In 1902, five years before India’s largest iron and steel plant was established, its founder, Jamsetji N. Tata, in a letter to his son Dorab, wrote about his vision for a city for its workers. “Be sure to lay wide streets planted with shady trees, every other of a quick-growing variety. Be sure that there is plenty of space for lawns and gardens. Reserve large areas for football, hockey and parks. Earmark areas for Hindu temples, Mohammedan mosques and Christian churches….”
Tata died before the city, aptly named Jamshedpur, was built. But his vision persisted. Located in eastern India with a population of 1.3 million, the city, once a cluster of tribal settlements, has an impressive literacy rate (75%) and is among the cleanest and richest in India. Managed almost entirely by Tata Steel, it has a 980-bed hospital, several schools, colleges, a zoo, parks, a sports stadium and uninterrupted electricity (a rarity in India). It is one of the few cities in the country where one can drink water directly from the tap. So seriously does Tata Steel take its job as civic administrator that it self-deprecatingly yet famously advertised: “We also make steel.”
Creating townships as a means to promote employee welfare was among India’s primary tenets of corporate philanthropy. “In a free enterprise,” said Jamsetji Tata, “the community is not just another stakeholder in business but is, in fact, the very purpose of its existence.” More than a century later, the group’s current chairman drives the same ethos, which is articulated in a foreword Ratan Tata wrote for Code of Honor, a book on the Tata Group’s attitude to corporate social responsibility. “We have to recognize that we cannot place ourselves in a community and operate in an isolated manner,” Ratan Tata wrote. “We have to grasp the imperative of putting back into the community from which we gain as a corporate.”
The Tatas were not alone in building upon that sentiment. Other private companies also created similar, albeit smaller, townships — such as Hindalco’s Renukoot complex, Walchand Hirachand’s Walchandnagar and the Modi group’s Modinagar — for employees in far-flung plant locations. As industrialization set in, public sector units set up plants in remote areas and had to provide for the needs of their employees. The Steel Authority of India (SAIL) has established thriving townships around its plants in Rourkela, Bokaro and elsewhere. In the book, Change and Turbulence at SAIL,author C.V. Madhavi wrote, “Apart from engaging itself in the production and marketing of steel, the company also has welfare schemes for its employees including housing, hospitals, schools, concessional transport, recreational and cultural activities, and canteen facilities.”
In a society as steeped in faith and convention as India, however, religious giving has been the mainstay of charitable contributions. In addition to former corporate townships that are now thriving cities, India’s philanthropic legacy includes religious temples, and trusts and donations that funded universities, scholarships and other initiatives. “In India, people believe in rebirth and karma. Good deeds ensure fortune in future lives,” notes Devdutt Pattanaik, chief belief officer of the Future group, which operates India’s largest retail chain.
Itinerant holy men live entirely on charity. Villagers provide free shelter and food to travelers. Houses in cosmopolitan and Westernized Delhi still have clay urns filled with water outside, inviting thirsty passers-by to help themselves. The tradition of philanthropy is as ancient as India itself. “Charity is a [key performance indicator] of spiritual evolution in India, not a [key result area] of material growth,” says Pattanaik.
Birla’s Wide Canvas
By any measure, the late Ghanshyam Das Birla — the founder of the Birla clan — was certainly amongst the most generous. The landmark Lakshmi Narayan Temple in Delhi is only one of the many Birla Mandirs in the country. Birla was also the financier for Mahatma Gandhi during the Independence movement.
“During the Independence movement, several industrial thought leaders extended their financial support to leaders of the freedom struggle,” according to K. Ramachandran, Thomas Schmidheiny chair professor of family business and wealth management at the Hyderabad-based Indian School of Business. “G.D. Birla’s financial contributions to the movement and Ardeshir Godrej’s generous donation to the Tilak Fund for the upliftment of Harijans were notable among these.
“Families in India are in some ways microcosmic socio-economic systems, strongly embedded in their local communities, and have a long tradition of giving to the poor, needy and destitute,” adds Ramachandran. “Donating toward temple building, for instance, has been a favored charitable activity throughout history.”
But Birla also invested generously in causes more progressive than religion; he endeavored to make education accessible to ordinary people. A school dropout himself, Birla is known to have opened 400 primary schools in a single year and made a donation of Rs. 70,000 (a large sum in 1925) to the Aligarh Muslim University. He even managed to get support from experts at the Massachusetts Institute of Technology to establish the Birla Institute of Technology and Science (BITS) — quite a feat for an educational institution in India in 1964 — in his birthplace Pilani, in Rajasthan in western India. BITS, with a ranking on par with the Indian Institutes of Technology (IITs), started in the early 1900s as a small school. Today, it offers courses across the spectrum — wider than any IIT — and has spread to other countries.
Education a Priority
Education was certainly a priority for the philanthropists of the past. In southern India, eminent banker and philanthropist Annamalai Chettiar founded the various institutions that led to the establishment of the Annamalai University in Tamil Nadu in 1929. The Murugappa group set up the AMM Charities Trust (now foundation) in 1953 with education as a primary initiative. Vikram Sarabhai, a Gujarati businessman and considered the father of the Indian space program, founded the Physical Research Laboratory in Ahmedabad in 1947.
In 1953, industrialist K.C. Mahindra set up his eponymous trust to “transform the lives of people in India through education and financial assistance across age groups and income strata.” The trust initially provided scholarships to help students go abroad for degree courses, such as aviation and defense, not available in India at the time. “The main idea was that after these students availed of the scholarship, they would return to India and give back to the country. Mr. Mahindra wanted India to benefit and education seemed to be the best way. It was the most sustainable area of investment,” notes Sheetal Mehta, chief of corporate social responsibility initiatives at Mahindra & Mahindra.
In fact, contributions toward nation-building prior to Indian independence in 1947 were perhaps the most socially transformative acts of early philanthropy in India. Wealthy Marwari businessman Jamnalal Bajaj established the Shiksha Mandal (centre for learning), as early as 1914 as part of the national movement to propagate education. Bajaj considered himself the “fifth son of Gandhi” and contributed significantly — financially and otherwise — to the freedom struggle. When he died in 1942, Bajaj had willed his entire share in the family wealth — Rs. 500,000 — to establish the Jamnalal Bajaj Seva Trust.
The late Ardeshir Godrej, founder of the Godrej Group, also donated Rs. 300,000 to the Tilak Swaraj Fund (for the upliftment of the downtrodden) in 1920. His contribution set the mandate for philanthropic responsibility within the Godrej group. “We have been doing philanthropy for many decades now, but in the 1970s, we set up the Godrej Trust which has 25% shareholding in our parent holding and manufacturing company Godrej & Boyce,” says Adi Godrej, chairman of the Godrej Group. “This is a constant source of revenue for the trust to engage in philanthropic activities.” Over time, a fair amount of resources have been spent on education and health, establishing schools and hospitals. “But an area that we concentrate on that is not common with many trusts is environmental protection,” Godrej adds.
The Tata Trusts
Trusts in India are synonymous with the Tatas. In 1892, Jamsetji Tata established the JN Tata Endowment Scheme for higher education and research. In 1898, Tata pledged half his personal wealth, then Rs. 3 million, to establish the Indian Institute of Science. Justifying what might have seemed at the time as vanity philanthropy, Tata made the case for holistic giving: “There is one kind of charity common enough among us… It is that patchwork philanthropy which clothes the ragged, feeds the poor and heals the sick. I am far from decrying the noble spirit, which seeks to help a poor or suffering fellow being. [However] what advances a nation or a community is not so much to prop up its weakest and most helpless members, but to lift up the best and the most gifted, so as to make them of the greatest service to the country.”
Tata’s sons, Sir Dorab Tata and Sir Ratan Tata, similarly donated large chunks of their personal wealth. Today, the Tata Group has two principal trusts: the Sir Dorabji Tata and Allied Trusts and the Sir Ratan Tata Trust. The Sir Ratan Tata Trust was established in 1918, the year of his death. At a time when most charitable initiatives were communal or religious in nature, the funds from Ratan Tata’s trust were directed toward basic and advanced education; primary and preventive health; rural livelihood; art and culture and public initiatives. The Sir Dorabji Tata Trust was set up in 1932 and is responsible for founding several institutions such as the Tata Institute of Social Sciences in 1936; the Tata Memorial Centre for Cancer Research and Treatment in 1941; the Tata Institute of Fundamental Research in 1945; and the National Centre for the Performing Arts in 1966.
Over the generations, the purview, purpose and process of philanthropy have clearly undergone redefinition. According to Godrej, Indian philanthropy waned after the years of British rule and during the early days of independence. “Because of the Socialist nature of the economy, Indian companies were not very successful, and philanthropy took a back seat. After the opening up of the economy in 1991, philanthropy has gained a lot of momentum. Now everybody realizes that there is no unemployment in India, just unemployability. So there is a lot of attention on primary, secondary and university education; on training; on vocational training; health care and social development. In the early days religious philanthropy took a lot of attention, which is much less now.”