Seven years after Bill Gates pioneered the Giving Pledge, 171 ultra-wealthy people have vowed to give away at least half their wealth. Nandan and Rohini Nilekani have just become the fourth signatory to the pledge from India. The trio spoke to ET’s Anand Mahadevan and Archana Rai about the different but complementary roles that private philanthropy and the government need to play to solve the problem of poverty. Edited excerpts:
How will Nandan and Rohini signing the Giving Pledge catalyse philanthropy in India?
Bill: It’s very exciting because they are not only a great example of generosity, they are also putting their time and energy into it. A lot of stuff they are doing is very catalytic. So, both by example and the platforms they’re building, I think they help us draw more people in.
Philanthropy either catches on and gets to critical mass, or it doesn’t. In the US, although we could do better, it’s pretty well developed. Not so in parts of Europe. Because of people like Nandan and Rohini, we hope to strengthen this idea in India and involve a high percentage of very successful people and then create platforms for an even broad philanthropy.
Do you think the Indian business community has been inadequately involved in philanthropy?
Bill: I think there’s always been a history and tradition of philanthropy. But the idea that you do it in a large scale and nearly put in your time and energy to it — I think that is on the increase.
The Tata Trusts predate American philanthropy. But, more recently, Azim Premji made this huge commitment. It was pretty dramatic and got some people to say we don’t just give a little bit of our dividends, we should think about giving off our capital. The sophistication (of philanthropy) is going up. And it’s nice for us that some of the people here are joining the Giving Pledge.
Rohini, Nandan, you’ve been deeply engaged in philanthropy for many years. Why the decision to sign the pledge now and what will it change?
Rohini: We’ve been thinking about it for a while, because we always wanted to give away a bulk of our wealth. It took me some time culturally to adjust to this that we declare it so publicly. But we could never have done it if Bill and Melinda had not created this platform.
They created it so elegantly. It doesn’t push people, it allows them to evolve into their ideas and create a lot of space for learning as well. I think the time is right for us now. We’re pretty much committed to doing only this. We are keen to learn and collaborate with a lot of others who have signed the Giving Pledge.
But what will change now that you have signed the pledge?
Nandan: We have been doing philanthropy for almost 20 years now. What’s really attractive about the Giving Pledge is the many people coming together and thinking about how to solve the world’s large problems. And that collaboration, the ability to work together, exchanging best practices, doing things together — that’s very attractive.
We felt that if we become a formal part of this group, then we can both learn from the other philanthropists as well as give from our learnings. So the ability to have that two-way traffic of ideas, that’s very powerful. I think that’s the real power of what they have created — the ability to share, collaborate things together. All of us are equally concerned about how we solve these big issues and none of us can do it alone. We have to do it together.
Rohini: And we can learn quickly what works and what doesn’t. And that’s very important. The feedback can come in faster.
Nandan: One reason why we feel philanthropy will go up is it needs a lot of first-generation wealth-creation. If it’s inherited wealth, then it’s difficult to give it away. And in a socialistic India, it was inherited wealth. In liberal India, there are many more people who are first-generation entrepreneurs.
Rohini: We can see the younger entrepreneurs very interested in what we are doing, why we are doing it. And they may not be able to give so much money now, but their commitment is there.
But have you experienced reluctance among Indians to make a pledge about giving away a percentage of their wealth?
Nandan: Already four in Bengaluru have signed the Giving Pledge. I think it’s a process. I mean, when Bill first came 6-7 years back, we hardly had any people in the room. Now, it’s really taken off. I think his (Bill Gates’) efforts to be in India every year and push the needle has worked.
Rohini: It’s also about building confidence to be able to give so much. That also needs to exist. You must feel that you will be able to give so much. It’s not so easy to give it away either.
Bill: That’s one thing I underestimated. The US has so many non-profit organisations you could give to. Here, there is a supply constraint. Both in India and China, people tell me that who would be here to take money? Because there hasn’t been such a scale to give.
Philanthropy does have some huge challenges. It forces you to think about your death. It pushes you into a second career. You are competent in your first career and then you start this second career (philanthropy) and it doesn’t give the same feedback signals of profit and loss.
People you give money to tell you that you are brilliant, but maybe you are not. You also have to tell your kids. Are you going to show them your will? It’s a tough thing and it requires a family to get to a certain point where they feel like this makes sense for them. We’re now 171 (people who have signed the Giving Pledge), which is way beyond what we thought we would ever achieve.
Bill, as Nandan was mentioning, you’ve been catalysing philanthropy in India. Seven years after you started the pledge, four people from India have signed on. Would you consider this to be a success?
Bill: Philanthropy has increased in India but you can’t attribute that to one person. The last thing I want to do is take credit for anyone else’s generosity. I do think getting us together helps us all be a little braver and a little more inspired. You know the economy is doing well, there are many things that have come along that help.
Given the needs — education, sanitation, etc — philanthropy plays this unique role of piloting innovative things. If it’s done super well, the government will take them up, and if it’s not, you try again.
There are some concerns that philanthropy is becoming too powerful. What are your views on that?
Bill: As a percentage of the economy, philanthropy is a very small part. Government needs to be deciding which textbooks do we use, what policy to use for teachers, etc. But if the government is weak enough, one can imagine that philanthropy would influence that. So we all want the government to play its role very well.
Frankly, we’re just doing pilots. These pilots will either be adopted (by the government) or they won’t be. The stuff we do in health, it’s 100% with the government. We’re not building some side-type thing. Maybe I am too close to it. But I don’t see (this happening)
Nandan: Obviously, philanthropists have to be careful about the trends they exert. But I see philanthropy as extreme risk capital. The good thing about philanthropy is that if you spend money on something and it doesn’t work, you can write it off. You’re not answerable to anyone, it’s your money. That’s not true of government money, that’s not true of market money.
I think, therefore, philanthropy should go where no one else can go. It’s a place where governments can’t go, where markets can’t go, where NGOs don’t have the scale. So, I think when you view it that way, there are so many white spaces that philanthropy can make a difference for other things. So I think that’s the way to think about it.
Rohini: Honestly, I think philanthropy should play only a limited role. It should not be the only player. There are societies, there are markets, there’s the state. Philanthropy should enable samaj, bazaar, and sarkaar to do their role. But as Bill said, at the end of it, philanthropy is still a very, very, very, tiny piece. If we can innovate, if we can collaborate, if we can demonstrate, then I think it plays a very critical role, but a limited one.
But, earlier, didn’t people like Rockefeller do a bit of the state’s role in social security, etc?
Bill: The biggest thing he did was for the green revolution, which had a huge impact. It helped the government, but the government had to build the roads, the government had to make sure the fertiliser got there.
We (Bill and Melinda Gates foundation) are the biggest foundation (in the world). We have about $30-40 of capital for every Indian. If we tried to be the government, the money will be gone in a week.
There have been some voices of concern about power in the hands of philanthropists. For example, roughly 10% of the money spent by the World Health Organisation comes from your foundation. Are these concerns real?
Bill: WHO is controlled by the World Health Assembly. We have no vote there. Most of our money (given to WHO) is for polio eradication. You can decide if it’s a good thing or a bad thing. I could’ve bought some boats instead of giving it to polio eradication! Someone thinks I am doing that to be powerful, yeah… paralysed kids bother me. Governments should probably give more money to the WHO…
Rohini: There is power, but I’d like to focus on the power of intent. I think that’s also an important power to focus on especially to philanthropy. Things can go wrong and they do. But the power of intent is something we should keep in mind.
Do you need safeguards in place to ensure philanthropy remains benign?
Bill: The state should have progressive tax policies. You know, the US has the Estate Tax – it’s there for another three weeks at least. (India does not have an estate tax.) Philanthropy comes from whatever we get that’s separate from that. You don’t want to hurt philanthropy. Its ability to pick wild ideas is part of its strength. So you would want to be careful there.
The CSR thing the Indian government is doing as an experiment… I don’t think there’s any guarantee that the impact per rupee spent is going to be fantastic.
Nandan: Historically, except for a few like Rockefeller, a lot of philanthropy goes to universities, museums, etc. If you have lunch with a private university president, he’ll ask you to fund the school before the soup is done! But newer philanthropists actually want to solve global problems.
The reality is that the world has taken on very ambitious challenges, like eliminating poverty by 2030. We are talking about sustainable development goals. These are massive complex societal issues and everybody has to pitch in – government has to pitch in, markets have to pitch in, NGOs have to pitch in and philanthropists have to pitch in. So philanthropy is just a part of that mix trying to solve these big global problems.
Some signatories of the Giving Pledge have set up their own foundations. But the urgency and efficiency with which these foundations work vary. How can collaborative initiatives like Co-Impact help?
Bill: There’s room for collaboration. Co-Impact is exciting. You will see more of that. But it’s all voluntary. We work on sanitation. It used to be lonely. We have a lot of philanthropists (working on sanitation) now, which is exciting.
Rohini: There are many partnerships developing. We’re building a new culture. It requires a new culture to collaborate and it’s also a new culture of philanthropy. It’s almost becoming the new norm. You can’t be wealthy and not give.
Bill: A lot of things they are doing in India we want to take it to other countries that are even earlier in their development process.
Bill, you’ve been quite critical of the Indian government, of Indian states, on their work in health and education…
Bill: No, no! It’s a glass half full. Everyone else seems to be saying the government can’t do anything and I was like, wait a minute! You know child morality has been cut by half in 10 years? It’s easy to get into this Indian-government-can’t-do anything mode.
The Indian government is truly imperfect, but amazing things have happened. We need to keep some perspective… I was surprised…people here were way more negative than I was.
Hasn’t the Indian government perhaps underachieved?
Bill: Unless they get more serious about nutrition, health, some of these economic dreams will not happen as quickly as they want. India has got a great economic future. But will it happen as soon as it should or will it happen as equitably as it should? People may not realise, but those (poor) nutrition numbers really mean kids’ brains are not developing and I really want to highlight that in a big way.
I will say this that the government is willing to look at the nutrition figures and sanitation. How many governments talk about not having enough toilets? It’s definitely a glass half full (not half empty).