Wednesday, August 31, 2005
Premji planning a Gates?
One of my pet peeves in the past about Indian industrialists was their complete disdain towards charitable giving, the Tatas being the major exception. This situation changed quite a bit in the 90's with the arrival of the technology titans, who picked their cues from their American counterparts whose charitable giving is legendary. Of course, the estate tax in the U.S. acts as a real incentive for the rich to burnish their legacy rather than hand money over to the federal government. It looks like SEBI's new directive to firms to offer at least 25% of their shares for public trading may have an unintended consequence, besides of course being a boon to investors. Azim Premji, the richest Indian resident is considering offloading some of his shares in Wipro.
Bill Gates has set the benchmark for charitable giving by offloading some $30 billion of his personal wealth to the Gates Foundation. As has been pointed out on this blog several times, the work done by the Gates Foundation in public health (especially with HIV and the vaccine initiatives) is without parallel. Now, Premji does not have that kind of money to throw around, but even if he decided to give away 10% of his wealth (approx $10 billion) to promote rural primary education in India, it would make a HUGE difference, if targeted well.
PS: FYI, IRS regulations in the United States require a Foundation to give away the equivalent of 5% of its endowment every year to maintain its charitable status. That's 5% of $30 billion every year for the Gates Foundation. I don't know what the rules are in the Indian tax code, but I presume it's something similar.
Premji didn't give a timeframe to cut his stake, but indicated it would depend on technical interpretations of the new rules and his monetary commitment to the Azim Premji Foundation, which provides education to poor children in rural India. "We are giving a lot of money to the foundation," he said.
Bill Gates has set the benchmark for charitable giving by offloading some $30 billion of his personal wealth to the Gates Foundation. As has been pointed out on this blog several times, the work done by the Gates Foundation in public health (especially with HIV and the vaccine initiatives) is without parallel. Now, Premji does not have that kind of money to throw around, but even if he decided to give away 10% of his wealth (approx $10 billion) to promote rural primary education in India, it would make a HUGE difference, if targeted well.
PS: FYI, IRS regulations in the United States require a Foundation to give away the equivalent of 5% of its endowment every year to maintain its charitable status. That's 5% of $30 billion every year for the Gates Foundation. I don't know what the rules are in the Indian tax code, but I presume it's something similar.
