Billionaires must give 2% of their wealth every year for greater good: Mohandas Pai

The former Infosys CFO believes that a lack of compassion and sensitivity is the biggest barrier to giving in India

Published: 24, Feb 2017

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Image: Shutterstock (For illustrative purposes only)
Image: Shutterstock (For illustrative purposes only)

Having served as CFO at software giant Infosys from 1994 to 2006, Mohandas Pai moved out of the role to focus on the Infosys Leadership Institute, human resources, and education and research at the rapidly expanding multinational – while still serving as a board member during 2000-11. In hindsight, the move appears to be an early indicator of a social conscience that almost defines him these days.

Among the frank-speaking philanthropist’s earliest social ventures is Akshaya Patra Foundation, a mid-day meal program for school children that currently serves 1.5 million students across India every day, and is the largest such program in the world. Another of his interest areas is funding think tanks that work on public policy – because he believes the writing of the law is often where it all begins. Along the way – and often alongside some of this – he has advised government policy panels on information technology, and consulted for India’s central bank as well as its securities regulator, among others.

Asked about what keeps him up at night, he outlines the shape of India’s ticking demographic bomb. Asked about the biggest barrier to giving in India, he says quite simply, a lack of compassion and sensitivity.

Why do you think it’s important to give?

To me, philanthropy means that we all contribute to the greater social good and leave behind a world that is much better than the one we inherited from our parents. It’s not something that you give away as a grant. Philanthropy is an obligation that you have to your fellow human – because a few of us are blessed with a significantly wider range of economic and social opportunities than the rest, which allows us to achieve a far higher level of material success than those less fortunate.

I think it’s very important for philanthropists to look at India’s big challenges. And I am increasingly frightened about the future of my country. Look at the data – every year for the last 30 years, we have produced 2.5 crore babies, of which 2.4 crore attain the age of maturity, and 70% want jobs – that’s 1.8 crore young people looking for jobs. And when the overwhelming majority of these people don’t find jobs – simply because there aren’t that many jobs in the first place – their anger and frustration finds outlets in all the local violence we’ve been seeing in state after state across the country. So much of this angst comes from the basic lack of economic opportunity. These are people in the prime of their youth, with enormous amounts of energy, and no way to spend that energy!

In the next 10 years, if we don’t produce enough jobs, by 2025 we’ll have 20 crore people aged 21-42, 45% of them won’t have jobs and they’re not going to keep quiet. They’re going to disrupt society and the rest of us will suffer. You can’t enjoy wealth for too long when you’re surrounded by slums and misery.

Was there a trigger that started your giving? There was no particular trigger, as such, apart from guilt. I felt guilty that I had come into wealth when so many people around me had not. I know those people are still struggling to make ends meet. I felt guilty that I’ve done so well at such an early age. Also, apart from coming into wealth, I was born into a relatively comfortable family, which financed the kind of education that I wanted. If was born into a poor family with no resources, I wouldn’t be here talking to you. I felt I owed something to those who were born into deprived circumstances.

When and how did you start giving?
There was no big family money for me to start philanthropy with, and even at Infosys at the time, we weren’t paid all that much (laughs). I only came into money in 1999, when our stock options vested and we could sell some of it – and the stock markets were doing quite well at the time! I felt the first thing I needed was a house because I had an obligation to my family. I also put away some money in the bank for my children’s education, and then I said I must do something for those who had helped me earlier on in life.

So I started by funding a computer center in the school where I studied, because I felt the school had given me so much. Then I set up something in my college, for similar reasons. Along the way, I also set up something in Mangalore, in memory of my friend Devang Mehta, who headed NASSCOM (National Association of Software and Service Companies), and with whom I had worked there.

I set up a convention center in the school where my father studied. His father had spent his lifetime in poverty – he worked on weaving looms and the family survived on INR 5 a month. Despite all this, he managed to get my father into a Kendriya high school. And only because of that education was he able to find work, provide for us, and make sure we got a better education and a more comfortable life than his.

What is the Akshaya Patra story?
Well, in 2000, I was talking to Swami Madhu Pandit, president of the ISKCON temple in Bangalore, asking him things like how the temple had been built, how much money was spent… and during that conversation, I suggested that ISKCON do something with its resources for the betterment of society. He asked me for some options and I said he could supply one mid-day meal to children every day.

He said, “Okay, I’ll do it, but I want two buses if we are to feed, say 1,500 children every day”. I ended up getting him three buses, with contributions from some friends and my own money. Today, the program reaches 1.5 million children. For me, the idea was to start a program to address a challenge so large that it may not be solved in my lifetime, but at the same time, year after year I can see some tangible results that’ll keep motivating us to do more.

How have you gone about selecting your causes?
Over the last few years, I have felt I have social responsibilities at different levels – country, state, city and community – and that as far as possible I need to contribute at each of those levels. Akshaya Patra is an effort to meet some of my obligations to my country. Also towards that obligation, I decided to fund policy organizations that I think are doing good work. One of them is Gateway House, a foreign policy think tank based in Mumbai – it’s been around for six years and is doing very well. Another that I’m funding is the Delhi-based think tank, Vidhi Legal Services, to write good laws for India. People in the government’s law department seem to have lost the ability to write good laws because they have become disconnected from the world outside their windows. They are all technically sound but they don’t have enough context, so they draft laws in these context-deprived conditions.

As part of my efforts for my state, I chaired mission groups on IT and tourism. I helped write Karnataka’s first IT policy in 1999. Along with Kiran (Mazumdar-Shaw of Biocon) and some others, I co-funded and helped form BPAC (Bangalore Political Action Committee), which is a great program to improve communication between citizens and political leaders. I felt we can’t have a system where citizens simply keep saying all politicians are bad. We need to fill the gaps; we need politicians because they have the potential to bring people of varying backgrounds and beliefs together.

For my community, we have the Vishwa Konkani Parishad, which has two objectives: to preserve our cultural heritage and to help Konkanis advance economically. Towards this economic advancement, we run a scholarship program for Konkani students in Mangalore, for engineering, medicine and other degree courses.

As a philanthropist, could you talk about the value of giving time and skills to an organization?
If you have it, giving money is easy. It’s much more difficult to give time. During my years at Infosys, as CFO and in various other capacities, I built the company’s infrastructure, I worked in the education area, I worked in product development, I worked in HR, I did organization restructuring. Across all that, I acquired a diverse set of skills. Now when I sign up to support an NGO, if I don’t use those skills to grow the organization and build its capacities to scale and deliver maximum impact, what’s the point of having me on their board?

With that in mind, with the NGOs that I support, I’m as hands-on as possible. I raise aspirations, I push them, get them to meet people, work on policies, work to improve the ecosystem, and over a period of time, build the management team so they can do things by themselves.

What is the importance of picking those leaders and backing them?
Ashwin Mahesh of Bangalore once told me a beautiful thing; he said, “India has thousands of problems, so we need hundreds of thousands of problem solvers. Find a problem solver, invite him or her, invest in them, and ask them to take over. Then you’re done, you don’t have to spend time on it any more, they’ll finish the job”. This can mean finding leaders for your own organization, to step in after you leave, or leaders for outside organizations that you see the need to support.

When it comes to your own organization, you don’t want to be stuck with something for a long period of time because with something new, there’s excitement, but once it becomes routine, it stops being exciting – which is the time you should get out of it! Because by then you’re not inspired anymore, which means you’re not bringing any great value to the table. So in your absence, you need somebody else to carry it on, and keep it sustainable over the long run.

When it comes to outside organizations, if you develop a group of 20-30 leaders in your lifetime, people who are doing extraordinary things – you encourage them, give them some money, watch them transform their respective sectors – and your life’s purpose is served.

Could you talk about the importance of working with the government?
I think if you decide to start giving back to society, and you aim to create large-scale, long-term impact, you have to see the government as a key partner. Political leaders want to do well for their people, but they don’t get good advice, they don’t get opinions from people who are concerned about the greater good – they get advice from people who want things for themselves: they want land, they want a mine; they want some policy change that suits them. I think only when we give continued, unbiased and useful feedback can our representatives in government take informed decisions on the issues that affect our daily lives.

In my case, from 1994 when I joined Infosys, I also worked with NASSCOM. Before that, I worked on norms for the hire purchase industry along with the Reserve Bank of India. I worked with the finance ministry, the IT ministry, I’ve been on various SEBI (India’s securities market regulator, Securities and Exchange Board of India) committees for maybe 20 years.

The government is that very unique piece of the puzzle that can make so many of the other pieces fall in place automatically. It is potentially such a hugely valuable ally, yet we spend so much of our time seeing it as an adversary. Imagine if we had the government fully backing every serious, well-planned social initiative from the last 10 years – imagine the country we would have been by now!

Where do you think India is in terms of the stage and evolution of philanthropy?
I think we are at 20% of what we should be as a country. We have more than 60 billionaires. I wish they would give at least 2% of their wealth every year for the greater good. And I think it’s very important to define a desired percentage figure. Many of them said we’ve given away 50%, but they’ve simply put money into endowments. And I believe keeping money in endowments is capitalization of misery. If you spend to alleviate misery today, you won’t have misery tomorrow. But if you spend little because you want to build a corpus and the corpus has to grow into something big, which you say you’ll spend over a period of time, then the misery will continue.

What are the barriers to giving in India?
I think in India the biggest barrier to giving more is a lack of compassion and sensitivity. How can people live in extreme luxury when they see their fellow men suffering, dying from lack of medicines, children dying before age five due to malnutrition? Increasingly, I feel we need an inheritance tax – say 25-30% of your wealth, and it applies on your demise, and all the money that you’ve given away to charities under Section 80G of the Income Tax Act, can be taken as credit to offset the inheritance tax. Suppose you have INR 100 crore and you die. You need to pay INR 30 crore as inheritance tax, but in the last 10 years if you’ve given away INR 30 crore under Section 80G, that can be offset against your tax liability.

Now, with Bill Gates and others saying we want this 50% giving pledge, that becomes a different kind of pressure, which hopefully will change things, but I feel we should all be doing it voluntarily as part of our obligation to society.

What do you think philanthropists in India should do differently?
I think philanthropists in India should fund institutions that can address the country’s big issues. Like health and education. We need 20-30 good universities that will offer high-quality education at reasonable prices. We need people to set up thousands of schools across the country, reaching out to even the remotest areas. We need people to invest in think tanks that can come up with new ideas, because you can’t expect the government to be the repository of all wisdom. And finally, we need agencies that can instill in people the core values of humanity, because at the end of the day, humans are distinguished from other animals by the values that they live by. Values of compassion, sustainability, sensitivity, being considerate to others. So I think an education program for that is very important – and it needs to be designed to really be absorbed by the people it is being targeted at, not just something they read in a textbook and forget.

What’s your big philanthropy goal?
I know that some of the things I do may not have a great impact in my lifetime, but the hope is that you see impact in the long run. For example, Akshaya Patra gives school children a mid-day meal every day, which makes them much more likely to stay in school, become better educated and ultimately much better suited to the job market than they would be without an education. The program could stretch 25-30 years, maybe 40 years, because the impact is really long-term, specially in the area of health, where it takes one or two generations for people to settle into a self-sustaining economic cycle.

The last 25 years have been extraordinary for India. We’ve grown from a GDP of USD 275 billion to USD 2.25 trillion. We’ve grown from a country that had 50% poverty to 20% today. The next 20 years are going to be very exciting, and I hope to do my bit for an even more prosperous India.

Over the next 10 years of philanthropy, where do you think India should be?
I think on a scale of 1 to 10, India is at 2 right now, but in 10 years, we should aim to be a 5 – and 5 happens when billionaires start giving away 2-3% of their wealth every year. When people earning let’s say a crore and above give away 10% of their income every year. And philanthropic outlay needs to be at around 10% of India’s social expenditure in some strategic areas at least.

If you could describe your philanthropic journey in one sentence, what would that be?
The ultimate aim of life is happiness, and I hope to find happiness in serving others.

This interview is a part of the India Philanthropy Series, a joint initiative between Dasra and the Bill & Melinda Gates Foundation, aimed at capturing inspiring giving journeys.