‘Giving away 99% of wealth...there can’t be a more powerful message’

MUMBAI, March 24 (Agencies): Philanthropy has become the flavour of the season with American billionaires Warren Buffett and Bill Gates visiting India. However, the jury is out on how successful their initiative would be here, with homegrown corporates giving divergent views on whether there is a need to emulate western concepts. “I don’t think the concept of philanthropy in India needs to simply emulate Western concepts,” said Harsh Goenka, chairman, RPG Enterprises. Goenka believes Indian industrialists and corporate houses have their home-grown, successful and time-tested models of philanthropy which are yielding good results.
But this has not changed the image that Indians are frugal when it comes to donations. The idea continues to stick to the country even after billions of dollars were put aside as donations by software czar Azim Premji and telecom tycoon Sunil Mittal to set up charitable foundations. Some believe, the Buffett-Gates initiative might just do the trick. “Warren Buffett is somebody who is giving away 99% of his wealth to charity and philanthropic activities. Nothing can be more powerful a message for corporates than this,” said Dilip Ranjekar, CEO, Azim Premji Foundation. A Bain & Co report supports this view. While there are more than 400 million people (40% of India’s population) below the poverty line, India lags developed economies with philanthropic donations of 0.6% of the country’s GDP. Indians gave away about $7.5 billion to charity in 2010, compared with $300 billion contributed by the US in 2009.
But Adi Godrej, chairman, Godrej Group, says, “The momentum is strong and will continue.” Twenty-five per cent of the shareholding of Godrej Group’s holding company (Godrej & Boyce Manufacturing Co), which owns a large part of the shares of all its companies, is held for many decades by the Pirojsha Godrej Foundation, where the main philanthropic activity is aimed at education, healthcare and environment. Corporate philanthropy is not new in India as well and it’s also not clear whether they would change their established ways of giving. The $72 billion Tata Group sowed the seed of constructive philanthropy-from setting up an endowment fund to improve education in 1892 to building prominent educational institutes, hospitals and performing art centres in the country. Similarly, for the Birlas, philanthropy dates back a hundred years. Rajashree Birla, chairperson, Aditya Birla Centre for Community Initiatives and Rural Development, said: “Our social vision is integrated into our business vision. “With focus areas like education, healthcare and family welfare and women empowerment processes, the group spends approximately Rs 200 crore annually on philanthropy and CSR. In addition, we are able to mobilize Rs 100 crore from funds earmarked by the government towards inclusive growth in our role as catalysts,” said Birla.
As the number of Indian billionaires grows and their income streams swell and become steady, optimists believe there will be a natural growth in corporate philanthropy. Vidya Shah, ED & head, Edelgive Foundation, the philanthropy arm of the Edelweiss group, said it is very timely that the Gates-Buffett initiative is taking place in India, and she expects it will get a very strong response from India’s rich. In India, philanthropy is more in-bound in nature with NGOs and organizations doing philanthropic work going to corporates and individuals for help. Shah feels the initiative by the Gates couple could bring to India a more out-bound concept, that is corporates and individuals reaching out to the NGOs and organizations in this field. According to Rana Kapoor, founder/managing director & CEO, Yes Bank, responsible banking is deeply embedded within the DNA of the organization wherein it incorporates sustainability principles in its core business operations, consistently keeping triple bottom line objectives-people, profit, planet-at the forefront of doing business.
On the other hand, Ahmedabad-based pharma Zydus Cadila prefers volunteer-driven philanthropy rather than chequebook philanthropy. The company’s Shiksha Shikshak Jagruti Abhiyan is a mentoring programme to empower teachers in rural communities in Gujarat. More and more wealthy individuals in India are establishing foundations. The Bajaj trusts have amassed $150 mn, and the Bharti Foundation, started by Sunil Mittal, has slightly more than $60 mn, according to the Bain report. Azim Premji recently transferred shares (213 mn) worth $2 bn to a trust and the dividends would fund philanthropic work in India. Similarly, Shiv Nadar put in several crores into his pet education project.