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| Towards efficiency in doing good | | |
B.S. Prakash
If giving is seen not as charity but more as allocation of resources, the question of efficacy and measuring the results is critical.
THE SPIRIT of philanthropy and the desire to do "good" are age-old and universal. The science of management is relatively modern and, originally, mainly Western. One of the fascinating developments today is the application of management theories to philanthropy or, seen in another way, the desire to do public good but with a keen eye on efficiency. And this has relevance for us in India.
When Warren Buffet, the world's second wealthiest individual, decided recently to give away $30 billion of his fortune to the Gates Foundation, the story made waves. Understandably so. It was the biggest amount to be gifted away ever and in the process it also created the largest philanthropic Foundation of all times with a total capital of an astounding $60 billion, more than the GDP of many countries in the world. But what was equally noteworthy was the reason Mr. Buffet gave for contributing his money to this particular Foundation. Mr. Buffet has made his phenomenal wealth by being a shrewd investor, by "allocation of capital to give maximum returns." When signing away his fortune, he said he was essentially applying the same principle to his act of charity as he had done to investments: he was entrusting his money to where it would be put to the best use, with optimum efficiency.
This is illustrative of some significant trends unfolding in the field of philanthropy. But before looking at these, it may be useful to keep in mind some basic distinctions.
There are broadly two channels for aid or assistance or financing development or whatever other term one prefers to use — each of these terms has its own connotation and ideological implications. Internationally, the Official Development Assistance (ODA) is the governmental channel as the name suggests. In 2005, the total ODA was close to $100 billion but a substantial component was debt relief. The rich donor countries, with some honourable exceptions, have never met the accepted target of 0.7 per cent of their GNP as the ODA.
In India, we have several decades of experience both with the theory and the practice of aid. India has been influential in the evolution of doctrines on developmental assistance and has also traditionally been a major recipient. We had valid perspectives some of which were respected and accepted: that aid should not necessarily be tied and conditional; should take into account national priorities and capabilities and not reflect only the donor sentiments or preferences; should be with the consent and cooperation of the government rather than imposed or handed down; and should create capacity in the recipient rather than fostering dependency. Many of these are still valid in the development debate and this writer's own experiences as a diplomat in Africa showed the relevance of such concerns, though we in India have come a long way now in terms of the criticality of ODA for development. The policy debate about the rich countries assisting the poor will no doubt continue.
Interesting phenomenon
A distinct and perhaps more interesting phenomenon today is the role and relevance of private initiatives in doing public good. A mention was made earlier of the Gates foundation, an initiative of Bill and Melinda Gates, but there are many other examples of individuals or corporates with a sense of civic spirit. If in the U.S., the Carnegies or the Rockefellers exemplified it, in India, the Tatas or more recently the Byrraju foundation of the Satyam group illustrate the trend of private moneys for public causes. Worldwide, the efforts of a cult figure such as the singer Bono or the interest of Google, a new giant in the IT field, in supporting worthy causes such as the Aravind eye care are a part of the same phenomenon.
There are several notable features in this type of activity:
First, is the question as to why indeed do rich individuals or private corporations have the impulse to `give'? Obviously there can be a mix of motives ranging from social obligation to corporate image and brand-building to tax benefits, but a striking feature today is the belief at least among some that their money can be put to use "to make a real difference to the reality in the world." It is sometimes an effort at problem-solving — not the problems of the company but the problems of humanity. Thus for instance is the belief that some of the serious problems — diseases such as HIV/AIDS, Malaria, TB; illiteracy or inadequate literacy; lack of access to drinking water or sanitation; crippling poverty, etc. — may be better tackled with infusion of resources and the right solutions. At the recent global AIDS conference in Toronto, one of the approaches was to allocate huge budgets for preventing AIDS — the search for a vaccine for example — as distinct from dealing with those already affected. In this sense it would appear that the impulse to give is motivated more from a desire to make a difference than an urge to "give away" riches, as it were.
A corollary of the above is the recognition that some of these problems are global and not local or even national. HIV/AIDS, which affects so many countries, is an obvious example. Environmental threats are similarly trans-national. Some charitable foundations no doubt focus on local or national projects such as schools or an underprivileged section of society but some of the bigger entities are aiming big in trying to find solutions to challenges that afflict large swathes of humanity. The Gates Foundation has made a commitment of $500 million for global heath issues, for instance.
If giving is seen not as charity but more as allocation of resources, the question of efficacy and measuring the results becomes critical. Here is where modern management theories are being increasingly applied to non-profit or non-governmental work with the objective of making them more efficient. Peter F. Drucker, one of the greatest of management gurus, recognised this in the 1990s and pioneered thinking in this area. Drucker's question was simple: how do you measure the bottom line and the results achieved in an area where there is no bottom line in terms of profits? It is so much more difficult to evaluate the results in a field where there are no customers who complain or clients who criticise. The recipient is nearly passive and is normally grateful but this may lead to gross misjudgments about the efficiency of the charity work. Drucker made the focus shift from raising resources to spending them more effectively, an important corrective for many NGOs.
Recent years have seen advances, both in theory and in practice, in making the non-profits more productive. One would expect no less if fine minds like Bill Gates or N.R. Narayana Murthy were to apply themselves to larger social and developmental problems with the same rigour and dedication as they did to their companies. And this is beginning to happen. What is the relevance of these developments for India? A great deal.
First, it is self-evident that every developmental challenge, be it public health or education or sanitation or poverty is prevalent in India and the numbers are staggering. With all its success stories and despite the progress made in poverty alleviation, India continues to pose a challenge to anyone looking at solving major problems. Secondly, we are an open society, increasingly getting integrated into the world and hence there are ready opportunities for partnership, with the Indian NGOS, with State governments, and with a multiplicity of agencies and actors. If the trend is towards collaboration in finding solutions, Indian organisations can be useful in public-private or international partnerships as we already see in the health field. Thirdly, if in some areas, the need is to address issues based on science and technology, Indians have the aptitude and the attitude in the search and application for such solutions. Fourthly, and most important, with all our inadequacies and waste, globally we may still have relatively better efficiencies in absorbing capital assistance and in delivering it to the needy. The international organisations find India a good partner for these reasons.
The picture that emerges is that Indian agencies and NGOs have an opportunity to be partners in a global effort at doing good, but with efficiency and accountability.
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