Tuesday, 24 May 2016

Why are Indian Industrialists apprehensive towards Philanthropy?

“Be the Change you wish to see in the World” – Mahatma Gandhi

Philanthropy refers to the desire of giving, contributing by way of acts of social service or capital to various causes and promoting social welfare.

India, in its vivid culture, has the act of giving, inbuilt in itself. Right since times immemorial, our culture has greatly promoted giving a portion of our income towards uplifting the needy, or in the form of time, being benevolent towards the society, donating in temples, etc. The concept of giving the income to a charitable institution/NGOs, however, is relatively noble.

There are many causes prevalent today that requires the immediate attention of philanthropists and donors such as poverty, lack of education facilities, underdevelopment of rural areas (i.e. lack of basic amenities), environmental issues, and contribution to the institutes promoting skills of the specially abled, etc.

The Indian industrialists are the key contributors to philanthropy today. Yet, their apprehension does indeed play a great role in limiting their contribution. Primarily, this is because they are unsure of the impact of every rupee of their contribution. Their reliance on the NGOs, non-profit organizations, and charitable trusts is highly questionable. Most of the industrialists would not donate earlier, and if they would, it would be a bare minimum of their profits only to enhance their reputation in the market stating that they are serving the society. The deeply rooted causes in the society require purposeful giving i.e. the contribution doesn’t have to be directionless; it needs to be focused towards the cause, and the change it creates needs to be measured adequately which was barely being done in the recent past. The main concern is whether the donations are being channelized effectively.

Now, gradually the scenario is changing. With the new rule coming in as per the Companies Act, 2013, it mandates companies over a certain net worth to give 2% of their last 3 years’ net profit to Corporate Social Responsibility (CSR) initiatives.

In spite of the advent of this law, it is observed that not all companies are complying with the law. Further, the ones who would contribute greater than 2% earlier are now restraining themselves to this bar as mandated by the law. Also, another matter of concern that arises here are, for meeting this requirement the companies may enter into a negotiation with the charitable institutions, give in their contribution and then get it back by way of rendering some commission on the same. That brings us back to the same old question, whether the contribution made on the face of it, is ideally yielding a benefit?

Times are evolving eventually. Industrialists such as Azim Premji (Wipro), Shiv Nadar (HCL), have majorly contributed a great portion of their income to the different causes widespread across the country, having their private institutions as well serving them. They are being referred to as a few of the biggest philanthropists in the country today.

On the overall front though as per The World Giving Index (WGI), 2015 statistics, India ranks 106 out of 156 countries. So well, we still do have a long way to go! Rome wasn’t built in a day.

There is an immense opportunity out there to contribute and make the wrongs right. Application and collaboration in the right sense will bring the change that we are hoping for. The apprehension is bit-by-bit withering away and in a matter of time, all will understand the urgency of philanthropy and probably benefit the society in numerous ways without a sense of skepticism. It is bound to only grow and with the increasing wealth and awareness, today the philanthropists have begun to ensure that whatever they contribute is going in the right hands and that it is making a positive impact and resulting in social welfare.

Written by Shivani Roy
A CA aspirant. Passionate about social service, movies, tennis, travel, music, and so much more, the new one being writing!

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