According to the Nonprofits Communications Trends report: “Nonprofits say email is their most important communications channel, but the sector is woefully behind in implementing best practices for email list management and engagement.”
However, when it comes to keeping in touch with donors, nonprofits prefer to do it via Annual Reports(64%) and Benfeciaries, updates, and interactions(62%). Around 38% prefer to do it via email newsletters and 39% via social media.
Obviously when you don’t make email a strong medium of interaction with your donors then how would the medium drive results.
Everyone wants to do email, but no one wants to do the hard work. All we are looking for email lists so that we get leads or new donor lists.
Hence we see the below ongoing challenges even in 2021. While acquiring new donors remains the evergreen challenge, wonder how many are thinking of building a relationship with existing donors, special in the digital age.
22% pointed that they don’t have a clear and compelling message - in other words, the ongoing conundrum with communication continues.
The report ends with a list of qualitative remarks from the respondents. One such remark caught my attention:
“Raising money from individuals is definitely a hard task, but if dedicated person available for fundraising and communication will definitely help in raising funds from individuals.”
As a nonprofit, if you are still considering that individual giving in India isn’t big. Then think again especially if you are a medium and small nonprofit organization.
Just makes my ongoing belief stronger - Is the average Indian giving?
Nonprofits can’t ignore individual India. The job is to build trust and that will only happen by showcasing or communicating. Digital is the medium but not everywhere it will work. So one needs to know the donor, the details such as what is his/her age group, and the medium she is comfortable in communicating.