The Business of Benevolence - An All You Can Give ‘Buffet’

The recent visit of the ‘Oracle of Omaha’-legendary investor and chief executive officer of Berkshire Hathaway-Warren Buffet- to India has sparked a long delayed but highly needed interest in global philanthropy. It is definitely an apt theme to bring up. India is reeling under a series of scams and scandals-some including even the stalwarts of corporate India. In such a situation philanthropy would definitely do a world of good to everyone.

Buffet has appealed to the leaders of corporate India to loosen their purse strings and make a conscious effort to give back to charity. In his own words “It is an act of humanity and you are very humane and rich people...I think when people join the Giving Pledge their act has some influence on others.” Indian billionaires are not a patch on their foreign counterparts in giving their wealth away. Slowly but steadily, however, things are changing and definitely for the better.

Wealth created in post-reform India has given philanthropy a whole new dimension. Last year Wipro chairman, Azim Premji, announced that $2 billion would be transferred to a trust which works for the improvement of the education sector in the country. Another notable example would be the $340 million grant that G.M Rao, chairman of infrastructure conglomerate, GMR had pledged for humanitarian activites. And who can forget- the Tatas charitable trusts which were one of the earliest in the world. No doubt, efforts being made in this direction are commendable; however the numbers still remain abysmally low. A report by Bain&Co. pegs India’s philanthropic contributions at just 0.6% of the total GDP.

There are various reasons why Indians give so little. Firstly, most of the Indian billionaires have amassed their wealth only recently therefore loath to part with their moolah. The inherent sense to look at every initiative in monetary terms and the shrewd motive to maximize the profit through every deal comes in the way of donating generously. Secondly, charity or philanthropy doesn’t really put Indian businessmen on a pedestal (read increased social status). However this does look all set to change with big names of India Inc embracing philanthropy.  But what remains the most crucial factor that impedes charity in our country is the lack of institutional framework and policy support for the most beneficial use of funds. Take the case of the ‘Sage’ (Buffet, for the uninitiated). His philanthropy has not flowed from any nondescript charity but from the Bill and Melinda Gates Foundation. Many rich benefactors wonder whether their funds actually reach the intended beneficiaries or get entangled in the loop of middlemen as is so common in India.

Philanthropy and profit, too are not mutually exclusive to each other. These new age ‘philanthropreneurs’ invest in social outfits that come up with ingenious solutions to problems that affect the community. This new breed of philanthropists ensures that their invested capital generates reforms in the social environment while maintaining a sustainable approach since profitability ensures sustainability.

Whatever form philanthropy  might take, there’s no denying the fact that it has assumed paramount importance in today’s day and age. With problems like poverty, malnutrition, unemployment and illiteracy being a part of routine life in countries like India, it is incumbent upon the rich to do their share and to reduce the ever-widening gap between the haves and the have-nots. India and the world are hoping they do just that.