Warren Buffett and Bill Gates are in India this week to promote philanthropy and motivate ultra wealthy Indians to get involved in philanthropic activities. Can philanthropy truly help India? How can philanthropists help tackle India’s vast social challenges? Which philanthropic model can have the most impact in India? Should government be doing more to encourage philanthropy? These are the questions swirling around the trip; Mr. Buffett and Mr. Gates will probably face these questions from potential philanthropists, the media, and policy-makers.
Wealth is accumulating at an astonishing rate in India. Whether we count dollar billionaires or millionaires, we will soon have more wealthy people than any other country in the world except for the US and China. This is a natural byproduct of India’s rapid economic growth that will likely continue for many more years. Unfortunately, our economic growth has also been somewhat inequitable since it has resulted in income being concentrated at the very top of the economic pyramid rather than trickling down to the base of the pyramid. Moreover, these income effects have been compounded by our tax code that allows assets to accumulate over generations. Under these circumstances, it is vital that the Indian wealthy recognize how fortunate they have been and step up their philanthropic activities.
Mr. Buffett and Mr. Gates’ visit is therefore timely. Mr. Gates’ own efforts on behalf of the Bill & Melinda Gates Foundation (BMGF) demonstrate how philanthropy can help India. BMGF has already had significant impact on public health in India and has been instrumental in launching the Public Health Foundation of India. The Tata Trusts and the Birla Trusts are Indian philanthropies that have demonstrably improved Indian society through the various institutions that they have built and supported over many decades. But philanthropy is not just about financial capital. In many cases, the management and governance support provided by philanthropists is much more important than the money. Philanthropists have to create professional organizations and devote sufficient time to their philanthropic organizations to truly achieve