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Philanthropy: Promise of plenty?

December 7, 2010

Industry must now take the initiative and forge a strong partnership with civil society to take forward the agenda of going beyond economic and inclusive growth to real and holistic development.

AZIM Premji’s . 9,000-crore endowment did not get the headlines it deserved. This donation is truly a bonanza for the projects of school education, teacher training and university setting-up, undertaken by the Azim Premji Foundation. Certainly, the figure is but a fraction of the alleged loss through the 2G spectrum scam, and not as titillating as the phone tapes. Yet, as the biggest-ever endowment in Indian history, it does merit more attention.

The last few years have seen many top business leaders give generously to various societal causes. Apart from the Tatas, long known for generosity toward social causes, Shiv Nadar and Sunil Mittal have recently announced substantial donations, and many others have provided funds for education (generally to their alma mater) or other societal priorities. Does this signify an upsurge of generosity in India, the dawn of a new age of philanthropy?

Yet, charity is hardly widespread in the country, as fund-raisers for any social cause will vouch. We seem to suffer from the general lack of a culture of ‘giving’. In many countries, countless small donors collectively donate a huge amount. In contrast, individual donations are extremely limited in India, except for religious purposes. Thanks to an overpowering government, bureaucracy and an increasingly materialistic society, corruption has been growing. Apparently so have the attempts to bribe God, judging from the booming collections at religious shrines. The ‘Tirupati syndrome’ — putting money, gold and jewellery in the hundi at the temple, presumably in the hope of being thereby absolved of earthly sins —extends to giving money for all kinds of religious and ritualistic causes. However, donations for social causes are difficult to come by. The large and growing middle class, despite the prosperity brought by economic boom, is yet tight-fisted when it comes to non-religious charity.

At the level of organisations, there is growing consciousness about the wider social responsibility of business (corporate social responsibility or CSR), and recognition that this is an aspect of good corporate citizenship. It also stems from increasing interest in integrating this with the core business itself, so that doing good is an enabler of doing well. There is, too, a degree of pressure and expectation from the environment — be it civil society organisations, the local community or government. As a result, CSR has now become a part of the regular corporate vocabulary. However, for far too many companies, CSR is a mere ‘tick in the box’ — another item to be symbolically met, like gender diversity, recruitment of differently-abled, or a woman on the board.

The government, in its demonstrative espousal of inclusive growth, considered making it mandatory for companies to spend at least a specified minimum on CSR. This idea was abandoned, though, after most felt that mandating it would not be wise. However, the pot has been stirred and there is certainly far more debate and consciousness now about the point that companies do have a role with regard to broader societal problems.

Companies now do set apart funds for CSR, but prefer to operate through their own trusts or foundations, often leading to the suspicion that these are but camouflaged marketing arms, aimed at brand promotion rather than philanthropy. As a result, there are a few (if any at all) grantmaking organisations like the Tata trusts, which provide funding to other organisations. Thus, while many such ‘company foundations’ are flush with money, well established NGOs, particularly at grassroots level, are starved of funds and perpetually facing a cash crunch.

FURTHER, even as more corporate funds (hopefully) begin to flow into the social sector, there is an emerging danger. The new breed of grant givers are ‘professionals’, and talk the corporate lingo. Thus, they are looking for measurable outcomes, specified deliverables, quarterly figures, cost-benefit ratios and quantifiable ROI: in fact, the kind of hard data by which one would assess a company’s performance every quarter. For certain kinds of work — for example, constructing schools — this is feasible, even if it is not very desirable. However, hard-core development work involves things like creating empowerment, breaking shackles and structural barriers, capacity building, self-confidence, community organisation, and awareness of rights. These are processes that are difficult, slow and not generally amenable to quantification. Unfortunately, most funders prefer specific projects with measurable deliverables (vaccinating a given number of children) to the more difficult and equally important task of building confident, self-reliant individuals and cooperative communities.

Who will fund this kind of work, which is at the very core of true development? It is unlikely that such work could be done by ‘corporate foundations’, or anyone but grassroots activists, familiar with an area and trusted by local people after years of hard labour. Channelising philanthropic generosity towards such groups is one of the key challenges to both civil society and business organisations. It is here that one needs grant-giving organisations (of the Ford Foundation or Tata Trusts type), and one looks towards the large corporate houses to create such entities. However, it is important that they do not end up distorting development priorities, as has sometimes happened with large international funding.

Premji, Nadar and other captains of India’s ICT industry have shown the way, and one hopes that many more business leaders and entrepreneurs will follow, opening up their purse strings with the generosity of a Azim Premji. To expect philanthropy on the scale of Bill Gates or Warren Buffett may be unrealistic; yet, can one expect more from individual donors and corporates than what we have seen so far? The small donor in India is a poor contributor, except to religious causes; one hopes that this too will change.

The industry-government relationship has moved from antagonism to cooperation (sometimes, sadly, only for personal benefit) and spurred economic growth. It is time for industry to now take the initiative and forge a strong partnership with civil society to take forward the agenda of going beyond economic growth, even beyond inclusive growth, to real and holistic development.

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