In the spirit of global philanthropy
The Good Life | Shoba Narayan
Well-endowed: Wealthy Indians often donate to alma mater overseas, such as Harvard University. Wikipedia
Updated: Thu, Oct 07 2010. 08 34 PM IST
So Anand Mahindra has given $10 million (around Rs44.3 crore) to Harvard. I know, I know. I saw the emails too. “Why do India’s rich make large donations to foreign universities?” His money; his prerogative. And others have done it before him. The Murthys have donated $5.2 million to Harvard to establish the Murty Classical Library of India; the Nilekanis have donated $5 million for the Yale India Initiative; Ratan Tata gave $50 million to Cornell. Both the Ambani brothers have given to Stanford and Wharton respectively, for a fund and an auditorium named after their father. And now Mahindra has given his alma mater money it doesn’t need to establish a humanities programme in honour of his mother. Is this sincere or philanthropic social climbing? Methinks it is both.
Mahindra went to the film studies programme in Harvard and has spoken in forums about the value of a humanities education. Harvard had probably been hitting him for a donation for a while now; and boy, these foreign universities are persistent. The Boston Brahmins probably cultivated Mahindra for years. What was smart was the way Mahindra carefully calibrated this large gift so that he got the most bang for the buck. Had he given $10 million to the Harvard Business School, which he also attended, they would have said, “Gee, thanks,” and poured him a champagne toast, if that. Humanities programmes on the other hand are so poorly funded that even Harvard lapped up his donation like a hungry puppy; and gave him a centre for it. If Mahindra had to give to a foreign university, the way he did it was maximum paisa vasool (bang for the buck), as we Indians call it. Should he have given to a foreign university? That’s a different matter.
Let’s assume this: India’s rich, whether it be Mahindra or Murthy, are Indophiles. Most of them want to give back to India. They balance donating their money abroad by donating as much, if not more, to Indian causes. Even if they do give to foreign universities, they don’t do so disingenuously—to get a honorary degree for instance. Usually, there is a personal connection. Now we come to the crux of the issue. Put yourself in Mahindra’s shoes. Say you wanted to donate $10 million, either to get your name noticed in the global philanthropy world; or to get a building at Harvard—no less—named after you; or because you were simply fed up of the smooth arm-twisting; or because Warren Buffett dared you to; what would you do? Giving to a university is better than giving to, say, Lincoln Center, isn’t it? At least the money goes towards education and you could make your peace with that.
In that sense, for a wealthy Indian, writing a large cheque to a foreign university is like the Commonwealth Games are for India. You can argue, as Azim Premji did, that the money could have been better spent elsewhere. Premji is fundamentally right but that’s not really the point. The Commonwealth Games are not about substance; they are about style. Donating to a foreign university too is about style; Rajini style if you wish. It is about throwing your hat in the ring and telling the world—not just India—that you have arrived.
Mahindra has done terrific work with Nanhi Kali—the NGO dedicated to providing primary education to underprivileged Indian girls—but do you think Charlie Rose or Jon Stewart are going to ask him about Nanhi Kali (if they can even pronounce it) or the Harvard donation? The only guy who will view Nanhi Kali higher than Harvard is Nicholas Kristof but then, you win some; you lose some.
Let’s take the other side now. Bill Gates gives; as does Prince Charles. A fair chunk of their money comes to India. Are Indians being parochial in suggesting that India’s super-rich should give only to India? Absolutely. In politicizing Mahindra’s gift, I am ignoring his strong and genuine ties to his alma mater. I went to Mount Holyoke College for my undergraduate degree. It changed my life. I went from being a psychology major to becoming a sculptor. When I lived in New York, I got invited to lunch with the president of the college because they had somehow found out that my husband worked for Wall Street and wanted a big cheque. We got wined and dined, at the Harvard Club, ironically enough, and donations with a lot of zeros were suggested. I owe my feminism to Mount Holyoke; I owe my love of art to that college. I haven’t given it a penny. Why? Because I am a parochial Indophile Indian; because I think India needs the money more than Mount Holyoke; and because I don’t have enough money to get a centre named after my mother.
When we lived in New York, there was a blow-out between the Tisches and the Everetts, both prominent families, over their donations to the Central Park Zoo. Both families wanted the zoo to be named after them. The Tisches eventually won. It was hilarious. I guess my point is that when we Indians gripe about our rich giving globally, we fail to realize that in the high-stake world of global philanthropy, that’s how it’s done. Mahindra’s donation, in a sense, will open doors for India.
Nanhi Kali is a terrific effort. I downloaded its latest annual report to find out how much Mahindra has given to this cause that he founded and which is clearly close to his heart. I couldn’t get all the numbers so I don’t know for sure. Again, it’s his money, but may I respectfully suggest to Mr Mahindra that he should consider a matching and very public donation to Nanhi Kali? A $10 million cheque will catapult its efforts. If nothing else, it will silence wags like me.
Also read Shoba’s previous Lounge columns at www.livemint.com/shoba-narayan
Shoba Narayan is considering following Mahindra’s example and donating to her alma mater. Write to her at [email protected]
Well written, Shobha. Points made with objectivity .
Regards. Raghava. Singapore.
Shoba I normally love your work (and it doth truly pain me to write this reply) but I have a completely different point of view on this issue.
(This piece struck a chord also because of another thread, here.)
First, I looked at Nanhi Kali, which is a great foundation, and its 2012 financials show 36-37 ($5.6 million) crore with 20 crore as direct giving to Nanhi Kali. Mahindra Group 2011 profits were about $670 million which makes their philanthropy less than 1%. As I wrote before, “laughable”.
But the point of this reply is not to unfairly rubbish the Mahindra group. Nanhi Kali is a great program and I sincerely think it does wonders for the 75K (and growing) number of girls.
The overall point of your article is that wealthy Indians donate a speck of their net worth to their foreign alma mater/s and that that donation is mostly for “show”. Second point is that wealthy Indians are Indophiles who give more to India and whether this is parochial or politicized.
I don’t think the second point is quite correct, and I think you are ignoring 3 crucial problems. (I beg you to give me this space because this is something I believe in deeply.)
#1 Indians, particularly wealthy Indians, have a very outdated view of philanthropy. As I wrote before it’s always a laughable “speck” of the overall. This is radically different from Carnegie and Buffett and Gates, who believe that their wealth is basically a claim on society so they are giving it – all of it – back! All of it!. It’s important to get this concept right.
#2 Gates model of philosophy is a problem-solving model not just a check-writing model. He invests a lot of money in grants and is personally involved with the research to, say, study diseases in Africa. In many cases the research turns up very interesting facts i.e. hygiene over medicine. Everybody is throwing money into airdropping medicines into Africa, but Gates finds out that the syringes are dirty, so he decides to invest (“give”) clean syringes, not just drugs. The point is that he gives his own time – again, all of it – to study the issue and then give where it makes a difference. Wealthy Indian business leaders normally create a seva-sanstha and let their wives or managers run it. This model should change. Can we ever see an Indian CEO devote 50% of his full time to philanthropy?
#3 I think it’s pointless for Mahindra to get into another “naming battle” just so he can replay what happened with the Tisches and Everetts. Rather I think every wealthy Indian should follow a model where they first spend a few months studying various issues to find out the ones that truly matter to them. Then they should give – their time, energy, money, everything – where it really makes a different.
That is what makes the ultimate difference.
RG: thanks. Let me think about these.
RG your point is well made but I gently disagree with you.
OK, so Gates who ran Microsoft (with 97K employees) and made a big fortune can hand it off to someone else and focus on charity. But Mahindra, Tata, Infosys etc are in a very different line(s) of business in a very different environment. India is still “emerging” so to speak and Indian CEOs have, in my opinion, a much harder job to do to keep it going. In India the systems and relationships and “arrangements” cannot be transferred so easily to a new man, much less to an unknown new man. (Just see what happened in Infosys after NRN left; he had to return.) Also remember that Tata and Mahindra and Infosys collectively employ about a million Indians. This by itself is a form of philanthropy. A lot of Indian workers are in mid-to-low level jobs and their livelihood is a requirement.
I know Westerners (myself included) like to argue against all this and say that India is booming, there is no dearth of jobs and there is a skill shortage etc etc, but just listen to Ramadorai’s lecture on secondary skills development. Not all 400-500M Indians are going to become software engineers. A great many of them will become accountants and middle managers and even down to works supervisors (God been long since I used that term) and cooks and drivers and cleaners and whatever else.
So I don’t think Indian CEOs will be able to spend 25% or more time on philanthropy.
Now I have reviewed the Gates model and yes I agree with the problem-solving part of it. But again here, look at Nanhi Kali. There are a thousand consulting reports and studies that cover the ins and outs of the education problem in India. In many cases what is really needed (and imminently) is short term stuff – books, supplies, schoolrooms etc. The “big think” stuff is also needed to address maybe the systemic and structural issues (funding, direction, management). But, surely you don’t want to wait for all those issues to be resolved; do you think the nanhi kali should wait (and lose her prime young years) without a book and pencil until someone figures out the bigger problems? Of course not. I’d say spend the couple thousand bucks and get her the books so she can get on with it now.
So, for your #2, I agree Gates is a good model, but I think India needs on-ground methods immediately and I urge everyone to support these methods. I also agree with you RG that we should do what we can with the govt and leadership to resolve the structural issues.
On your #3 I agree; I’ve never been able to understand the NYC “society set”. Reminds me of a line from Frasier: “Within 24 hours of any natural disaster they can put together a ball”! Anyway, I guess we’ll let the socialites figure this one out!
Vinay: when did you “gently” disagree with anything :)
Enjoying your repartee with RG.
LOL Shoba! What is your take here? I hope your SelfControl app won’t mind if you spend a few minutes engaging with your loyal readers on the blog and not just observe from the gallery and give “vote of thanks” in the end?? :-)
Ok, so you asked for it. My take on Indian philanthropy is very hopeful, actually. Our rich guys are very smart at figuring out global movements and whether/when to join them. Shiv Nadar is pledging more and more of his fortune to philanthropy. As is Rohini Nilekani. Mukesh Ambani isn’t, but maybe he will do a big bang giving-away when he does. We are nowhere near the giving paradigm of the West, either amidst the prosperous or the super rich, but I have great hopes (from talking to people of my generation and younger) that we will get there. Younger Indians are going into the social sectors in droves. they are children of prosperity and somehow this frees them up to do solar power, water harvesting, dancing, and the arts. As for the Mahindras and the Mittals, my hope is that they will pledge 95 percent of their fortune for causes dear to their heart when they realize that 5 percent of what they have is enough for their children. So I disagree with RG’s point number #1 and agree with #2 and 3. As for your point about Indian CEOs not taking time off from their day-jobs, that is tricky. Could argue it both ways. They are so invested in their companies that they cannot quit; ergo they don’t find replacements. Or the time is yet to come.
Hi Shoba thanks for your reply. Infosys donates 1-2% profit after tax, Nadar $400M (over the next 5 years, a fraction of his net worth), Premji 8000 crore ($1.2B of a $15B fortune), Ambanis, Tatas, Mahindras and Mittals far far behind.
None of these people have committed to give a majority (much less 90%) of their wealth away, and none of them have committed to hand over the reins of their empire to focus on philanthropy. They simply don’t get it.
This was my point #1, and the data suggests they have not got it. I am hopeful – really as hopeful as you – but I don’t see our Indian wealthies taking actual steps in that direction.
RG you are too quick with the facts.
Shoba, data clearly shows RG is right, the Indian wealthy don’t really get it. I am curious what is your basis for disagreement? Also when you write “younger Indians going to social sector in droves” because they (the children of prosperity) are free to do social stuff etc. If this were the case then why are Rohan Murty and Rishad Premji and Roshni Nadar still marrying so rich and still having executive positions in their family empires? (The list of fief-guarding scions goes on BTW.)
Nope. I don’t think the Indian wealthy gets it. I think their children will stumble through the family empire, much like how RG said, and only after they’ve amassed more wealth (OK and created more jobs) that they will, in their 50s, retire to give another 5% of their ballooning empire/s to charity.
How is India different from the robber-baron stage of American history (RG and Vinay)? I see your points. I am just saying that we are at a different historical stage– as a country?
Incidentally, RG, do you see any Indian philanthropist who gets it? Who is worth looking at/writing about?
For example, one dominant trait I see in Indians is this desire to protect their own children no matter what– lying, keeping quiet even if they murder, etc. I am wondering if it is this same ‘gene’ that makes them give less? Or will this just change with prosperity as a nation?
Shoba I think it is different in 2 ways. Firstly Americans had a body of literature and a system of governance on wealth and power. Adam Smith wrote extensively about charity and capitalism and his work established the “wealthy man” as a trustee, not an owner, of wealth. The trusteeship was temporary. Carnegie, JP Morgan, Rockefeller – all robber barons – were influenced by this work and had pledged a major portion of their wealth to charity. (Carnegie said that to die rich is to die disgraced.) Also a related point that George Washington did not want permanent power – hence term limits on the presidency. England held that wealth should be stockpiled and bequeathed, and power (and title) were dynastic. America overturned this: wealth and power were trusteeships; presidency was not a reign and term limits were in place from the start.
OTOH India was a collection of royal states until Independence and even after that the princes (Hyderabad, Mysore, J&K) did not want to give them up. After two centuries of British Rule and forty odd years of license-raj (where very few industrialists prospered), I can only imagine that the mentality of the Indian industrialist, that their wealth could be taken away anytime. Plus with all this nepotism and corruption and general chaos, no sane Indian industrialist will want give it away. The Indian books (Ramayana, Mahbharat, Arthshastra) talk about family and dharma and nobility (which narrowly includes charity) but do not systematically deal with capitalism and wealth and philanthropy.
To your other question I don’t know that anyone “gets” it just yet. I guess I’ll concede that the signs are in that direction. Tatas have 66% of their equity (wealth) in trusts that are supposed to do philanthropy. (But it just appears to be a stockpile so far.) Infosys and Nilekani are sort of there as well. Like you I just hope all these guys make a public pledge together, and then follow through for the benefit of the nation and the world.
Wow guys great dialog.
India is not ‘slow and steady’ rather it is growing by ‘fits and starts’. I don’t think Indian industrialists will make an aggressive pitch like Buffett and give away 4-5% of their wealth annually. Buffett is doing this because he is entrusting it to Gates who is managing it full time. So why do Indian CEO’s not want to “give”? One, the Gates foundation works on diseases and development (globally) which accounts for 40% of funding, and Gates personally is involved in the implementation. But India has different needs e.g. water, orphanages, Indian rural development etc which aren’t high or immediate in Gates’ agenda. Two, India still has lots of infrastructure and corruption problems, even if 20 Indian CEOs publicly committed big amounts, it is not clear that it would be used effectively. Three, not all Indians see or prioritize things the same way. Some want to attack poverty, some health, some social enterprise (like your husband Shoba). Fortunately India has all sorts of big problems so there’s wide open field there.
In sum, RG I think Indian CEOs do get it, but as with all things in India, the results are not yet apparent. I wouldn’t so quickly shut the door on it.
Naina hopefully an Indian ‘Gates’ will emerge. And these CEOs can run their foundations too, can’t they? Then again, you are the MBA. :)