A true philosophy of giving – Part II

In our earlier piece we mentioned being struck by the fact that Mr. Mohandas Pai’s philosophy of giving was also a ‘philosophy of living’. It wasn’t a statement of how much money he gives to charity each year. It’s not about which NGOs he supports. It’s an expression of the values that govern his work and influence his actions towards others. Curious? Read on!

The principles of philanthropy:

  • Duty: One got the sense that Mr. Pai believed that doing good towards others is a duty that he has to perform. Rather than CSR, he felt that individuals taking up responsibility would drive social change. He mentioned that one should consider donating 10-20% of one’s income to charity. There is a caveat – donations should not be made with the intention of seeing one’s name on a plaque somewhere, or cleaning off sins. A duty-bound donor is driven by a desire to pay off one’s debts to society and see everyone around him or her prosper. Mr. Pai expresses gratitude to the receiver who has provided Mr. Pai with an opportunity to give back to society. He never fails to he join his hands in front of the receiver and believes that ensuring that the recipient’s dignity is respected in the act of giving is paramount.
  • Accountability: Pai mentioned that he, like millions of Indians went to a low-cost government school. Subsidised fees made it possible for him to get a good education and access to a job market. As he said ‘Somebody paid for me.’ This country has given a lot to many of us. It is therefore up to us in turn to pay for other people. Imagine if all of us operated with such a strong sense of accountability towards others! Many of our social problems would reduce immediately. He also mentioned that for every student who received a subsidised IIT education, a hundred have probably died of hunger. If we are part of this society and enjoy these privileges, we should also give back to our society. Mr. Pai even took this one step further. Our time on Earth is one thing, but what happens when we meet our maker? Should we not be able to answer the question – What did you do with your life? Did you leave the world better than what you found it?
  • Giving back to one’s community (ies): Mr. Pai mentioned his personal philosophy of giving – first to the country you belong to, then the state, city and finally your own community. He mentioned various initiatives that he is part of that reflect this focus:
  • Country: Founding team member of Akshaya Patra which currently works in 7 states
  • State: Supports scholarships for deserving students through the Manipal group of colleges and a scholarships NGO in Karnataka
  • City: Mr. Pai, Kiran Mazumdar Shaw and other prominent citizens have spearheaded the Bengaluru Political Action Committee (BPAC). Political Action Committees are popular outside India. They work as a vehicle through which citizens come together and advocate with governments and elected representatives for their common interests. The BPAC hopes to improve governance of the city of Bengaluru, create infrastructure of global standards and improve the image of the city.
  • Community: Mr. Pai, a member of the Konkani community pointed out that his community numbers only 2.5 million in India’s population of 1.2 billion. He supports the provision of scholarships for students from the Konkani community.

This is a wonderful principle to follow indeed, as most of us have an identity of being citizens of India, live and work in a particular state and may belong to a community that is not part of that state. Each of these groups have different priorities, and it would be necessary to direct time, money and efforts towards each in a different way to achieve results. In this manner, we can work for the welfare of all the groups we are part of without neglecting a single one.

  • Ownership: Yes, we may belong to different states and communities. Yet Mr. Pai emphasised that every time he sees a child in need on the street, he feels for him as if it were his own child. As he said, many of us are well-off because our parents took good care of us, and we in turn take good care of our children. This should not result in a world view where we are only concerned with the welfare of people who are related to us. As Indian citizens and members of society, it is upon us to look out for all those in need.
  • How to choose a cause: There is an old quote that states, ‘a society grows great when old men plant trees whose shade they know they shall never sit in’. This philosophical sentiment was also echoed by Mr. Pai when he spoke of his choice of causes: ‘Pick a problem that is so big that you cannot achieve it in a lifetime’. Wouldn’t it be easy to say ‘I donated at Diwali time, I have done my part’, or ‘I gave away all my old clothes, there’s nothing more I can do?’ Real generosity lies in taking a long-term view of a problem you cannot solve alone, and making a start anyway. At Akshaya Patra Foundation, they took the view that they would not shut down the programme if even one child was hungry. There were a lot of times when the organisation was short of money, or did not know how it would meet its expenses. They soldiered on anyway.

Having such a value-based philosophy ensures that you bring about the maximum good towards others and the most peace towards yourself. It is an approach well worth emulating!

The side-effects of charity

Making a donation has an effect on your life and behaviour as well. You may not even realise it, but it will change the way you feel about the world. Have you ever had any of these reactions? Find out below!

  • You feel good: You start to realise that you are not helpless and can actually play a part in bringing about some change. It feels good take action about something that is important to you. This sparks a feeling that is not happiness, but a feeling of positivity about yourself and your action. This is especially true of people who donate blood.
  • You may even feel happier: But this is not the kind of happiness you get when buy something at the mall. Psychologists gave money to two groups of people. One of them was asked to spend it on themselves, the others were told to buy something for someone else. When surveyed later, those that had spent the money on others were happier! Turns out that sometimes doing something for others can make us happier than spending on more things for ourselves. This was even true for women in Uganda who had very little money of their own, but felt happier after helping others.
  • You feel less selfish: We are trained to conserve our money, time and our energy for ourselves, our families or things that matter only to us. This sentiment is understandable if you are going through difficult times. However, in the long run, it makes one narrow-minded and focused on the money-value of everything. After you donate, you start to lose a little of the scarcity mindset with which we usually view the world. You may realise you actually have enough resources, be it time or money. You are able to look beyond the concerns of everyday life.
  • You learn a little more about the world: We all have mental models of the world and we operate according to those. Our theories about other people’s lives change after we hear stories of those in need. You put yourself into the shoes of elderly mothers abandoned for being a burden to their children. You wonder why a woman who lost her only daughter is volunteering at the cancer wing where her daughter died. You start to realise that the world is not as predictable as you thought it was, and not as black-and-white either.
  • You rethink your own values: The media wrote a story about the man who downsized his daughter’s wedding to save farmer’s lives instead. Here is an ordinary, middle-class person who probably put aside some part of his salary each month for years to save for his daughter’s wedding. As it turns out, when his daughter is to get married, farmers who have been struggling with drought are dying for want of a few thousand rupees. Should he do something? Isn’t it the government’s job? After all, he didn’t cause the drought, and he had planned for his daughter’s wedding years ago. Yet there is something about the plight of the farmers and his own money that lights a spark in him. He cuts down the unnecessary expenses and manages to donate Rs6 lakh to charity. What’s more important than the money is the fact that he gave up something important to him to focus on someone else. He has acquired a new value of his life’s priorities, his money and his relationship to others in society. This happens to many people who sacrifice something of their own to give someone else. You orient your priorities in a way that is more meaningful to others, and not just yourself.

It's something to keep in mind the next time you want to help out someone else. The rewards you get from acts of charity are not material, but it is surprising what a high value they will have for you!

The year ahead for philanthropy

In every industry there is a phase that is marked by great turbulence and change. It’s hard to predict the outcome of the change while one is in the midst of it. However, we can be sure that the philanthropy sector is currently facing great changes from the outside. The assumption that NGOs are the solution to a social problems is being challenged by those who see NGOs as a last-mile delivery mechanism or a way of reaching the unreached. NGOs in turn are also responding to the changing paradigm in their own ways. Many of these factors complement each other, and have a cumulative impact on the non-profit sector and expectations from it. Here are factors that will change charity in 2016:

  • Big donors who want causes, not charities: Mark Zuckerberg is giving away money! Will charities benefit? Ultra-rich donors like Bill Gates and new entrant Mark Zuckerberg are not looking to fund charities. They’d rather look at the root cause of a social problem and engineer a solution that can best address the problem. It marks a shift from philanthropists writing out to cheques to hospitals to indefinitely fund operations. It’s a new market-based ideology that is not averse to alliances with unlikely bedfellows to provide solutions. In India, many of the ultra-rich like Azim Premji, Narayana Murthy, Ratan Tata and others route money through their own foundations, with existing NGOs receiving funds from those entities. At the same time, Tata believes in funding low-cost technological innovations (like the X-Prize) that can improve the lives of the poor. Not all of tomorrow's philanthropists are going to be signing cheques to existing NGOs.
  • A FitBit for your donations?: When you sign in to Facebook, you receive notifications of new messages, new friend requests and new updates. How about if you got notifications of how much impact your donations have had? There is now a move towards measuring and reporting NGO work in a manner that helps donors decode what is achieved with their money. Movements like ‘The Life You Can Save’ have pioneered this approach. Their 'Impact Calculator' shows you how many individuals you can impact for each dollar donated. For example, they estimate that donating Rs1000 to their chosen charity can provide 58 people with food-based micronutrient supplements for a year. The combination of data and the ease of giving online will transform the way donors look at donations. At HelpYourNGO, we're very excited by these developments. We started off by making data about NGOs more transparent and accessible. We're working on making giving easier next year. Watch this space for more!

In India:

Indian non-profits are looking at a changed playing field in 2016.

2016 marks a year that will herald great changes for charities. In the future, it will no longer be business as usual for charities!

What type of donations can I make?

We often hear – I am not sure whether my money will reach the beneficiary. To simplify, we explain here, the different ways in which NGOs use donations to further their work with the communities they serve. The next time you make a donation, you’ll know where your money is going!

   1. Corpus Donations: Probably the least common, but among the most fiscally prudent options you could fund. A donor has to direct the NGO (Trust, Foundation, Society, Section 8 Company) that his/her donation is towards the entity’s corpus. The NGO is not allowed to use the money for operating expenses. The corpus is liquidated only in case the organisation is shutting down.

Ideal for: Long-term donors. A donation to the corpus is an investment in an NGO’s future. If you like an NGO and feel they are doing good work, consider a corpus donation. It helps the NGO to sustain itself financially. Many NGOs with large corpuses use the interest earned by investing the corpus funds to finance programmes. Dependence on donors reduces considerably and the NGOs can run their projects without an interruption.

    2. Donations for purchase of Capital Assets: When you choose to purchase equipment like a computer, a car, an ambulance or medical equipment. Corporate donors tend to fund capital assets as they feel comfortable seeing a tangible asset being created.

Ideal for: Corporate donors, family foundations, institutional donors. It provides a win-win to NGOs and to donors. Many bigger donors are uncomfortable making large donations for programme expenses (see point 3), and prefer to purchase assets that have a long life and are used when implementing a programme.

   3. Donations for Programme Expenses: This is the most common form of donation requests. An NGO requests a specific amount (often small-ticket) to support a programme that directly impacts one or more beneficiaries. You may have seen NGOs asking for Rs500 to provide feed a child or Rs1,000 for a scholarship.

The amount may represent a bundled cost in delivering the service. Example: an NGO requesting funds for ‘treatment of a child’ could use the amount towards paying the doctor’s fees, purchasing medicines, the NGO’s costs to bring the child to the hospital or any other activity related to that programme. Your donation could function as gap-funding for the amount the NGO lacks, or it may even sponsor the entire expense.

Ideal for: Anyone looking to make an immediate impact. Funding requirements here are often urgent, and a lack of funding means that that beneficiary could be left out of a programme. It’s a great way to prop up an organisation’s work.

 4. Donations for specific resource requirements: NGOs also turn to donors to help them source the materials they need to provide services to their beneficiaries. This could include buying rice for mid-day meals, medicines for patients under treatment or books for students from underprivileged backgrounds. They could put up the cost of the item itself, and donors can give in multiples of that amount. This does not cover the NGO’s own operational expenses in bringing that service to the people who need it.

Ideal for: Anyone who has an affinity for a cause. If you like animals, and feeding animals is particularly close to your heart, buying dog food or pet food will make you feel most connected to the cause.

There you have it! When you look at an NGO request next, you will know what kind of donation they are asking for. It also shows you how far a few hundred rupees that we take for granted in our lives can go in helping someone in need.

The reverse brain-drain in philanthropic funding

 

The recent success of Sundar Pichai, Satya Nadella and other Indian-born CEOs of global companies has shown how meritorious students with no ‘family background’ can succeed professionally and economically. The co-relation between success and education is particularly strong for those from financially underprivileged backgrounds who went on to study pure sciences or its applied fields like engineering. This is a narrative that echoes of an earlier generation; Shiv Nadar, Narayana Murthy and others who were raised in small towns before attending elite engineering colleges.

It’s no surprise then that those who attribute their professional success to their education are most keen to make philanthropic gifts to educational institutes. The Beyond Philanthropy GIZ Dasra Report 2014 found that education is one of the most popular choices for donation because people have a sense “of being deprived of a high quality education. Many either persevered to their current status in spite of not having access to a decent education, or only because they were lucky enough to find a helping hand to complete their education. There is also a belief that contribution to education is the most sustainable strategy for uplifting not only individuals but entire families from poverty.” A shot at a better life and chance to build a legacy through one’s work feature not just in their professional careers but in their personal ones as well. We examine how these professionals envision their philanthropy.

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India loses many a Narayan Murthy and Shiv Nadar because of the levels of poverty in our country. Sundar Pichai – who didn’t have a phone connection in his house – went to Stanford on a scholarship. Raghuram Rajan requested MIT to consider his application even though he could not afford the fees. The cost of studying abroad is prohibitive. Even making it to a graduate degree in India is beyond the reach of many. Narayana Murthy had to turn down an offer from IIT because his family couldn’t afford the fees.

India has reached a position where a high quality education and developed professional skills can guarantee entry out of a low-income household and into the aspirational middle class. A number of Foundations have been filling this gap with scholarships for deserving students. The Sir Dorabji Trust, Bharti Foundation, Shiv Nadar Foundation, Inlaks Shivdasani Foundation Scholarships, Foundation for Excellence India Trust (FFEIT), Vidya Poshak, and several others are set up only to award scholarships, many of them exclusively for higher education in STEM (Science, Technology, Engineering and Mathematics) field. FFEIT, for instance, feels that “the multiplier effect on the society of enabling a talented child to become a high income earning professional is huge. By a conservative estimate, each rupee invested in a talented child returns 140x to society.” Other NGOs offer scholarships for various stages of education as part of their other programmes.

Building for the future

Scholarships, however, are only the tip of the iceberg as far as higher education is concerned. Other philanthropists are focusing their sights on a bigger picture. Narayana Murthy recently created a storm in a teacup when he questioned the contribution of Indian universities to promoting scientific breakthroughs or creating innovative products. He pointed out that services like GPS, Bionic Prosthesis, Microchips and others were designed thanks to research at universities like the Massachusetts Institute of Technology. In 2014, the World International Patent Organisation recorded over 1,000 patent applications from 5 leading American Universities (University of California, Massachusetts Institute of Technology, University of Texas, Harvard University and Johns Hopkins University). U.S. universities account for 13 out of 20 universities filing patents worldwide.

He may have drawn flak for his remarks, but he has a point. World-class universities house well-funded research labs that foster innovations which transform industries of the future. Many Indian-born CEOs got a competitive advantage through exposure to cutting edge technologies and developments at their university. Indian research institutes are catching up, but have a long way to go to compete with their peers. They lose out not only on scientific breakthroughs but in the subsequent economic prosperity that accompanies it. A 2011 Stanford study found that companies formed by alumni of the college “generate world revenues of $2.7 trillion annually and have created 5.4 million jobs since the 1930s.” Another study in 2007 found that 13.4% of Silicon Valley start-ups were founded by Indians. Creating Indian universities that produce world-class researchers and entrepreneurs will require significant investment. It will reduce the current brain drain and create economic opportunities for India. However, it will require a future-oriented mind-set that envisions India’s role as a thought leader going forward.

Some entrepreneurs who perhaps share this vision are setting up Foundations to fund research and development in nascent fields of science and technology. Institutes of excellence like IIT have played a large role in shaping the minds and career paths of their students. In turn the students are grateful for the academic and non-academic opportunities and networks given to them by their alma maters. A recent Hindustan Times article threw light on a number of other interesting investments in the science and technology field. IIT-M alumni and Infosys co-founder Kris Gopalakrishnan has given to IIT Madras and IISc Bangalore to study brain science. IIT Kharagpur has received donations to the tune of a million dollars each from its alumni Arjun Malhotra, PK Sinha and Asoke Deysarkar. Meanwhile Vinod Khosla has committed $5 million to support research at alma mater IIT Delhi, while entrepreneur Anurag Dixit has donated more than $4 million towards a centre there. They’re not alone; a lot of other businessmen have swelled these ranks.

Institutions of the future

Leading institutes of higher learning in India like the Indian Institute of Science (IISc), Tata Institute of Fundamental Research and the Tata Institute of Social Science were set up in the past thanks to the largesse of the Tata group. It’s a sign of maturing philanthropic giving that there are now more philanthropists entering into university education and not just funding primary schooling.

A few are taking the less-trodden path and setting up universities of their own. Shiv Nadar’s Foundation set up the Shiv Nadar University in 2011. In 2014, the University offered approximately Rs34 crores in scholarships to its students. This followed on the heels of the Azim Premji University, which was founded in 2010. APU is focused on finding “key responses to the challenges confronting the education and development sectors in India”, and offers degrees in education and development. The Ashoka University, set up in 2014, aims to bring an “Ivy League” quality undergraduate education to India. A consortium of 46 investors guided by investment banker-turned philanthropist Ashish Dhawan raised over Rs350 crores to establish the university. Many of these universities focus on non-commercial or non-profit areas of study and are not intended to bring revenue for the founder.

The Infosys Foundation has been in the news for meeting the 2% CSR spending target. They’ve drawn less attention about the fact that they’ve provided corpus funding to the IISc, Bengaluru to endow professorships or that they helped the Chennai Mathematical Institute improve their infrastructure and provided similar support to a number of educational institutions. They’ve also set up the Infosys Science Foundation to award an annual award to recognise researchers doing seminal work in pure sciences, applied sciences, humanities, social sciences and mathematics. The award carries with it a purse of Rs65 lakh, enabling researchers to continue their academic work without concern for money.

Conclusion

Indian entrepreneurs are being held in high regard abroad and the Indian economy is performing better than its counterparts. What we need to take our place on the global stage is a workforce of talented individuals who are not held back because of birth, caste or income. Funding education is one of the best ways to guarantee our future and these philanthropists have found a way to ensure it happens.