The United States and India have much to learn from each other about the development of philanthropy and corporate social responsibility, according to panelists at a discussion hosted by the South Asia Institute at the Harvard Faculty Club on Tuesday.

Moderated by Harvard Business School associate professor Alnoor Ebrahim, the panel featured Rohini Nilekani, the founder and chairperson of the Arghyam Foundation, and Geeta Pradhan, an executive at the Boston Foundation. Though the two work in different philanthropic landscapes, both emphasized the role that non-governmental and philanthropic organizations play in tackling problems that governments and markets fail to address.

“Philanthropic capital should go where markets will not go, and where the state cannot go,” Nilekani said. “It is only when we build out a very strong society that you can have accountable government and accountable markets.”

Nilekani and Pradhan cited the similar context created by the “devolution of government”—the decentralization of social welfare programs in both countries in the late 20th century—which saddled municipal governments with administrative and social burdens that the private philanthropy sector has stepped in to shoulder.  

To that end, Nilekani said, “I spend my philanthropy capital on doing things that help build out people’s institutions.”

Rather than give rural Indian townships water filters, for instance, the Arghyam Foundation has worked with communities to levy social pressure on municipalities to distribute clean water more efficiently.  

Targeted efforts like Nilekani’s, according to Pradhan, stand in contrast to current inefficiencies in U.S. philanthropic activity.

“Here, one of the biggest issues is that the cost of transactions is very high and the sector has become very professionalized,” Pradhan said. “It has become a job sector in and of itself.” She noted that the NGO sector accounts for nearly 14 percent of Massachusetts employment.

Pradhan, in turn, suggested that Indian organizations should adopt the Boston Foundation’s model of “community mobilization,” which allows many private donors to contribute to a central, public fund. She also said that incentives for corporate philanthropy in India are often misaligned by current “social responsibility” laws that require larger firms to allocate 2 percent of profits to philanthropic activity.

While the panelists focused on the benefits of philanthropic reform, discussion attendees observed that a conflict often remains between economic development and philanthropic efforts to preserve natural resources. Harvard Law School doctoral student Erum Sattar noted that “the question often becomes, what should governments do—expedite job creation at the expense of the environment now, or act as the long-term custodians of the natural environment?”

Nilekani and Pradham also acknowledged the problem of state abdication of social welfare responsibilities.

“Philanthropy has a limited, but important role to play,” Nilekani said.  “And it must continue to evolve.”