What gives?

PUBLISHED : Friday, 19 August, 2011, 12:00am
UPDATED : Friday, 19 August, 2011, 12:00am


For his 50th birthday last year, billionaire investor Rakesh Jhunjhunwala flew out 200 relatives and friends from Mumbai to Mauritius for three days of non-stop celebrations.

Amid the fine food and wines (eight chefs were flown in), dancing and beach sports, Jhunjhunwala took to the stage to speak about his father.

'My father told me that whenever anyone comes to you for help, greet them with the open hand of generosity, never a closed fist,' he said. He added that his father would never have finished his education without the timely help of a friend.

Jhunjhunwala, who already gives more than US$2 million to charity every year, stunned India on August 3 by pledging to give 25 per cent of his estimated US$1 billion fortune to charity in his lifetime.

'I didn't even discuss it with my wife before I announced it. I'd been thinking about it for a while. There has to be a social purpose to life. I have everything, my family has everything. I'm not going to miss any lunches or cigarettes by giving this away,' he says.

This is big news in a country where most of the wealthy splurge on weddings, mansions, cars, planes and yachts, but tighten their fists when it comes to charity.

Will his gesture set off a new trend? Will India's growing list of billionaires - 55 according to Forbes - who have enjoyed the fruits of India's rapid economic growth, take up philanthropy?

It's a sensitive topic. Microsoft founder Bill Gates and investor Warren Buffett visited India in March to ask the country's richest tycoons to give more to charity. They explained the 'art' of giving and promoted their 'Giving Pledge' campaign to persuade some of the world's richest to give away half of their fortunes. Their campaign in the US prompted 57 billionaires to make a pledge; it fell flat in India.

In the audience in New Delhi was an honourable exception to the rule: Azim Premji, one of India's IT pioneers, gave US$2 billion to an education foundation. HCL Technologies' Shiv Nadar pledged 10 per cent of his wealth to charity and GMR Group's founder, G.M. Rao, promised a 12.5 per cent stake in the business to a family-run foundation.

On the whole, rich Indians prefer to leave their money to their children, due to a bias in society that favours the family over the wider community. If a cousin needs a job or money, people will go all out to help, but will avert their faces from a beggar with an amputated limb. Author Anand Giridharas Giridharadas, whose book India Calling was published this year, explains how, in India, nepotism is accepted because 'it is understandable to help a nephew rather than upholding some abstract principle.'

Many rich Indians donate generously to temples, mosques and Sikh gurdwaras because they seek to procure their personal salvation.

In southern India, the Tirumala Venkateswara temple generates an annual revenue of US$120 million in cash from donations and has tonnes of gold. The Sree Padmanabhaswamy temple in Kerala was found to have treasure worth US$22 billion.

It is to these temples that billionaires and Bollywood stars troop to please the gods and receive a blessing.

'They're not interested in hospices, dispensaries or homes for widows; only their own salvation,' says Mohini Giri, who runs a home for destitute widows in Vrindavan, not far from the capital. 'Even getting someone to give us some cows so that we can give milk to the widows is difficult.'

Corporate social responsibility (CSR) has not found a foothold in India. Babu Lal Jain is the Indian senior adviser for the UN Millennium Development Goals. When he started work on the goals, he thought it made sense for Indian companies to incorporate them into their CSR programmes.

The only problem is that there is hardly any CSR. 'It's just something companies talk about but don't act on. It's not a priority,' he says.

A report by consultancy firm KPMG shows that less than one-third of India's top firms file reports on their CSR activities and only 16 per cent have a CSR strategy.

According to Giri, who has been a judge on countless CSR award panels, even when they undertake CSR, the motive is semi-altruistic.

'A company will build a school near its factory so its workers stay on as employees, but it won't open a school anywhere else. I'm dismayed at what passes off as CSR. I don't want to be a judge any more, it's all so phony,' she says.

Enthusiasm for voluntary CSR is so tepid that last month the minister for corporate affairs, Veerappa Moily, said it should be compulsory for companies to spend 2 per cent of their profits on CSR. '[For] 60 years we have tried voluntary CSR. Unfortunately, it did not catch [on].'

The culture of philanthropy has yet to take root in India. You hear about weddings that cost as much as the American defence budget but rarely about charity balls or fund-raising dinners. One explanation is that behind this parsimony lies a deep insecurity. Social commentators such as Parsa Venkateshwar Rao say that, given that about 600 million Indians live on less than a dollar a day, those who live on islands of affluence are surrounded by a level of poverty that can be frightening.

'I think the middle class is afraid something can happen to take away their comforts - losing a job, a business failing or a huge hospital bill,' says Rao. 'They see poverty all around them, every day. They can't forget it.'

At the home of a corrupt civil servant couple in central India, tax officials recently found during a raid that they owned 25 flats, 160 hectares of land, kept suitcases stuffed with gold, and slept on mattresses and pillows stuffed with money.

Does Jhunjhunwala hope others will follow his example? 'It's up to individuals to give according to their conscience and their pocket,' he says, laughing. 'I'm not lecturing anyone.'