BackInvesting for giving
'But where will I get the money to spare?' If that's what is stopping you from donating, here's how you can do your bit towards 'personal social responsibility'
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Traditionally, giving meant a post-retirement plan, or religious donations, or even as part of a will. Natural calamities also prompted people to donate. But contributions to social causes can take on a more systematic nature if giving is treated on a par with saving and investing.
Bengaluru-based financial adviser Shweta Jain has created a “giving plan". But the 33-year-old didn’t start off this way. “Till about four years ago, I used to donate to temples. Giving was a one-off thing to do but now I have become more organized," says Jain. The change was brought about to a large extent by the birth of her son, Ishaan, who is four years old now. “After our son was born, I realized how fortunate we were to have such lives, while many others didn’t," says Jain, whose “giving plan" is an annual one which is further divided into quarterly duration. She supports various non-profits that work for the girl child and women-related causes and usually dips into her savings to make these contributions. “The amount has been increasing year-on-year. Earlier, it used to be ₹ 2,000-2,500 per quarter. As the income and savings have gone up, I have increased the donations," she adds.
Not all people, however, turn to their savings when they think about giving. Also nowadays most people want to know who the end recipient will be or at least want to be sure that the money is being used for the right purpose. “Awareness about giving has shot up (as well as availability of funds), and there is a conscious effort to allocate a part of monthly savings towards this," says Lovaii Navlakhi, founder and chief executive officer, International Money Matters, a Bengaluru-based financial advisory firm.
The helping hand extends further. “All my nature-related photographs are released under Creative Commons licence and many not-for-profits use these in their gift cards, posters, greeting cards, blogs, books and more," he says. This is Narasimhan’s version of charity in kind, where he shares his skills as a photographer which non-governmental organizations (NGOs) use to promote their causes. Across all initiatives, his contributions total around ₹ 50,000 a year.
Ten years ago, Narasimhan had started off with ₹ 5,000. “I open bank FDs (fixed deposits) for this purpose only and break some of them when needed," he says.
Noida-based software engineer Prejith Pillai, 28, does freelance app and software development work to raise money for various causes. “I have been raising funds and contributing since I was in college in 2004. I used to donate almost every month on a need basis for an old-age home in Kerala—for clothes, medical care, even items like toothpaste—for the 150-plus residents there," says Pillai. “I freelance to be able to generate money to donate. While there is no fixed amount, I manage to make ₹ 2-5 lakh a year and use this to make donations," says Pillai.
Building a basket
There are various other ways to find the money for philanthropy. “If you have a plan in mind you could start a recurring deposit for short-term needs (within a year)," says Srikanth Meenakshi, founder of FundsIndia, a financial advisory firm. An even better way, with scope for higher returns, is to invest in a systematic investment plan (SIP) of a mutual fund scheme. “Over a longer period, SIPs tend to give better returns, and you can use a part of the returns or all of it towards a cause," says Meenakshi.
Another smart method is to choose the dividend-paying option of an equity-linked savings scheme (ELSS). “Every year, ELSS pay dividends in January or February. Since the time of receiving dividends is known, you can plan your donations accordingly," says Meenakshi. An added advantage of this is that you can claim tax deductions under section 80C of the Income Tax Act, 1961, and if the returns are given to certain trusts or institutions, the donations get tax benefits as well.
“This strategy serves a dual purpose. One, as dividends are declared towards the end of a financial year, when many people want to invest to save tax, donating that money helps get tax benefits. Two, you get money to contribute without having to dip into savings; this can be seen as ‘extra money’ in a way," says Meenakshi.
Different strokes
You can also use your credit card points to generate money for a cause. For instance, if you have, say, 14,000 points on your credit card and four points equal ₹ 1, the points would be equal to ₹ 3,500.
Occasions like an anniversary, birthday, even a wedding, can be an effective way of raising money.
Jain convinced her son to not expect gifts on his birthday. Instead, the guests were asked to contribute to an NGO. “We were able to raise about ₹ 35,000 on his last birthday," says Jain.
Information technology consultants Anisha Agarwala and Behezad Mehta, both 30, did something similar for their wedding in 2014. The Virginia, US, based couple asked their family and friends to contribute to two NGOs—Muktangan and Bal Asha Trust—instead of giving them gifts. “A total of ₹ 1.27 lakh was donated to both the organizations through GiveIndia (Foundation)," says Agarwala on email. They opened a page with GiveIndia, an online donation platform that brings together various NGOs after scrutinizing them for transparency and efficiency, and selected the two NGOs for their charity wedding registry. Guests had to visit the online page and donate any amount they wished to, in Indian or foreign currency.
Agarwala says they wanted to “do something meaningful for children in India less fortunate than us".
“The trend of occasion-giving is slowly on the rise. Weddings and baby showers are popular occasions on which people request guests to support a cause," says Rahul Moosad, senior manager, payroll giving, GiveIndia. “People include the details on their wedding or event e-invitations. This is a good way because collecting cash at the venue can be difficult," he adds.
At the other end of the spectrum is the Mumbai-based couple Trupti and Mandar Natekar, both 40. “We don’t wait for occasions; we give whenever we feel there is a need that we can support. We are in this position due to fate, destiny. Others don’t have the same privilege," says Natekar, who is a senior vice-president with a media company.
Recently, the couple donated to the Prime Minister’s National Relief Fund for the flood victims in Jammu and Kashmir and towards the Nepal earthquake relief. “I read recently that (actor) Nana Patekar is raising money to help farmers in Maharashtra. We want to help and while we haven’t decided how much, it will be at least 15,000," he says, calling it “PSR"—personal social responsibility.
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