In his blog last week on India's callousness towards the floods in Pakistan, Sanjay made a very interesting point at the start of his post when he talked about the country's fast-expanding nouveau rich not taking up philanthropic causes.
It's a thought that's found its way into many editorials in India the past couple of weeks, especially in the wake of the incredibly admirable Giving Pledge initiative launched by Bill Gates and Warren Buffett in the United States. Championed by two of the wealthiest men in the world, The Giving Pledge is an effort to invite the wealthiest individuals and families in the United States to commit to giving a majority of their wealth to philanthropic causes. Nearly 40 American billionaires, including Michael Bloomberg, Ted Turner and George Lucas have joined Gates and Buffett in pledging, in some cases, up to 99 percent of their formidable wealth to charitable causes.
It's a rare spirit, and one I believe only Americans are capable of. In contrast, most Indian business houses and many of our famous billionaires lag significantly behind in their giving efforts. India is home to two of the richest five people in the world according to Forbes Magazine, and the list of Indian billionaires grows robustly each year.
But, it’s par for the course here for wealth to be bequeathed and inherited. A study in March by Bain & Co, quoted in an excellent blog on the subject by Devin Banerjee in The Wall Street Journal, found for example that just 10 percent of charitable giving in India comes from individuals or companies, compared with 75 percent in the United States.
Meanwhile, the government continues to be the biggest donor here. I recall an interview on a leading English news channel with Sunil Mittal, founder chairman and group CEO of Bharti Companies, a few months back. The news anchor had asked him a question on a somewhat similar issue after Mittal spoke about the recent attempts by The Bharti Foundation, his company's philanthropic arm, to improve education in India. Mittal said Indian billionaires had amassed immense wealth over the last few decades, but were probably therefore more insecure about losing it. This insecurity could be one reason why in terms of giving, India’s rich have a less than stellar record (as does the rampantly corrupt development sector).
It has been reported that Gates and Buffett might come to India early next year to enlist pledgers here. They better sharpen their marketing pitches though, because I doubt they'll find the going as easy here.
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Nathan
Wealthy Indians come from the upper caste and see the poor lower caste as subhuman therefore merit no help. Their Hindu religious belief states that an Individuals suffering comes from karmic retribution so thus their lot is determined by heaven.
Vishal
In the U.S. donations are tax free and a part of the corporate tax strategy! By parking their wealth in a trust for “charity purposes” , the rich mask their bypassing of Estate and Capital gains tax with an simple “charitable” purpose.
Its a common estate planning device in the US for millionaires and billionaires.
What these trusts do with the money or who controls it is not really public knowledge. How much of the money is actually used for “charitable” purposes would be less than 2 cents per dollar ( which acts like a 2% estate/capital tax, which is pretty darn good)
In India, the tax law doesn’t really allow for the same strategies. Make the tax law similar and you will be surprised at the number of “charitable” donations.
Praveen Kumar
India’s rich never had a penchant for charity. At the most, as we can see in the recent past, people establish a hospital/ temple and proclaim it as a charity, which after some time is re-branded and charity becomes “profity”. The reasons are many, the rich want to save for their children, since most of them are used to lavish lifestyles and are not generally competent enough to eke out their own independent living. Also there are so many people in India that any charity looks like a pittance to the general public and this de-motivates the donors. We should not forget that charity does have a great social value, when it is really appreciated. The scenario will surely change, as India produces more first generation super-rich who genuinely believe in giving back to the society, Narayan Murthy and his social work firm managed by his wife being a case in point.
For all other “richs”, a penny saved from charity is a penny earned.