JOIN USInfosys co-founder Nandan Nilekani and his wife Rohini Nilekani recently followed Wipro's Azim Premji, Biocon's Kiran Mazumdar Shaw and Sobha Developers' PNC Menon, in pledging half their wealth to philanthropy. They undertook 'The Giving Pledge', which is a network of the world's wealthiest individuals contributing most of their wealth to philanthropy.
Two American billionaires, Bill Gates and Warren Buffett, started 'The Giving Pledge' to channel the wealth of the world's richest people into addressing some of the world's most pressing problems. As on date, 173 super-rich individuals have signed up. The Giving Pledge aims to encourage many more billionaires to either pledge their wealth during their lifetime or make a will.
The Giving Pledge has evoked appreciation and criticism in equal measure. It does not bind anyone to walk their talk. It is a moral commitment, not a legal one. Only a small percentage of the money pledged may be channelised towards local or small and disadvantaged constituencies, while a major portion would be given to institutional interests like hospitals and education sectors. Does such philanthropy amount to a high profile public relations exercise for billionaires to promote their images? The fact that only a handful of billionaires can join this pledge clearly creates an exclusive social group. Charitable contributions by the wealthy may promote an unequal balance of power in society. Another issue is that donations from individuals should not encourage the state to abdicate its role to deliver social justice.
The conventional method to redistribute wealth and pay for public services is through taxation. However, in less developed countries like India, this model has its limitations because the GDP-to-tax ratio is low, while the demand for public services is disproportionately higher.
Therefore, civil society needs to fill this funding gap through philanthropy to deliver better public services because the government's capability to do so is constrained by lack of adequate competence and high corruption levels. Civil society has the potential to not only fill the funding but also the competence gap. To illustrate, the Bill and Melinda Gates Foundation drove the anti- AIDS campaign in India because the government lacked the expertise to do so.
Several state governments have not achieved the required social equilibrium due to inequitable distribution of wealth in India. Instead, these governments extravagantly squander money on elected leaders and their affairs, on the interior decoration of their homes and offices and buying luxury cars to foreign tours, among other means to waste the taxpayer's contributions. They have failed to offer good governance. This vacuum is then filled by religious institutions.
The major religions like Hinduism, Christianity, Sikhism, Islam and Jainism foster philanthropy as a duty, which explains why temples and seers administer, fund/support educational and health institutions. The number of schools, colleges and professional education institutions that various religious denominations run fills the gap left by government's failure to provide these public goods to society.
To illustrate, the Siddaganga Mutt in Karnataka offers free food and education to over 10,000 underprivileged children belonging to different castes and religions. Considering the good quality of education offered here, alumni of this institution, who have reached high positions or earned much wealth, express their gratitude through philanthropy. This practice of giving back to the institution has a track record of many decades.
Another notable initiative is the Bharti family's announcement that they had decided to pledge 10% of their wealth to philanthropy. This commitment translates to Rs 7,000 crore, which is earmarked for the Bharti Foundation, a philanthropic body of the Bharti group. Similarly, Nilekani supports 'The Nudge Foundation', which works with over 50 partners - NGOs, government agencies, foundations and corporates - towards skill development to lift one million people out of poverty by 2020.
While philanthropy and charity may appear to be the same, there is a subtle difference between the two. Philanthropy is more structured and has an element of continuity to ensure the earmarked resource accomplishes its objectives. On the other hand, charity is an act of giving without any strings attached to it. Neither the giver nor the taker actually bothers to monitor the end-use of the resource given.
Not just money
One need not be a billionaire to share one's resources. While philanthropy need not always involve huge sums of money, even a small but meaningful effort offers the donor joy and satisfaction. It transcends materialistic items. Even sharing an idea with others is appreciable. Similarly, to share knowledge without any expectation is giving that invokes joy and satisfaction for the giver. Any act of giving becomes meaningful only when the needy and less privileged people are able to get access to its resources. The very act of giving must be appreciated and encouraged. It must not be questioned with cynicism.
Mark Twain observed, "To get the full value of joy, you must have someone to divide it with". While compassion for the less privileged motivates generosity, the act of sharing one's wealth with the less privileged, to a large extent, paves the path towards equity and social justice. The march towards socio-economic equilibrium is not just the responsibility of the state, but other agencies like NGOs, also need to support this endeavour. An individual experience true happiness when he uses his capabilities/resources to make others feel happy. While there are several ways to help people or make them happy, one way is through the medium of sharing the wealth. Even Winston Churchill, not exactly known to be charitable in his views or remarks on others, once said, "We make a living by what we get. We make a life by what we give".
(The writer is Professor of Finance, Institute of Management, Christ Deemed to be University, Bengaluru)