Giving Journeys: Philanthropy & Indian Corporations

21252801_706f21b34eMy friend, Priya Viswanath, is a philanthropic consultant based in Delhi, India. She was formerly the CEO of Charities Aid Foundation (CAF) India and is on the governing council of Asia Pacific Philanthropy Consortium, (APPC). Priya has written and published extensively on the topics of corporate, diaspora and local philanthropy. Her book, Diaspora Indians: On the Philanthropy Fast Track, provided ground-breaking research on the Indian diaspora in the US, UK, Far and Middle East and their contributions to India’s development. In the post below, Priya tracks the growth of corporate philanthropy in India.

A recent announcement by Mukesh Ambani on the setting up of a new foundation with an initial capital of Rs. 5 billion led to speculation from some parts of the media asking the proverbial questions around motivation, intent and tax breaks. Given at the AGM of Reliance the day before, Mukesh had quoted cash balance of a whopping Rs. 19, 425 crores ($4.2 billion), I would opine Rs. 5 billion is not a lot of money.

My real concern as I mentioned to the journalist trailing this story was however less about the amount he had committed and more around interest areas of the proposed foundation and the impact that it can create. Having said that we are aware that every contribution big or small matters in the larger scheme of things given there are 1.85 billion people living in poverty in Asia (Centre for Asian Philanthropy, 2009) and a majority in India and China. The rhetoric of the Indian tiger and the Chinese dragon; the phenomenal growth of ultra high net worth wealth alongside stories of deprivation and suffering in two of the largest emerging economies and the recent HDI figures seem to propel folk like Mukesh Ambani into action!

In my role as Chief Executive at the Charities Aid Foundation from 2003-2009, we helped companies and employees to give to non profits in a sustainable, accountable, tax efficient manner. While our remit was to work with corporations we often found takers largely among multi nationals who practiced traditions of community investing and volunteering much in keeping with their global mandates. While we attempted to inspire Indian companies, it remained a challenge to bring them on board. There were many reasons for this – from knowing from what they wanted to do (cultural context not an issue for Indian companies), to wanting to go for it on their own and retain control over their philanthropy, to a resistance to paying for professional services and in many cases having the infrastructure to do it themselves.

Since leaving CAF in 2009, I have been reflecting long and hard with a variety of stakeholders on the larger picture and the role philanthropy has to play in building an equitable society. While it is easy enough to be skeptical on motive, intent and action of companies and donors, there have been initiatives by Indian companies that have made a difference. While much of the collective data is not quantifiable given there has been no giving survey in the country for over a decade, there seems to have been some evolution in the corresponding period. For the purpose of this article I will look to use the term philanthropy in its most basic form.

Indian companies have a long tradition of giving. While giving by Bill & Melinda Gates attracts media attention aplenty, I wonder how many Indians let alone the world know that generations of Tatas have sustained a tradition of bequeathing much of their personal wealth to the many trusts they have created for the greater good of India and its people. The Tata trusts today control 65.8 per cent of the shares of Tata Sons, the holding company of the group. The wealth that accrues from this asset supports an assortment of causes, institutions and individuals in a wide variety of areas. The trusteeship principle governing the way the group functions casts the Tatas in a rather unique light: capitalistic by definition but socialistic by character. The Sir Dorabji Tata Trust one of the larger Tata Trusts is best known for promoting six pioneering institutions of national importance. Four of these were established in Mumbai: the Tata Institute of Social Sciences, in 1936; the Tata Memorial Centre for Cancer Research and Treatment, in 1941; the Tata Institute of Fundamental Research, in 1945; and the National Centre for the Performing Arts, in 1966.

In pre independence India along side the Tatas were contributions from the Bajaj family. Soon after the demise of Jamnalalji in 1942, as per his wishes, the first charitable trust, Jamnalal Bajaj Seva Trust was established. With an initial corpus of Rs. 500,000, that was, Jamnalalji’s entire share in the family wealth.

Post independence the K C Mahindra Trust was founded in 1953 to promote literacy and higher learning; in Southern India in the same year the AMM Foundation was set up by the Murugappa Group. The late 50s and 60s saw many family trusts being established; community initiatives being set up by companies. The Birlas, Lala Shri Ram, Sarabhais, Mafatlals also contributed significantly to institution building and initiating development programmes in communities where they operated. Leaders such as Hasmukbhai Parekh, Darius Forbes, Godrej, Lalbhais all provided leadership and voice to philanthropy promotion.

The 80s and 90s – years of economic awakening of India saw increased investment by Indian and multi national companies largely in the areas of education and children.

Anand Mahindra of Mahindra & Mahindra reflecting on the period and his own initiative Nanhi Kali that focuses on the girl child says … “the yuppie boom had just commenced with the onset of the leasing industry in the mid-1980s and it brought wealth to a large number of young finance professionals. This generation of newly affluent young people yearned to give back to society, but was unable to locate an appropriate medium. They had little knowledge of the NGOs that existed at that time and these existing bodies were unable to demonstrate a direct consequence of individual contributions. So I started to think about putting together a system where people had a direct connect with who they were helping, where they could see the results of their contributions. I borrowed the Nanhi Kali model from a couple of charity organizations I had seen abroad. We adopted from the best practices of several NGOs. I suppose I could have chosen to donate money directly to NGOs, which in turn could have passed it on to needy girls. The other choice was to create an avenue for more interested young people such as myself to donate for the cause of the girl child. I chose to do the latter. I gave a corpus to the KC Mahindra Education Trust, which has been in existence since 1953, and asked them to manage this programme. This money was used to create the infrastructure to solicit donations. I funded the ads, the staff and the infrastructure” (Mahindra Anand, Oct. 17, 2009 Mint).

In 1996 two of India’s flagship companies Infosys Technologies and Dr. Reddy’s Laboratories set up the Infosys Foundation and Dr. Reddy’s Foundation respectively. While the latter works in the areas of Livelihoods, the former focuses on education, health care, rural development, arts and culture. In 1996, Shiv Nadar of HCL Technologies gifted of 1 million of HCL shares to the college he founded in the name of his father.

In 2001, Azim Premji founder of Wipro established the Azim Premji Foundation, a not-for-profit organization that today reaches out to over 2.5 million children in more than 20,000 schools across India. The vision of the Foundation is to significantly contribute to quality primary education for every child, in order to build a just, equitable, humane & sustainable society. The financial resources to this foundation have been personally contributed by Premji. The model adopted by the Foundation – working in partnership with government and other non profit organisations with a similar vision has led to real impact being created.

The last couple of years have seen leading Indian companies Bharti, Gujarat Ambuja Group, JK Group, SRF Ltd and others taking up scaling initiatives. In 2006, Bharti Foundation unveiling its plans committed to a corpus of Rs. 200 crores and planned to open 500 primary and 50 senior secondary-cum-vocational training schools for underprivileged children across rural India under its Satya Bharti School Programme. In addition to the large Indian promoter led companies there are a range of Indian companies such as ICICI. The ICICI Foundation established in early 2008 with a commitment of 1% of ICICI Bank’s profit is today looking at Education, health, financial inclusion, civil society and the environment. From total receipts of Rs. 617.80 million received over 2 financial years (January 4, 2008 to March 31, 2009), the Foundation grant made Rs. 555 million in the same period.

There are also companies such as ITC where there has been an enmeshing of CSR into Business, besides a large spend on pure CSR itself! In 2000, harnessing the empowering force of information technology and its scalability, ITC launched e-Choupal – a knowledge portal providing farmers with a range of information and services. Designed to enable them to bargain collectively and enhance their transactive power, e-Choupal became the much needed and easily adoptable tool farmers had been waiting for. Today e-Choupal is a vibrant and rapidly growing zone of business and interaction for over 4 million farmers. For ITC this is an expression of a commitment beyond the market.

The aspiration of old and new companies to be active in the philanthropy space is on the rise. In a recent interview to Forbes India Shiv Nadar of HCL Technologies commenting on unaccomplished tasks says “I wish I had gotten into philanthropy earlier” (Interview, Forbes India, Nov. 6, 2009). Patu Keswani, Chairman and Managing Director of Lemon Tree Hotels who now owns 11 hotels with a revenue of over Rs 103 crore, wants to adopt 5,000 poor children in Delhi and 3 MCD schools and venture into corporate social responsibility aggressively. “I want to open a trust,” he says exemplifying Alexander the Great. “Alexander had told his grave men not to embalm his hands, and keep them open to signify that he took nothing. I plan to do something similar by entrusting wealth to a social trust, when I’m gone,” he adds. Philanthropy practitioners in India often wonder why companies go to it on their own – setting up Trusts, Foundations when there are existing initiatives they can partner with. The business of business is business not philanthropy. Would it not therefore not be wiser to let intermediaries and established non-profits that have specialist knowledge and staff to direct their philanthropic aspirations? The other concern is around reinventing the wheel. Government investment in education and health infrastructure has been considerable; but much of this is not managed well or functional. Would it not be a more efficient use of resources to partner, bring in resources and expertise that corporates have in plenty to make these functional?

Azim Premji, Chairman Wipro Corporation in a recent address emphasizes this …”In a country such as ours achieving quality education is an extremely challenging task and it becomes imperative for the three critical stakeholders – the government, civil society organizations and the corporate sector, to work together in unison to face this challenge.”

As Indian companies find their place in the sun, we hope philanthropy organisations, non profits, government and big business will find ways of optimizing use of resources to build a more equitable world.

Republished with permission by author. Formerly published in the Centre for Advancement of Philanthropy, Mumbai, Philanthropy newsletter on Dec. 2009. Photo courtesy of mutbka, Creative Commons, Flicker.

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