Billionaires in India are often accused of doing not enough for the have-nots.
Wipro chairman Azim Premji’s decision to transfer 213 million shares worth R8,846 crore for a foundation that is little known for its contribution in improving the education system in various states of the country perhaps would set a trend for many of his billionaire peers to follow.
A Rs 9,000-crore corpus would give the foundation an additional yearly income of about R900 crore assuming an annualised return of 10%.
For any not-for-profit organisation, that’s a decent sum of money.
Foundation co-CEO Anurag Behar said the organisation use the funds in a calibrated manner gradually scaling up its operations across different areas of work.
“Essentially, liquidation or non-liquidation ( of shares) is entirely a judgment issue of prudent management of the endowment and depends upon the need for it… and the need is only going to grow gradually.”
The share transfer will effectively bring down Premji’s shares in the company to 70.68%from the current 79.4% complying with the government norms that all listed companies should have a minimum public holding of 25%.
The share transfer will be completed by December 7.
The fact that the trust is controlled by Premji and he will continue to retain voting rights of the transferred shares would only embolden the foundation’s credibility.
Premji’s latest act of philanthropy, the biggest in India, comes during a time when corporate India is increasingly facing questions of not ready yet to let go of their hard-earned cash, even for charity. The number of so-called “high net worth individuals” in India has grown at about 11% every year since 2000, to more than 115,000 at present.
Yet India’s rich have been seen as not very keen on loosening their purse-strings for charity.
Consider this: donations in India aggregated $7.5 billion (about R33,000 crore) in 2009, according to a study by consulting firm Bain & Co which is less than 1% of the country’s GDP.
There are an estimated 2.5 million non-profit organisations in India, about half of whose donations are go to religious, sports and cultural organisations, the Bain study showed.
To that effect, Premji’s recent transfer to the trust could well be a trend-setter.
“We had decided not to work towards creating schools, but work with the government to improve existing framework by lending (logistic and academic) support to improve quality of education,” Behar said.
The endowment will now be channelled to significantly scale up its operations, reaching out to government schools in almost all states to improve teaching and management practices.
It will also pave way for a first-of-it’s-kind university offering tailor-made post-graduate courses, like MA in Education or Curriculum Development or Masters in Education Development and Management, to teachers and teacher trainers from far-off rural areas.
“Imagine a school run by 3-4 teachers in remote area, where the nearest road is a 2 hour walk, where the teachers have clear-cut programmes laid for managing and improving learning process. And it is a government school,” said Behar revealing plans to replicate it through 50 institutes in various remote areas of the country and five state capitals.
The current system of education based on the principles of “learning by rote” has not yielded much in qualitative parameters.
“Forget assessing the level of understanding, building the right moral values or higher cognitive skills like critical thinking, synthesis or analysis… the level of learning in India is poor,” Behar said.