Lessons to Indian corporate house Charity Begins At Home
Poverty is a malignant curse, which eats into the vitals of a country. And with the increasing number of people in the world today are facing the curse of poverty, thus there are hardships in financial and social status, and educational background. Being aware of these facets of life nowadays creates a sense of charitable purpose in each person, which, in turn, is translated into charitable deeds. So to eradicate this malignancy of poverty, all strata of society will have to make endeavours, particularly the rich. In the fast-paced life, no one thinks of charity—be it corporate house or the common man, which portends a gloomy picture. But all is not so dismal. A global consultancy firm Bain & Company in its report, released this month, titled “Philanthropy Report 2011”, painted a somewhat rosy picture. In its first report on the state of Indian philanthropy a year ago, it was clearly documented that wealthy Indians give a lot less to charity than their American or British counterparts. Warren Buffett and Melinda Gates visited India in March this year and exhorted their rich Indian peers to part with some of their wealth for charity. It was, quite frankly, embarrassing, but it began to spur soul-searching among higher income Indians about what was amiss. That self-examination seemed to have worked. In this regard, we can learn a lesson or two from American billionaires. Warren Buffett, has pledged 99 per cent of his wealth to philanthropy, while Bill Gates ploughs a lot of his personal money into the Gates Foundation. It is noteworthy that Mr Gates, with an estimated net worth of $56 billion and Mr Buffett, with a $50-billion net worth, are ranked second and third among the richest peoples in the world, according to Forbes magazine. Mr Gates has been active in philanthropy for several years, through the Bill & Melinda Gates Foundation. Media reports suggest that since 2009, he has teamed up with Mr Buffett to encourage wealthy Americans to give away a majority of their wealth to charities during their lifetime. However, it cannot be gainsaid that lot of India’s wealth is young and the culture here is to pass on wealth to the next generation. It takes a couple of generations before they reach that stage of saying that it’s time to give it away. India’s established wealthy like the Tata family already has several philanthropic efforts in place. In the last couple of years, several tycoons from India’s information technology industry have given to charities and educational institutions. Recently, Azim Premji, founder and chairman of Wipro Ltd., said that he planned to transfer $1.95 billion of his equity in the company to the philanthropic trust he controls. Still, India’s wealthy are not giving away to “the extent that they could, which is immensely perturbing.
But, according to Bain report now, a year later, its follow-up report shows an increase in giving in India in recent years compared to 2006, the same year the previous study used for comparison. There has been a 50 per cent increase in calendar year 2010 in private charitable giving—as a percentage of the gross domestic product—compared to 2006. However, on the positive front, annual private giving in India has increased almost threefold to between $5 billion and $6 billion in 2010, from $2 billion in 2006—a satisfying increase, one can say. Also corporations in India gave an estimated $1.5 billion last year, five times the amount donated in 2006, an increase that is faster than the pace of their rise in profits, it added. But it is worth mentioning that private giving in India accounts for only between 0.3 per cent and 0.4 per cent of the gross domestic product, significantly behind the United States, at 2.2 per cent, and the United Kindom, at 1.3 per cent,. But among developing nations, India is one of the leaders, ahead of China and Brazil. However, it will not be fair if I do not mention the great Indian philanthropists. “From the Tatas, Birlas, Bajajs, Dalmias, Jalans, Modis, Mittals, Singhanias, to small businessmen—India has a long history of philanthropy. But unlike in the West, donations here are largely given silently. About two-third of Tata Sons, the Tata Group’s holding company, is owned by various Tata trusts that use the money to fund educational and medical institutions, and other charities. The Birlas, likewise, run a large number of religious, educational and medical charities across the country without much fanfare. And though Tata Group chairman Ratan Tata announced a $50-million (Rs 230 crore) endowment for Harvard University, to which Mahindra & Mahindra vice-chairman Anand Mahindra had earlier given $10 million (Rs 46 crore) and several others are doing their bit for the less privileged within India also. But the proportions are still miles short of what the Buffett-Gates campaign wants the rich to do. I will conclude by saying that being charitably aware instigates a sense of fulfilment to those who translate their desire inot actions and thus enriches the lives of those who are in dire need.