With over 100 unicorns and 80,000 startups, India is the third-largest startup ecosystem globally. Startup wealth creation in India continues its upward trajectory with unicorn and gazelle founders accumulating greater amounts of wealth at a much younger age. The IIFL Wealth Hurun India Rich List 2022, for the first time in a decade, featured 100 start-up founders with a cumulative wealth of INR 5 trillion. Interestingly, the average age of the startup founders was only 40, and of these 100 startup founders five featured in the top 100 on the 2022 list. In fact, the cumulative wealth contributed by unicorn and gazelle founders to the rich list increased by 35 percent this year.
Rising wealth creation among this dynamic and entrepreneurial cohort is a trend that can have positive implications for the Indian philanthropy sector. According to the India Philanthropy Report 2022 published by Bain & Company and Dasra, the total private philanthropic funding in India is estimated to grow at approximately 12 percent annually in the next five years. The 2021 edition of the report noted that the average age of giving in India is dipping every year, indicating an earlier induction for next-generation givers into philanthropy.
To add to this, the disproportionate increase in wealth during the pandemic catapulted Indian startup founders and entrepreneurs into philanthropy much earlier in their careers. The giving potential of this vibrant cohort of disruptive go-getters remains largely untapped and could potentially unleash a fresh wave of philanthropic leadership to reimagine giving in India aimed at meeting the country’s social sector fund requirement.
Change in perception towards wealth
Indian startup founders have unlocked a dynamic ecosystem of innovation in the country. Today, these entrepreneurs as well as several in leadership roles within these startups, who have garnered significant wealth and can contribute towards India’s development story, are increasingly scouting for avenues to engage meaningfully. The pandemic has brought about the realisation that life is uncertain and time is finite, therefore, they must contribute and give back to society in whichever way possible.
The urge to leave behind wealth for future generations is dwindling and less desirable amongst this cohort, therefore presenting them with a multitude of options to positively leverage their wealth and address a plethora of pressing societal issues. In fact, they are keen to leave a legacy for the social impact they create, rather than for the amount of wealth they hold. This generation of entrepreneurs and startup wealth creators want to make efforts to bridge the huge inequality gaps that prevail in our country. It is not about doing one big thing in one year; it is about consistently giving over a long period of time to bring about sustained change.
We are increasingly witnessing many of them engage in philanthropic endeavours that have the potential to reimagine giving approaches, thus unleashing a new era of bolder, innovative, and even more catalytic philanthropy in India. An interesting example to note is the ACT Grants, a collective of venture capitalists, tech entrepreneurs, startup founders, and social impact leaders who came together in 2020 to support emergency response to COVID. Today, it’s a robust community that seeds innovations capable of addressing complex social problems at scale across diverse sectors. Another example is Mekin Maheshwari, who has been leveraging his skills, time, and effort to build Udhyam Learning Foundation and Global Alliance for Mass Entrepreneurship, which are driving innovative change in the field of education and entrepreneurship.
Rainmatter Foundation, another social initiative by a start-up team, funds fellowships and organisations working to restore the environment through direct action, research, climate advocacy and policy. Rainmatter Foundation also funds community projects and on-the-ground conservation and restoration endeavours.
Untapped philanthropic potential
This spirited cohort has all the ingredients to reimagine the philanthropic landscape in India. They are technology friendly, have a higher risk appetite, and are willing to invest their time, money, and effort to solve complex developmental challenges. What is most exciting is that they are inspiring their personal networks, fellow startup founders, and entrepreneurs to engage in philanthropy by exploring newer approaches to giving and having conversations in public about their efforts. The Young India Philanthropic Pledge is a manifestation of just this. The pledge is aimed at inspiring Indians below the age of 45 to make thoughtful philanthropic investments by picking impactful projects and investing their funds, experience, and expertise in them. Making a pledge becomes a lifelong commitment and helps ensure continuity in strategic philanthropic intervention.
Another characteristic of this cohort is their keenness to deepen their knowledge about the philanthropy sector by connecting and engaging with evolved philanthropists and sector experts. This helps to create a sense of community for givers so they can leverage each other’s learning experiences and explore synergies for collaborative giving. An example of such a network is GivingPi, which provides philanthropy-focused offerings and a robust ecosystem to support family givers in achieving their philanthropic vision. A space of trust, openness, and honesty to share lived experiences, explore collaborations, and enable trusted connections will be of incredible value to these entrepreneurs, who are increasingly engaging in philanthropy and meaningfully engaging their families as they shape their giving journeys.
Need for an enabling ecosystem to accelerate giving
As the startup ecosystem in India continues to catapult to newer heights, it will be critical to unleash the giving potential of this segment. Their willingness to engage in philanthropy needs to be nurtured and supported with the right means. To that extent, it is important to engage with them and understand their aspirations and challenges. Strengthening the philanthropic ecosystem with credible NGO data, insights, giving vehicles, and networks to support this cohort will go a long way in harnessing their giving potential.
India’s startup founders and wealth creators armed with perseverance, innovation, and ambition are well poised to rebuild India into a nation we will all be proud to leave behind for future generations. The time has come for the intent to meet the ability to build the future that awaits India@100.
—The authors Nikhil Kamath is Co-founder, Zerodha and True Beacon; and Jyotirmoy Chatterji is Head, Giving Pi, and Associate Director, Philanthropy Labs. The views are personal.
(Edited by : CH Unnikrishnan)
First Published: Dec 17, 2022 10:54 AM IST
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