India needs ‘new generation - impact driven’ philanthropy
By: Atul Raja
Feb 23, 2015

Philanthropy-smallThere is no denying the global phenomena of growing income disparity and this is true for India as well. Some of the recent economic statistics have been eye openers. A 2014 study by Oxfam showed that the world’s top 80 billionaires had a cumulative wealth of over $1.9 trillion, which is more than the poorest 3.5 billion people on the planet. What’s more, the richest 20% in the world own more than 90% of global wealth!

With the rich becoming richer and the poor poorer by the day, corporate philanthropy in India will have to steadily take the responsibility of tackling some its burning issues and challenges, especially in areas of education, health and community development which not only affect the majority of Indian masses, but also need dire attention as these have been traditionally ignored by public institutions. The need of the hour is to have a long-term sustainable approach to development, act rapidly, pilot innovative ideas and programs and promote policy analysis and advocacy. With India slated to be among the top 5 economies of the world, Indian corporates today are well equipped in terms of resources to create large-scale impact in critical sectors of the economy and play a vital role in economic growth.

Globally, leading philanthropists spend between 2% and 5% of their net worth in philanthropy annually, while in India as per the list of Biggest Givers in 2014, the average giving range across some of the biggest philanthropists (with the exception of Azim Premji) is between 0.4% to 1.7%. Also, just two out of the top ten richest Indians find a spot in the ‘Top 10 Philanthropists’ list. Hence, philanthropy in India has the room to upgrade and upscale. India’s wealthy can definitely afford to be more charitable.

Bill Gates during his round table with leading Indian philanthropists in 2011 clearly hit the nail on its head when he opined that “a key factor holding [Indian] people back from being even more generous is finding philanthropic endeavours that make them feel like they are having a significant and unique impact”. The way forward is to have professional guidance, teams and structure for optimal use of the philanthropic grants. “High impact and sustained philanthropy can change the face of India” says Indian American business magnate, Silicon Valley entrepreneur, and Chairman and Founder of the Bengaluru headquartered Wadhwani Foundation, Dr. Romesh Wadhwani.

However challenges remain and there is a long way to go. With India still feudal in its mindset and debilitating societal inequalities still in existence, the weakness of the charitable sector is a source of concern for philanthropists. It is estimated that there are around three million NGOs in India, or one for every 400 people. Dearth of regulation and proper accounting procedures are real impediments for grant-giving organisations. We need to work around this and one such attribute is to build the right organizational structure to cater to the vast network of volunteer fundraisers.

Indian philanthropy has to catch up to Western standards, but there are encouraging precedents and few visionaries have taken the lead. While some business leaders have pledged to donate most of their wealth to various organizations and charities, others have directed their attention towards specific causes they believe in. Adds Dr. Romesh Wadhwani who has pledged most of his wealth to the Wadhwani Foundation, “I’m from an Indian family of professionals and my parents had to go through hardships themselves to send me to IIT-Mumbai. And having got the best of education myself, I firmly believe it is my personal obligation to give back to the community”. As for his family, wife Kathy and daughter Melina, Dr. Wadhwani believes that they should have only that much of wealth as is needed to keep them comfortable. “Leaving too much for one’s children will take away their entrepreneurial skills,” he says.

There are other who are ushering in winds of changes in their own areas of belief. Subramanian Ramadorai, adviser to the Prime Minister of India in the national council on skill development, post his tenure at Tata Consultancy Services, has raised over Rs. 85 crore to build a paediatric hospital in Mumbai, one of the country’s largest. Rajashree Birla of the Aditya Birla Group, has over the years raised over $14 million for polio eradication alone. Nimesh Sumati and Rajesh Kacholia, both Mumbai businessmen, have catalyzed Caring Friends—an eclectic, informal and expanding giving group of people who fraternize, raise and channel over Rs.25 crore each year into high-impact NGOs. Anand Mahindra is a co-founder of Naandi-Danone, a partnership with the French multinational that pioneered the social business model in Bangladesh as propounded by Nobel laureate Muhammad Yunus.

With benchmarks being set for others to follow, corporate philanthropy in India should rise to the occasion and become the leading mode of giving back to the society. However, a sustainable and large-scale impact driven approach coupled with the power of ideas and partnerships could be the game changer.