Azim Premji quietly gives away more to charity2 min read . Updated: 07 Mar 2018, 09:10 AM IST
The move marks another step in Azim Premji's efforts towards giving away most of his wealth to charity by merging his investment arm PremjiInvest with Azim Premji Trust
Azim Premji, founder of India’s third largest software services company Wipro Ltd, has quietly increased his commitment to philanthropic initiatives by a third.
The move marks another step in his efforts towards giving away most of his wealth to charity by merging his investment arm PremjiInvest with Azim Premji Trust, the holding entity for the endowment trusts that he set up as far back as 2001.
With this, the corpus of funds under the family’s endowment trusts has gone up to some $12 billion (about Rs78,000 crore)—more than 63% of the 72-year-old Premji’s wealth as estimated by Forbes magazine. The magazine’s World’s Billionaires List ranks Premji as India’s second richest individual with a wealth of $19 billion.
The move to fold his successful investment arm with the charitable trusts his family controls underscores Premji’s intent to give away almost all his wealth towards philanthropy, according to three people directly familiar with his plans.
“In essence, the move to merge family office with endowment only means one thing—that he wants to ensure more funding for philanthropy and give away substantially more to charity," one of the people said, requesting anonymity.
A spokesperson for Azim Premji Foundation confirmed the increased allocation. “The total value of transfer to endowment, including beneficial interest in Wipro and other investment assets, is approximately $12 billion," he said in an email reply.
According to the second of the three people cited above, this $12 billion includes $3 billion worth of assets under PremjiInvest’s management and another $9 billion of the endowment overall.
In July 2015, Premji had transferred 18% of his shareholding in Wipro to the family’s trusts, taking the total to 39% with his eponymous trusts and foundation. This followed earlier tranches: in 2010, he had transferred 9% of his shareholding, followed by another 12% in 2013.
PremjiInvest, which employs a few dozen private investment professionals managing public market investments and equity deals across companies such as Housing Development Finance Corp. Ltd, Jubilant FoodWorks Ltd, Marico Ltd, Fabindia and Flipkart, among others, still functions as it did. But that could change going forward, according to the people cited above.
“It’s a very uncomplicated structure. He (Premji) believes whatever money he has, must go for greater good," the second person added.
Established in 2001, the Azim Premji Foundation, which is now over 1,000 people strong, works in the area of primary education across over a dozen Indian states. In 2014, Premji set up the Azim Premji Philanthropic Initiatives, which will go beyond the foundation and donate Rs500 crore annually to not-for-profit organizations working to improve lives of street children and the disabled, as also governance issues.
Ravi Venkatesan, a former head of Microsoft India who is now the chairman of Bank of Baroda, said India’s billionaires and the country’s nearly quarter-of-a-million “ultra rich" could do a lot more.
“The top 1% owns 58% of wealth and also capture over 70% of new wealth created, so it’s getting richer. The good news here is many, many more people could be giving at significantly higher levels towards problem areas they care about," he said.
“Second, we need to move from a mindset of spare change to real change. So, while charitable giving is still important, more funding must go towards systemic solutions to major problems such as literacy, healthcare, livelihoods etc. Philanthropy must be more strategic and more collaborative," said Venkatesan, who is also the chairman of Social Venture Partners India, a global network of philanthropists aiming for long-term social change.
The writer works for FactorDaily.