Billionaires and responsibility for Organizational Development

As anyone who is travelled to India knows, this is a country of contrasts – of spectacular riches and spectacular poverty. This is the country that has built the Taj Mahal, the Mysore Palace, and some of the most luxurious places to stay in, but at the same time the majority of the people still live in abject poverty. Recent data show that 11 families or individuals control close to 14.3% of Indian wealth (the US is close behind with its billionaires controlling 10% of US wealth). When you begin to see numbers like this, what does this mean? Do billionaires have some sort of responsibility to society for profiting so handsomely from the consumption of many?

Source: New York Time, July 26th, 2011

Some of the billionaires listed in this table (and related article) have foundations. They are generous and give funds back to causes such as education and so on. For example, the Azim Premji Foundation hopes to enable “systemic changes in Indian education to facilitate a just, equitable, humane and sustainable society. The Foundation has engaged with over 2.5 million children in 20,000 schools across 13 States through a committed workforce of over 250 professionals and hundreds of paid volunteers”. The ArcelorMittal Foundation works in areas such as education, health, environment and so on and has “invested over $37 million in 585 community projects across the world”. So clearly, it seems like these billionaires are giving back to society.

Many foundations work through intermediaries – other NGOs on the ground or sometimes government programs. I call these intermediaries the “middle-man”. Some consider such intermediary organizations places where money is wasted. One often hears the refrain,
“the funds are not reaching the beneficiary and are being eaten up by administrative costs”. While this may be true, when you are working with the poorest-of the poor, the middle man is sorely needed. The poorest of the poor lack financial capital, but also institutional and social capital which these organizations provide and help build. This is especially true in India, where the state social services structure is fraught with political and organizational organizational challenges. So India’s many non-profits are partially a response to the failures of the state. These non-profits organizations too are started by entrepreneurs who have devised a work-around solution. For example, one of the organizations we worked for in India, Dream a Dream, has figured out a way to provide quality after-school programs the build life skills of underprivileged children. This is something that government schools should be providing, but do not. These organizational intermediaries that implement programs either on behalf of foundations or in some cases the government are important. But these organizations themseleves have institutional and organization development challenges. They are understaffed, do not have systems in place to monitor program output and also have challenges focussing on their core competencies.

The issue for me is less about the fact that there are administrative costs to building institutional and social capital in poor communities. It is more about how Foundations, especially the large foundations support a given intermediary organization to improve efficiencies and work on organizational development. Arguably, an intermediary organizations will have many “on-the-ground challenges”, chief amongst them attracted and retaining quality human capital. What are foundations doing to enhance the quality of human capital in the social sector, especially the grantee intermediate organizations? How are they working with a diverse set of institutions of higher learning to give experiences to and place graduates in the social sector? How have they oriented their giving to enhance the organizational development of their intermediary organizations that actually implement the change we seek? This is the problem that I would like to see all billionaires coalesce around.

This entry was posted in by Professor Amyaz Moledina and tagged , , , , . Bookmark the permalink.

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