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Philanthropy Incorporated

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In the din of all the corruption scandals last year, one trend often got overlooked: the increasing number of the super rich, the rich and the middle class who were earmarking chunks of their wealth for philanthropy.

Indeed, if 2010 saw the Commonwealth Games scandal, the Adarsh society fraud, and the unravelling of the 2G mess, it was also the year when Azim Premji, Shiv Nadar, Rohini and Nandan Nilekani, Anand Mahindra and half a dozen other corporate luminaries donated record amounts.

India has always had a deep tradition of philanthropy. Some of the biggest Indian businessmen in the pre- and immediately post-Independence era spent considerable sums of money on philanthropic activities. The founders of the Tata empire gave away much of their personal shareholdings to the trusts they had set up — one reason why Ratan Tata has a relatively small personal shareholding in his group. G.D. Birla, Jamnalal Bajaj, the Modis and the others also spent on all sorts of charitable activities.

But personal philanthropy (as opposed to corporate social responsibility spending where the company spends money on doing good) had taken a bit of a back seat in the past few decades. There were relatively few examples of the big philanthropic activities in the 1970s, 80s and 90s. Even in the 2000-09 period, the focus of Indian business icons was on creating wealth, not giving it away.

In 2010, the biggest examples of giving came from the IT sector. Azim Premji, Shiv Nadar, the Nilekanis and even professional managers from the sector gave to philanthropic trusts. Almost all were first-generation millionaires.

Of course, critics will point out that what the Indian businessmen gave is a mere fraction of the kind of money pledged to philanthropy in the US. Warren Buffett, one of the world's richest men, has decided to give away 99 per cent of his wealth. He, along with Microsoft founder Bill Gates, persuaded almost 57 billionaires to give away half their wealth.

But the US and India cannot be compared just yet. A big start has been made in India in 2010, and one hopes it will gather momentum going forward. Special correspondent Meera Mohanty spent several weeks putting together our cover story on the Art of Giving.

(This story was published in Businessworld Issue Dated 17-01-2011)