The Charitable Face of Indian IT

Around 30
crore people in India go to bed without having proper 3 meal a day.
And, strangely enough, this is the same nation, which expects to
become a superpower by 2020 like the US and China. How? Perhaps, the
key lies in the hands of Indian entrepreneurs.

Today,
Indian
companies have stepped up social spending at a faster rate than their
own profit growth. It has been estimated that corporate giving in
India now totals $1.5 bn, increasing 5 fold since 2006. This is
according to the India Philanthropy Report 2011, released by a global
consulting firm at a function hosted by the Indian Philanthropy
Forum.

Recently,
out
of a total 48 philanthropists in the list, 4 top givers from India
were named in 'Forbes Heroes of Philanthropy' in Asia. Looking at
corporate contributions in India, experts believe, corporate
philanthropy is not just a mere financial contribution; rather it
speaks volumes about their holistic view of helping the nation.
Corporate houses like Tata, Birla, Infosys, Wipro and others have
been powerful drivers of philanthropic activities. They are entrusted
with in any society and India is no exception. They say, over the
last few years; Corporate Social Responsibility (CSR) has played a
huge role in changing the face of India.

Some of the
examples are-Tata, setting up institutions like the Indian
Institute of Science (IISc) and the Tata Institute for Fundamental
Research (TIFR); Wipro chairman Azim Premji's pledge to donate
nearly Rs 10,000 crore for improving school education in the country;
and Infosys committing 1% of its profits every year to social causes
through the Infosys Foundation. Premji said, “Good education is
crucial to building a just, equitable, humane and sustainable
society. All our efforts, including the university that we are
setting up, are focused on the underprivileged and disadvantaged
sections of our society.” Other biggies like Birla and Mahindra too
have been spending a fraction of their profits on social causes. This
inspires even SMEs to do its bit in the growth of the nation.

INDIAN
SPS: GAME CHANGERS

Corporate
Social Responsibility (CSR) not only plays a major role in helping
underserved hands to get support; it also helps an organization to
build its brand image among the common people. Recently, Premji
announced of giving $2 bn to a charity providing education for
underprivileged children in rural areas across the country. And, the
announcement not only brought smiles on the faces of under privileged
children, who want this kind of gestures by big corporate houses, but
the government too, welcomed the pledge. Union finance minister,
Pranab Mukherjee, welcomed the pledge, saying it would send out a
positive signal. “I welcome it. It is a very good decision. I
congratulate him and his company,” said Mukherjee. And in the
current scenario, the importance of CSR has increased so much that
even solution providers like Computer Supermarket too understands its
need in changing the image of an organization among people, customer,
as well as its own staff.

Commenting
on
the importance of philanthropic activities in the current situation,
Rupesh Kedia of Computer Supermarket said, “Once we grow above the
fulfillment of self day-to-day needs, we have our social
responsibilities to let the society also get benefits of our
achievements. I don't think that it should be done just for image
enhancement, but it enhances the self-image as an Indian.” CSR is
coming out of the purview of doing social good and is fast becoming a
business necessity.

The
government, on its part has accepted the proposal of Parliamentary
Standing Committee headed by former finance minister Yashwant Sinha,
which makes it mandatory for companies with a turnover of Rs 1,000
crore or net profit of Rs 5 crore to allocate 2% of their profit
towards CSR.

Kedia
explained, “There are many factors driving CSR. For example
'reactive strategy' for reviving the status and business by gaining
confidence of localities we operate into. We also try to plant trees
in our office campus to save the environment from pollution; and to
give staff and visitors a completely clean environment. All these
things help us to build an image of the organization among our staff,
customers and society at large.” He went on to say, that it is an
opportunity to do something for the society because of which the
companies are prospering. It indirectly helps the company to build a
brand image, increases employee satisfaction and recruitment, as well
as product marketing. Many CEOs focus on CSR to build the image of
the company, but there are a few leaders, who do it for personal
satisfaction too.

Rajiv Sethi,
CEO of Liberty Automation Systems said, “My philanthropic work
gives me happiness, enhances my stature in the society and makes me
more successful. It is because of this that I am held in high regard
by my team, my customers and my family. The 12 camps in the colleges
of Mumbai that we supported between July 1, 2010 and March 31, 2011
resulted in 2040 units of blood being collected and 3390 Thalassemia
Minor Screenings. This means that many lives were saved by making
blood available and prevention of thalassemia disease.”

According to
Atul Hemani, CEO and MD, Omnitech InfoSolutions, a strong CSR program
is an essential element in achieving good business practices and
effective leadership. Companies have determined that their impact on
the economic, social and environmental landscape directly affects
their relationships with stakeholders, in particular investors,
employees, customers, business partners, governments and communities.
“We are involved in different social activities with the help of
NGOs like Rhidaysparsh Welfare Association and Handmaids of the
Blessed Trinity (orphanage for healthcare) and have provided
financial aid in the past, but our focus for 2011-12 shall be on
education, healthcare and espousing social causes including disaster
relief. We shall be having a tie-up with an NGO in this financial
year,” explained Hemani.

Also,
Kolkata-based KL Lalani, CEO, Lalani Infotech, is doing a lot of
rural computer education programs in the name of 'Compact' for rural
educational development by Lalani Computer Academy (LCA), which is
the company's sister concern. He said, “We have also opened up a
small franchisee center in rural areas for the betterment of the
rural students. The prime objective of 'Compact' is to provide
computer education to students in rural areas at affordable prices.
We also provide monthly installment options for students. This
program is 'no profit—no loss' for Lalani Computer Academy.”
Lalani is running the program in eastern India, West Bengal, Odisha,
Chhattisgarh, Bihar, Jharkhand, Assam and the northeastern states.

According to
Reeta Budhay, director, finance, Business Algorithm, philanthropy is
less about financial numbers and more about intent, execution and
outcome. An individual donation may not always come in the shape of a
financial contribution. It can also be devotion of personal time and
effort. “We have donated Rs 1,44,000 towards food for 2 months for
the old age home inmates in Matoshree Vruddhashram about 30 km from
Nagpur,” emphasized Budhay. Similarly, for an entrepreneur,
developing a low-cost product or service and distributing it
efficiently across remote areas to deliver life-transforming
possibilities, despite running on thin bottom lines could mean as
much commitment to social welfare as a big direct contribution.

TREND:
MORE FROM IT AND GOVERNMENT

Undoubtedly,
IT is one of the most growing sectors in India. And, it makes
solution providers a huge ambassador of spreading corporate social
responsibility method. But the question is: Is enough being done by
the solution providers for the society?

Speaking on
this, G Krishnaswamy of Chennai-based Three Dot Solutions said, “CSR
is an opportunity to give back to society, but one can say how much
one needs to do, one must contribute whatever one can, for the
benefit of the society at large. And, as far as we are concerned, we
try to help the society in whatever way it is possible.” Commenting
on the same, Sethi of Liberty Automation said, “While CSR becomes a
part of planning and budgeting in large organizations, in smaller
set-ups, CSR activities are led by or represented by activities in
which head of that organization gets involved in, be it charity or
otherwise. In that sense CSR is an activity that anyone can
participate in.” Many experts do talk about the size of companies
to follow the CSR rule. But, most of the solution providers believe
that size of the company hardly matters in this case. He also added
that CSR is not about organization size or scale but rather
willingness on the part of the individual and the organization to
contribute for a cause. Size and number of people or the financials
do not make a big difference if willingness is there.

However,
Precision Infomatics believes that a company's size does not matter
much in CSR. V Murali, CEO, Precision Infomatics, said, “CSR is a
social obligation for most corporates, especially the big players,
which smaller organizations can learn to embrace. At the end of the
day, the objective is to contribute to the society and bring a humane
aspect to our business.” But besides solution providers, there are
few associations too, who go beyond their limit to help the society.

Not only the
IT solution providers, but also several IT associations are active
drivers of corporate philanthropy. B Hari, president of the Computer
Association of Eastern India (COMPASS), provides computer training
for the benefit of unemployed youth and students from the less
privileged sections of the society with a nominal course fee. COMPASS
provides total hardware and software support and also helps students
get jobs after the completion of the training. Similarly, Vidarbha
Computer & Media Dealers' Welfare Association (VCMDWA) has been
helping the society in a different way. It organizes Swaranandwan
Orchestra, an orchestra by inmates of Maharogi Seva Samiti (an
organization founded by Baba Amte for leprosy patients). It also
conducts annual blood donation camps for the members, their family
members and staff. Also, it conducts Cyber Security Rally, which
makes people aware about cyber security.

According to
a study undertaken by an industry body in June 2009, which studied
the CSR activities of 300 corporate houses, corporate India has
spread its CSR activities across 20 states and union territories,
with Maharashtra gaining the most from them. About 36% of the CSR
activities are concentrated in the state, followed by about 12% in
Gujarat, 10% in Delhi and 9% in Tamil Nadu. The companies had on an
aggregate, identified 26 different themes for their CSR initiatives.
Of these, community welfare tops the list, followed by education,
environment, healthcare, as well as rural development. Not
surprisingly, the survey revealed, that corporates targeted most of
their activities around the areas they operate in. This trend is
likely to continue.

But the flip
side is that, it is generally the more developed states that have
been the beneficiaries of CSRs, rather than the ones languishing at
the bottom, whose developmental needs are more central. The
government is now working on a framework for quantifying the CSR
initiatives of companies to promote them further. Efforts are also on
to develop a system of CSR credits, similar to the system of carbon
credits which are given to companies for green initiatives.

LEARN
FROM
'THE WEST'

Premji's
donation of $2 bn might be huge, but corporate honchos like Bill
Gates and Warren Buffett, believe that the Asian ultra-wealthy should
give more, and said they would hold a philanthropy drive in India
similar to a recent exercise in China. According to a recent report
by Bain, a global consulting firm, around $7.8 bn were given in India
in 2009, amounting to 0.6% of India's GDP. Though this compares
favorably with other developing nations such as Brazil and China, it
lags far behind in the developed world. Another survey, which ranked
Indian companies' CSR activities on a scale of 0-5, showed that
none of the Indian companies got placed in the highest level. Only
16% of the 500 companies surveyed had well defined CSR activities.
The concept was yet to catch up with the remaining 84% of the
companies. Recent major donors include Nandan Nilekani, co-founder of
the hugely successful software company Infosys, who gave $5.6 mn to
the Yale University India initiative and Narayana Murthy who gave
$5.1 mn to Harvard University and its publishing arm for a series on
Indian literary heritage. Noted CSR expert Prof Leo Burke of the
Notre Dame University, USA said, “India needs to adopt
'national-local' approach. National in the sense that there will
be a need for nationwide alliances and databases in order to quickly
learn best practices, share innovations, and 'scale-up' pilot
programs. Local in the sense; it will require organizations to
efficiently implement programs at the grassroots level, as well as
mobilize volunteers to serve their local communities.”

“Successful
global businesses have the power to make a real difference. Economic
performance and social responsibility can go hand in hand, when there
is a genuine consideration of our impact on the communities and the
environment in which we live and work. True global companies must
foster good relations with customers, communities in which they
operate, nation, and bear the responsibility of the impact their
activities have on environment and society,” emphasized Hemani.

It is not
only big corporate honchos; small companies too have to come in a big
way to help the society grow. Seeing the current Indian scenario, it
has almost become the need of the hour.