Royal Bank of Scotland is targeting India's young super-rich with a range of products designed to help make giving to the needy easier and more efficient. Whether making business out of society's ills is ethical or not is a moot point, many observers say. Pia Heikkila reports
A heavily bejewelled hand stretches out of the gleaming Bentley's window with a couple of rupee coins.
A skinny little boy of no more than 6 quickly clenches his fingers around the coins and limps off to the next car.
You can see hope in the child's eyes - he believes he can still do at least two more cars before the light changes.
It's a sad but all too familiar scene in most metro cities in India.
India is a country with vast divisions of wealth. It has more millionaires than anywhere else in the world but, at the same time, hundreds of millions of people go to sleep hungry every night.
Royal Bank of Scotland (RBS) wants to change that by helping the wealthy to channel some of their cash into good causes.
The company has launched philanthropy service businesses designed to help its wealth management clients to identify charities or foundations that help the less fortunate.
Rather than giving alms to beggars at traffic lights, RBS reports that its clients see education as a key to a better life.
"Earlier, most of the charitable aspirations of the families were associated with their religious beliefs' causes but now in addition, there is a strong interest in education, housing and health care," says Maya Prabhu, the executive director for philanthropy services at RBS's wealth management division.
"There is a strong belief among high net-worth individuals [HNIs] that education is a powerful tool to empower this country to eliminate poverty."
But is it fair to create business out of giving? RBS says it is. The company wants to help its wealthy clients to create "an effective giving strategy" while at the same time advising them how to make even more money. It didn't reveal how much it is charging from its charitable services, though.
Those working directly for charities believe it is not only fair but necessary.
"It is imperative that HNIs begin demanding philanthropy service and advice from their private wealth managers to help them make the smart decisions," says Deval Sanghavi, the co-founder of Dasra, a strategic philanthropy foundation based in Mumbai.
The country has a long tradition of philanthropy, mostly linked with religion. But today's India has more to give than ever.
According to Credit Suisse, the total private wealth in India has tripled in the past decade to US$3.5 trillion (Dh12.85tn), while it is projected to hit $6.4tn by 2015.
The country has nearly 200,000 millionaires. But what is surprising is the fact that the millionaires are getting younger every year. And it is these rich young tycoons that RBS wants to target with its philanthropy services.
"The more recent surge in philanthropy follows the tremendous private wealth creation in India particularly post-liberalisation," says Ms Prahbu. "This is a particular trend among the young - those in their 20s, 30s, or 40s - who have either accumulated substantial wealth at a relatively young age through their own business ventures or who are benefiting from the substantial wealth of their parents," she adds.
The super-rich across India have attracted the interest of large global banks, with Barclays, Morgan Stanley, Credit Suisse and Standard Chartered all launching wealth management businesses in the country.
But because the market is maturing fast with product innovation and niche customer funds, wealth management companies have started courting their clients with offers for charitable causes.
"Many WM [wealth management] firms in India are trying various ways to build that trust in their brand and thereby in the sector as a whole: new advertising campaigns; training; and workshops to increase awareness and financial literacy," says Aamod Gokhale, the director of consulting at Cognizant.
"They are also reaching parents through sponsorship at educational institutions, launching new surveys and indices, as well as product innovation and highlighting the safety and past performance of their products," he adds.
The experts say India has plenty of potential to come up with market-based solutions to ease poverty, where the philanthropist provides the start-up capital to try out different types of business models - such as health care or education.
"Private philanthropy is necessary to help [start-up companies] in India," says Mr Sanghavi. "This funding needs to allow social entrepreneurs to take risks, assemble and retain strong management teams and forge linkages with the government to help influence change," he adds.
But how do you make certain your money is really going to the right causes? Evolving regulations will play an important role in building the future of the "giving industry".
"Even wealth management firms and advisers need know that regulations [are in place]," says Mr Gokhale.
"The securities and exchange board of India has published a concept paper on forming a self-regulatory organisation for investment advisers, which will protect investors from fraud."
The successful marriage of business and charities can only happen with transparency throughout the industry.
"Effective funding can only happen if these donors are given information about the issues involved," says Mr Sanghavi.
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