The art of giving, the Indian way

There are two broad sources of philanthropy in India today: old money and new money


John Godfrey. Photo: Pradeep Gaur/Mint
John Godfrey. Photo: Pradeep Gaur/Mint

Ninety per cent of what is written about philanthropy is based on experiences from the US. Yet philanthropy is but an infant in the US. Ancient philanthropy traces its roots back to Islamic and Hindu scriptures. The Laws of Manu (first century) are among the earliest quoted by scholars writing about philanthropy.

The Jamsetji Tata Endowment Fund set up in 1892, which encourages young people to take up higher studies, predates the Carnegie Foundation set up by Pittsburgh’s steel industry pioneer, Andrew Carnegie, in 1900. In fact, Emily Bornstein, a professor of anthropology at the University of Wisconsin, US, has suggested that John D. Rockefeller’s philanthropy was influenced by Swami Vivekananda in her 2012 book Disquieting Gifts (Stanford University Press).

In the course of the last two years, I have been interviewing around 30 major philanthropists in India and there is no doubt in my mind that there is much philanthropy in India. I don’t agree with those pundits who bemoan the failure of India’s high net-worth individuals (HNWI) at philanthropy. Comparisons between HNWIs in the US and Indian HNWIs as far as philanthropy is concerned are odious because, frankly, comparative data to lend credence to such claims simply does not exist.

Based on what I have observed, there are two broad sources of philanthropy in India today: old money and new money.

The old business families—the Tatas, the Birlas, the Godrejs, to name a few—undoubtedly play an important part in India’s philanthropy, as they have done for at least three generations or more. Contemporary Indian philanthropy, on the other hand, has emerged from Indians who have made their fortunes notably through the information technology sector, financial services sector and others, who have successfully grown businesses in emerging sectors, post 1991, after the opening up of the Indian economy.

And there is a third set: the philanthropy of the middle class and the poor. The Charities Aid Foundation (CAF) “India 2012 Report” speaks of a clear majority (84%) of Indians who gave money to a good cause in the previous year.

The types of philanthropy practised by India’s philanthropists, in my view, could be described as institution-building, risk-taking, “new” or “venture” philanthropy, and major gifts.

Today’s exemplars of institution-building are university founders such as Shiv Nadar of HCL and Azim Premji of Wipro. They are following the tradition of Jamsetji Tata’s Indian Institute of Science, set up in 1909, and Sir Syed Ahmad Khan’s Mohammedan Anglo-Oriental College of 1875.

Risk-taking philanthropy is exemplified by philanthropists who are applying innovation and entrepreneurial acumen to grass-roots challenges. One example is UTV’s Ronnie and Zarina Screwvala’s Swades Foundation, with its unique 360-degree approach to rural empowerment. Another is Padmini Solami’s Salaam Bombay Foundation, with its creative approach to empowering slum children.

Venture philanthropy, sometimes irreverently referred to as “philanthropy for bankers”, is one which emulates financial investment or venture capital structures. It places emphasis on measuring impact and return on investment. A notable example is Ashish Dhawan’s Central Square Foundation, which works in the area of education.

The last category, major gifts, are made to established organizations such as schools, universities and hospitals, and existing non-governmental organizations. Major gifts may support causes close to the giver’s heart, such as an alma mater, arts, crafts, historic monuments, or endangered animals.

The practice of any of these categories of philanthropy is not exclusive to one or other types of philanthropists. Members of business families are involved in both traditional and risk-taking philanthropy. Many who have made their wealth through financial services favour philanthropy which emulates investment or venture capital structures.

Besides how they give and what they give for, there are some more noteworthy differences between philanthropists in India and those of the US. First, and most significant, is that a large amount of philanthropy in India is dedicated to fundamental, grass-roots challenges—education, health, economic uplift—often after some first-hand investigation by philanthropists themselves of the issues to be combated.

American commentators frequently point out that in their country, a lot of philanthropy is directed at causes from which philanthropists and their families directly benefit. This so-called “consumption philanthropy” is given to universities, schools and art institutions that the philanthropists and their families attend. In India, this seems true of only a small fraction of philanthropists. Most Indian philanthropists are unlikely to see direct, immediate benefit from the causes they support.

In the US, many philanthropists see themselves as offering an alternative, better solution and a substitute for government funding. They are dismissive of and reluctant to deal with government. Indian philanthropists seem to follow a much more pragmatic path. They recognize the importance of collaborating with and enhancing government programmes. Tax, in contrast with the US, and especially given the absence of estate duties in India, is of little or no incentive to donors.

Most Indian philanthropists are candid in that their primary motivation is their recognition of the enormous gap that exists between their great fortune and the lot of those at the bottom of the pyramid.

It is commonly assumed that much giving in India is religiously motivated. While some whom I interviewed follow religious practices, others claim to be spiritual rather than religious. Few make significant donations to church, mosque or temple.

Indian philanthropy is not without its faults and challenges and yes, ways need to be found to give it more oxygen and light, but it is significant, different and as worth celebrating as its more publicized US younger cousin.

John Godfrey is a researcher at the Swinburne University of Technology, Melbourne, Australia, and a consultant to the non-profit sector. He is currently researching philanthropy in India.

More From Livemint