Why are wealthy Indians stingy while rich Americans give generously? Azim Premji has the answer

Why are wealthy Indians stingy while rich Americans give generously? Azim Premji has the answer

Monday December 14, 2015,

8 min Read

Is there such a thing as the art of giving? Apparently there is. Ask Mark Zuckerberg, who recently pledged 99 percent of his wealth to charity during his lifetime, or Warren Buffett, the guru of philanthropy, or Bill Gates. And closer home, Azim Premji, and maybe a handful of other corporate leaders.

Azim Premji believes charity begins at home.

Philanthropy is suddenly attracting a lot of attention. Though traditionally Indians have always donated to charity in their own little ways, it is usually the big billion dollar charities that get talked about. And who better to demystify philanthropy than Azim Premji who started his philanthropic initiatives systematically in 1999 when he set up the Azim Premji Foundation. He donated 40 percent of his shares of Wipro to not-for-profit philanthropic trust which forms the corpus of Rs 52 thousand crores or $8.5 billion. In the last two years, he has been leading an informal effort with like-minded peers to promote philanthropy.

Premji feels there are two reasons why wealthy Indians don’t give as much as Americans. “One is their families are much larger in terms of wealth sharing. Two, a majority of Indians who are wealthy believe that they must leave their entire money as an inheritance to their children.”

At the first IIM Bangalore Alumni meet, IIMBUE, in Bengaluru on Saturday, Kiran Mazumdar Shaw said if she had to write Premji’s biography, she would call it, ‘Giving it all.’

Here are the excerpts from the engaging fireside chat between Kiran Mazumdar Shaw and Azim Premji.

Azim Premji and Kiran Majumdar Shaw during the fireside chat at IIMBUE.

Kiran Mazumdar Shaw: What is it that influenced you to be so philanthropic? Was it something that was influenced from childhood?

Azim Premji: My greatest influence that encouraged me to go towards philanthropy was my mother. She was a doctor but never practiced medicine. She founded a children’s orthopedic hospital in Bombay (now Mumbai) for polio-stricken children, and children with cerebral palsy. She worked as the chairperson of that hospital from the age of 27 to almost 77. She devoted her whole life to raising money to run this hospital because the hospital depended on government grants which never came on time.

KMS: You have always been someone who has been careful with money. Someone who has avoided staying at five-star hotels and driving expensive cars. In fact, you are known to shun all status symbols. Was there an inflection point in your life that made you take to philanthropy in such a big way?

AP: The reason I give it (money) away is because it is the right thing to do. There is so much poverty, and misappropriation of funds and so many people are majorly disadvantaged.

KMS: There is a great saying that wealth and knowledge must be shared. It is about how we invest in society. How do you send this message to society and ingrain it in people?

AP: My biggest regret is I started too late. It was 14, 15 years back that I started in a small way in education in government schools in villages of India. We’ve really begun to scale in these past four years primarily because we saw such a strong need to uplift the quality of education in government schools. The reality is we started small and we started much later.

487763255 (1)
In a country like India, sharing your wealth with the unfortunate goes a long way. (Image credit: Getty Images)

KMS: I would like to take you to another part of your philanthropy which is the philanthropic initiative you have started with Bill Gates. And I must say I’m highly impressed by the time you devote to sensitising others in the corporate world about the concept of giving. Why do you think people need to be told and more importantly, why do you think people are so self-consumed and selfish about their wealth?

AP: (a moment’s silence) I think those are very loaded statements (laughter from the audience). You know I don’t think people need to be told. Most people know what their social responsibilities are. The reason I think the wealthy Indians don’t give as much as Americans -- in fact, Americans are actually leaders in this – one is their families are much larger in terms of wealth sharing. Two, a majority of Indians who are wealthy believe that they must leave their entire money as an inheritance to their children. That acts as a deterrent. It is more prevalent in certain parts of India than in other parts of India. I think the more generous part of India is South India.

KMS: We are here with the present and future generation of wealth generators. How do you get the message across that they need to give some of their wealth to philanthropy?

AP: I think the present generation of the wealthy and the semi-wealthy demonstrate much more generosity. They either contribute time, effort, or money to philanthropy. So far the older generation is concerned one has to give examples to them. Keep on persuading them and hopefully, we’ll make a breakthrough. Actually, the people you’ve got to convince are the wives (laughter from the audience). Wives are socially more sensible and have more time at their disposal to lead initiatives of philanthropy. The husbands are much too busy making money (loud cheering and laughter from the audience).

72438350 (1)
Volunteering one's time and effort to social causes are a good start towards philanthropy. (Image credit: Getty Images)

KMS: I think this is a great testimony to women and wives. You are here at the leadership summit of IIMB…so talking about giving back to alma mater. Is it important to give back to alma mater? Of course, it is a ridiculous question to ask because it is indefensible as an argument. But should one feel guilty about not giving back to the alma mater?

AP: No. I have not given back to my alma mater (loud cheer from the audience). I think the priority of our society far outweighs those of our alma mater. I think it is a matter of individual priority. But most wonderful universities of the world are significantly financed by their alumni.

KMS: But I am sure if your school or college reached out to you for help, you will not say no.

AP: They reach out to me all the time (laughter from audience).

KMS: So why do you say no?

AP: I just want to prioritise my funds to things which are more relevant to our country (applause from the audience).

KMS: I don’t like the applause that you got, Azim (laughter from the audience). Because I do believe that this has to become a part of our giving back to our alma mater. Because I believe that institutions are responsible for making us who we are today (cheer and applause from the audience).

AP: You got a louder applause (laughter from the audience).

KMS: I hope they mean it. Another question I wanted to ask you is when one looks at global business leaders, one associates philanthropy with entrepreneurial wealth whether it is Bill Gates, Elon Musk, Warren Buffet, or Mark Zuckerberg. Yet one sees a lot of other wealth creators in the corporate world like people in banks and hedge funds with huge salaries and stock options, isn’t that wealth creation as well, and shouldn’t they also be philanthropic? Because you don’t hear about that kind of philanthropy being articulated…the salaried class and employees. How do you create that kind of culture?

AP: I don’t know whether they are giving or not giving. I would be hesitant to make a harsh judgment. It just doesn’t get attention or get publicity.

dor50274703 (1)
(Image credit: Getty Images)

KMS: I think it is extremely important for media to cover stories of philanthropy from the salaried people.

Talking about philanthropic philosophy, how can businesses institutionalize it? Can we actually introduce a course on philanthropy in business schools?

AP: Oh! yes…and they can make you a professor (laughter from the audience). This kind of a course can generate a spark…

(After the Fireside Chat, Kiran Mazumdar Shaw opened it up to the audience to ask Azim Premji questions. Here are some excerpts.)

To a question on challenges he faced while giving away his money, Premji said, “The biggest challenge we faced is the size of the problem, the scope of the problem, and the depth of the problem. There was a high sense of frustration. However large an organization setup you are there is frustration that you do not have the bandwidth. We do rely on government machinery in what we do, and you have to keep at it, and keep at it.”

Interestingly, to a question on why he is not in politics, Premji replied, “Because it will kill me in a couple of years. I think you need to cultivate a sense of insensitivity to be in politics.”

But the session ended with the most profound thought from him which was an answer to a question on how does one decide when one should start giving.

“We had a meeting of our philanthropic initiative last week, and one of the panel members, whose family has been active in philanthropy, was telling us that as kids whenever they got money as gifts, they were required to give 25 percent of that to charity. And this was inculcated since he was two years old. That’s how you cultivate philanthropy.”