Forbes India Rich List 2022

Why Mindtree co-founders Subroto Bagchi and NS Parthasarathy are betting big on health care philanthropy

Their Rs425 crore donation to the Indian Institute of Science—the largest private contribution received by the institute to date—has earned the duo and their spouses a pride of place among the top five philanthropists in the country. And they are just getting started

Divya J Shekhar
Published: Nov 3, 2022 01:30:51 PM IST
Updated: Nov 4, 2022 08:43:00 AM IST

Why Mindtree co-founders Subroto Bagchi and NS Parthasarathy are betting big on health care philanthropy(From left) Radha Parthasarathy, N S Parthasarathy, Subroto Bagchi and Susmita Bagchi. Image: Mayur Channagere / AGNA

Two meetings. Two video calls. Six weeks.
 
That’s all it took for Subroto Bagchi and NS Parthasarathy, along with their respective partners, Susmita Bagchi and Radha Parthasarathy, to give Rs425 crore (close to $60 million) to the Indian Institute of Science (IISc).
 
They use terms like “destiny” and “call of intuition”, but the significance of their donation lies in its potential to positively impact health care research, education and infrastructure, and become a role model for younger philanthropists to follow. Bagchi and Parthasarathy are co-founders of technology company Mindtree. Susmita is a writer and Radha is a retired banking professional.
 
Their money will go toward building an 832-bed non-profit hospital and a postgraduate medical school, which will be located within the IISc campus in Bengaluru. It will bring science, engineering and medicine under one campus, says Govindan Rangarajan, director, IISc. This, according to him, will help strengthen clinical research and medical technology, and “create a cadre of physician-scientists that is currently missing in India”. The medical school will have dual degree MD-PhD programmes. “Research focus areas include infectious diseases, metabolic disorders (including diabetes), cancer, neurology and cardiology,” Rangarajan tells Forbes India over email.
 
The contribution of the Bagchis and Parthasarathys has made them the fifth-most generous philanthropists in the country, as per the latest EdelGive-Hurun India Philanthropy list, released on October 20. They are new entrants on the list this year, and are preceded by veteran philanthropists like HCL Technologies founder Shiv Nadar, former Wipro Chairman Azim Premji, Reliance Industries Chairman Mukesh Ambani, and Aditya Birla Group Chairman Kumar Mangalam Birla, in that order.
 
Their entry among the top philanthropists in the country is “Mount Everest-level inspirational”, says Anas Rahman Junaid, managing director and chief researcher, Hurun India. According to him, the donation signifies how the wealth-creation potential of the country is helping create more disposable philanthropic capital, and could also lead the way for executives and founders to put money into philanthropy after cashing out of their companies. “Now, because of startups and faster pace of wealth creation, cashing out is likely to happen at a younger age compared to the previous generation. And if that happens, the younger generation has role models in these people.”
 
The transparency with which the donation was carried out could also inspire others to come forward with their philanthropy instead of staying anonymous, adds Naghma Mulla, CEO, EdelGive Foundation.

Also read: Can India's ultra-rich families step up and give more?

India’s billionaires and super-rich give less than one percent of their wealth to philanthropy, according to the India Philanthropy Report 2022 by Bain & Company and Dasra. While the economic disparity among the top first percentile and bottom 50th percentile of people in India has continued to widen, and Covid-19 pushed more than 20 crore people into poverty, overall family philanthropy [giving by ultra-high net-worth individuals (UHNIs) and high net-worth individuals (HNIs)] has actually contracted, the report states. “Given this scenario, to ensure that philanthropists give wholeheartedly, and also transparently declare what they are giving, becomes significant,” Mulla explains.

Why Mindtree co-founders Subroto Bagchi and NS Parthasarathy are betting big on health care philanthropy

The roots of their giving

For a nation of 1.3 billion people, India is woefully inadequate in terms of health care infrastructure and investment, and the big part of this is not hardware, but human capital mismatch of not having enough doctors, nurses and paramedics, according to Bagchi. “As a result, access and equity have suffered hugely over the last many decades,” he says. “The underbelly of the health care system was starkly visible during the pandemic, and we run the risk of collective amnesia as we come out of it.”
 
Parthasarathy, who also had a first-hand experience of the gaps in the health care system during the second wave of the Covid-19 pandemic last year, decided that it was time to use his resources, connections and privilege to do something large and meaningful. It was during this time—rather coincidentally, he says—that he was introduced to Rangarajan at IISc. A presentation shown by the latter on December 30, 2021, impressed Parthasarathy and Radha with its attention to detail, and level of research.

Also read: How to enable productive communication between funders and communities
 
They believed that science, engineering and medicine in the same campus could foster a fertile ground for innovation and scientific discovery. After all, Parthasarathy explains, insulin was discovered in the University of Toronto a century ago. “Even the Covishield vaccine for Covid-19 was co-developed by the Oxford University,” he says, explaining that a medical school and a hospital would help have a “bench-to-bed approach” where research could help in medical care, which could help in further clinical discovery.

Why Mindtree co-founders Subroto Bagchi and NS Parthasarathy are betting big on health care philanthropy
 
Parthasarathy then took the idea to the Bagchis, who then met Rangarajan to finalise their interest over the next few days. By February, the Memorandum of Understanding (MoU) was signed, and a formal announcement was made in March, all in six-odd weeks. The Rs425-crore contribution is divided equally among the donors.
 
The government’s push for a multidisciplinary approach in higher education institutions (HEIs) like IITs and IISc has also been a deciding factor behind their philanthropic donation. In March, the University Grants Commission (UGC) draft guidelines stated that India had various standalone and domain-specific institutions and universities, and even in multidisciplinary HEIs, the boundaries were so rigid that there were limited opportunities to learn and explore. “Internationally, the culture of establishing and sustaining a multidisciplinary university is increasing fast, thereby maximising productivity with enhanced focus towards research and development, innovation, and incubation,” the draft guidelines say. “It is therefore, pertinent for the higher educational system (HES) to phase out standalone, fragmented and domain-specific HEIs and create HEI clusters and multidisciplinary HEIs instead.”

Also read: Why private philanthropic funding needs to urgently shift focus to sanitation
 
The caveat here, Bagchi explains, is that these institutes have been told to generate their own resources for being multi-disciplinary. “Health facilities require massive investments. It could freeze someone into inaction. But we were stumped when we saw how far, how professionally, a group of leaders in IISc had gone forward to blueprint their ideas,” he tells Forbes India over email. “Frankly, when I read up their papers, I was asking myself, could I myself have written a plan so good with my decades of institution-building experience.”
 
Rangarajan tells Forbes India that the hospital, to be called the Bagchi-Parthasarathy Hospital, will be spread across 12.6 lakh square feet. The academic and research block will occupy two lakh square feet and the residential complex about six lakh square feet. “The cost of the hospital, including biomedical equipment, is expected to be around Rs1,000 crore,” he says. The medical school will have a similar cost, Rangarajan explains, primarily for endowments to fund chair professorships, visiting professorships, student internships etc. “The residential complex (comprising housing for nurses, medical students and faculty) will cost around Rs250 crore.”

Apart from the Rs425 crore by the Bagchis and the Parthasarathys, the project has on-boarded a few other donors, including Axis Bank, which came forward in September for the paediatrics wing of the hospital, and Prashanth Prakash, founding partner at Accel, who will support the geriatrics wing. To set up a Centre for Public Health (CPH) as part of the postgraduate medical school, IISc has received a donation of Rs105 crore from Ajit Issac, founder and chariman of Quess Corp, and Sarah Issac.

Why Mindtree co-founders Subroto Bagchi and NS Parthasarathy are betting big on health care philanthropy
Why Mindtree co-founders Subroto Bagchi and NS Parthasarathy are betting big on health care philanthropy
 
While the donations made by the Bagchis and Parthasarathys remain the single-largest donation to IISc to date, the second-highest contribution is by Infosys co-founder Kris Gopalakrishnan, who has given Rs225 crore for the Centre of Brain Research.
 
At the core of Bagchi and Parthasarathy’s philanthropic strategy is ascertaining four things in the recipient: Shared vision, the competence to execute, the ability to scale and governance. They have a largely hands-off approach, where their involvement is largely putting their tech expertise to use wherever possible and leveraging their network to help recipients make relevant connections.
 
“Both Susmita and I are deeply influenced by how so many people in the US make contributions to a cause and simply walk away from it,” Bagchi explains. “The Memorial Sloan Kettering Cancer Center and many such great institutions were created because people have the sagacity, they do not think they are doing anyone any favour. On the other hand, they see money as a responsibility and institutions as platforms they need to use as the staging ground of social good.”

Also read: Seven things to keep in mind before going the philanthropy route
 
That said, Parthasarathy shares that their donation does have certain checks and balances in place, where the payout is linked to IISc achieving construction-related and other milestones. There are eight milestones till 2024, by when the hospital is expected to be operational.
 
Rangarajan of IISc says that early visible success of such a project is important as it would attest the ability of academic institutions to plan and execute such large projects. “We have completed the excavation for the hospital. Foundation and steel superstructure work commenced in September. We hope to complete the hospital construction by the middle of 2024. We plan to admit medical students in August 2025,” he explains, adding that the Bagchis and Parthasarathys have been understanding and accommodating as donors. “They understood the flexibility needed to accomplish a project of this magnitude,” he says. Given its complexity, their main concerns, according to Rangarajan, was how to attract the best research-oriented faculty members and construct a “world-class hospital”.

Win for research, capacity building

Health care is the second-most preferred philanthropic cause in India, as per the EdelGive-Hurun India Philanthropy List 2022. It accounts for 18.7 percent of total contributions, behind education, which occupies the top spot with 20.2 percent. But within these sectors and otherwise, investments towards research and capacity-building are still under-funded, says Mulla of EdelGive.

Why Mindtree co-founders Subroto Bagchi and NS Parthasarathy are betting big on health care philanthropy
 
Personal experiences are a major driving factor behind the Bagchis and Parthasarathys picking health care as a sector for philanthropic contributions, along with their insistence of investments towards research, awareness and capacity-building. Earlier, the duo had also been spearheading the White Swan Foundation to spread awareness about mental health.
 
“Long back, Susmita and I chose to focus on health care due to personal reasons. My mother was blind, my father had mental health issues, Susmita’s mother battled with cancer and later dementia. Through deeply personal experiences, deeply personal choices present themselves,” says Bagchi. “That is how we decided to work on mental health, vision, cancer and ageing.” Apart from the hospital at IISc, the Bagchis are setting up a 750-bed cancer hospital and palliative care centre in Bhubaneswar, Odisha, for which the state government has given them 20 acres of land, free of charge, he says.
 
Parthasarathy believes that making investments in capacity building could be challenging because it is difficult to measure outcomes. “Many things we do, in business or otherwise, are easy to quantify, but not research and capacity-building. But that’s what can produce something that can have a long-term positive impact on society,” he says, referring to how, in the immediate post-Independence years, philanthropy of some of India’s wealthiest business families, including the Tatas, Birlas and Bajajs, focussed on institution and nation-building.

Also read: Indian philanthropists need to become bolder, lead with trust, look for new areas to fund: Rohini Nilekani
 
The IISc, too, in fact, was the brainchild of Jamsetji Nusserwanji (JN) Tata in the late 1880s, for which the industrialist is said to have endowed a “substantial part of his personal wealth”, according to the IISc website.
 
“Our belief is that a focus on institution-building is equally important from a philanthropic strategy point of view,” says Parthasarathy, who sold some of this shares in Mindtree to give money to the IISc. He says that just like the government focuses on ease of doing business, it should also create ease of philanthropic giving through tax incentives.

Why Mindtree co-founders Subroto Bagchi and NS Parthasarathy are betting big on health care philanthropy
 
The presence of the Mindtree co-founders among India’s top philanthropists is unlikely to be a one-time phenomenon, hopes Mulla of EdelGive. She gives the example of Rohini Nilekani, who had cashed out on her Infosys shares to fund her first philanthropic initiatives in the early 2000s. Today, she is India’s “most generous woman”, as per the philanthropy list, with her contributions for FY22 standing at Rs120 crore, up from Rs70 crore a year ago.

Also read: How SD Shibulal is breaking the poverty cycle with higher education
 
“Nilekani also did not have a precedence of giving grants when she started out,” Mulla says. Creating Arghyam (a non-profit working on sustainable water and sanitation solutions co-founded by Nilekani) did not end her sense of responsibilities, but actually fuelled her determination to give more, and to bolder, more diversified causes year-on-year, she explains. “That gives you hope that philanthropy can be addictive in the most positive and beautiful sense.”
 
Radha possibly best sums up their intent: “Give money, or whatever you can, with a large heart, and hope it meets the larger purpose.”

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