179 TRUSTS OVERVIEW A tradition of trust The Tata trusts are the unsung heroes of an extraordinary saga of philanthropy that has enriched India and its citizens in more ways than can be quantified You may wonder why the Tatas among India s most illustrious business families for well over a century never show up on any of those ritual listings of the country s richest people. The reason is as simple as it is remarkable. Over generations, the Tatas have crafted and sustained a tradition of bequeathing much of their personal wealth to the many trusts they have created for the greater good of India and its people. That is how the Tata trusts have come to control 65.8 per cent of the
180 CODE OF HONOUR shares of Tata Sons. The wealth that accrues from this asset supports an assortment of causes, institutions and individuals in a wide variety of areas. The trusteeship principle governing the way the Tata companies function casts the Tatas in a rather unique light: capitalistic by definition but socialistic by character. India has an old religious tradition of philanthropy, passed on down the ages by kings, noblemen and rich merchants. Jamsetji Tata, the founder gave new meaning to this term. In his words: There is one kind of charity common enough among us It is that patchwork philanthropy which clothes the ragged, feeds the poor and heals the sick. I am far from decrying the noble spirit that seeks to help a poor or suffering fellow being. [However] what advances a nation or a community is not so much to prop up its weakest and most helpless members, but to lift up the best and the most gifted, so as to make them of the greatest service to the country. This was the sentiment that led Jamsetji Tata to establish the JN Tata Endowment Scheme for higher education in 1892. The scheme helped bright Indian students of moderate means to become administrators, scientists, doctors, lawyers and engineers, funding their education through loans and grants. The maiden grant was to Dr Freney Cama, who became one of the first women gynaecologists in India and who would come to have a maternity hospital in Bombay named after her. Of the 37 beneficiaries in the first batch, as many as 15 joined the Indian Civil Service (ICS), the colonial version of the Indian Administrative Service, realising Jamsetji Tata s desire that Indians learn how to govern themselves. By 1924, over a third of Indian ICS officers were Tata scholars. Illustrious JN Tata Endowment scholars include former Indian president KR Narayanan, renowned scientists Raja Ramanna, Jayant Narlikar and Raghunath Mashelkar, and Gyanpeeth award-winning writer and actor Girish Karnad. What advances a nation or a community is not so much to prop up its weakest and most helpless members, but to lift up the best and the most gifted Jamsetji Tata
181 TRUSTS OVERVIEW Philanthropy as a means of promoting higher education and research was a novel concept even in the United States at the end of the 19 th century. Andrew Carnegie s pathbreaking endowment of $1 million to set up a technical school in Pittsburgh, now the Carnegie Mellon University, was made in 1900. But Jamsetji Tata preceded him. Two years earlier, in September 1898, he pledged half his personal wealth, an amount of Rs30 lakh (then 200,000), to make his dream of a university or institute of research a reality. That the Indian Institute of Science (IISc) in Bangalore would take another 11 years to be born, aided by a generous donation of 300 acres of land from the Maharajah of Mysore, is quite another matter. Jamsetji Tata died in 1904, unaware that his vision for science in India would indeed be fulfilled. Over the next 50 years it became a prime source of India s technological prowess. When various national laboratories were established in the late 1940s and 1950s, IISc alumni provided the intellectual manpower. Jamsetji Tata s idea of philanthropy was to be given true expression by his sons, Dorabji Tata and Ratanji Tata, both of whom donated the major chunk of their personal wealth for the public good. The Sir Ratan Tata Trust and the Sir Dorabji Tata Trust and Allied Trusts are at the heart of the enduring Tata commitment to community development Dorabji was the quintessential entrepreneur, working tirelessly to make his father s visionary ideas a reality roaming the jungles of what is now Jharkhand in a bullock cart to set up Tata Steel and pioneering the generation of hydroelectric power in the wilds of the Western Ghats while Ratanji was a connoisseur of the arts and a passionate votary of social development. Ratanji Tata gave a grant to support Mahatma Gandhi s work in South Africa and another for Gopal Krishna Gokhale s nationalist activities in India. He also funded the first archaeological excavation at Pataliputra, which resulted in the
182 CODE OF HONOUR discovery of the 100-pillar Mauryan throne room of Ashoka s palace. He donated resources that enabled the London School of Economics (LSE) to research the causes of poverty and how to alleviate it, leading to the establishment in 1912, of LSE s Sir Ratan Tata Department, subsequently called the Department of Social Sciences (the department s first lecturer was a bright young man named Clement Attlee, later to become the British prime minister when India became independent). Ratanji Tata died in 1918 at the relatively young age of 47. Apart from donating his unparalleled art collection, especially of Chinese jade, to the Prince of Wales Museum in Bombay (now Mumbai), he left directives in his will for his personal wealth to be used for basic and advanced (postgraduate) education, primary and preventive health, rural livelihood and communities, art and culture and public initiatives. This was meant for all Indians, at a time when almost all trusts were communal in nature. The Sir Ratan Tata Trust was set up that same year. A few months before his death in 1932, Dorabji Tata bequeathed most of his personal wealth, then estimated at Rs3 crore and comprising substantial shareholdings in Tata Sons, Indian Hotels and allied companies, his landed property and his wife s jewellery including the famous Jubilee diamond, twice the size of the Kohinoor and even his pearl-studded tiepins and cufflinks, to the newly registered Sir Dorabji Tata Trust. The Sir Dorabji Tata Trust is best known for promoting six pioneering institutions of national Projects must be aimed importance. Four of these towards sustainability were established in Bombay: for the community, and the Tata Institute of Social money is always released Sciences (in 1936), the Tata in a phased manner that Memorial Centre for Cancer meets the requirements Research and Treatment of recipients (1941), the Tata Institute of Fundamental Research (1945) and the National Centre for the Performing Arts (1966). The National Institute of Advanced Studies (set up in 1988) and the Sir Dorabji Tata Centre for Research in Tropical Diseases (1999) are in Bangalore. In 1931, at the age of 50, Dorabji s wife Lady Meherbai died of leukaemia. Dorabji started two trusts in his wife s
183 TRUSTS OVERVIEW memory. The Lady Meherbai D Tata Education Trust enables young Ratanji Tata left directives women to go in his will for his personal abroad and wealth to be used for basic specialise in and advanced education, social work. The primary and preventive Lady Tata health, rural livelihood Memorial Trust and communities sponsors international research in leukaemia and the alleviation of human suffering. An international committee of experts in London carefully selects the researchers. The Sir Ratan Tata Trust and the Sir Dorabji Tata Trust and their allied institutions are at the heart of the enduring Tata commitment to community development, but there are several other trusts too. The JRD Tata Trust, established in 1944, gives institutional donations to promote the advancement of learning, supports research grants and scholarships, provides disaster relief and backs social welfare projects. The MK Tata Trust, set up in 1958 by Minocher K Tata with his personal resources, delivers research grants and scholarships for the advancement of learnings as well as donates medical and other relief during natural calamities. The Jamsetji Tata Trust, established in 1974 to mark the centenary year of the first Tata enterprise, bestows grants for innovation. The RD Tata Trust, named after Jamsetji Tata s cousin and JRD Tata s father, and set up in 1990, gives institutional grants to advance learning and also backs social welfare projects. The Tata Social Welfare Trust and the Tata Education Trust, also founded in 1990, supports educational institutes, hospitals and non-governmental organisations (NGOs). The JRD and Thelma J Tata Trust, set up in 1991 by JRD Tata with his and his wife Thelma s personal wealth, works to uplift women and children. How do the trusts operate? Over 75 per cent of the funds of the many Tata trusts accrue from dividends on the shares they own in Tata Sons and the rest comes from their own statutory investments. The trusts, for the most part, operate as a funding agency, much like the Ford Foundation. The Sir Dorabji Tata Trust supports different kinds of NGOs some do social work, some research, while others are community based usually for a period of three to five years. It also works with international agencies such as the United Nations,
184 CODE OF HONOUR mostly in times of natural disasters. For the Sir Ratan Tata Trust, the focus has changed over the years from charity to development funding. Both of these trusts can and do come together sometimes to fund large projects with different components. The two have very stringent appraisal, assessment, and accounting and auditing requirements for the NGOs they fund. Projects must be aimed towards sustainability for the community, and money is always released in a phased manner that meets the requirements of recipients. The Tata tradition of trust assumes all the more importance in the light of a survey conducted by the Indian Market Research Bureau (IMRB), which revealed that the concept of corporate partnership was not understood nor was the importance of corporate giving realised by many companies in India. Of the 600 companies surveyed, there was no indication of any upward trend in the role being played by the corporate sector in social development activities. For the Tatas, however, social development is an article of faith. To die rich is to die disgraced, said Andrew Carnegie, the American business legend who transformed himself from robber baron to philanthropic epitome. For Carnegie, The JRD and Thelma J Tata Trust, set up in 1991 by JRD Tata with his and his wife Thelma s personal wealth, works to uplift women and children the surplus wealth of the few will become, in the best sense, the property of the many. The narratives in this section of Code of Honour offer a window to the breadth and depth of the philanthropic endeavours of the Tata trusts, their quiet contribution to the cause of the country s poor and needy, and a ringing affirmation of the values of Tata s founders. As management guru Peter Drucker says: A healthy society requires three vital sectors: a public sector of effective governments; a private sector of effective businesses; and a social sector of effective community organisations. While there s not much they can do about the first sector, Tata companies are contributing all they can to the other two.
185 TRUSTS OVERVIEW Charity spread There are two main trusts operating under the Tata umbrella: the Sir Dorabji Tata and Allied Trusts and the Sir Ratan Tata Trust. The allied trusts component of the Sir Dorabji Tata Trust comprises the Tata Social Welfare Trust, the RD Tata Trust, the Tata Education Trust, the JRD Tata Trust, the JRD Tata and Thelma Tata Trust, the Jamsetji Tata Trust, the JN Tata Endowment, the Lady Meherbai Tata Memorial Trust, and the Lady Meherbai D Tata Education Trust. About 75 per cent of the funds of the Tata trusts accrue from dividends on the shares they own in Tata Sons. The remaining comes from statutory investments. Sir Dorabji Tata Trust and Allied Trusts A few months before his death in 1932, Dorabji Tata the elder son of Jamsetji Tata, bequeathed most of his personal wealth to the newly registered Sir Dorabji Tata Trust. This wealth was then estimated at Rs3 crore and comprised substantial shareholdings in various Tata enterprises, landed property, his wife Lady Meherbai s jewellery, even his pearlstudded tiepins and cufflinks. The trust is best known for promoting pioneering institutions of national importance. These include the Tata Institute of Social Sciences (set up in 1936), the Tata Memorial Centre for Cancer Research and Treatment (1941), the Tata Institute of Fundamental Research (1945) and the National Centre for the Performing Arts (1966). The trust funds projects in the following thematic spheres: management of natural resources, health, social development initiatives, education, and urban
186 CODE OF HONOUR poverty and livelihood. Allocations for individuals come under the heads of medical grants and travel or education grants. Grants for individuals total Rs12-13 crore a year. Institutional grants, which can vary year by year, account for about 25 per cent of the trust s annual budget. The largest chunk of funding, up to 65 per cent, goes to NGOs. In 2005-06, the Sir Dorabji Tata Trust and Allied Trusts disbursed Rs76.2 crore; this figure grew to Rs207 crore in 2007-08. The trust handles 40-50 projects at any given time and gets 10-15 funding proposals every day. Sir Ratan Tata Trust and Navajbai Ratan Tata Trust The Sir Ratan Tata Trust was established in 1918 following the death of Ratanji Tata, the younger son of Jamsetji Tata, and it operates in accordance with his will. Ratanji Tata wanted to establish a trust that would help further the advancement of education, learning and industry in all its branches. Up to the mid-1990s, the trust largely made grants in Mumbai. One of its early ventures was the Sir Ratan Tata Industrial Institute, which gave work to needy women. In 1948, the trust contributed to the setting up of the National Metallurgical Laboratory at Jamshedpur. The trust funds projects in the following thematic spheres: rural livelihoods and communities, education, health, civil society and governance, and art and culture. The rural livelihoods and communities component absorbed 62 per cent of the trust s funding spread. Education received the second-largest funding support (19 per cent). In 2007-08, the Sir Ratan Tata Trust disbursed Rs110 crore in support of NGOs, individuals and institutions.