July 16, 2010 by Post Team
Philanthropy:My friend, Priya Viswanath, is a philanthropic consultant based in Delhi, India. Former Director General of the Charities Aid Foundation (CAF) of India and is in the governing council of Asia-Pacific Philanthropy Consortium (APPC). Priya has written and published extensively on the topics of business, the diaspora and local philanthropy. His book, Indian Diaspora: On the Fast Track Philanthropy, provided innovative research on the Indian diaspora in the U.S., UK, Far and Middle East and its contributions to the development of India. In the post below, Priya monitoring the growth of corporate philanthropy in India.
A recent announcement by Mukesh Ambani, on the establishment of a new foundation with an initial capital of Rs. 5 billion led to speculation of some sectors of the media to do the proverbial questions about motivation, intention and tax breaks. Since the general meeting of confidence yesterday, said Mukesh had a cash balance of whopping Rs. 19, 425 million rupees ($ 4.2 billion), I would say Rs. 5 billion is not much money.
My real concern as I said to the journalist behind the story was however less than the amount he had committed and more around the areas of interest of the foundation proposal and the impact it can create. Having said that we are aware that every contribution matters great and small in the grand scheme of things since there are 1.85 billion people living in poverty in Asia (Asia Center on Philanthropy, 2009) and a majority in India and China. The rhetoric of the tiger in India and the Chinese dragon, the phenomenal growth of ultra high net worth wealth alongside stories of deprivation and suffering in the two largest emerging economies and the recent figures seem to propel HR people like Mukesh Ambani in action!
In my capacity as chief executive of the Charities Aid Foundation from 2003-2009, we have helped companies and employees to give the profits in a sustainable, responsible and effective way of taxes. While our mission was to work with companies that are often largely among makers of multinational traditions practiced by the investment community and volunteerism both in accordance with their global mandates. While we have tried to encourage Indian companies, which remains a challenge to take on board. There were many reasons for this – to know what I wanted to do (no cultural context is a problem for Indian companies) want to go for it on their own and maintain control over his philanthropy, a resistance to paying for services professionals and in many cases with the infrastructure to do it themselves.
Since leaving the CAF in 2009, I have been thinking long and hard with a variety of stakeholders in the larger picture and the role of philanthropy is to play in building an equitable society. Although it is quite easy to be skeptical about the motives, intent and action of businesses and donors, there have been initiatives by Indian companies have made a difference. Although much of the collective data can not be quantified because there has been no summary in the country for more than a decade, seems to have been an evolution in the corresponding period. For the purposes of this article I will look to use the term philanthropy at its most basic.
Indian companies have a long tradition of giving. Giving by Bill & Melinda Gates attracts the attention of the media in abundance, I wonder how many Indians not to mention the world to know that generations of Tata has maintained a tradition of bequeathing much of their personal assets to many who have created trusts for the benefit of India and its people. The Tata trusts now control 65.8 percent of the shares of Tata Sons, the holding company of the group. The wealth derived from this asset supports a variety of causes, institutions and individuals in a wide variety of areas. The trusteeship principle governing the operation of the group gives the Tatas in a unique light: capitalists, by definition, but by the socialist nature. The Sir Dorabji Tata Trust one of the largest Trusts Tata is best known for the promotion of six pioneering institutions of national importance. Four of them settled in Mumbai: Tata Institute of Social Sciences, in 1936, the Tata Memorial Centre for Research and Treatment of Cancer in 1941, the Tata Institute of Fundamental Research in 1945, and the National Arts Centre Performing Arts, in 1966.
In India before independence alongside the Tatas were contributions of the Bajaj family. Shortly after the disappearance of Jamnalalji in 1942, according to his wishes, the charitable trust first, Jamnalal Bajaj Seva Trust was founded. With an initial corpus of Rs. 500,000, which was all Jamnalalji share in household wealth.
After the independence of the KC Mahindra Trust was founded in 1953 to promote literacy and higher education in southern India in the same year the MOA Foundation was established by the Murugappa Group. The 50s and 60s saw many family trusts being established, creating community initiatives by business. The Birlas, Lala Shri Ram, Sarabhais, Mafatlals also contributed significantly to the creation of institutions and to initiate development programs in the communities where they operate. Leaders like Hasmukbhai Parekh, Darius Forbes, Godrej, Lalbhais all provided leadership and voice to promote philanthropy.
The 80 and 90 – of India’s economic awakening saw a greater investment by domestic firms in India and multi largely in the areas of education and children.
Anand Mahindra of Mahindra & Mahindra period and reflect on their own initiative Nanhi Kali which focuses on the girl says … “The yuppie boom had just started with the beginning of the leasing industry in the mid-1980s and brought together a number of rich young finance professionals. This generation of young nouveau riche longed to return to society, but could not find an appropriate medium. They had little knowledge of non-governmental organizations that existed at that time and these existing bodies were unable to demonstrate a direct result of individual contributions. So I started thinking about setting up a system where people had a direct connection with those who were helping, where they could see the results of their contributions. I borrowed the model of Nanhi Kali from a couple of charities had seen abroad. We have adopted from the best practices of various NGOs. I suppose I could have chosen to donate money directly to NGOs, which in turn could have happened to girls in need. The other option was to create a way for young people more interested, like me, to donate to the cause of the girl. I chose the latter. I gave him a corpus for the KC Mahindra Education Trust, which has been in existence since 1953, and asked them to manage this program. This money was used to create the infrastructure needed to solicit donations . I funded the ads, staff and infrastructure “(Anand Mahindra, October 17, 2009 Casa de la Moneda).
In 1996 two flagship companies of India Infosys Technologies and Dr. Reddy’s Laboratories created the Infosys Foundation and Dr. Reddy’s Foundation, respectively. While the latter works in the areas of livelihoods, the former focuses on education, health, rural development, arts and culture. In 1996, Shiv Nadar of HCL Technologies endowed with 1 million shares of HCL for the school he founded in the name of his father.
In 2001, Azim Premji of Wipro founder Azim Premji established the Foundation, a nonprofit organization that today reaches more than 2.5 million children in over 20,000 schools across India. The vision of the Foundation is to contribute significantly to quality primary education for all children, in order to build a just, equitable, humane & sustainable. 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 nonprofit organizations with a similar vision has translated into real impact is being created.
The last couple of years have seen major Indian companies Bharti, Gujarat Ambuja Group, JK Group, SRF Ltd and other initiatives taking scale. In 2006, Bharti plans revelation Foundation committed to a corpus Rs. Rs 200 million and plans to open 500 primary and 50 higher vocational schools-cum-school for underprivileged children across rural India under the Satya Bharti School Program. Besides the great Indian promoter led companies there are a number of Indian companies like ICICI. ICICI Foundation established in early 2008 with a commitment of 1% of profit ICICI Bank is now looking to education, health, financial inclusion, civil society and the environment. Of the total revenues of Rs. 617.80 million received over two years (January 4, 2008 to 31 March 2009), the Foundation grant was Rs. 555 million in the same period.
There are also companies like ITC where there has been a cog in the CSR on business, and spent a large part of CSR clean itself! In 2000, leveraging the strength of empowerment of information technology and scalability, ITC launched e-Choupal provide farmers – a knowledge portal with a range of information and services. Designed to enable them to bargain collectively and to increase their power Transactive, e-Choupal has become a much needed and farmers can easily adopt the tool had been waiting for. Today e-Choupal is a vibrant and fast growing business and the interaction area for more than 4 million farmers. For the ICC is an expression of a commitment beyond the market.
The quest of the old and new companies are active in the area of philanthropy is increasing. In a recent interview with Forbes magazine India Shiv Nadar of HCL Technologies comments on the unfulfilled tasks says: “I wish that had gotten in previous philanthropy” (Interview, Forbes India, November 6, 2009). Patu Keswani, chairman and CEO of Lemon Tree Hotels, which now owns 11 hotels with a turnover of over Rs 103 crore, want to adopt to 5,000 poor children in Delhi and three MCD schools and venture into the social responsibility companies aggressively. ‘I want to open a trust, “says Alexander exemplifying. “Alexander had told his men tomb to anoint his hands, and keep them open to signify that he took nothing. I intend to do something similar to entrust the social wealth to a trust, when I’m gone,” he adds. Philanthropy professionals in India often wonder why companies are going to by them – the creation of trusts, foundations when there are ongoing initiatives that may be associated with. The business of business is business, not philanthropy. Would not it therefore not be wiser to allow intermediaries and established nonprofit with expertise and personnel to direct their philanthropic aspirations? The other concern is about reinventing the wheel. Public investment in education and health infrastructure has been considerable, but much of this is not handled well or functional. Would not it be more efficient use of resources to work, providing the resources and experience in companies that have everything to make this functional?
Azim Premji, chairman of Wipro Corporation in a recent speech that emphasizes … “In a country like ours to achieve a quality education is an extremely difficult task and it is imperative for the three major stakeholders – government, civil society organizations and the business sector to work together in unison to address to this challenge. ”
As Indian companies to find their place in the sun, we hope that philanthropic organizations, nonprofit, government and large companies will find ways to optimize use of resources to build a more equitable world.
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