http://www.bain.com/bainweb/PDFs/cms/Pu ... Speech.pdfThis is the excerpts from bain pdf which somnath quoted.
I am posting it as he has not done so by default (agree it is his choice)
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Today, more than 400 million people—around 40 percent of India’s population—live below the poverty line. The World Bank defines poverty as living on less than $1.25 a day.
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The recent global downturn has only made the challenge of reducing poverty in India even more monumental. It has pushed an additional 25 million to 40 million citizens below the poverty line.2
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According to Bain analysis, philanthropic donations would amount to 0.6 percent of India’s GDP. In Brazil, the rate of giving is 0.3 percent and in China, just one-tenth of 1 percent, so we are faring well when compared with other emerging nations. But this is cold comfort given the enormous needs of the poor and disadvantaged in India
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Annually, Americans make donations totaling slightly more than $300 billion—or about 2 percent of the US gross domestic product.
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Admittedly, the US is a far more developed economy and the comparison between its figures and India’s has its limits.
what are the limits-Read further Quote:
The philanthropy chain is made up of three major stakeholders—donors, supporting networks and charitable organizations or grassroots nonprofits
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In India 1) the supporting networks are not prevalent and not on a large scale relative to america.Yet individual and corporate donations make up only 10 percent of charitable giving in India (see Figure 2). The balance of the
philanthropy comes from foreign organizations and the government. In fact, nearly 65 percent is donated by India’s central and state governments with a focus on disaster relief.
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By comparison, nearly threefourths of all philanthropy in the US is undertaken by individuals. This tradition
reflects America’s history and culture of individualism as well as a supportive tax structure
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Between 2006 and 2007, the number of wealthy individuals in India surged by 23 percent—possibly the highest growth rate in the world
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You and I know that it is not because Indians do not have heart—that is definitely not the case.
We are a generous people: Just ask any guest who is welcomed into our homes, or consider how we go out of our way to support family and friends. (He does not define it but indirectly says that we are charitable. it is well known in the adage athithi devo bhavah in sanskrit which is centuries old. It did not come after 1947. 
compare it to america when he quotes philantropy reflects american history.I am not denigrating the author please just pointing it out) Quote:
To understand the challenge before us, we need to look at the three major factors that constrain giving in India. A) We believe that the relatively recent accumulation of wealth by individuals inhibits philanthropy. The number of wealthy individuals in India started growing rapidly only after the economic reforms of the 1990s. Normally, it takes 50 to 100 years for philanthropic markets to mature. Today in India, many of those with hard-earned new wealth are not eager to part with even a small amount of their money.(reflects the new found wealth and the zealnousness to guard for the progeny for future which is not very clear.This occurs in all societies) .B) As a society, charitable donations do not necessarily win social recognition. Instead, many of the newly wealthy view increased material wealth as the key to improving their social standing. A Bain analysis of 30 high-net-worth individuals in India showed that they contribute, on average, just around one-fourth of 1 percent of their net worth to social and charitable causes. But remember, even the great philanthropists—John D. Rockefeller, Andrew Carnegie and J.P. Morgan—did not give away their riches until toward the end of their lives. (after they had enough for themselves, so also gates and buffet along with other circumstances which I will post later-again not to denigrate them but to show all are humans-does not matter american or Indians.)
C) Another factor impeding contributions is a belief by donors that support networks are not professionally managed, and as a result, their contributions won’t be put to good use—or are at risk of being misappropriated.( major problem in India) Finally, for some, the lines may be blurred between personal giving and corporate social responsibility initiatives. Much of corporate India is run by family-owned groups.(same in America) Among the top 40 business groups, nearly 70 percent are family-owned or -controlled enterprises. It is likely that some families and individuals view corporate responsibility initiatives as extensions of their own giving. And that may curb their interest in making personal donations.
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Let’s look at 2) donation-support networks in India. Most of them are in their infancy and that limits their impact. We need to help these networks increase their activities and efficiency so that donors are confident their contributions will have a significant impact. Just look at United Way in America. It is able to have a dramatic impact on communities in need, with annual revenues of $4 billion in 2007.It has distributed funds to nearly 1,300 organizations with clearly defined missions.
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Private foundations offer another support network for distributing funds to charitable organizations. In the US, foundations play a critical role, thanks to the country’s tax laws.(ex-think Gates foundation) With inheritance tax rates of nearly 46 percent for large estates of more than $2 million, wealthy individuals have a large incentive to create private foundations before death. There is no such inheritance tax in India or in many other nations, including China and Australia.The largest 100 foundations in the US have more than $200 billion in assets. These assets are used to help underwrite philanthropic activities. When the assets of all US foundations are added up, the total available to fund nonprofit work was nearly a staggering $700 billion in 2007. This massive asset base allows foundations to have not only a national impact, but to extend their impact throughout the world.(when you have enuf money and cannot spend in america as it is developed you obviously venture to help the under privileged communities which is to be welcomed but not to put on a pedestal for worship. Of course no sermonising please- IMHO) Given their size, these are professionally managed institutions and collaborate closely with grant recipients and charity operators.(they have to be professionally managed considering the huge sums involved- some of them exceed the GDP of poorer countries) In other words, they are not simply money-giving machines. They raise the bar, increasing the power of their donations to help those in need
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The good news is that more and more wealthy individuals in India are establishing foundations. For example, the Bajaj trusts have amassed $150 million, and the Bharti Foundation, started by Sunil Mittal, has slightly more than $60 million. As the number of wealthy individuals continues to accelerate and more foundations are created, one can foresee a day where foundations in India play a growing role in addressing the needs of the impoverished, helping them lead healthier and more productive lives.
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This constitutes 3) grassroots nonprofits and charity operations. There are some 2 million charity operators in India. The vast majority are run with the best of intentions, but without the transparency, processes and professional staff required to reassure donors and encourage large contributions.( a major drawback) In all of India in 2006, there were only about 500 that operated on a large enough scale (more than $100,000 in income) to be effective. If we’re going to reduce poverty in India, we’ll need more—many more—professionally run, large-scale charity organizations.
Governmental role in inhibiting Indians to do more charitable work- compare and contrast to america is telling Quote:
Like many aspects of Indian life, archaic laws and bureaucracy hinder both the growth and operations of nonprofits. There is an urgent need to reform our laws and taxation policies and create a more supportive climate for charitable organizations. Here is a short list of the hurdles and laws that make the work of charity operators more difficult:
1) Foreign funds or operators must obtain a Foreign Contribution (Regulation) Act certificate. That can take up to a year.
2) Donors who provide material goods receive no tax benefits.
3) The current tax deduction structure does not encourage donations. Current tax laws allow deductions of either 50 percent of the amount given or 10 percent of taxable income, whichever is lower. However, there are exceptions where 100 percent deductions are available; for example, contributions to relief funds established by the central and state governments.
4) The cumbersome bureaucratic process required to obtain tax exemptions from the government hinders the smooth operations of NGOs.
Those involved in the world of philanthropy—nonprofits, such as Dasra, government agencies and donor support networks, such as the Red Cross—need to do more, and are, to create a system that gives donors like you greater confidence and more incentives. They understand that to boost giving, they must become more transparent, professional and effective. At the same time, the government must remove the obstacles that discourage philanthropy from
flourishing in India.
(amazing that even red cross in India, dasra and govt agencies are not transparent and professional- what can we comment on others 
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Look at how Vineet Nayyar of Tech Mahindra is harnessing his wealth. His recent 30-crore rupees gift to the Essel Social Welfare Foundation is a high-profile example of philanthropic giving in India.
(nearly 30% of his wealth)Hope this helps in understanding some important differences between the way charity works in both the countries.
No one disbelieves that Indians do not do charity but there are some other obstacles which inhibit charities on a large scale. With increasing wealth creation and more reforms from govt to streamline the tax laws, growing awareness we will be in for better times.
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) could be described likewise..
- I have not commented on it. In fact I have asked questions to somnath regarding the article, he goes off tangent. He use different yardsticks for Indians and americans( that is my perception). He should clarify it. That is his responsibility because of his posts.
I mainatian it his responsibility because of his own posts. He need not have to post them if he wishes to, just mention it I can post them. It is not a big matter. 