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Philanthropy and Corporate Social Responsibility in South Asia and the US

Strategic Philanthropy | Civil Society | Jan 7, 2015

This is an edited version of a panel discussion on “The Use of Philanthropy and Corporate Social Responsibility for Social Change in South Asia and the US” with Rohini Nilekani, Geeta Pradhan, and Alnoor Ebrahim. The event was presented by The South Asia Institute at Harvard University in 2014. It was cosponsored by the Hauser Institute for Civil Society at the Center for Public Leadership

Wealth has become a prerequisite for philanthropy today, however the original meaning of philanthropy was just about the love of humankind and the act of giving your time and resources to help others. My journey as a philanthropist began in 1999, when I was working with the state government in the education sector in India. Through an organisation called Pratham, our aim was to ensure that every child in Karnataka was in school and learning well. From there I went on to co-found and fund Pratham Books, India’s largest nonprofit children’s publisher.

Around that time, I had come into some money because of a smart investment I made a long time ago in my husband’s company, Infosys. Suddenly, we found ourselves with more money than we needed. It took me a long time to adjust to that idea, but eventually I realized that this was an opportunity to use that wealth responsibly especially in a country like India. Redefining what wealth is meant for in societies became something that was very important to me and I moved from doing philanthropy on my own to engaging with larger questions within the sector. For the past few years, I have been very actively involved in growing the philanthropy sector in India.

The Changes in Indian Philanthropy
Since the 1980s, many of the original philanthropists of India were outsiders, including four of the Rockefellers and bilateral agencies from Europe. They were doing a lot of society building work on issues like human rights, inclusion, governance, etc. However, in the last few years, we have seen them receding for various reasons, discontinuing the work they have been doing for decades. It appeared as though India had enough wealth on its own, and there was also a political backlash. In the meantime, the Indian wealthy began to do new kinds of philanthropy, but there is still a vacuum left by the organisations that are receding that I believe has not been filled. Therefore some of my work involves drawing new Indian philanthropic capital into some of those spaces such as the environment, human rights, and children. Today, a lot of Indian philanthropy goes into areas like education rather than other areas. Traditionally, Indian philanthropy focussed on neighborhoods, temples, or direct charity work. But in the last eight years, we are seeing a sea change, with more young people getting wealthy thanks to the technology boom and other sunrise industries. These young, wealthy people have decided that they need not wait till they’re much older to start giving. It’s a very exciting new landscape because they want to see impact and metrics, rather than waiting for years.

My own approach has been a little different. I think that the new wealth comes from people who have benefited from the market economy and have strong faith in markets. I tend to be a little more on the left of the political spectrum, and I have never run a company in my life. My work really focuses on the non-market, nonprofit side of things. I believe that it is only when we build out a strong society or Samaaj in India that we can have an accountable government and accountable markets. That work can only be supported either through direct action by civil society activists or through philanthropic support. So I spend my philanthropic capital to do a host of things that help build out people’s institutions, contextual collective action, and stewardship of the idea of a strong Samaaj which is able to resist the potentially oppressive forces of the state and the market. It’s the biggest lesson from the last century’s history — both the state and the markets can get oppressive unless there are sufficient checks and balances in society.

There is also a change in the CSR environment in India, requiring companies of a certain size and profitability to give 2% of their profits to certain narrowly defined areas. Although these areas seem broad, when you get into the clauses it is actually quite a limiting framework on what you can and cannot do with that 2%. Personally, I have been opposed to it, because it seems like a tax by alternate means. It also seems like the government is trying to outsource governance to the private sector. This kind of forced social responsibility is already creating some perverse incentives in India. We have to wait and see what happens but it’s going to mean approximately 15,000 crore rupees on an annual basis. We have to see where that money goes and what impact it can possibly have.

Most Indian civil society movements until now have come from a left-of-centre combination of Marx and Gandhi. That has been a very different civil society action than the kind that new philanthropy wants to fund. Today’s new philanthropists focus more on problem solving and impact measurement. What worries me about this trend is that by only seeing things through the lens of impact, factors which otherwise may be crucial but not easily measurable fall to the wayside. You cannot measure a society’s sense of self, inclusion, the rights of many people left behind, and whether they have a voice in the system. The danger of coming to the philanthropy sector with the belief that markets can solve most social problems, is that you tend to leave out some of these things that are really below the market. For example, in villages across India, Dalits and the minorities are left behind. Today, many young, able-bodied people are migrating out of villages, so the old, the very young, and the women are left behind. Nothing there is attractive to the market, but that is exactly where the state is completely inefficient in terms of reach and accessibility.

I’m involved in working towards making water resources more accessible and ethically utilised. My foundation could have focused on giving everybody a water filter which we would replace every three years, but that is not a sustainable solution. What we do instead, is to ask communities why the water quality is bad there, and how they can hold the state, which is a public authority that is supposed to be managing the water supply accountable. As Geeta Pradhan points out, in communities where people don’t have a political voice, you will see that there is not the public investment.

Takeaways From American Philanthropy
There’s a lot that the Indian philanthropy sector can learn from the US, and vice versa. Personal generosity is certainly something we can take away from America. A lot of the wealthy give without necessarily expecting fanfare, and they give consistently and well, which is something we could also learn to do. The second thing we can learn is transparency. In India, we don’t really know who is giving what, to whom, and what it’s all adding up to. The public pressure on wealth is beginning to increase in India and that’s important, but we still have a way to go in order to create a transparent regime around giving. We also need professionalisation in the ecosystem around philanthropy, whether that means enabling public policy, match-making platforms, or any other sorts of services for the sector.

However America also serves to warn us about certain things within philanthropy and one of these is inequity. We see how so much wealth concentrated in so few hands is a very distorting thing, even if it’s given through philanthropy. However much I like and admire Bill and Melinda Gates, it is a serious problem that they have to give away $4 billion a year and create a huge bureaucracy for that giving. In my mind, philanthropy should question how so much inequity and concentration of wealth happened in the first place. That is something to learn from this country — how not to create the kind of society where the 1% and 99% are so sharply delineated. The consequences of this kind of inequality can be seen through the distortion of political influence. The recent American election was partially funded by wealthy individuals. It is hard to say how much the results of the election reflected the majority of its citizens versus the few wealthy who funded certain campaigns.

This could easily happen in India, and we are seeing a similar kind of concentration of wealth happening here. I’m a part of that class in India and I am very conscious of how wealth enables you to wield power. What we need to work towards is dismantling the power structures of wealth. Understanding and acknowledging this in your philanthropy, and being conscious of the kind of societal outcome of your philanthropy is crucial. Nevertheless, the US has been working for decades to build out their public institutions. Thanks to Carnegie and the government, the public library system in America is the most fabulous in the world. When my husband and I were living in the US for seven years, we didn’t have a lot of money but the enormous wealth of public services — which all started out with some component of philanthropic capital — carried us through and I personally carry a debt of gratitude for that. Additionally, Geeta points out that one of the things the Indian philanthropic sector could take away from the US model is the ease of giving. The US government has actually created a lot of enabling infrastructures so that giving is very easy. Despite my critiques of America, I do have a deep admiration for what has been created there, from the kind of institutions they have been able to set up to their societal base.

Philanthropic Capital and Ethical Advocacy
In India there is a demand for more evidence-based decision making in terms of policy, so a new host of think-tanks are being set up, funded by philanthropic capital, that are building out evidence for public policies. Essentially it forms a kind of indirect advocacy platform. But decision-making in our rather noisy democracy at the political level is made in many ways, not just one way. So we have witnessed smaller organisations in policy advocacy making positive changes despite fairly small sample sizes. The right to information and right to work in India were the result of the work of three organisations at a district level scale. They were able to take up strong advocacy positions and successfully implement their work as public policy, which was then nationally rolled out. So there are many advocates of all kinds of issues, and sometimes you can be very effective even without much philanthropic capital backing you because the justice system in India is more open-based. However, I do believe that when philanthropic capital is being deployed for advocacy, there should be some mechanisms to ensure transparency so that society is aware of people’s motives and intent.

Today, the kind of philanthropic capital that was going into supporting human rights inclusion, equity, and non-market solutions is really shrinking. A lot of my personal work consists of not only funding that myself, but also to create a coalition of people. So we do round tables in different cities in India and showcase the innovative work and impact that people are having in governance, accountability, transparency, justice, and independent media. It also allows them to meet future philanthropists or current philanthropists. We have been doing this for the past five years and I believe it is making a difference.

The wealthy feel like markets have benefited them and will therefore benefit Indian society, so they put a lot of their philanthropic rupee into that sort of work. However, people are realising that no matter what causes they support, they are going to hit a governance deficit. We try to make the case that we need to invest in organisations that help the government to work better and help societies put pressure on government better. For example, governments have been ineffective in protecting water resources in far-flung areas. The spring systems in the hilly regions in the Himalayas, Western Ghats, and Eastern hills are especially suffering. The government doesn’t reach those communities, so they were relying on spring water, but those springs are degenerating. By supporting a lot of work and research, we have now created a pool of knowledge based on typologies of springs renewal in India. So while we wait for the whole system and the grid to turn up in every corner of India, allowing people simple gravity-based systems with a little bit of institution building will get a sustainable and high quality water resource for them.

Holding the Wealthy Accountable
Philanthropy can not replace the government’s ability to tax and direct that money for the larger public interest. Philanthropy is very important, however it has a limited role to play. Sometimes we tend to forget that because of the kind of large philanthropy that is happening around the world. Governments will allow the wealthy to have an easy taxation regime only so long as society feels that the wealth is being used as well as the government would have used it in taxation terms. If that does not happen there is going to be a backlash. So that’s why the responsibility of wealth is to deploy itself, at least as well as if it had been used as taxation.

While we do want wealth generation, we also need to hold the wealthy accountable to society for the larger public interest. There is public pressure on wealth now, and I think that has to stay steady. There is a lot to learn across countries and many of the wealthy are now more conscious about having to give back.To that end, we need more strategic collaboration among philanthropists. Eventually, philanthropy must be important but limited in its influence, because I believe that philanthropic capital must be deployed eventually to make itself redundant. As human beings, we are really wired for giving and sharing. Emerging neuroscience research is telling us that. So I think we should keep that as a prism to look at philanthropy, too. We are wired for giving and sharing, and we need to remember that.

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