Amit ChandraImage: Prasad Gori for Forbes India
Amit Chandra’s idea of philanthropy is donating not just his money, but also his time with communities at the grassroots in the development sector. The chairman of Bain Capital Private Equity, India, who is a former board member of Tata Sons and trustee of Tata Trusts, believes that that the network of philanthropists in India need to give more, especially in the wake of the pandemic threatening to cut corporate funding toward non-Covid-related social causes
in the short term.
In an interview with Forbes India
on the sidelines of The/Nudge Forum (global edition) on August 15, where he spoke about participative philanthropy in a live online session, Chandra discussed what helped him shift from the corporate world to the social sector and whether capitalism needs to be more empathetic during a crisis. Edited excerpts:
Q. You’ve said that philanthropy is more about changing one’s own life than about changing the world. How did you make that transition from corporate board rooms to working hands-on in the development sector?
People think that philanthropy is about going out and changing lives. I actually believe that the biggest life you change is your own. It [philanthropy] is an extremely fulfilling process. You often end up filling voids and developing yourself as an individual, as the lives of others.
I was lucky that success came to me somewhat early on. As a banker, I was fortunate to rise from the bottom of the pack at DSP Merrill Lynch and run the bank in my mid-30s. In my second innings, I helped build a successful private equity platform. During both those journeys, I have felt success purely from a material perspective—be it capital creation or the power that comes with it, it can be very uni-dimensional and unfulfilling. I felt that very early on, even though it means different things for different people.
For me, I felt fulfilled by engaging with societal problems. It got me to meet with interesting, different people very early on in life. These were grassroot leaders, people who have tackled education and healthcare problems, who have built movements. Through those interactions, I felt like I grew much more as a person.
The first Board I joined in my life was not a corporate Board, but the Board of an organisation called Akanksha [an education nonprofit]. It was also the first Board I chaired, before Bain Capital. There was a point when I was in an equal number of not-for-profit boards as corporate boards. Then there came a time when I started spending equal time in the not-for-profit and for-profit spaces. That’s what I meant by philanthropy being about changing oneself. Otherwise people think that they become great by just giving and changing somebody else’s life.
Q. So it’s about being humble, empathetic and starting small, but starting somewhere?
Starting small is very important. The biggest mistake people make is that they think giving should start at a later point, when they have fulfilled other responsibilities. My mentors and elders used to say this too. But I think we have to be empathetic all our lives. We have a responsibility to do these things in parallel. Like any other habit, if you start early, it becomes easier to make it part of your daily routine, and you will have more perspective on how to deal with things. You cannot respond to a nation’s issues without perspective from the larger community. Even if you don’t have money when you’re young, you can give your time.
That’s what I love about what has happened during Covid-19. So many youngsters are actually volunteering their time, in food distribution programmes, in helping migrants get home.
So, I tell people that starting small is critical, because you suddenly feel like you have equity. It’s like investing in the stock market. When you buy that share, you feel good when it goes up and bad when it goes down. You learn from your mistakes, and that’s how you become a better investor.
Q. Has the pandemic deepened the gap between the haves and the have-nots? Is there a need to move on from capitalism to a more empathetic system of wealth-creation?
I don't think the pandemic has widened the chasm, but it might have puta spotlights on what the fault lines have been. In many ways, it has also shown us what we can do to address those fault lines. There’s a set of people who basically don’t care and I don’t think anything is different for them. On the other hand, people who are in the category of haves, who deeply care about the have-nots, are willing to roll up their sleeves and work to alleviate their pain and suffering. That’s why many millions of people did not die of hunger, and many migrants were safely sent home [during the lockdown]. In some cases, these were large philanthropists, but in many other cases, they were ordinary, middle-class Indians. They were not what you would call ‘haves’ in the traditional sense, who reached out to help the underprivileged.
Q. Do you see the younger generation of corporate philanthropists doing things differently?
There are people who want to do things differently, even amongst the older philanthropists. This [the pandemic] is an event that is mindset-altering. I would be surprised if people came out of this without changing their perspective. And so, along with youngsters, there will also be some of the older folks with any form of power, influence and wealth, who will look at what is happening, and say, “I’m going to try and do things differently”.
The advantage of youth is that it has innocence, agility and the ability to adopt things faster. It also tends to have more hope and less cynicism. Folks in my generation and the older generation, they have cared more deeply about legacy, kids etc. But I do think now, some of them will step back and think about what is it that they have created and what is it that they will leave, and hence begin to think differently.
Q. How is the pandemic likely to influence sectors of investment in philanthropy?
The unfortunate truth is that in the short term, there will be a dip in CSR [Corporate Social Responsibility] funding, and that’s really bad news. Globally, governments are stepping in to see what they can do to help the social sector and smoothen the blow. We forget sometimes that the social sector is a massive employer. Even in India, it employs millions of people and is a big partner to the government and helps massively address the SDGs [Sustainable Development Goals]. So it’s going to be very important for policy-makers and philanthropists to step back and think about what is that we can do to ensure that the social sector funding does not get hit in the next two years.
Our sense is that if you exclude the funding that is going to go toward the pandemic, there is going to be at least a Rs10,000 crore dip in funding available for the social sector. Now, the government and philanthropists have to think about how to backfill this number.
The government is squeezed for resources but it has been fantastic, for instance, to see it think about the social stock exchange. That could be fast tracked. I was part of the committee set up by the finance minister [Nirmala Sitharaman] and we have made many recommendations as part of the social stock exchange, including tax incentives, smoothening regulatory obstacles etc.
I was also part of the high-level committee the government constituted for CSR and there are some recommendations pending that the government could consider, which includes allowing for tax deduction on CSR. Can the government, on a voluntary basis, exclude Covid-specific donations and allow that to happen over and above the 2 percent CSR limit? That could be a one-time provision for the next two years. Because otherwise, you are going to see a big dip in funding available to the social sector. It’s worth brainstorming on certain measures.
Q. As you mention, stakeholders have to step up now more than ever. The EdelGive Hurun Philanthropy List 2019, however, indicates that out of the top 100 billionaires in India, only 10 constituted for more than 61 percent of the total annual philanthropic contributions. The other 90 billionaires accounted for just 39 percent. How can his gap be bridged?
This is truly something that we have all worried about a lot. I think we do need to make giving more aspirational for India’s most wealthy people. Contributing to society should be seen as more or as respectful a thing to do as wealth creation. Then we will begin to see what you asked for, happen.
I would wait for the Forbes Billionaires list
to see the trends that explained how the list was drawn out, and would particularly watch out for a list on the top philanthropists
that would come out soon after, which had two parts to it: One was absolute amount [of philanthropy] and the second was the amount of giving as a percentage of people’s net worth and income. It used to be a big topic of conversation in the US and a large number of the wealthy would actually want to move up in the second list, as much as a segment that would focus on the first list.
Q. Do you see giving becoming more aspirational for the billionaires anytime soon?
There has been a backlash against capitalism and I don’t know [if] there will be acceleration on that because of the pandemic. But I do feel that in general, at least in the West, people have been giving more and more. In markets like in India, or China, the latter is seeing a greater trend towards it as well, the change has been slow.