Are you among those who wonder whether your meager contribution to improving society’s well-being will actually make a difference? The answer is a big yes, and a big shout-out to you for being empathetic.
Even before the next question pops into your mind, we will tell you how and why individual donations are important to a Non-Profit Organisation (NPO) like us.
Donation, by definition, refers to the act of voluntarily giving something valuable, like money, books, or clothes, among others, to a good cause. In particular, individuals donate mainly because of their social impact considerations, the desire to contribute to the wellbeing of society, and personal values.
It is true that both the state and union governments have been offering numerous grants under various schemes to the NPOs. The social sector funding is about Rs 17.5 lakh crore per annum. Though the funding has increased by 12% per annum from Rs 10 lakh crore in 2017, how can all the NPOs do all their good work with this funding? After all, India has 2,27,107 enrolled non-governmental organisations, according to NITI Aayog’s Darpan portal. These grants come with a set of guidelines that define how each penny should be spent. Not just that, it is also important for NPOs to have a sustainable mix of funding sources to ensure uninterrupted functioning.
How individual giving helps NPOs?
Unlike the for-profit organisations that use their profits to run the show, the NPOs depend on the generosity of kind-hearted and like-minded people and organisations rooted towards social causes in their DNA. Donations, especially individual donations, often come without any rules. It, in turn, allows NPOs to make mission-driven decisions, be innovative, develop programmes, and offer high-quality service in addition to helping them survive. Most of the time, NPOs are at the forefront of innovations as they test new approaches and solutions without the pressure of profitability.
Also, individual donations are time-efficient. It can be done by making a personal visit to their office, visiting our website or through fundraising campaigns. Depending on the donors’ stewardship, it can also be done on a monthly or annual basis.
Further, the number of individual donors is directly proportional to the visibility of the organisation. A larger number means higher visibility. At times, compassionate donors might also volunteer for fieldwork, campaigns and other programmes.
Little drops make an ocean
Individual donations might not be big. It could be as meager as the expenses paid for lunch in a day. This might not be helpful to educate a child or adopt a village single-handedly. But when it adds up with other donations received, it will definitely let the NPOs work confidently towards making a positive difference in society. Just like the saying goes, “little drops of water make a mighty ocean.” Not just that, NPOs also need money to remain stable to pay rent, utilities’ charges, or salaries to their employees. So that they can concentrate on their good work without too much worry.
Individual donations also help the NPOs to diversify their revenue sources to mitigate financial risks and ensure sustainability. It will be wiser for the NPOs to have at least one-third of their funds from individual giving. This will help us restructure, recover and move forward upon losing other sources of revenue.
What puts us in a difficult situation?
According to the India Philanthropy Report 2022,
- family philanthropy has contracted overall to form about one-third of the total private giving from 37% in 2015,
- UHNI giving has contracted from 18% in 2015 to 11% of total private giving in 2021
- and retail giving’s share remains between 25% and 30% of total private domestic giving.
This is a little concerning for us.
Individual giving also play a crucial role in helping the NPOs grow along with the Indian economy and the private sector to achieve inclusive and sustainable growth as envisioned in the United Nations (UN) Sustainable Development Goals (SDG) 2030. According to NITI Aayog, India needs to funnel about 13% of its GDP into social causes to achieve SDG commitments. It means India is in deficit of Rs 10 lakh crore for 2026. The set of 17 goals includes quality education, gender equality, good health and well-being, clean water and sanitation, reducing inequality and zero hunger.
Smile Foundation using individual giving for life-cycle value
With a vision to bring sustainable changes into the lives of the less privileged, Smile Foundation has been putting its consistent efforts into various sectors, including education, health, livelihood and women’s empowerment. We reach out to 15 lakh underserved children, youth , women and elderly in over 2,000 villages and slums in 25 states, including Tamil Nadu, Maharashtra, Kerala, Bihar, Jammu and Kashmir, Uttar Pradesh, Assam, and Tripura, through 400+ projects.
The foundation has helped over 3 lakh children get quality education, provided healthcare to 20 lakh people, and trained over 65,000 youths through its learning programmes. We have also supported over 5,000 grass-roots organizations through our capacity-building initiatives. Our mission is to use methodologies and technologies to achieve an ideal social return on investment (SROI) to promote good governance.