It’s easy to be cynical about people like Bill Gates and Warren Buffett doling out millions and even billions of dollars to poor and needy communities world-wide, having made their fortunes working the world markets – one in information technology and the other in finance. It’s also easy to be cynical about Indian businessmen lining up, as they have done in these past few days, at the Gates’ and Buffett’s beckoning, to consider doling out some of their sometimes ill-gotten gains for good works.
Gates and his wife Melinda have been in India this past week, along with Buffett who amazingly was visiting for the first time. They toured health projects (below) that they are funding in Bihar, India’s poorest state which has very high maternal mortality rates, and then met about 70 top industrialists from family companies to advocate philanthropy and discuss the sort of “giving pledges” that they encourage in the US.
The founder of Microsoft, and the world’s second richest man, Gates has set up the $37bn Bill and Melinda Gates Foundation with his wife to focus primarily on health care and on other development issues such as education. Buffett, 80, the third richest and probably the world’s most famous financial investor through his $200bn Berkshire Hathaway group, pledged in 2006 to give 99% of his shares and wealth to charitable causes. Much of that has gone to the Gates Foundation. Out of $17.5bn donations that the foundation has made so far, $1.25bn has come to India with $800m going to Bihar.
Apart from Tata, India’s biggest group, which is majority-owned by charitable trusts, and one or two other smaller examples, India’s wealthy old-style business families have traditionally built prestigious temples and sometimes schools, often in their home towns, but little else.
The new mega-rich, who have emerged in information technology, real estate and elsewhere since the economy opened up 20 years ago, have not yet grasped the idea of giving outside their own geographical areas or business sectors, though some have made high profile donations to their universities (notably Harvard and Yale). Several talk about wanting to create wealth first for themselves and their families. The mostsignificant exception is Azim Premji of the Wipro IT group, who in 2010 made a $2bn donation for education and social projects that possibly reflected the charitable traditions of his Ismaili Muslim faith.
In addition to Premji, the 70 industrialists at the Gates-Buffett meeting included the heads of top family-controlled businesses such as the suddenly-rich and amazingly-expanding GMR airport and infrastructure company that announced Rs1,540 crore ($340m) a few days ago for an in-house charity, real estate developer DLF, Bajaj (two wheelers), Godrej (diversified manufacturing), Bharat Forge (engineering), HCL (software), and Dabur (pharmaceuticals).
This has started a new debate. Ajay Piramal, who runs a large pharmaceuticals group, thought the event set an example and encouraged discussion. “People are looking for role models,” he said in Mumbai’s DNA newspaper. “Now I’ve started talking about the [charitable] work we do, which I haven’t really done earlier”.
Most important in all this, I guess, is the motivation of the ‘givers’, and how effectively their money is used. I’ve heard how the Gates Foundation reflects its huge wealth by being top heavy, over-staffed, bureaucratic and dominated by its US-headquarters, and by paying US-level salaries that disturb developing countries’ pay structures.
There are even allegations, partly stemming from advocacy of genetically modified seeds, that the Gates have wider business oriented motives – “Monsanto in Gates clothing” as a US lobbyist puts it. Critics say the foundation has been unsympathetic to local problems, such as overcoming the rural poor’s instinctive resistance to vaccines, assuming that they react to philanthropic funds in the same ordered way that big companies react to investment. Much of that was certainly true when the Gates couple began their work 12-15 years ago, and some is still valid as the ranks of support staff have shown this week.
But on Tuesday afternoon I listened to Melinda Gates, first in a rural health seminar and then in a ten-minute one-on-one interview, and I came away with my scepticism giving way to a realisation that she and her husband really are helping to stimulate change in India and elsewhere. I asked her about head office domination, and she demurely replied that “Bill and I do make all the decisions,” but added “we are taking a lot more input than we used to”. I think that meant listening more and delegating some authority – the India office is to include health experts as well as policy and administrative staff.
I asked how, given their world-wide focus, they choose where to go with funds, and what to do – and why they came to in India with its buoyant economy, 8-9% growth and massive corruption.
India was an obvious place I was told because half the 1.2bn population is extremely poor, because of a crying need for better health care, and because of technological expertise in producing low cost health products such as vaccines. The aim, working with government agencies and other organisations, is to “do things that society has a hard time doing” and acting as a “catalytic wedge where governments can’t or won’t experiment”.
Asking for an example, I was surprised by the simple answer: “You won’t see a government trying for 18 months to teach women not to let their babies get cold”, which the foundation has done. That is the beginning of the focus on “everyone’s right to a healthy and full life”; helping babies in the poorest areas survive the first 30 days of their life by being warm – and vaccinated.
The foundation began in India with a $338m HIV prevention campaign, which is now being handed over to the government having achieved some success with a decrease in the rates of sexually transmitted diseases among those most at risk. There has also been work on polio eradication that has contributed to a dramatic drop in new cases, and there are plans for a diarrhoea oral vaccine for children. In Bihar, the foundation has been particularly successful because of co-operation from the state government, which in the past six years has been turning round decades of economic and social decline. The target is to cut mortality rates for mothers and children under five by 40% by 2014.
One has to respect the Gates for devoting this part of their lives to making life better for the world’s poorest and most deprived. It does not cost them anything of course because, as Buffett said, handing over largesse “has not changed my life in any shape or form“ – he was “giving away something that has no value to me but has value to other people”. Also, Berkshire Hathaway did not lose anything either when his shares were transferred to charitable foundations.
Buffett also had an instant answer when asked about the ethics of India’s hordes of black money being given to charities: “A child receiving a vaccine is not going to question the source of the money”. Premji whimsically thought that some people “might want to give away unofficial money”.
Whatever the source, the poor are definitely benefiting, and the Gates’s-Buffett combine is driving change in places like Bihar as well as Africa and elsewhere. Let’s hope the Indian businessmen who have enjoyed parading in their philanthropic shadow this week ensure their money reaches places that need it.