Wipro chairman Azim Premji has announced on Wednesday a hike in his philanthropic giveaway by ₹52,750 crore ($7.5 billion), taking his overall giveaway to his endowment to a humongous ₹145,000 crore ($21 billion). This accounts for making it one of the biggest foundations in the world.
The Bill & Melinda Gates Foundation has investment assets of about $40 billion, and the Ford Foundation about $12 billion, according to the website Pensions & Investments. Premji’s largesse comes at a time when the ultrarich in India are giving less for social causes than they did five years ago, according to estimates by management consultancy firm Bain & Co in its recent India Philanthropy Report 2019.
Premji, 73, was also the first Indian to sign The Giving Pledge initiative started by Bill Gates and Warren Buffett, under which billionaires commit at least 50% of their wealth to philanthropy. Premji’s latest commitment is in the form of transfer of all economic benefits in 34% Wipro shares. Economic benefits that come from 67% of Wipro shares — by way of dividends, sale of shares, etc — will go to the endowment.
The Premji family will continue to have voting rights on the entire 74.3% stake they hold in Wipro. But the family, including Premji’s sons, Rishad Premji and Tariq Premji, together can hope to benefit in financial terms from only a maximum of 7% of the stake. In that sense, the income they will earn from their assets will be dramatically lower than what the family earned till now, and will be more in line with promoter earnings in the rest of the industry.
The beneficiaries of this extraordinary gesture will be largely disadvantaged communities all across India, which the Azim Premji Foundation serves. “For every dollar of profits earned, 67% goes directly towards the community,” said Anurag Behar, chief sustainability officer at Wipro and CEO of the Azim Premji Foundation.
The foundation works directly in three areas — improving standards in government schools, heavily subsidising students of the Azim Premji University, and supporting not-for-profits in specific areas. The grants have supported over 150 organisations engaged in many issues including nutrition, women suffering domestic violence, and human trafficking.
For the university, which currently has one facility in Bengaluru, the foundation’s commitment is that it will bear 90% of its costs. The work with government schools is spread across Karnataka, Uttarakhand, Rajasthan, Chhattisgarh, Puducherry, Telangana and MP. The foundation focuses on creating and scaling up a network of institutions at the district and state levels to contribute to improvement in the system on a sustained basis.
“The idea of the endowment is to support the designated causes for perpetuity. We are scaling up each of our activities sharply. The number of students in the university will rise from the current 1,300 to about 14,000 in a few years, including in a second facility that we are planning in a Hindi-speaking state, may be Madhya Pradesh. We are planning to scale the government school activity and the grant-making activity by 3 to 5 times. To support this in perpetuity, we can’t eat into the endowment, but will use the returns from the endowment,” Behar told on Wednesday.