Where is India’s Warren Buffett? Not just in making legendary stock picks like the famous US wealth creator, but also in giving away the bulk of what he has earned.
In 2006, he gave away 85 per cent of his $44-billion fortune in charity to the Bill & Melinda Gates Foundation and some other organisations. This kind of philanthropy is rare in India, where wealth levels have shot up over the past decade.
India now has as many as 52 billionaires in the Forbes magazine’s global rich list.
The Bombay Stock Exchange (BSE) 200 companies collectively earned a net profit of Rs. 213,668 crore in 2009, zooming up from Rs. 33,906 crore in 2000. But charity figures are negligible.
A report by Bain & Company on philanthropy suggests that India lags significantly behind developed nations in this department. While India’s charity contributions account for only 0.6 per cent of the GDP, it is as high as 2.2 per cent in the US and 1.3 per cent in the UK.
Only 10 per cent of India’s charity funds comes from individuals and corporates. The government accounts for 65 per cent the overseas aid agencies the rest. A Bain survey showed rich individuals contribute just 0.25 per cent of their net worth to charity. Growth leader, Philanthropy laggard?
Non-governmental organisations (NGOs) say corporate social responsibility (CSR) in India is largely an eyewash.
“Companies like to do CSR but only around their factory and this does not lead to overall social development of the nation,” said Mathew Cherian, CEO, HelpAge India.
The public sector has a policy to give away 2 to 5 per cent of profits. The private sector has none.
“There are a handful of companies that are giving 1 per cent of their profits and it is a very sad state of affairs,” said Amita Joseph of the Business and Community Foundation, who added that high wealth existed side-by-side with hunger and suicides by farmers.
A Bain’s survey of high net worth individuals shows they contribute just 0.25 per cent of their net worth to charitable causes.
Karmayog, a social initiative, says barely 13 companies of the largest 500 in India managed to get a rating of 4 on a scale of 5 in CSR, given to firms that have social activities as part of their daily drill.
The Bain report said India’s economic forms started only in the 1990s, while philanthropic markets take 50 to 100 years to mature. Can India Inc buck up?