Charitable thoughts

The Indian media has been recently awash with reports regarding the visits of Warren Buffett, and Bill and Melinda Gates and their campaign for The Giving Pledge. As the whole world knows, this is a campaign to persuade the richest people in the world to pledge half their profits to charity and to make the world a better place to live for millions of disadvantaged people. A noble cause, no doubt, and a very praiseworthy effort indeed. Yet, by and large, the visit of Mr Buffett and Mr and Mrs Gates has not left a great impact on the hearts and minds of the Indian people (and, of course, the Indian billionaires).

This is not because charity is not popular in India. Far from it. The Indian society has always wholeheartedly believed in the concept of charity — be it business corporations, feudal families or individual homes, our people have never been reluctant to give to the less privileged. In any home in India, which is even reasonably wealthy, it is an article of faith that those who work as domestic staff are taken care of, their families looked after, their children educated, and all aspects of their life provided for. Those who are not so wealthy as to have retainers, have proved to be amazingly generous with their time, money and effort to help their fellow citizens in times of need. Whether it was the tsunami that hit Chennai, or the earthquake in Latur, Indians from all over the world contributed to help the victims. I found ordinary housewives in Chennai cooking food in their homes and then going out to feed a few victims when the ravage of the tsunami was at its worst.
Many well-known and established names in the corporate sector have contributed in larger ways — building schools, hospitals and entire townships, not just for their employees but for all people living in the region. In Coimbatore, when one drives down the main road, one notices that almost every building is either a school, a college, or a hospital, run for the disadvantaged sections of society by large companies in the area — strictly as charity or on a non-profit basis. India is, therefore, no stranger to the joys of giving. The question, hence, is, how relevant is Mr Buffett’s campaign in the Indian context.
My own reactions are mixed. I had occasion to meet Mr Buffett, and I mentioned this to him, and he was quick to concede that it was never his belief that one size or model could fit all. In other words, we in India have our own model and that need not necessarily be the model of The Giving Pledge. The essence of my concern was that, on a very personal level, I like to see where my contribution to “charity” (for want of a better word) goes. I would be far more happy to see the recipients of my contribution, whether orphans in a local school or children in need, than to donate my money to a large charitable institution and then worry about how much of my contribution would actually reach the intended beneficiary and how much would be eaten up by the administrative costs of that charity. In short, rather than arms length philanthropy, I like to see where my contribution goes, and assume responsibility for it.
Obviously, large corporations are not the same as individuals, and this brings us to the ongoing discussion on corporate social responsibility (CSR) or how large companies can give back to society. Under discussion at present is the possibility of legislation which will mandate that companies give two per cent of their profits towards CSR, a proposal that is naturally viewed with extreme disfavour by the corporate world who say (rightly) that this will become yet another tax.
Well, why not? Some believe that The Giving Pledge, proposed by Mr Buffett and others, is no more than tax write offs, a harsh criticism to which I certainly do not subscribe. However, the issue remains that at the end of the day, notwithstanding all the concomitant drawbacks of delivery systems, the state or the government is the best possible agency to provide for the welfare of disadvantaged sections of society and to decide where and how those funds are to be utilised. Private corporations who pledge money to their own foundations, howsoever well intentioned, can never be as non-partisan or as effective as the government in implementing welfare schemes.
The argument that while giving charity it is the right of the individual or the company to decide where that money should go is indisputable and inviolable. However, the fact is that if the choice is between high net worth individuals and companies paying slightly larger taxes to fund government welfare schemes, and setting up their own private charity institutions, there can be no denying that slightly higher taxes, with the government supervising delivery of welfare schemes, would be far more effective than private charitable institutions.
Peter Kramer, a Hamburg-based shipping magnate and billionaire, has the following to say about The Giving Pledge: “I find the US initiative highly problematic. You can write off donations in your taxes to a large degree in the US. So the rich make a choice. Would I rather donate or pay taxes? The donors are taking the place of the state and that is unacceptable. It is just a bad transfer of power from the state to billionaires, so it is not the state that decides where the money should go, but rather the rich… That runs counter to the democratically-elected state”. Very strong words, but thought-provoking, particularly when one reflects that The Giving Pledge has mostly been signed by billionaires (including Mr Buffett and Mr Gates) who had already pledged or given their money away to their charitable foundations before signing the pledge. In other words, the money had already been committed, it was not an increase in charity.
In the ultimate analysis, the concept of giving and sharing is at the foundation of our social fabric and, as a society, it is our duty to encourage every genuine initiative that takes the idea forward and strengthens it.

Jayanthi Natarajan is a Congress MP in the Rajya Sabha and AICC spokesperson.
The views expressed in this column are her own.