Azim Premji wants to give more
Azim Premji, already the most generous man in India, is looking to give more. And, he plans to do so under the aegis of his two-year-old grant-making body, Azim Premji Philanthropic Initiatives (APPI).
Through APPI, Premji, founder of Wipro Ltd, aims to give Rs.500 crore every year to non-profits that cater to vulnerable groups such as street children and the disabled and also to promote governance.
“We see ourselves giving Rs.500 crore a year by 2018, and becoming one of the largest grant-making bodies in India,” said G. Ananthapadmanabhan, who is in charge of running APPI.
Premji already runs an eponymous foundation that looks to improve quality of education for rural children. But he wanted to do more, said Ananthapadmanabhan, as it had become clear to him over the years that philanthropy would be the largest use of his wealth.
The Hurun India Philanthropy List bestowed the title of “Most Generous Indian” on Premji in 2015, the third year running, for his contribution of Rs.27,514 crore to education.
“It was always clear that education is an important focus area. But it was only one of the many important things that were needed to fulfil Premji’s mission of an equitable society. So there was always the idea that we should do more,” said Ananthapadmanabhan.
A few years ago, they were faced with a choice, he said. Either set up another foundation on the lines of the Azim Premji Foundation for health, and become a large health organization, or support the work of non-profits and give them grants to help them scale up.
Ananthapadmanabhan said they chose the grant-making route, given that there are already non-profit organizations doing the kind of work that Premji wanted to support (vulnerable groups, governance and nutrition).
APPI has so far made about 50 grants, of Rs.4 crore each, for a three-year period. Of the Rs.200 crore committed so far, 80% is almost entirely for vulnerable groups like street children, small farmers and the disabled.
Out of its allocation of Rs.500 crore a year, APPI will be spending a significant part on two projects—rehabilitating children who run away from home and reducing stunting of children in Odisha.
For these two tasks, APPI is setting aside Rs.200 crore and Rs.300 crore, respectively, which will be disbursed to the NGOs over a period of seven years.
Premji’s entry into grant-making is, in a way, reflective of the evolution of his philanthropy, said Smarinita Shetty, a director at Dasra, a philanthropy foundation.
According to Shetty, India has so far mostly had two types of givers—one where people set up their own institutions like schools and hospitals, wherein they function in an own-and-operate model; the other has philanthropists merely writing out cheques.
Grant-making is a route wherein you can get more bang for the buck as you are supporting something that someone has already invested in, she said, adding that it also affords the giver the flexibility to choose various causes to support.
Moreover, grant-making is a better way to support non-profits than donations as the latter become accountable for outcomes, even as they retain their independence. “Grant-makers bring new thinking to the process and there is high engagement,” said Shetty.
Dipesh Sutariya, co-founder of EnAble India, a non-profit that helps people with disabilities find employment and has received funding from APPI, said that grant makers should be aware that, while they are facilitating change, they should leave the execution to the non-governmental organizations (NGO).
“We are the experts. Grant makers are partners. But if they dictate how to execute, it derails us from our mission,” he said.
APPI understands that.
Ananthapadmanabhan said that while they work closely with grantees to orchestrate change, they are aware that they own no part of the NGO’s implementation of the work.
APPI, besides giving NGOs financial support, also helps certain NGOs scale up by giving them technical assistance. It will help them get other funding partners, so they are financially sustainable even after APPI stops supporting them.
In India, the giving landscape is dominated by company foundations. Very few individual philanthropists have turned grant makers. Even the Tata Trust, which is one of the largest grant-making bodies, runs on the profits of the Tata group’s companies.
The Bill and Melinda Gates Foundation in India is among the largest grant-making bodies in the country, having given close to $150-200 million (about Rs.1,000-1,300 crore) every year over the 10 years it has been in India, according to a spokesperson for the foundation.
The Tata Trust gives about Rs.600 crore a year to about 450 NGOs. The trust also gives a chunk of its money to institutions such as the Indian Institute of Science.
In 2013, Premji became the first Indian to take the giving pledge, an initiative conceived by Bill Gates and Warren Buffett in 2010 to get billionaires to give more than half their wealth to philanthropy.
And to walk the talk, Premji increased his contribution to charity in 2015. Of the 73.39% stake he owns in the company he founded, he irrevocably transferred an additional 18% stake on top of the 21% he had already given away. Based on market capitalization as of Wednesday, this amounts to about Rs.56,000 crore.
This is eight times larger than what all companies in India together gave away in 2015 as part of their corporate social responsibility spending. According to industry lobby Confederation of Indian Industry, more than 1,000 BSE-listed companies put together gave Rs.6,400 crore in fiscal 2015.
The challenge that APPI will face is in the absorptive capacity of NGOs.
“Most NGOs operate with an average budget of Rs.1 crore to Rs.2 crore a year. So NGOs may lack the capacity to absorb crores of money each year as they are not used to that scale,” said Noshir Dadrawala, chief executive of Centre for Advancement of Philanthropy, a consultancy for non-profits.
To tackle this, Ananthapadmanabhan said APPI will also support non-profits in their quest to scale up and strengthen their organizations.
Besides, it will also look to monitor the impact an NGO is having. To make this assessment, it is looking to hire a chief impact officer.
As APPI gets bigger, it may have a positive impact on the giving landscape in the country, as experts feel Premji’s example will inspire others to give more and keep the charity economy ticking.