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Business News/ Mint-lounge / Features/  Why our rich don’t give enough

Why our rich don’t give enough

Giving, especially on a large scale, does not come naturally to Indians

Bill Gates (left) and Warren Buffett are known for their far-reaching philanthropic initiatives. Photo: Daniel Acker/BloombergPremium
Bill Gates (left) and Warren Buffett are known for their far-reaching philanthropic initiatives. Photo: Daniel Acker/Bloomberg

Others may rage against their rich, but we in India celebrate our newly minted Bentley Barons and Falcon Jet Maharajas. Faced with images of the teetering stack boxes of Ambani Towers, the glitz of Mallyaland or DLFabad, the poorest slum boy gazes with awe, not anger. And we peer eagerly through vicarious lenses into the lives of the unearthly rich. It’s Indians who founded and run, devoted to trumpeting “the authentic luxury experiences to the handpicked luxury products in every category, including automobiles, gadgets, and jewelry to the luxury trends analysis into the high-end real estate, collectibles, and auction market", which can tell you all about the world’s most expensive shirt (22K gold, owned by Datta Phuge of Pimpri-Chinchwad: At $235,000— 1.3 crore—it comes complete with six Swarovski crystal buttons, though whether a spare is also included is not revealed).

Nowadays, it isn’t like that elsewhere. In some places, the rich have become a target. Disaffected publics—Occupy Wall Street, the Indignados—fill the streets, while penurious governments in France, the UK and across Europe try to fill their coffers by charging the rich more for the privilege of being wealthy, through heightened taxes and levies.

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Richard Branson at a fund-raising event for the Strike A Chord For Cancer Foundation in Australia. Photo: Paul Kane/Getty Images

In India, however, it cannot as yet be said that giving has become cool. The combined wealth of India’s richest 100 people (almost two-thirds of whom are billionaires) is some $250 billion, according to Forbes magazine. Yet if we look at India’s Top 10 philanthropists, we see that from a list headed by Azim Premji, only three of them have given away 10% or more of their wealth (on average, the rich in the US give away more than 9% of their wealth annually). And by the time you get to the 10th name on the list—Mukesh Ambani—the giving is down to just half a per cent of their overall wealth (in his case, $21 billion). The total given by those in this Top 10 list comes to a little over $2 billion, a meagre fraction of the wealth of India’s leading rich.

Giving, especially on a large scale, does not come naturally. The US of course has a long history of private donors, but the recent resurgence began at the end of the 1990s, when Ted Turner of CNN spontaneously and spectacularly announced in a public speech that he was giving away a billion. But it took pressure—subtle and not so subtle—from peers, from media sites like Slate and from watchdog groups that tracked and made public the giving records of wealthy individuals, to help push others to emulate Turner. That got going after Bill and Melinda Gates endowed their Foundation in 2000. Then in 2006 Warren Buffett transformed the philanthropic landscape with a gift of $31 billion and a pledge of virtually his entire remaining fortune to the Gates Foundation, to help fight infectious diseases and reform education. Buffett’s gift was transformative not only by its size, but also by virtue of his decision not to create a new foundation bearing his own name, but to give his wealth to one he judged to be doing well the kind of work he wished to support. The very rich are not renowned for their undersized egos, but here was a clear instance of setting ego aside in order to achieve efficiencies of scale and maximize impact.

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Azim Premji leads the list of Top 10 Indian philanthropists. Photo: Simon Dawson/Bloomberg

While India too has a deep history of significant private donations to public goods, as well as a rich tradition of social service organizations, it’s hard as yet to see signs of an Indian “philanthrocapitalism"—a structural shift towards large-scale, private giving directed at core issues like public health, education, environment, security: All issues that are historically the responsibility of states, but which fiscally strapped governments are increasingly reluctant to tackle. Premji remains the foremost of what is in fact a very small group of enlightened Indian philanthropists—others would include Shiv Nadar, Nandan and Rohini Nilekani, Ratan Tata, and a few more.

But there are some encouraging signs. In their 2012 annual report on Indian philanthropy, Bain & Co. noted a broadening of the base of those involved in giving, with a growing interest among younger novice givers, spread across the country. That’s important, because a broad base of individual donors is most likely to provide transformative effects that are more sustainable. In the US, for instance, in 2009 individual donors gave some $227 billion to charitable causes, compared to $38 billion given by all foundations (and $3 billion by Gates).

So, as well as motivating the super-rich to feel more accountable in how they use their money, we need also to encourage the moderately rich to imbibe the ethos of giving. Equally, we need also to hold to the highest standards of accountability the myriad non-profit organizations in India who are the would-be beneficiaries of philanthropy—to evaluate and assess their work so as to make them more transparent to givers. Organizations like in the US, devoted as they put it to enabling a philanthropic “market that rewards charities for their ability to help people, not just for their marketing", provide detailed evaluation reports of dozens of charities that are available to small donors as well as large ones. This is a still-nascent field in India, with only a few organizations like Mumbai-based Dasra focused on independent evaluations of non-profits and trying to connect them to philanthropists. But we’ll need each of these equally important elements to be in place—a motivated rich, and a genuinely accountable and scrutinized non-profit sector—if the culture of giving is to become cool, and effective.

Sunil Khilnani is Avantha professor and director of the King’s India Institute at King’s College London.

Also Read | Sunil’s previous Lounge columns

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Published: 23 Feb 2013, 12:13 AM IST
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