A 2-Pager by Ajit Chaudhuri
I had promised myself that, when I made my first billion, I would buy myself a football team – Olympique Marseille was my target at the time (its owner was broke and incarcerated), but any top class side would have done. My dreams of kicking about with Maradona, Platini, et al (I would include their current equivalents if I thought they had any) have yet to fructify, but I notice that others have been treading in my imagined trails twenty or so years later. Yes, according to Forbes.com, there are 946 dollar billionaires in the world (178 qualified in the past year) and they are buying things from submarines to football teams. They are also putting money into development philanthropy.
What’s new about this? The Rockefellers and Carnegies had done this long ago. My own employer, the late Paul Hamlyn, put GBP 400m of his personal wealth into philanthropy. In India, the Tata Trusts have been major players in development funding. Is it just the amounts – the $30b plus that the Gates put into the Gates Foundation, Warren Buffet’s $37b addition to it in 2006, and the subsequent scramble among billionaires to give and be seen to give significantly – or is there something more to this phenomenon? I was fortunate to attend a talk by Mathew Bishop, Editor of The Economist, at the Association of Charitable Foundations meeting in London last month on the subject “What’s New About New Philanthropy?” that touched upon these matters.
To make sense of new philanthropy, according to him, it would be useful to understand new philanthropists. Many of today’s billionaires are self-made –highly successful, arrogant, and with a scale of ambition for their philanthropy that matches that of their businesses. They expect their philanthropy to have a global impact, and they transfer their attitudes on business to philanthropy. Interestingly, they do not think that they have much money! They therefore see themselves as innovators and look to use their efforts to leverage resources from governments and MNCs. They are uninterested in approaches that do not have the potential to scale up significantly. They are interested in for-profit ways of addressing social problems because of the possibility of attracting serious resources (brains and money) to the problems. New philanthropists see the need to build quality organisations around the problems they look to address, and they understand the requirement of a long-term perspective. And even though many have made their money by acquisitions, they prefer to build their respective Foundations from scratch rather than to acquire existing organisations. They see old philanthropy as being all about making grants rather than addressing problems, and they are determined not to go down that road.
Why is this of any interest whatsoever? One – because the effects of new philanthropy within the Indian development sector are becoming visible. I work (via the Paul Hamlyn Foundation) along with other ‘old philanthropy’ types with an NGO in Jaipur to universalise elementary education within the city – dealing with governmental capacity constraints, political issues and red tape at every stage and slowly and steadily moving forward. Along comes the Airtel Foundation, which says it will do what it takes to ensure this – set up as many schools as required, manage (and pay all costs for) them, ensure quality, and all of this into the long term – the government just has to give the land for the schools and manage the likely freaking out of the government teachers’ unions. Wow!!
Two, there is something exciting about this whole approach – to identify a serious problem and then work to address it at a district, state or national level – none of these islands-of-excellence-in-ten-villages stuff any more. To bring in the best brains, the latest technology, serious money and a long-term perspective to addressing problems. To develop models that work, and scale up across regions, and excite governments, and attract more resources. This is refreshing when compared with the rather cynical attitudes that currently prevail on most matters relating to the social development sector.
Three, where does this leave the good old NGO? Where does this leave the traditional grant-making organisation? Where does this leave old philanthropy? And, last but not least, where does this leave me? Are we part of the solution in this paradigm, or part of the problem? Are we ants to be crushed, or deadwood to be ignored, or irritants to be brushed aside, or sheep to be co-opted? I am not too sure as yet.
Are there grounds for cynicism? I have read of the times, in the 1950s, when humankind had just gone into space, when cures for TB and malaria had been discovered, and when we were going to eradicate disease, misery and poverty. TB and malaria continue to be major killers fifty years later, and the less said about misery and poverty the better. What will happen when the billionaires get bored, or when they discover that some problems defy solution, or when they die and their successors show signs typical of second-generation wealth? And, let us not forget, some of these billionaires have reasons for getting into philanthropy that are not exactly philanthropic. There are significant tax breaks involved. And I remember the aftermath of the Kutch earthquake, when the Ambanis grandly announced to the world that they would be rebuilding Anjar town. They then made a quiet request to the Gujarat government for permission to build a private port in the vicinity as well. No port, no philanthropy! Neither happened!
To conclude! There is certainly something exciting happening in the Indian development sector courtesy the billionaires, and it is happening away from the usual terrain of NGOs, panchayats, donors and government. I for one see huge potential here, and want to engage and take advantage of the resources – human, technical and financial – that are available. How much will I have to change, in skills and attitude, to be able to do so? I am not too sure. And will I be able to? Maybe not! But the younger generations in the sector will. At the least, new philanthropy will provide a space for and the ability to absorb the brilliant and committed. For this in itself, I welcome the billionaires!
 This is in a special report by Luisa Kroll and Alison Fass on 3rd August 2007.
 Some among us will be proud to note that India is the land of the fastest rising number of billionaires, 36 in total of whom 14 joined in the past year, and the most in Asia (Japan comes next with 24).
 These include the Aga Khan Foundation, the American India Foundation and the Bunyan Tree Foundation. I am not sure whether AIF would qualify as ‘old philanthropy’, and as they are on this reading list I hope that they will enlighten me on this matter.