PHILANTHROPY AGE India’s icon BY Andrew White

is employees talk of an almost Ratan Tata has achieved almost legendary status obsessive attention to detail, and H the considered pauses he takes among many of India’s 1.2 billion people. In an before he delivers approval or reproach. His exclusive interview with Philanthropy Age, the critics begrudge him as the inheritor of an opportunity, a legend by dint of dynastic former chairman of the Tata business empire tells succession rather than entrepreneurial us why his country needs to change its approach distinction. The rural poor speak of him as an almost otherworldy figure, able to to improving the lives of the hundreds of millions change lives at the stroke of a pen or the of Indians mired in poverty inflection of a bushy grey eyebrow. In the flesh, Ratan Tata addresses all three perceptions. He reels off statistics as though they were laid out in front of him, speaking slowly and deliberately and the Tata business empire is attempting (CSR), the two largest Tata trusts between clarifying even the most innocuous of to spearhead that change. Now retired them disbursed an additional $800m during verbal missteps. He makes no claim to have from the corporate sphere, he retains Tata’s two-decade tenure as chairman of been an empire-builder, when referring to the chairmanship of the Tata trusts, a both organisations. And, as has become his past as the “custodian” of a company group of some of the country’s oldest and de rigueur for successful business leaders of which less than 2 per cent is owned by certainly most high-profile philanthropic intensifying their efforts in the philan- the Tata family. When he speaks of India’s organisations. The trusts hold around 66 thropic sphere, Tata is attempting to instil a manifold problems, he does so with a fierce per cent of the equity capital of Tata Sons corporate culture in the charitable trusts he authority that would lift the hearts of Limited, the holding company of the Tata now oversees on a day-to-day basis. millions of Indians without a voice. Group. Founded in 1868, the Tata Group “One hopes that one can treat the “Slumdog Millionaire was a successful encompasses more than 100 companies philanthropic activities of the trusts as a movie and there are a number of people across sectors as diverse as IT, engineering, corporate entity: setting goals, looking who think it showed India in a bad light,’ he energy, steel, chemicals and automobiles. at efficiencies, monitoring the outcome says. “It showed India in a realistic light. We For more than a century, a significant and benefits of what we’re doing,” he says. should all be ashamed of what [inequality] proportion of the conglomerate’s profits “The first thing is to question a lot of what there is, and try to solve it. Are we doing it? have been ploughed back into helping is going on already, and it’s something I No. And that’s something that really needs change the lives of impoverished Indians. faced with the Tata Group when I started. I to change.” While the Tata Group routinely spends was told; ‘This is the way we’ve been doing From his nondescript offices in Mumbai, 4 per cent of its net profits on activities things for 25 years, and who are you to the 76-year-old former chairman of related to corporate social responsibility ask?’ But when you’re the chairman

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they have to answer, and so things did donations a form of taxation, and therefore change in time.” “You can’t have a prosperous employ every means at their disposal to Tata’s methods, resented at first, helped funnel the money back into corporate the Tata Group’s turnover grow tenfold to tomorrow if, each year, 17 million coffers. “The NGOs need to be certified by $100bn during his chairmanship. If he can the government, but their causes are not achieve even a small percentage of that are vulnerable to infirmity” defined, their mandates are their own, and impact now that his focus is directed solely there will be those venal corporates that towards the Tata trusts, the naysayers are short-circuit those funds back into NGOs likely to be proved wrong again. that they are connected with under the “Operating traditionally is perhaps the problem that has “gone unnoticed by the surface,” he cautions. greatest weakness of the trusts; there’s a government”. He does, however, believe Tata’s suggestion is that the govern- tremendous resistance to change, and I that the disbursement of “huge budgetary ment define no more than five “thrust have not shaken that attitude just yet,” he allocations” has been rendered ineffective areas, things that it considers necessary admits. “A priority is to go out and look at thanks to inefficiency and corruption. It’s for the rank and file of the people.” Specific what other foundations are doing, broaden difficult to mitigate a distribution network, projects should be identified and guidelines our thinking and benchmark ourselves he admits, where government-supplied established so that funding is monitored against others.” nutrient packages are more likely to be sold and accounted for, and goals should be Today, one of Tata’s primary focuses in the local market, than they are to find set district-by-district or state-by-state. is on India’s so-called invisible epidemic. their way into the feeble young hands that “The whole scheme is very vulnerable to A 2011 study provided reliable – and need them most. exploitation,” he warns, “and it needs much saddening – estimates of child nutrition Although the Tata trusts are grant- more clarification than there is currently.” in India. The Hunger and Malnutrition making organisations that often work That the government should feel the survey found that some 42 per cent of hand-in-hand with government bodies, need to mandate giving is both a reflection children under five were underweight and Tata is less forgiving when it comes to of the huge economic imbalances with 59 per cent were ‘stunted’, or chronically other government efforts to redress India’s which India struggles, and the curious state malnourished. Of those children who all-too-evident inequalities. He is particularly of philanthropy in India. For a country with were stunted, about half were classified critical of a specific clause in the country’s so much wealth, technical expertise and as ‘severely stunted’. The prevalence of new Companies Act, which mandates that management talent, where are India’s underweight children in India was double large corporations must spend at least 2 per great philanthropists? that of sub-Saharan Africa. In 2012, another cent of their profits on CSR. “The biggest philanthropic families in report by British charity Save the Children “We have a phenomenon which is India have been very understated,” says estimated that 1.83 million Indian children meant to be good but is going to be Tata. “When you go into some of the rural die every year before the age of five, the somewhat chaotic,” he says, warning that areas you find that a handful of families majority from preventable diseases made India does not yet have the infrastructure have done great things for those lethal by the malnourished child’s inability or oversight capability to successfully communities. And yet the amounts that to fight back. introduce such a scheme. “You’ll see an are being disbursed are small: ours is the “We are a large population: we grow at enormous growth in NGOs, everybody biggest in the country and we disburse only about 17 million people a year; the tripping over themselves to register to about $92m a year. equivalent of one Australia or Malaysia,” attract this money. However we don’t as “I think we’re still a feudal country, so says Tata. “If that new generation is weak yet know what kind of monitoring there’ll there’s great disparity and a relative lack of or suffers physical and mental defects due be in terms of how this money is used. concern among many about the wellbeing to malnutrition, or has a high mortality rate, “You will have a registered NGO, you of the poor around us,” he continues. it’s a major issue. You cannot have a will have the money, the money goes to “The caste system has a lot to do with it, prosperous tomorrow if, each year, 17 the NGO and it may be three or four years and in certain parts of India you get almost million people are vulnerable to this before the whole thing explodes in a series unbelievable, inhuman actions against the infirmity. If you then look at those who do of fraudulent operations; money being lower caste citizen, almost treating him like survive but survive with weakness and low given to people that don’t exist, or causes an animal. It’s illegal, it’s not supposed to resistance to various ills, then you have that are subterfuge for something else.” happen, but it does.” another problem of a high cost of health.” In addition, Tata suspects that some If such attitudes are to change, then He argues that malnutrition is not a companies will consider the mandated much will depend on the next generation

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66% The Tata trusts’ holding in Tata Sons Limited, which owns the Tata Group

his critics might admit that his greatest inheritance was not corporate, but ethical. Growing up he was inspired in particular by his grandmother Navajbai, the widow of Sir Ratan Tata, founder of one of the two major family trusts. “I learned a lot from her in terms of how she looked at misfortune and how she mitigated that for people when they came to her,” he recalls. “She had homes for the poor all over the country, or sanatoriums as they were called in those days. She operated in that way not to gain visibility for herself, but because she was very kind- MAIN Ratan Tata is now hearted and passionate in terms of doing devoting his energies full-time away with misery.” to the Tata trusts, having retired as chairman of the Tata Group in Tata is insistently self-deprecating when December 2012 talking about his own giving, describing his own personal wealth as “marginal”, and preferring instead to emphasise the institutional giving enshrined in the family and their approach to those marginalised “We’re trying to change that within our companies by their founders decades ago. and less fortunate elements of Indian organisation, by paying corporate salaries,” Nevertheless, he does admit to a sense society. In a culture where grey hair and he continues. “If [India’s philanthropic of pride when he meets those who have experience often trumps youth, Tata sector] offered a respectable level of benefited from the efforts of the trusts. argues that fresh blood must be incentiv- remuneration to young people then there “I was awarded a medal by the Indian ised into the philanthropic sector, in order would be those who have the same interest government, and it was presented at the to drive innovation and help overcome in making a difference to humanity, and president’s official home in Delhi, a big centuries-old prejudices. would want to apply their ingenuity and event with horns and a procession,” he “The younger breed is interested in its creativity to that cause. At the present smiles. “When I was handed the medal I own prosperity, and that’s another change moment, it’s only the person that has that told President Narayanan, ‘Sir I am greatly that philanthropic organisations have to passion and is willing to make an enormous honoured to receive this from your hands’. make,” he says. “They don’t pay the kind of sacrifice. But I think this will change.” He replied: ‘I was a Tata scholar. That’s salaries on offer in the corporate world, so Tata’s introduction to the world of how I got my start in life’, and then burst they don’t attract people other than those philanthropy was, of course, dictated by into laughter. That was a great moment; I who are willing to come for much less. circumstance rather than salary. Yet even almost broke down in tears.” n

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