By Rohit Menezes, Sonali Madia Patel, & Daniel Pike
On a September evening in 2014, more
than 600 Americans of Indian origin
gathered with friends at the Museum
of Modern Art in New York City for
a gala to raise money for Pratham,
one of the largest NGOs in India.
For more than 20 years, Pratham
has worked to improve reading and
math skills among India’s poorest children.1 Guests generously
pledged more than $2 million to advance its mission.2
The event was a success. But there’s more to the story. The guest
list also said a lot about the elevated social and economic standing
of the Indian diaspora that has settled in America. This influential
group now numbers more than 1.9 million Indian-born immigrants
and another 1.6 million Americans who report having Indian ancestry.
3 And the gala highlighted an important new direction for Indian
diaspora giving from the United States. Traditionally, money has
flowed from Indian Americans primarily to family and community.
Now it is increasingly supporting organizations with broad social
missions and evidence of impact, like Pratham.
The timing of this trend is important. Much attention has been
paid to India’s growing middle class, but the country still needs
massive investment to create more jobs, housing, and infrastructure
to meet soaring aspirations, according to the World Bank.4
The United Nations Development Program found that nearly 75
percent of India’s population lives on less than $2 a day, and the
average Indian attains fewer than five years of schooling. A shift
in giving from family and community to broad-based social issues
could advance the pace of change to address India’s pressing needs.
The Time is Right
As a nation built by immigrants, the United States has a long
history of diaspora groups giving back to their countries of origin.
(See “Jewish Diaspora Giving to Israel” sidebar, below.) But compared
to many immigrant groups, Indian-American diaspora giving is
relatively new and rapidly evolving.
In part, this evolution is due to the rise of foundations and philanthropic
intermediaries that are focused on supporting Indian
causes. These organizations, based both in the United States and
in India, have encouraged and enabled Indian-American philanthropy
to become more strategic in several dimensions: geography
(from local communities of origin to populations and needs across
India); focus (from perceived need to established need); mode
(from personal connections to more professional intermediaries
and NGOs); and accountability (from subjective milestones to
measurable results). They are a critical link between well-intentioned
donors in the United States and high-impact organizations
operating in rural Indian outposts,
villages, and cities.
That link is more important
than ever as the status and
wealth of the Indian-American
diaspora rise. (See “Segmenting
the Indian-American Diaspora”
sidebar, below.) As a group, Indian immigrants to America have fared
well and amassed significant wealth. Indian-led households have
a median annual income of $89,000 (compared to the US median
income, $50,000), and 27 percent of them earn more than $140,000,
putting them in the top 10 percent of earners nationally.5 As a result,
the combined annual discretionary income of Americans of
Indian origin is approximately $67.4 billion.
If their philanthropic contributions were consistent with
those of other US households in similar income brackets, and if
they directed 40 percent of their philanthropic giving to India,
$1.2 billion per year would flow from Indian diaspora donors to
Indian causes. This sum would dwarf official US foreign aid to
India ($116.4 million in fiscal year 2014).6 What’s more, it would
represent more than half the entire amount of annual official development
aid received by India from all countries—$2.2 billion,
on average, from 2005 through 2013.7
Indian Americans also have significant nonfinancial assets to
offer. They are highly educated8 and well represented in science,
technology, engineering, and math professions.9 They have been
active and successful in technology and entrepreneurship,10 and
they increasingly occupy roles of political and social influence that
track their economic ascendance.11 These nonfinancial assets—
education, expertise, and positions of influence, combined with
familiarity with Indian culture and communities—could all be
applied to great effect in India to build the capacity and professionalism
of India’s civil society organizations and the philanthropic
entities that support them.
Diaspora Giving Has Evolved
A watershed moment in Indian diaspora giving occurred on
January 26, 2001, when a 7.9 magnitude earthquake struck
Gujarat in northwest India. More than 19,700 people died,
and 166,000 were injured. With the support of US President Bill
Clinton and Indian Prime Minister Atal Bihari Vajpayee, a group
of philanthropists created the American India Foundation (AIF)
to channel diaspora donations to relief efforts in India. AIF soon
began aggregating funds from the Indian diaspora to provide relief
from natural disasters beyond the Gujarat earthquake. Over
time, the organization shed its disaster-response focus and pursued
various issue-based initiatives that channeled large-scale investments
from Indian Americans (and others) to NGOs in India. By
June 2015, AIF, which does not operate with an endowment, had
raised and distributed about $100 million to 248 Indian NGOs.12
Concurrent with AIF’s emergence, and perhaps in part because
of rising awareness of need, many of the largest US-based associations
serving Indian Americans stepped up their efforts to meet
social needs in India as well. The Asian American Hotel Owners
Association, the American Association of Physicians from India,
and The Indus Entrepreneurs, among others, have led fundraising
campaigns to provide relief after natural disasters. These organizations
also have set up other philanthropic activities in the past
10 to 15 years that reflect their members’ expertise and eagerness
to tackle other social issues in India.13
More recently, an increasing number of Indian NGOs have
opened US offices, typically focused on fundraising alone. Some,
such as Pratham, have successfully targeted various segments of
the Indian-American population to raise funds. In other instances,
ultra-high net worth individuals have donated to specific NGOs.
For example, Desh Deshpande, an Indian-American venture
capitalist and entrepreneur, has provided significant financial
and nonfinancial support to Akshaya Patra, which was founded
in 2000 and now provides a midday meal to 1.4 million Indian
school children each day. (See “Q&A with Desh Deshpande,” here.) Deshpande was introduced to Akshaya Patra through
the Social Innovation Sandbox he had developed in Hubli, Karnataka,
where Akshaya Patra had built its largest kitchen.
Government Support for Diaspora Giving
Meanwhile, during the past 15 years, the Indian government
has taken several steps to make diaspora
giving easier:
New visa standards for nonresident Indians, adopted in
1999, made it easier for diaspora members to visit, invest,
and open rupee bank accounts in India.
An annual conference of overseas Indians—Overseas
Indian Day (Pravasi Bharatiya Divas—was created in
2003 to facilitate networking and to celebrate emigrants
who have helped India.
The Ministry for Overseas Indian Affairs was established in
2005 to coordinate trade, academic exchange, heritage exploration,
and philanthropy between India and its diaspora.
A 2011 law allowed Indian citizens residing abroad to cast
votes in their home constituencies.
By and large, the trend looks set to continue under Prime
Minister Narenda Modi, who announced a further easing of visa
and travel requirements during an appearance at Madison Square
Garden on his inaugural trip to the United States in September
2014.14 Modi’s administration seems particularly attuned to the
upside potential for financial and nonfinancial support from the
Indian-American diaspora. His focus on bilateral India-US initiatives15
may be an indicator of his openness to connect with US
constituencies, including Indian Americans, that could contribute
meaningfully to India’s development.
As Modi cultivates the diaspora, a new law at home has initiated
a tectonic shift in India’s social sector, with positive implications for
diaspora giving. The 2013 Companies Act requires large firms to
spend 2 percent of profits on corporate social responsibility (CSR)
activities in India. It also requires companies to establish a boardapproved
CSR policy and a board-level CSR committee. Despite a
great deal of uncertainty about all the ways in which the new law will
play out, early developments suggest strongly that corporate actors
are impatient for high-quality NGO data to guide their decisionmaking.
Over time, increased corporate sector activity in India’s
civil society should nudge NGOs and intermediaries toward greater
transparency with regard to performance data, which in turn will
offer them another lever to use in engaging and mobilizing the already
motivated Indian diaspora.
Barriers to Giving Back
Although the shift to more strategic diaspora giving has unmistakable
momentum, it faces numerous challenges. In
fact, three serious barriers hamper giving by the Indian-
American community: donor distrust, regulatory constraints, and
disconnected second-generation Indian Americans.
Donor distrust | Virtually all the people we interviewed said
that widespread distrust of NGOs and intermediaries in India is
the primary obstacle to increased giving, strategic or otherwise.
First-generation immigrants told us that their hands-on experience
with corruption in their homeland has influenced their views on
Indian civil society organizations. And these views appear to have
influenced the attitudes of their US-born children; many of those
we interviewed seem to consider corruption in India systemic.
Some of their concerns about corruption may be well-founded,
but we were struck by how little many donors know about Indian
NGOs that have proven trustworthy. Many of these NGOs are
listed on the websites of reputable giving intermediaries such
as Dasra, Kiva, Give India, and Global Giving. Several of these
intermediaries work with Indian NGOs and social enterprises
to encourage giving by Indians in the United States. In addition,
nonprofit evaluators like Charity Navigator—which rates nonprofits’
financial health, accountability, and transparency—have
reviewed some US affiliates of Indian NGOs. For donors wary of
Indian NGOs, these resources can add a critical level of reliable
information about organizations with successful track records.
Regulatory constraints | Despite the Indian government’s
steps to make diaspora giving easier over the past several years, the
country’s active scrutiny of foreign money flowing to India’s NGOs
remains an issue. The 2010 Foreign Contribution Regulation Act
(FCRA) restricts giving to NGOs by foreigners, reflecting official
apprehension about foreign contributions to groups considered
a threat to national security. Under the act, NGOs must register
if they wish to receive funds from sources outside India.16 To be
eligible, an organization must have been in operation for at least
three years. Younger organizations can accept foreign funds only
if they apply for and receive permission from the Indian government
for a specific purpose and amount.17
The Indian government also retains and exercises the right to
reject FCRA license applications and permission for outside funds
for any reason.18 Some NGOs may decide to accept such funds
without registering under FCRA, but they risk being fined, reprimanded,
or shut down.19 In June 2015, the government cancelled
the licenses of 4,470 NGOs for violations of the act. In addition, the
current Indian government has been actively scrutinizing funding
by the Ford Foundation, a clear signal to non-Indian funders that
their social sector activities may not be welcome.
JEWISH DIASPORA GIVING TO ISRAEL
The giving experiences of the
Indian-American and Jewish-
American diasporas merit comparison.
The rationale is clear: both are relatively
small communities that have enjoyed
outsized economic and social achievement
in the United States. Indeed, the Jewish-
American diaspora, which has a longer track
record than its Indian counterpart, can be
considered an exemplar because of the
sustained role it has had in the economic
and social development of Israel.
But there also are dissimilarities that
make it difficult to translate lessons easily
from one diasporan experience to the other.
The population of Israel, for example,
is much smaller than that of India, and so
it is likely easier for the Jewish-American
diaspora to exercise greater overall influence
in its homeland than it is for the
Indian-American diaspora to influence
India. In addition, the existential threat to
the state of Israel has nothing comparable
in the Indian experience.
Nonetheless, we observed at least
two aspects of the Jewish-American
experience that provide food for collective
thought among Indian Americans
motivated to give to India. First, Jewish-
American donors have long benefited
from trustworthy channels by which to
support Israeli development. Since World
War II, Jewish-American donors have
been able to channel their funding reliably
through several centralized mechanisms,
most notably the Jewish Federations of
North America. What’s more, over the
past few decades, the number of American
Friends of Israel organizations linked
to Israeli NGOs and private foundations
has exploded.
Second, Jewish organizations have
actively cultivated a connection among
newer generations of Jewish-Americans
and Israel. A recent example of this work is
Birthright Israel, a nonprofit that sponsors
free 10-day trips to Israel for Jewish young
adults living in other countries. Since
1999, more than 300,000 people from
the United States and Canada have taken
advantage of the offer.
FCRA thus effectively limits the number of NGOs eligible
for foreign contributions, and
in doing so, likely discourages
many Indian NGOs from
attempting to raise foreign
funds.20 These obstacles stand
in stark contrast to the mechanisms
available to the Jewish
diaspora’s giving to Israel,
which are far less restrictive.
And it appears that the regulatory
environment in India
is unlikely to change much in
the near future. In fact, it may
become more complex in the
short run as the scrutiny of
foreign-funded social sector
efforts in India continues.
Disconnected second-generation
Indian Americans
| Our research found that
Indian-born diaspora members
—a group that has grown
by 1.5 million since 1990—
are more motivated to give to
India than are second-generation
Indian Americans, who
often lack direct ties to the
homeland of their parents.21
Our interviews with fundraisers
suggest that absent active
cultivation, second-generation
Indian Americans are not as motivated to give to India as their
parents. Those who do give, however, are less constrained by
birth ties to particular communities. Rather, they are interested
in supporting organizations with broad social-impact missions
wherever they operate. Major diaspora organizations should
heed these shifting demographics, and Indian NGOs need to
find new ways to connect with younger members of the diaspora
or face the prospect of eroding financial support.
What Donors Can Do
The barriers to diaspora giving are real enough, but not
insurmountable. Our research points to four complementary
steps that Indian-American donors can take to
expedite the shift in diaspora philanthropy toward more strategic
giving that is pan-Indian, focuses on established need, is facilitated
by professional organizations, and achieves measurable results.
Invest in professionalizing Indian NGOs | Increasing the
professionalism of Indian NGOs in fundraising, management,
and impact measurement will enhance their performance and
pave the way for increased giving by Indian Americans. For
example, consider five well-known Indian NGOs—Akshaya Patra,
Brahmananda Saraswati Foundation, Ekal Vidyalaya, Pratham,
and Sankara Eye Foundation—that formed US-based affiliates
with professional staffs to raise funds from Indian donors. (See
“Case Study on Akshaya Patra,” here.) Taking that step
helped those organizations increase the funds they raised collectively
by 45 percent in four years, from $18.6 million in 2008 to
$34 million in 2012.22
Other Indian NGOs also are boosting their professionalism.
For example, Magic Bus, which helps children develop life skills
using a curriculum focused on activity-based learning, is assembling
a team of fundraising professionals in the United States to
design and roll out a new marketing strategy.
The value of investing in a professional approach to fundraising
and marketing stands out when we compare American Friends of
Israel organizations in the United States with their Indian-American
equivalents. The 25 India-based NGOs that raised the most
from foreign contributions received approximately $350 million
in fiscal year 2012 from all sources including the United States,
according to the most recent FCRA report.23 By comparison, the
five largest US-based affiliates of Israeli NGOs raised roughly $1
billion a year from the United States alone between 1998 and
2009.24 An in-depth study of the Israeli experience found that
strategic investments in human resources and fundraising were
the key to the growth.25
We found that fundraising professionals who are focused
on Indian Americans appear to have deep knowledge of their
own regional markets and a strong sense of the most promising
segments of the Indian-American population to target. To date,
however, our interviewees noted that fundraisers tend to target
the same Indian-American communities through galas and other
events’concentrated on the East and West Coasts—leading to a
sense of donor fatigue. Outreach to less-targeted US markets could
be productive and might take some of the pressure off the most
frequently targeted communities. In addition, interviewees suggested
that high-potential donor communities are growing among
Indian Americans living in Florida, the Carolinas, and the Midwest.
(See “US States With the Most Indian Americans” below.)
One organization that has used that strategy effectively is the
Ekal Vidyalaya Foundation, dedicated to bringing education and
village development to rural India. It has been successful in raising
significant funds in cities outside traditional fundraising areas by
staging charity concerts featuring Bollywood music.
Become a strategic partner and visible champion for NGOs |
Most Indian NGOs need more than financial support. They need
visible and passionate champions who can help in a variety of important
ways, including navigating the FCRA registration process (as
Give2Asia.org does with its NGO partners);26 providing advice and
management expertise, sometimes even assuming leadership roles;
and tapping their own personal networks to raise additional funds.
Vijay Goradia provides a striking example. Goradia came
across Pratham on a trip to India and was so impressed that he
went back home to Houston and became a dedicated full-time
advisor, advocate, and fundraiser for the organization. His tireless
advocacy for Pratham and his credibility within his community
have led to successful fundraising in Houston and 14 other
cities across the United States, including Dallas-Fort Worth, Los
Angeles, and Phoenix.
It’s not necessary to go to the same lengths as Goradia to make
a meaningful difference. As visible supporters, patrons build trust
for an organization in the broader Indian community and influence
their peers to join in. For inspiration, they need look no further
than a for-profit analogue, The Indus Entrepreneurs. This group,
founded in Silicon Valley in 1992, today boasts 61 chapters in 18
countries—including India—and 13,000 members, who provide
role models, structured one-on-one coaching, and business support
to aspiring entrepreneurs.
Look for program models that offer effective or promising
solutions | NGOs such as Pratham showcase their impact with
profiles of individual children and outcomes data. Success stories
are particularly useful at fundraising events to raise awareness of
the organizations’ program models. At a 2014 conference on giving
to India organized by Dasra—one of India’s leading strategic
philanthropy foundations—Goradia explained that the main
reason he became a dedicated supporter of Pratham was its lowcost
model for helping children achieve literacy and its ability to
provide compelling data documenting effectiveness.27
Join and support intermediaries that connect donors with
NGOs | A growing number of intermediary organizations focus
explicitly on connecting donors with high-performing NGOs
in India. These groups help overcome trust and information
deficits by conducting due diligence on Indian NGOs, educating
donors about various options, and providing regular updates
on NGO performance. They also put a lot of information online
to facilitate quick and easy access by potential donors. These organizations
include:
Dasra, which provides in-depth research, organizational
advice and leadership training, donor reporting, and other
intermediary services (such as organizing Giving Circles)
to connect philanthropists around the world with high-performing
NGOs and social enterprises in India.
GiveIndia, which vets, selects, lists, and channels donations
to Indian NGOs. Donors choose from among 200 NGOs
that have been scrutinized for transparency and credibility.
GiveIndia then reports back to donors to confirm that donations
have reached their target.
GlobalGiving, which vets, selects, profiles, and channels
donations to NGOs around the world, including in India.
Based in the United States, it provides reports on donated
dollars reaching their destination.
Another intermediary to keep an eye on is the national NGO
monitoring hub being developed by the Indian Institute of
Corporate Affairs. The Indian government commissioned the
hub as part of the follow-through on India’s 2013 Companies Act.
The Indian Diaspora Investment Initiative, recently launched
by the US-based Calvert Foundation, the US Agency for International
Development, and several private financial institutions
in India, is another promising venture. The initiative will help
make it easier for Indian Americans to invest in sustainable development
across India.
The Indian Diaspora Investment Initiative will target investments
in health care to rural communities, improving water and
sanitation, and opening up financial services. Indian Americans
and other investors will be able to fund the growth of social enterprises
in India while earning a financial and social return. The
initiative’s success could pave the way for other such funds.
Results in Our Grasp
The rising affluence of the Indian-American community
and its desire to give back coincide with the growth of
new intermediary organizations that facilitate giving
to high-quality Indian NGOs. The scale of potential giving—as
much as $1.2 billion annually by our rough estimate—could certainly
be consequential to the economic and social development
of India. The time is right for Indian-American diaspora giving to
grow while shifting its focus from family and community to pan-
Indian issues of pressing need.
SEGMENTING THE INDIAN-AMERICAN DIASPORA
Approximately 3.5 million people of Indian origin live in the United States: two million
Indian immigrants and one million American-born. Another half million were
born elsewhere and are not included in the segmentation below. Our research
identified five groups with different approaches to giving back to India. Our segmentation is
rough, but it is a helpful starting point for understanding how different life experiences and
philanthropic motivations within the diaspora may influence giving practices.1
1. Ultra-high net worth individuals.
These Indian-Americans each have more
than $30 million in assets, and most
immigrated to the United States before
1990. We estimate that there are between
250 and 1,500 people in this segment,2
collectively controlling assets of between
$20 billion and $115 billion.3 These people
live primarily on the coasts or in major
metropolitan areas. Some of them are motivated
to contribute both in the United
States and in India, some are leaders in
Indian philanthropy and have helped develop
and fund NGOs, and others remain
untapped by Indian NGOs but are making
large contributions to nonprofits serving
the United States.
2. Older professionals and entrepreneurs.
Approximately 278,000 Indian-
Americans immigrated to the United States
before 1990 and live in households that have
an annual income of more than $80,000.
Most are older than 45, and they likely
possess total assets between $500,000
and $30 million. These people credit their
success to their US communities, and they
tend to be active givers to those communities
or to their hometowns in India. Their
philanthropy tends to be based on personal
contacts. Through their professions (as
doctors or hotel owners, for example) they
are sometimes members of close-knit and
well-networked groups.
3. Newly immigrated professionals.
The roughly 1.5 million Indian-Americans
in this segment immigrated to the United
States after 1990, often to work in skilled
jobs requiring H1-B visas. Two-thirds of
them have a median annual income of
more than $80,000. They tend to be
younger than 45, and many are Indian
nationals. Many have strong, recent ties
to particular communities in India, send
remittances to their families, and participate
in smaller-scale philanthropy.
Given the trajectory of previous waves of
Indian immigrants to the United States,
the economic assets of this segment
could grow considerably over the next few
decades, providing a large opportunity for
giving. Roughly half of this segment plus
the previous one—older professionals and
entrepreneurs—have settled in a handful
of geographic areas. California is home to
approximately 278,000, the New York City
metro area about 238,000, Texas about
118,000, Chicago about 77,000, and the
Washington, D.C., area about 77,000.4 The
rest (some 459,000) live in areas scattered
across the country and represent a
population that has not been targeted in a
meaningful way by organizations fundraising
to meet needs in India.
4. Middle-aged professionals and entrepreneurs
born in the United States. The
approximately 56,000 individuals in this
segment are affluent Indian-Americans
who were born in the United States, are
older than 35, and are part of households
with an annual income of more than
$80,000. They tend to be the offspring of
older immigrant professionals and entrepreneurs.
Most have never lived in India and have
few personal ties to specific communities
or regions there. As a consequence,
we believe they are rarely tapped to give
through traditional diaspora networks.
This segment may be more likely to support
pan-Indian issues. More than half of
US-born middle-aged professionals and
entrepreneurs live in six states: California
(11,500), New Jersey (3,800), New York
(7,400), Texas (3,500), Illinois (3,600), and
Maryland (4,000).Migrahave
few personal ties to specific communities
or regions there. As a consequence,
we believe they are rarely tapped to give
through traditional diaspora networks.
This segment may be more likely to support
pan-Indian issues. More than half of
US-born middle-aged professionals and
entrepreneurs live in six states: California
(11,500), New Jersey (3,800), New York
(7,400), Texas (3,500), Illinois (3,600), and
Maryland (4,000).5
5. Young people born in the United
States. Approximately 897,000 people
who identify as Indian and are under age
35 were born and live in the United States.
The median annual income of the households
they live in is between $120,000
and $160,000. As members of this group
mature, they are likely to use data, online
intermediaries and networks, and other
technologies to learn about Indian NGOs
and make giving decisions. We believe
that this group’s ties to India are not as
strong and immediate as those of other
segments we identified, so encouraging
this segment to give to India may call for
purposeful education and exposure to the
needs of the country, reinforced with data
and evidence.6 These people are more
evenly dispersed across the United States
than other segments of the diaspora.
About 189,000 live in California, 95,327 in
New York, 96,000 in New Jersey, 82,700 in
Texas, 54,000 in Illinois, 27,000 in Georgia,
26,700 in Massachusetts, 24,000 in Michigan,
and 21,000 in Maryland.7