February 2016

'The Tata Trusts will have to keep renewing itself'

Ratan Tata, Chairman, Tata Trusts, talks about the trusts’ evolving philanthropic approach, future growth and priority issues facing India

Ratan Tata, Chairman, Tata Trusts

Ratan Tata’s imprint on the direction the Tata Trusts has taken over the past two years is discernible. Since stepping down as Chairman of the Tata group, Mr Tata has been able to devote more of his time to redefining the operations, objectives and purpose of what is one of India’s largest and most impactful philanthropic organisations.

The results have been noticeably striking. "The Trusts are functioning under R Venkataramanan, its executive trustee, in a more focused, integrated and hands-on manner to maximise the benefits it seeks to embed in disadvantaged communities and for less-than-privileged people across India,” says Mr Tata, the Chairman of the Tata Trusts and Chairman Emeritus of the Tata group in this interview.

There was this exercise in 2014 to reconsider what the Tata Trusts was doing and how it was going about implementing its philanthropic agenda. What was the need for the evaluation?
We appointed the Bridgespan Group [a nonprofit consultancy] to validate some of the issues we were trying to verify ourselves. We wanted to change the form of our philanthropy from one that was predominantly executed by non-government organisations (NGOs) to one where we would manage some of the projects ourselves. We would continue to collaborate – the trusts to NGOs to communities system – but now we would also be involved directly.

Bridgespan has worked with many international philanthropic organisations and we were advised that they may be able to give us valuable views on how those organisations operated, and on what we could do. They looked at what we were attempting to accomplish and, by and large, they endorsed the work we were undertaking. Rather than suggest a radically different approach, their report brought some order to our efforts. It helped us define how we work up a particular philanthropic portfolio into different pockets.

One important finding to emerge from their assignment — and this may have remained under the scanner without an outsider saying it — related to delegating authority to speed up the process of allocating resources for grant-making. Earlier, trustees sat and personally scrutinised every single grant application. That took up most of their time and, as a result, they couldn’t add much value.

Bridgespan suggested that we delegate up to a certain level. The trustees would be informed of all grants but wouldn’t sit and sign their name on every single grant application. The trustees would perhaps not have accepted such a recommendation coming from the staff but this was by an independent organisation.

What have been the changes in the grant-making process?
There have been some changes, but these have nothing to do with Bridgespan. I have been emphasising that the trusts must be concerned, in any given project or programme, about the sustainability of the community. Let’s say you have a community that requires assistance. You double their agricultural yield but their people remain below the poverty line; this doesn’t seem to enter the equation. You have enhanced their livelihood by 100 percent but they are still unable to escape an existence of subsistence. You continue in this manner for five, six, seven years and then you say it’s time to move to another place and another community. And what happens to the community you have moved away from? It collapses, the NGO working with it collapses, and the entity we have been trying to help ends collapsing also.

The point I am trying to make now is that all grant proposals should have a sustainability objective. If, for instance, you are in a coastal community and you are looking at paddy to enhance their agricultural output and the community is still below the poverty line, maybe you need to introduce an additional, new livelihood activity, whether they ask for it or not. You should try to get them to do that to make the entire initiative sustainable.

A grant is given for three-to-five years typically; everybody should accept that it is not going to be for infinity. The NGOs who operate on the belief of perpetual funding may feel upset that a grant has stopped, which is why there needs to be clarity about the funding period. We have to state upfront what our intent is. We can never spread ourselves otherwise; we will never have adequate grant funds to provide new initiatives other than the few we are supporting.

It is easier to manage social charity with a couple of focused priorities. Why does it need to be different in the case of a more diversified philanthropic organisation like the Tata Trusts?
The reason for our existence is to enhance the quality of life of the people we reach out to. To realise our vision, we have to look beyond contributing mainly to ease personal hardship. You may have a kidney problem that requires dialyses and you cannot afford that, so we subsidise or pay for it. We have been doing that and will continue to provide such personal assistance – I think we are giving five times as much as we used to for such causes – but the needs are huge and finding genuine NGOs and project collaborators who work well in these spheres is getting ever more difficult.

Yes, we should be sensitive when it comes to funding the treatment of someone with, say, cancer, but the time has come for us to also be concerned with more meaningful ways channelling funds for, say, cancer research or the development of a malaria vaccine. We should be aiming to replicate what has happened in the United States, where large amounts of resources are pumped into research.

The question is: can we fund a research project that aims to eliminate or control a certain disease and, therefore, has the potential to benefit a larger number of people, or should we stick with helping individuals suffering from that disease? We believe we can make a greater difference through large projects that serve mankind.

Nutrition is a subject that provides an example of the point I’m making. You cannot just look at combating malnutrition in children; you have to bring the mother into the ambit. How do you do that? The government has large amounts of money that they expend in providing iron tablets. A tender goes out and the cheapest tablets are procured. This is given to the mother, who has to walk a few miles to get them. Other supplements are similarly sourced and they may or may not get to the people they are supposedly for. It’s not going to work.

How do we solve delivery problems? Can we for example embed these supplements in staple foods such as rice, wheat and salt? Can we get state governments to endorse the programme? Instead of putting money into tablets, can they mandate that all rice and bread that is produced be iron-fortified?

We are making some big guesses on such issues and, to the pleasant surprise of many of us, we are getting support from state governments that are willing to do this, that have budgets for this. We are sharing the technology with them and they have asked us to monitor the projects, which we are happy to do. These are projects that can be replicated across the country; what you have to ensure is that they are executed effectively.

The level of intervention by the Trusts while overseeing the projects it funds has increased. What’s the reason for this?
It’s crazy if, in projects where you have 50 NGOs doing things, each in their own way, we just keep funding them. If the project is important enough, we need to get involved with the NGO, or we may do it with another foundation. We need to have our face in there — our knowledge of what’s happening on the ground is going to increase if we do that — rather than merely concentrate on the funding.

In the old days, one trust would go out and solicitate NGOs who were doing good work and offer them funds. Another trust would be waiting for people to come to them and apply for funds, which they would then make available. We had different ways of doing things. Now we are trying to integrate that; not deprive the trusts of their autonomy but saying, “Let’s get together and see what can lead to the greatest gains.”

The ’Internet Saathi’ programme, where you have tied up with Google to help women understand the internet, is a new model of philanthropy for the Trusts. Can you elaborate on this new direction?
With Google we are spreading knowledge about the internet among women in rural areas to help give them a means of livelihood. This is not the kind of project we would have got into earlier. With the Bill and Melinda Gates Foundation we are working together, in a complementary fashion, to tackle diarrhoea. This is a first for the Foundation, which has previously always executed such programmes by itself. The World Bank has decided to support one of our programmes by contributing funds and letting us manage it like an NGO.

We have a major programme with the Massachusetts Institute of Technology to look at Indian problems and find Indian solutions to these problems. Some very interesting projects are in place and so are the ideas behind them. The projects we are supporting range from low-cost medical devices and checking for cataract to using biotechnology to treat cancer.

How do you see technology shaping philanthropy?
I just gave the example of biotechnology and cancer treatment; that’s pure technology. The whole issue is about us funding the application of that technology based on some findings. We are taking risks to get there and this may not end up serving the purpose, but we believe we are on the right road. Over the course of time, technology is going to allow you to make significant breakthroughs in treating cancer, diabetes, heart disease and the like. And technology is where we are playing a more active role than ever before, where it’s the lack of funds that creates barriers.

You have to embrace technology, not just high technology. My sister had a cataract operation recently and she was kept in the clinic till the evening, was told to wear black glasses for a week and had to cope with various other constraints. I had a cataract removed in the United States and I was back in the hotel in 30 minutes. If you keep on doing what you have been doing the way you have been doing it, you stay where you are.

Technology is not to be defined as a space age or state-of-the-art function. Once you adopt a technology, the next step is to make it affordable for everyone. If you treat technology as something only for the elite, then you have a problem.

There is a view that the Trusts should spread their wings to geographies other than India, simply because the Tata group has become a global corporation. What’s your view on this?
Much of what we do here can be done in other countries, but would that be right when you have not exhausted all means to satisfy the demand in India? A quick answer is yes. We should always be open to change here because the suffering of humankind is similar and heartwrenching, whether it be in Africa or India. There are regulatory problems in going that way, but we should be asking ourselves the question. We will cross that bridge when we come to it but I think we should be willing to play our role of trying to make a difference to the quality of life, wherever possible.

Do you subscribe to the view that philanthropy is inherently personal, even when it comes to professional funding institutions?
No, I would not describe philanthropy in that manner. Philanthropy starts with the donor, which may lead you to say it’s personal. Somebody’s wife dies of leukaemia and he decides to establish a hospital to treat the disease; somebody loses a child in a car accident and decides to set up an institute for road safety. Traditionally, philanthropy may get started due to some personal hardship or personal vision, but philanthropy in its true sense is not personal; it is humanity-based. It’s about the sensitivity you have to all the hardships that people face.

How do you see the Tata Trusts evolving over the next five years?
The same way as it is now. We are doing reviews of where and what we should be doing in the same general fields. We will, I hope, forever be looking at enhancing the quality of life of the people we seek to help. Today we are talking about diseases and cures; tomorrow it could be climate change. I think the Trusts will have to keep renewing itself every three-to-five years to see whether it is missing something because governments are not going to necessarily be helping humankind per se. They are going to be confined to their own people and there are going to be political issues; someone else has to at least define what can be pursued.

What advice do you have for young philanthropists?
I don’t want to address that; I don’t think I can. What holds true is that we want to be enhancing the quality of life of the less privileged, not just by giving grants but by eventually serving their needs.

The other hat you wear is with your support to young entrepreneurs...
This is closely related to supporting young entrepreneurs who are doing something you respect or are in an area that you feel has been ignored. By and large I’ve been backing businesses in the e-commerce space because they enable goods and services to reach people who could never have been catered to in this manner before. They never got a chance previously to order what they wanted, have it delivered at their doorstep, pay when they receive it, and return it if not acceptable. This sort of reach has never been there in the brick-and-mortar world.

We have a consumer population of 300 million that may go up to 600 million in the years ahead. There are tremendous opportunities in reaching this population and the task is being undertaken by passionate young people. They need backing. Having said that, some of the valuations are pricey. I support those who are really making a difference.

What are the three priority issues that you think India should address?
I have always felt that India suffers from having an environment that is inherently unequal. If I could sum up in one phrase, I’d say my greatest desire as an Indian is to be proud of my country because it is an equal-opportunity nation. We have had a woman prime minister but that was an exception to the rule. If you have the ability to study, work and rise on the basis of merit and not on the basis of who you are or how well-connected you are, that would make me very happy for our country.

What we are going through now in terms of religious differences and inequalities, that’s included in what I’m saying. We have for political reasons carved out the country according to caste, religion and communal groups. This may help some people at election time, but they don’t help in creating a unified country. We are now Maharashtrians, Punjabis and Tamilians rather than Indians. The day we all become Indians again, that’s when the country will be strong. 

This interview was part of the cover story on Tata Trusts that featured in the January 2016 issue of Tata Review.