Two events in the 1960s had a deep influence on my life. When I was 17, I got an undergraduate scholarship to Harvard. I was able to go only because an anonymous American family gave money for the scholarship — I never knew the family and would never know them. When I was abroad, I felt ashamed because newspapers called India a "basket case".
A ship from America laden with grain used to arrive at an Indian port 'every ten minutes' during the drought years. Soon, however, the situation changed spectacularly. Norman Borlaug, an American scientist, funded by the Rockefeller Foundation, helped discover a miracle, hybrid variety of wheat, which created a 'green revolution' in India, making it agriculturally surplus in many crops.
What unites these two events is the great tradition of American private philanthropy. On an individual level, it made my liberal education possible. On a national scale, Rockefeller's philanthropy led to a scientific breakthrough and brought prosperity to India. My purpose in recounting these two tales is to report that something similar is happening today in India — a quiet, philanthropic revolution is under way.
According to the respected annual Bain-Dasra India Philanthropy Report, private individual donations in the past five years have grown faster than either foreign donations or corporate donations via CSR or government welfare funding. They rose six fold from Rs 6,000 crore in 2011 to Rs 36,000 crore in 2016. Government was still the largest contributor at Rs 150,000 crore in 2016 but if this trend continues, private philanthropy could play a major role in improving education, health and alleviating poverty in the future.
This news is surprising and destroys a few myths. Wealth accumulation is a recent phenomenon — only after 1991, did Indians begin to accumulate serious wealth, after the 'license raj' went away with its 97% tax rate. Philanthropy usually begins after a few generations of family wealth. Typically, the first generation makes the money and flaunts it, as Laxmi Mittal did with his daughter's famous wedding in France. The second generation doesn't want money; it wants power, which explains why the Kennedys and Rockefellers joined politics. Born into money and power, the third generation seeks respectability and dedicates itself to philanthropy and art.
Thomas Mann, the Nobel Prize-winning German writer, makes this point in Buddenbrooks, my favourite novel about a business family. In his saga of three generations, the scruffy, astute patriarch makes the family fortune; his son becomes a senator; but his aesthetic, physically weak grandson devotes himself to music. But every rule has its exceptions. Even during the American 'robber baron era' in the late 19th and early 20th century, Andrew Carnegie, the steel king, gave away 90% of his fortune mostly to create public libraries in American cities.
The dramatic change today is that most entrepreneurs are giving away money during their lifetime. Just as the money-making cycle has shortened in the knowledge economy, so has philanthropy. Inspired by Chuck Feeney, Bill Gates famously broke the three generation cycle to give away his money in his lifetime. Warren Buffet followed suit. And they are role models today for the young rich. Gates is inspiring young entrepreneurs around the world with his 'giving pledge' to give away half their wealth in their lifetime. He has inspired Azim Premji, the Nilekanis, Shiv Nadar, Sunil Mittal, Ashish Dhawan, and many generous others.
They are not only writing cheques, but bringing the same passion to philanthropy as they did to their business. In Dhawan's case it has meant creating a world-class liberal arts university, Ashoka, with several like-minded founders. If you get into Ashoka, like Harvard, you are guaranteed a scholarship from an anonymous donor. The Nadars are creating a world-class museum.
The Bain report has broken another myth propagated by the Indian Left — that Indian businessmen are callous and stingy. The Panchatantra has a wonderful story which suggests that the spirit of giving always prevailed in India. An older merchant is advising a younger one that a successful life requires four skills. First, he says, you must learn to make money. Next, you must learn to conserve it. Third, you must know how spend it — don't be mean or extravagant. Finally, learn to give it away — and that too is a skill. With India ranking 130th on the Human Development Index, the wealthy have their work cut out, although obviously they can never replace the government's role.