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Tuesday, April 16, 2019

Azim Premji: A Trailblazer in Philanthropy

Azim Premji, the Chairman of Wipro, has announced a fresh bequest to his philanthropic endowment—transferring approximately 34% shares of India’s fourth-largest software services exporter, Wipro, valued at 52,750 cr ($7.5 bn)—that supports the Azim Premji Foundation. With this, his total commitment to the trust stands at 1.45 lakh cr ($21 bn) which makes the endowment one of the five largest private endowments in the world and the biggest in Asia, besides placing Premji alongside the world’s most influential philanthropists like Bill Gates, George Soros and Warren Buffett. 

This generous act of Premji, besides placing him far ahead of a rarefied group of Indians who have chosen to donate their wealth, has once again brought philanthropy, a word derived from the Greek term Philanthropos, which means “love of humanity”, to the forefront. Philanthropy is essentially an altruistic activity. It intends to serve others by addressing the root cause of the problems faced by the society as a whole, with no financial reward to the donor. It simply aims to effect desired change through giving.

Thanks to post-reforms rapid economic growth in the country, philanthropy has emerged in the recent years as a professional activity. Corporate philanthropy—the act of businesses to promote the welfare of others mostly through donation of funds or time, a program that often constitutes a part of the corporate mission statement—is slowly taking a tangible shape in the country. Corporate leadership is indeed today working towards best use of the resources for inclusive growth through an entrepreneurial approach to problem identification and to implement solutions.

Effective altruists like Premji are focusing more on mankind’s existential risks with a clear understanding that economic growth alone cannot improve India’s human development indicators unless they work in close association with governments in improving the basic requirement of future generation, namely quality education, to make them skilled-enough to get gainfully employed, affordable health care, environmental protection and so on. The significance of addressing existential risks can well be gauged from the mere fact that even a small reduction in the metrics of India’s Human Development Index and Sustainable Development Goals that remained almost stagnant for quite some time has a high expected value because millions of lives are at stake.  It’s against this backdrop that Azim Premji Foundation—a not-for-profit organization—is working towards a “just, equitable, humane and sustainable society” by facilitating “a deep, large scale and long-term impact on the quality and equity of education in India, along with related development areas such as child health, nutrition, governance and ecology”. 

Research reports indicate that income inequality in India is at its highest level since 1922: that India’s richest 1% hold 58% of the country’s total wealth. We have today 2% of the world’s millionaires and 5% of its billionaires. And wealth in the country has been growing at a higher rate than the global average for almost a decade. Yet, the relative corporate contributions to philanthropy are said to have fallen from 30% to 15% in 2011. It is pretty disturbing to note that the ultra-high net-worth individuals’ contributions to philanthropy have indeed registered a fall of 4% during fiscal 14 to fiscal 18, that too, despite the fact that their number has grown at a rate of 12% during the past five years.

Even the mandated Corporate Social Responsibility (CSR) under which corporates over a particular size are supposed to contribute 2% of their profits to designated CSR programs could not better the position. Reports indicate that 15% of CSR funds remain unspent, while much is desired in their implementation mechanism, for most of the CSR-money is compliance-oriented as a result of which most of it goes to government-sponsored causes. And the end-result could as well be guessed!

Amidst this gloomy scenario, there emerged a very promising hope: the middle-class individual donors, particularly the young crop from the tech industry, have emerged as the new philanthropists of India. According to Bain & Company report, 100 million donors have joined philanthropy movement between 2009 and 2013. Another noteworthy feature of this group of donors is their focus on efficiency and impact measurement. They are using technology platforms to attract a wider range of donors to achieve scale besides for creating greater public awareness and motivating people to take part in the social change process. In their pursuit of impact investing, they are even adopting cross-sectoral collaborations.

Above all, this young lot is bold enough to address issues such as human rights violations and social injustices including gender-related challenges, which are generally shunned by business houses. This development is more heartening to note, particularly in the context of government crimping the inflow of foreign funds to NGOs that are known for addressing politically contentious causes and activists. There is a growing awareness among the youngsters about the importance of defending core democratic freedom and ensuring the space for civil society to freely operate by offering support to the rationalist groups engaged in defending human rights, and the environment.  

Given the growing inequalities in the country and the challenge governmental agencies are facing in addressing the developmental needs of different sectors, it is hoped that the business leaders come forward to follow the example set by Azim Premji and spend more of their wealth and entrepreneurial skills to gently nudge India’s human development index to sustainable levels. For, in that alone the very development of corporates’ wealth too rests.

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