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Business News/ Companies / People/  Philanthropic funds take different route

Philanthropic funds take different route

The stereotype of the businessman who gives money to the local temple or sets up a school is beginning to break down

The employees of PRS Legislative Research in New Delhi. The organization has 20 employees and works with roughly 400 MPs. It sends out legislative briefs to all MPs, of no longer than six pages, which summarise the highlights, key issues and points of controversy of a given Bill or ordinance. Photo: Pradeep Gaur/Mint (Pradeep Gaur/Mint)Premium
The employees of PRS Legislative Research in New Delhi. The organization has 20 employees and works with roughly 400 MPs. It sends out legislative briefs to all MPs, of no longer than six pages, which summarise the highlights, key issues and points of controversy of a given Bill or ordinance. Photo: Pradeep Gaur/Mint
(Pradeep Gaur/Mint)

New Delhi: It sounds like a simple choice: in a country where 270 million people live in serious poverty—on less than 30 a day—would you rather give money to a child for a place in school and a nutritious lunch or to a Delhi-based research institution producing legislative briefs for politicians?

For decades, the vast majority of Indian philanthropists have chosen the former option, and sectors such as education and health, which produce tangible and emotionally engaging results, have been the overwhelming winners of philanthropic funding at the expense of research, policy development or transparency initiatives.

But, as the philanthropic community matures, the stereotype of the wealthy businessman or industrialist who gives money to the local temple or sets up a school with their name on the door is beginning to break down.

“While new donors generally want to support programmes where they can clearly identify the end beneficiary and hear about the person whose life has been changed, typically more experienced funders realize the importance of influencing government," says Deval Sanghavi, founding partner of Dasra, a strategic philanthropy foundation that has been working to fund such initiatives.

As the country gears up for elections due next year, Sanghavi says, there has been a focus on holding governing institutions to account. While poverty rates are falling (in July the Planning Commission heralded a drop from 37.2% in 2004-05 to 22% in 2011-12), public anger over corruption in government has intensified. Transparency International’s Corruption Perception Index of 2012 placed India at 94th place out of 174 countries.

On the eve of India’s 67th Independence Day, President Pranab Mukherjee defined the standards to which a mature democracy should hold its governing bodies and claimed India fell short. “Institutions are a mirror of national character," said the President. “Today we see widespread cynicism and disillusionment with the governance and functioning of institutions in our country. We need a Parliament that debates, discusses and decides. We need a judiciary that gives justice without delays. We need leadership that is committed to the nation and those values that made us a great civilization."

C. V. Madhukar agrees. He is the founder of PRS Legislative Research, an organization that aims to produce objective and bipartisan reports on legislation and Bills tabled in Parliament, giving members of Parliament (MPs) background information and analysis of key policy issues. Madhukar now works as director of investments at Omidyar Network, a philanthropic investment firm, but he maintains a board position at PRS.

His work to strengthen governance processes has made him a rare voice in support of lawmaking. “We see MPs working really hard to read up on the issues, waking up at 4am in the morning to prepare for Parliament," he says. “We need to support our MPs. Some of them maybe are holding up the debate but we need to invest in informing them about the issues or we are just pushing the envelope along."

Informing politicians

PRS (Parliamentary Research Service was started in 2005 and incubated in the Centre for Policy Research in Delhi, a thinktank headed by academic Pratap Bhanu Mehta. In 2006 it changed its name to PRS Legislative Research.

The idea, says Madhukar, was to provide a resource for MPs who wanted to read up about issues on which they would be asked to vote. “When we started there was nothing," Madhukar says. “If they wanted any information they would have to go to the parliament library and then they would get a stack of photocopies of newspaper articles on the subject. You can’t base national policy on newspaper reports."

Currently, Indian politicians are relatively under-resourced when it comes to research staff, says M. R. Madhavan, co-founder and president of PRS Legislative Research. Compared to their American counterparts, he points out, Indian politicians “have nothing".

While the United States Congress’ public policy research arm, Congressional Research Services, is funded by the government, it remains non-partisan. In fiscal year 2011-2012, CRS was given a budget of roughly $106.8 million by Congress. It has a staff of more than 600 lawyers, economists and researchers.

“Every senator, congressman has support of his own," said Madhavan. “Fifty-sixty people on his staff, of which 20-30 are research staff; office space in (Washington) DC. In India an MP gets 30,000 to hire all his staff, and that is after a significant increase—enough to employ a secretary, a driver and a chai maker. His budget is 15,000 for stationery and postage. If we expect something of these people then there should be support for them."

Today PRS has 20 employees and works with roughly 400 MPs, says Madhukar. It sends out legislative briefs to all MPs, of no longer than six pages, which summarise the highlights, key issues and points of controversy of a given Bill or ordinance. The 400 politicians are just those who respond with requests for more information, or attend the Wednesday briefings that PRS holds at the Constitution Club, where experts are invited to speak on forthcoming Bills.

In January, for example, while the Verma Committee’s recommendations were under scrutiny in Parliament in the aftermath of the December 2012 gang rape in Delhi, PRS invited Justice Verma to hold a workshop in which he explained the list of recommendations and the reasons they were made. “Twenty MPs attended the meeting at the Constitution Club," said Madhavan. “We do it there because they can speak freely without the press present and take positions that don’t necessarily comply with the party line."

“It’s an excellent service," says Congress MP for the Rajya Sabha, Avinash Pande. “Especially for the new MPs who get a lot of support for each and every Bill and understand in detail the subject matter. This is my first term in Parliament but in my personal experience they have never been biased or partial."

The other aspect of PRS’ work is citizen engagement, for which PRS publishes all its briefs on its website and tries to disseminate information as widely as possible. It set up fellowships in 2010 for under-25-year-olds with undergraduate degrees, who are trained as researchers and paired with MPs. The scheme has had more than 98 participants so far.

In the early days, the PRS team faced a certain amount of suspicion from MPs, says Madhukar. “It took about five or six months before MPs started to relate to what we were doing," he says. “By the time they started receiving briefs they would call up and say, ‘Who are you, what’s in this for you?’ and we would use that as an opportunity to go and tell our story and tell them why India needs something like this. Once they started trusting the fact that we don’t have an axe to grind, that we are not a lobby group, we started to build their trust."

By 2009, Madhukar says, PRS was working with 200 MPs on a regular basis. Unfortunately, having reached a decent number of politicians, the momentum slowed slightly after the 2009 elections, which brought new faces to 60% of Lok Sabha seats.

“We had to start again," said Chakshu Rai, head of outreach at PRS. “Given India’s history I guess that after the 2014 elections 40-60% of the Lok Sabha will again cease to be MPs, but this time it will be easier. Word-of-mouth will help us. What we have managed is to be known as objective—we never take a view, it’s only the data and analysis. We have built the reputation that we are not pushing anyone’s agenda—they believe in the quality of our research."

Domestic funding

While it was part of the Centre for Policy Research, PRS could receive funding from the Ford Foundation and Google Foundation, due to think-tank’s existing FCRA (Foreign Contribution Regulation Act) approval. This approval essentially makes it possible for an Indian non-profit group to receive foreign funding. When PRS decided to go on its own, however, things became tough.

“In 2010, we decided PRS should be independent, so we registered as a new entity (the Institute for Policy Research Studies) and had to seek fresh approval for FCRA," says Madhukar. “We’d got a letter from the Omidyar Network offering us a grant of a million dollars to be used over three years, and we had $550,000 from the Ford Foundation for two years, and $300,000 from IDRC (International Development Research Centre of Canada), so we had roughly a million. We approached the government saying we’d like to seek permission to put these funds into this new entity. After a year the Home Ministry replied saying it was not in the public interest."

The issue of who should be allowed to fund think-tanks and NGOs is controversial. As per the 2010 FCRA, an updated version of a 1976 act, newly created organizations have to apply to the FCRA for prior approval if they wish to receive foreign funding.

“While Congressional Research Services is government funded, it is a completely independent, bi-partisan entity which focuses on transparency," says Dasra’s Sanghavi. “Ideally similar funding should happen in India, but it is crucial that no political strings are attached otherwise it will become yet another mouthpiece for a political party."

When it received the letter of rejection in June last year, the money that PRS had counted on was suddenly inaccessible.

“We had a rough patch of 7-8 months and those eight months were miserable. We needed to make paychecks. We got help from friends in the Indian philanthropy sectors, bankers who had been colleagues earlier, we used up a lot of goodwill," says Madhukar. Although it didn’t seem that way at the time, Madhukar now says that the rejection by the FCRA was a blessing in disguise. PRS was forced to reach out to domestic philanthropists. Rather than three organizations, PRS is now funded by more than 20 Indian givers and their funding is diversified and sustainable.

PRS lists its supporters on its website (though it doesn’t mention the amount of individual contributions). They include: Ajay Piramal, Amit Chandra, Pirojsha Godrej Foundation, Puneet Dalmia, Rajiv Sahni, Rakesh Jhunjhunwala, Rohini Nilekani, and Mahindra & Mahindra.

“We have rebuilt our budget," says Madhavan. “There is a bias here, a suspicion of foreign funding—it’s stupid but it’s the mindset. But in 2005 we had two sources doing 96% of our funding and by 2013-14 no single funder will be more than 15% or probably 10% of our total. They forced us towards this but now it’s reinforced us.

“Interestingly our funders are a mix of very high net-worth individuals and people who aren’t high net-worth but high income. Typically it comes from people in the financial sector with large salaries, many of whom have written personal cheques for 5-10 lakhs."

Madhukar says he is now working on a project with Dasra, Omidyar Network and philanthropist Rohini Nilekani, wife of Infosys co-founder Nandan Nilekani and founder-chairperson of Arghyam Trust, a public charitable foundation, to engage more Indian philanthropists in the sector.

“The argument I am beginning to make is that (NGOs are) edifices standing on the foundations of democracy. If those foundations aren’t stable then all those edifices will crumble. Those foundations need to be owned by Indians, not foreigners," says Madhukar.

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Published: 20 Aug 2013, 12:22 AM IST
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