Open Forum

New Delhi, 23 February 2011

Corporate Charity

WHERE ARE THE PHILANTHROPISTS?

By Dhurjati Mukherjee

The Indian super rich have been rather slow in extending charity to the poor compared to other countries of the world. The Indian $ billionaires number around 69 being second only to the US which has around 403 and, according to Forbes, the combined net worth of the country’s 100 richest people rose to $ 300 billion in 2010 from $ 276 last year.

But unlike the UK where about 1 per cent of the GDP is spent on charitable donations and around 2 per cent in the US, in India philanthropy is miniscule. Recently, Microsoft’s Bill Gates and Berkshire Hathaway CEO Warren Buffet launched a ‘Giving Pledge’ to get their wealthy colleagues to donate half of their fortunes to charity. 

While Buffet made the world’s largest individual donation of $ 31 billion, Gates and his wife, Melinda, are busy spending their money on fighting malaria and river blindness. Earlier, Andrew Carnegie gave $ 7 billion way back in 1901. Many others have donated large sums to educational institutions in the US and UK such as Stanford, Cornell, Harvard and Oxford.

In India, the Wipro Chief Azim Premji, the country’s third richest man with a net with of $ 17 billion, decided to transfer Rs 8846 crores ($ 2 billion) worth of Wipro shares to a trust to fund charitable activities with a special emphasis on education. Following him, HCL Technologies founder Shiv Nadar too pledged 10 per cent of his wealth for philanthropy. The Shiv Nadar Foundation focuses on education and has set up a not-for-profit engineering college.

Apart from these two, the Bajaj trusts have amassed $ 150 million and the Bharati Foundation started by telecom czar, Sunil Mittal, has notched up more than $ 60 million. In fact, the Bharati Foundation schools are estimated to have provided free education to about 30,000 children in Punjab, Haryana, Uttar Pradesh, Rajasthan and Tamil Nadu. The Tatas and Birlas are also known for their charities and trusts that fund schools and colleges and hospitals.

But these are no match to those in the West, specially keeping in mind the country’s need of education and health. It is interesting to note that while Indian corporates capital to educational institutions has been substantial, their contributions to universities and centres of learning are meagre. One corporate giant gave $ 30 million for building in an Ivy League university. This presumably betrays a lack of confidence in the Indian educational structure.

Clearly, this should not happen. The educational and health sectors need enormous infrastructure to reach the poorer segments of society, specially the backward areas of the country. Notwithstanding, the Prime Minister’s emphasizes on the need for the private sector to come forward to donate towards charity for the poor and the impoverished, the response has not been to the desired levels or substantial enough to meet the increasing needs of the country.   

Indeed distressing, against the backdrop that the business community has been highly successful in profit maximization. The Prime Minister hit the nail on the head when he underscored that such maximization should be within “the bounds of decency and greed”. Even in a liberalized economy where there is full play of competitive forces, some self-restraint becomes imperative.

The lack of such self-restraint has resulted in increasing corruption, thus bringing a bad name to the country. Arguably, there is a need to check profit maximization and sharing a part of the profits with the community. For example, a businessman could consider setting up an education or a health centre solely for the poor at the place where his project or factory is running successfully.

While the rich are increasingly prospering, there has hardly been worthwhile improvement in the life and livelihood conditions of the poorer sections. Moreover, the urban bias in Indian planning has neglected the rural sector where a lot remains to be accomplished. Be it in the realm of health, education or power generation. There are many areas where a factory is surrounded by slums and squatter settlements with people living in wretched conditions.

The benevolence of the rich needs to be directed to these areas. Sadly, though industrial houses are setting up schools, educational institutes, nursing homes etc. these are not for any charitable objective but for earning money. Though funds are set apart for corporate social responsibility, most companies prefer to operate through their own trusts or foundations, often leading to the suspicion that these are camouflaged marketing arms aimed at brand promotion rather than philanthropy. It is this attitude of the business community, which needs to be changed.

It is a well known that rising income and wealth inequalities, if not matched by a corresponding rise of incomes can lead to social unrest and violence. As the Union Ministry of Home Affairs annual report admitted, the problem of Maoists is not merely a law and order problem but “has deep socio-economic dimension” and recommended “a multi-pronged strategy essentially of accelerated socio-economic development of Naxal areas”. The root cause of this violence has been the State’s retreat in key social sectors, stranglehold on political power by those who control land and other economic resources and lack of effective governance. 

Undoubtedly, development has benefited the well-off sections in the urban centres where lot of projects is taking place. Airports, city beautification plans, flyovers get precedence over providing safe, potable water, sanitation and basic health facilities for the poor in small towns and cities. More pathetic are the conditions in backward areas where the Government has limited funds for development.

Questionably, shouldn’t the Prime Minister be telling big business houses to take up development work in some of these places by giving a small share of their profits? As also curtailing conspicuous consumption or restricting the salaries of its top officials?        

Importantly, there is need for the business community to change its outlook, whereby they should not only think of building wealth but also about paying back to society. They need to avoid conspicuous consumption. Recall, Mahatma Gandhi had talked of tena-tyaktena-bhunjeethah (enjoy the wealth by renouncing it) when he said “Earn your crores by all means but understand that your wealth is not yours; it belongs to the people. Take what you require for your legitimate needs and use the remainder for society”.

He believed that “a violent and bloody revolution is a certainty one day unless there is voluntary abdication of riches and the power that riches give and sharing them for common good”. Gandhi wanted the rich to hold their property and use it for the common good of society.

In sum, it is necessary that corporates take the initiative in carrying out its social responsibility along with non-governmental organizations for ensuring that vital resources in the areas of heath, education, water and sanitation, road construction etc. are constructively used. This would go a long way in strengthening the local economy, closing the inequality gap and reducing poverty.  ----- INFA

(Copyright, India News and Feature Alliance)