New-age forms of philanthropy!

There are many ways in which you can donate to charitable organisations. Most donors prefer to write out a cheque, drop cash into a box or personally hand over money to NGOs with which they are familiar. Other donors are rocking that boat a little. These philanthropists engage establish sophisticated instruments to generate funds for their pet causes. We introduce new-age forms of philanthropy!

More popular:

  • Shares, stocks, and interest: Azim Premji donated shares worth Rs12,300 crore[2] to a trust that will fund the Azim Premji Foundation and his other philanthropic entities. Bill Gates, meanwhile, funds the Bill and Melinda Gates Foundation with the sale of Microsoft shares[3]. He and his wife have signed a pledge to eventually give away 95% of their wealth to charity[4]. Rakesh Jhunjhunwala currently gives away 25% of his dividend income from investments to philanthropy[5]. These gifts are a way of creating assets for non-profits that they could not otherwise have amassed.
  • Donor-advised funds: Community Foundations work as grant-making bodies that pool donor funds to create a multiplier effect. Donors can choose sectors to which they can give their money, set up donor advised funds or have the money go into a common pool. The money is then directed to organisations working for beneficiaries in the area. The Silicon Valley Community Foundation is best known for the donations it has received from Facebook co-founder Mark Zuckerberg, Go Pro founders and other internet giants. It now houses 1650 philanthropic funds and manages $4.7 billion in assets.[1]

Lesser known:

  • ‘1% equity’: Tech companies are known to make millionaires of founders overnight. Several young co-founders are starting to pledge 1% of equity. The 1% will be donated to the charity of their choice when the business is sold, so it works as a future investment for founders who desire to give to charity but don’t have the money. The plus point: 1% can turn into a huge amount depending on how much the company got acquired for. Australian startup Atlassian ended up donating $35 million to the Atlassian Foundation they established on being acquired[6]. Imagine what 1% of equity of a Flipkart or Amazon would be, and what it would mean for the organisation it goes to!
  • Mutual funds: Can mutual funds be a philanthropic instrument? HDFC Mutual Fund shows us how. In 2011, it launched a close-ended debt fund called the HDFC Debt Fund for Cancer Cure. Investors had to invest a minimum of Rs1 lakh with a lock-in period of three years. The total principal was then invested in debt/money market instruments or government securities. Investors could then choose to donate 50% or 100% of all dividend earned to the Indian Cancer Society, an organisation that sponsors treatment and therapy for patients in need. Investors could claim a tax deduction under Section 80G on any dividend amount they donated. HDFC reports that the total donations received under the scheme totaled Rs10.87 crores till December 2013[7]. A second series was launched in February 2014, with HDFC offering to match any donations made through the fund.

The world is changing at a rapid pace and philanthropy is evolving with it. We’re sure there are more innovative instruments and donation options coming in the future.

[5] ‘Rakesh Jhunjhunwala’s next target: Shed 20 kilos, give away Rs5000 crore to philanthropy’,, accessed on 4th December 2014

Khadi 2.0: Can ‘Make-in-India’ change the fortunes of traditional Indian textiles?

January 6th is celebrated as ‘veshti’ day in Tamil Nadu every year! With pride, Tamil men step out of their homes dressed in traditional veshtis or lungis. While ‘veshti’ day is encouraged in the name of culture, the Tamil Nadu Handloom Weavers’ Co-operative Society has stated that it supports the “interests of cotton weavers”. Prime Minister Narendra Modi has emphasized ‘make-in-India’. Remember too, Gandhiji’s successful strategy to promote spinning one’s own yarn as a mark of independence from the British and their machine-manufactured cotton. While these choices appear to be political statements they have significant economic impact. With Republic Day around the corner, we thought we’d examine how ‘Make-In-India’ can transform the fortunes of traditional Indian textile workers.

John Bissell is not a household name. Yet the company he founded is unique in many ways. Their brand is associated with making ‘ethnic’ fabrics cool, and moving them away from the government khadi bhandar aesthetic. They simplified, contemporized and commercialized traditional Indian designs and motifs, and brought them to the urban shopper who has rewarded them handsomely. They’ve grown bigger and bigger over the years, attracting funding from Premji Invest, Azim Premji’s investment fund and turning a profit of Rs54 crore in FY14.

If you haven’t guessed by now, we’re talking about Fabindia. Few people follow the make-in-India model as well as Fabindia does. Fabindia sources its products from community-owned supplier companies. The company’s presence has given the artisans an identity of their own as professionals, removing their dependence on government handouts. Business comes into the hands of people who make the products, wedding the interests of industry and culture.

Ultimately, the success story of Fabindia is not just in their success in bringing traditional Indian designs back in vogue. It’s that they managed to convert the concept of working in textiles to a profitable option for weavers. In an era of mass production, weavers are challenged in competing with machine and power looms that churn out hundreds of identical pieces in minutes. (Readymade synthetic fabrics are also cheaper to purchase and maintain for those with limited incomes.) Fabrics that are intricate and take hours to produce, sell for large amounts of money, making them unaffordable to many. Weavers aren’t adequately compensated for skills which have been handed down to them over the centuries.

A Dasra report on the crafts sector in India estimated that while there were around 7 million artisans practicing in the country, India’s share of the global handicrafts market was below 2%. ‘Make-in-India’ in the textile sector reaps benefits for the weaver communities while keeping India’s traditional art forms alive. We’re eager to find out if NGOs and social entrepreneurs working with weavers, artisans and other groups can replicate Fabindia’s success.

For the moment, impact investors see some potential in the sector. Last year, Aavishkar Venture Management invested Rs18 crore into Mela Artisans, a company that directly procures and retails products made by Indian artisans. While revenue figures are not available, Mela has “placed orders with more than 50 artisan groups across 10 states in India” since 2012. “..these groups employ 4,500 full-time artisans, of which 77 percent are women, and more than 6,000 part-time artisans.[1]

There doesn’t have to be only one winner in the debate on tradition and livelihoods. With a little bit of support we can make in India and support the livelihoods of Indians as well.