New Delhi: Ronnie and Zarina Screwvala have spent four years as philanthropists who set up Swades Foundation, working in Raigad district of Maharashtra to execute a rural development plan on the metrics of health, sanitation, education and skill development. “Philanthropy makes the work done by people to be something grand, larger-than-life action. It’s none of these things. If you really want to solve problems in countries like India, you need to roll up your sleeves and get involved, otherwise I can guarantee that 70% of the money you give will have low impact. However, I am yet to coin a better phrase to replace philanthropy," says Ronnie, serial entrepreneur and former head of production house UTV Group. From media to philanthropy in rural India to a start-up in higher education, the couple have tried it all and believe they still have a long way to go. In an interview they say why efforts to create entrepreneurship do not take off easily in rural India, and why they will not be signing the Giving Pledge initiative started by Microsoft Corp. founder Bill Gates and Berkshire Hathaway Inc. chairman Warren Buffett. Edited excerpts:
Creating a Shared Future in a Fractured World was the World Economic Forum’s focus this year. What does that mean to you?
Zarina: It means that which we share needs to outweigh that which divides us as human beings. For Swades specifically, it means that the rural-urban divide needs to dissolve; that we cannot rise to our true potential as a country without a fundamental transformation in the lives of our people in rural India.
Does the Swades model work in times when the aspirations of rural Indians are changing and they are looking to move to cities?
Ronnie: The Swades model believes that not everyone is going to migrate to cities, even if migration increases from 20% to 40% in a decade, 60% people will still stay back. Remember in rural India we are still not seeing mass migration like China, where almost 200-300 million people move into urban areas.
We thought our biggest challenge would be to establish trust, and then obviously acceptability but actually it is that people in rural India have very low aspiration levels. You have a lot of people who have four acres of land, but to get them to take a risk to try a new crop or even invest a little in, say, rainwater harvesting is very tough. If you have low appetite for risk, your aspiration will always remain low.
That might be the case with the older generation...what about the youth? Are they not interested in agriculture
Ronnie: Younger kids don’t want to be in agriculture. They’ve seen their parents suffer through one good monsoon, two bad ones, etc. But the minute you tell them that you’re not going to be dependent on the monsoon and we’re going to create a marketplace and you don’t have to just grow rice, their eyes light up. However, sadly, agriculture is not the ambition for most of the younger people now. Most of them want to be teachers, government officers, work in the police. I don’t know if we call this lack of interest in farming as a crisis but if we want to solve a lot of things in rural India, that economy cannot grow without agriculture booming.
If you are at the halfway mark of your work in Raigad, what has changed?
Zarina: Development is a slow process, but there are visible markers one can take heart from. Mindsets are the most difficult to change, but today many of our community members including students participate in volunteering activities in their own villages. We achieved this by building on early successes through community heroes, engaging the community in planning and execution, and creating institutions such as school management committees, water committees, etc. Today 90% of our 100,000 households have taken at least one Swades programme and 20% of households have all programmes. We have miles to go, but the years gone by give us hope that we can make a permanent change for good!
Did everything go as planned or did you have failures, and had to relearn and realign?
Ronnie: Our biggest recalibration was in livelihoods. We had to rethink everything there. We had to move from what we wanted to do, what we thought would be the acceptable specially in agriculture to what the ground reality was. Even in the field of creating entrepreneurs we had a lot of setbacks. It was tough to scale up from say 50 mushroom entrepreneurs to 5,000 in the district because there was a risk component which people were not willing to deal with.
Is it not frustrating when you have an idea that will bring jobs but it doesn’t work because of low buy-in?
Ronnie: If we were corporate social responsibility guys we would have given up a long time ago. We have been entrepreneurs, and so know that part of the fun is recalibrating and rethinking. Also since we have our staff, and do not work with non-profits, we get feedback on a timely basis and pulling the plug on something or revising an idea is faster for us.
On your website you mention that part of the focus on education in the district was to ensure every child is literate and speaks English. Why this emphasis on English?
Ronnie: It’s a commercial language. We were finding that employability was low if they don’t have that communication level whether we like it or not. It’s not a Western aspirational thing. The minute children learn English vs learning Marathi or Hindi, they have a higher level of confidence when it comes to communicating with a prospective employer. Internet literacy, English-speaking skills are basic skills needed to survive in this age of mobile revolution if you want a job that pays more than ₹ 6,000 to ₹ 8,000 a month.
Your model is scaling deep, not scaling up?
Ronnie: Raigad is a very large geography. The Maharashtra government is telling us you are working in six blocks, now move to three above and three below. But one of our macro learnings is that we want to go to the poorest of the poor. We also want to learn how aspirations work in other states. Or the second option is to look at something in urban areas. The key for Zarina and me is that we want to roll up our sleeves and be involved but we are not growing any younger, and hence we have to be in a place which we can access.
Why do you seek funding from different entities for Swades but follow a no-investor policy for your online education for-profit company?
Ronnie: In the not-for-profit space, it is about being collaborative. For the first three years we put in 100% of the contribution because donors had to buy into the idea. Funding from outside resources allows us to scale, else we could have only done half of what we are doing right now. When it comes to the for-profit sector, this is my learning after being an entrepreneur for 20 years—if I regret one thing from my UTV years is the number of times I diluted my equity. At the end of the day when I actually exited, I owned only 22-23% of the company. It’s when you realize that after one more round of funding you will actually be questioning who it is that you actually work for. With that in mind, in my second innings in the for-profit space that I don’t want to seek funding. Today if you look at almost every entrepreneur, because it’s been such a feather in the cap to raise funds rather than build a business, most of them have screwed up. The result is that all they are doing is fund, burn, fund, burn and nobody cares about the business. Creating a unicorn is more aspirational than owning a large chunk of the company that you have founded. Thirty years back maybe I would have felt the same way, but having gone through what I have gone through I am very obsessive about value creation, not control.
Celebrity power for philanthropy: is there a way to leverage it better, say, for fundraising?
Ronnie: We have given that a thought. We had Mr (Amitabh) Bachchan come down to Raigad and we did a fundraiser and it was fantastic but it drained the mickey out of us. Finally we realized that we were just calling on personal favours. Also we found that almost 40% of the funds you raise go towards raising the fund itself, and that does not work for us.
The Giving Pledge, will you sign it?
Ronnie: Giving is voluntary. Anyway why do I have to sign a pledge? I am not knocking down the people who have signed it because I think it’s evangelism that has created awareness. I, however, don’t need to be a signatory to something to do what I want to do. I don’t identify with the pledge in that context.