Azim Premji: Outstanding Philanthropist
For more than a decade, Azim Premji Foundation has been working to improve education. Just like at Wipro, Premji has left it to a professional team to run it
Azim Premji
Award: Outstanding Philanthropist
Age: 67
Why He Won: For making India’s biggest philanthropic contribution for achieving universal quality education.
His Trigger: Was deeply disturbed by growing inequity between haves and have-nots; was afraid growing disparity would threaten society.
His Mission: Improving quality of education; which would improve social and economic conditions.
His Action Plan: Working with government schools, bringing change at the top, improving quality of teachers, increasing capacity of education officers.
His next move: Set up institutions like Azim Premji University, to
produce education professionals, focus on research, set up 200 rural schools to showcase good education.
So when exactly did Azim Hashim Premji, the third richest Indian and ‘Asia’s most generous man’ feel the first tug of philanthropy? Was it when, as a young man studying at Stanford University, he dreamt of joining an international development agency like the World Bank? Or maybe it was when his mother, a doctor, set up a philanthropic children’s hospital in the 1940s. Or was it in the 1950s and ’60s when he was soaking in the spirit of nation building growing up in Nehru’s India? Or did it come much later, when in the late ’90s he watched his millions grow into billions, thanks to the IT boom, all the while becoming aware of the distance between his wealth and the average Indian’s income?
No one knows the answer, not even Premji.
Dileep Ranjekar, who has worked with Premji for close to four decades and started the Azim Premji Foundation (APF), says Premji first started talking about working in the social sector in 1998-99. Ranjekar, who was then head of Wipro’s HR, and Premji were staying in the Wipro guesthouse at Brunton Road, Bangalore. Premji was shifting Wipro’s HQs from Mumbai to Bangalore.
Both of them would sit late in the evenings talking and it was on one such evening that Premji first broached the idea. He had spent the last 30 years building Wipro, which was successful and stable, and now at 54 he felt that he needed to do something more.
After a lot of deliberation he chose to work in education and told Ranjekar to come up with a plan, but with one clear instruction: Whatever area they picked in education, it must have widespread impact.
The conversation that started in that guesthouse has today resulted in one of the largest programmes backed by individual giving in India and perhaps Asia. Premji has pledged close to $2 billion from his personal wealth to APF, which is working to improve elementary education across government schools in India. APF today has 800 employees. Last year the Azim Premji University started three post graduate courses in education and development to beef up capacity in the education sector.
It may take several more years, if not decades, to truly feel the impact of Premji’s efforts, but the work has left a deep impression on him. “As a person I have become more hopeful and optimistic… When you see teachers, government officials, my own colleagues in the Foundation, working in the toughest circumstances possible… it reaffirms faith in the goodness of man,” he says.
Now at 67, he has only one regret. That he waited too long to embark on this journey. “I wish I had started earlier, maybe in 1990, not in 2000,” he told Forbes India in an email interview.
His role as chairman of Wipro takes up most of his time today, but that is set to change. “He is spending more and more time on this [philanthropy]; it will increase going forward,” says older son Rishad who is also on APF’s board. Premji has talked to people about giving away most of his wealth (estimated at about $12 billion) to philanthropy. Rishad says that everyone in his family understands that the wealth does not belong to them. “He’s always told us, ‘I am comfortable giving you something in life but if you want anything above that, you have to earn it for yourself. The rest is meant to be given away, it is an obligation to give it away’,” says Rishad.
Close friend and associate Narayanan Vaghul, former chairman of ICICI Bank who is on the board of both Wipro and APF, says, “Premji is one of those rare people who sincerely believe that philanthropy is not a hobby. Even 20 years ago he was a hardcore businessman, and he is not particularly religious. But this work has changed him spiritually, it has made him a better person.”
Unlike Wipro where he kept his family out for a very long time (Rishad joined in 2007), every member of his family is involved in APF. Wife Yasmeen and Rishad are board members, while younger son Tariq works in APF’s endowment office. Premji says that having the family’s support is crucial in this work. “Your immediate family must resonate with the ideas, the purpose and philosophy. Else, the impact will be much less than it could be,” he says.
After maintaining a laser like focus on education for most of the last decade, he is now thinking of expanding into other areas like health care and livelihoods. “He is deeply worried about the state of governance in the country today,” says Vaghul, and some of his close associates say that he may choose to work in that field next. In January last year he joined 13 eminent citizens in India, such as former RBI governor Bimal Jalan, HDFC Chairman Deepak Parekh, and Godrej & Boyce Chairman Jamshyd Godrej to write an open letter to national leaders on governance deficit and corruption in the country. On November 2, while announcing Wipro’s quarterly results, he exhorted Bangaloreans to protest against non-clearance of tonnes of garbage lying on the streets.
He understands that a strong philanthropic movement needs partnerships. On June 1, he invited about 40 of India’s leading businessmen and philanthropists to join him, Bill Gates and Ratan Tata to share ideas about philanthropy. Attended by people like Sunil Mittal of Bharti Group and Rajshree Birla of the Aditya Birla family, “discussions revolved around the areas of education, health, water and agriculture”, according to a statement by APF.
So important is this work to him that he is even willing to lose some of his shyness and is stepping up his public appearances to take the message of philanthropy to a larger audience. On August 13, on the last episode of Satyamev Jayate, Aamir Khan asked him what prompted him to take up this work. Premji replied, “I do it, because it’s my responsibility.”
It takes a family
One of the earliest influences on Premji’s philanthropic work came from his mother, Gulbanoo Premji. In a recent interview to The Times of India, Yasmeen describes her mother-in-law as a woman “generous of purse, heart, and mind”. Although Gulbanoo was a doctor, she didn’t practice medicine but she did set up a children’s orthopaedic hospital in Mumbai in the 1940s. “I saw her run the hospital for decades, through all kinds of challenges, but never stepping back from her purpose. She was a determining influence on me,” says Premji.
Theirs was a close-knit family. Premji’s father died at a relatively young age of 51, and Gulbanoo stayed with her son and his family. Rishad remembers a day they had taken her to a five-star restaurant for a meal. “We told her, ‘Dadi why don’t you order a nice drink?’ When she saw that the drink cost Rs 300, she refused, saying, ‘Beta, humko hazam nahin hoga [Son, it won’t go down well with me]’.”
When it came to raising their children, Premji and Yasmeen followed the same principles. Rishad and brother Tariq travelled by the school bus; if they missed it, they would have to take the city bus. Rishad makes no bones about the fact that he grew up comfortably, going to the best schools and colleges around the world, but says there were no fancy holidays or any other trappings that money could buy. When he went to college in the US, he worked at a pizza place to earn extra pocket money.
“I am not trying to pretend, or trying to be cool about this, but we are pretty unfazed by all that wealth,” he adds. “In fact, my father’s lifestyle has become simpler and more modest with age. We tell him he should relax more, rest more, take a nice holiday, travel more, and live a little,” says Rishad.
He is surprised when people ask him if he is upset that his father is giving away so much of the family wealth. He says Premji took a professional decision to set up APF; it didn’t come out of a big family discussion about what to do with the wealth. “I have always felt this overwhelming feeling that I have been unduly, unjustifiably privileged to lead this life, to have this much wealth in a place like India. I struggle with it. And therefore since I was 16, I’ve felt a strong obligation to give it away,” he says.
A professional setup
The most definitive sense that Premji had bigger plans for philanthropy came in December 2010 when he allotted 213 million of his personal shares in Wipro (8.7 percent of Wipro’s equity) to a trust that would fund the work of APF. (Today that translates to about $2 billion.) It is by far the biggest contribution made by anyone in this country to philanthropy. According to a Bain report in 2010, Indians gave a total of $7.5 billion to charity.
The funding was a result of the shift in APF strategy. Till 2010, APF was running programmes with state governments at different levels. At the end, either the programme would be wound down or APF would hand it over to the government. But this approach ended up creating islands of excellence and when APF left, others tended to lose interest.
In 2010, the strategy shifted to setting up institutions: The University was created and several state- and district-level institutes were set up to provide teacher education and leadership development. In addition, a number of demonstration schools were set up at costs and constraints similar to rural government schools; the target is to have 50 such schools by 2016. There was a second objective: Building good institutes that would put groundswell pressure on the government to improve quality in state-run schools.
In the middle of 2010, Premji started thinking of a financial plan that would back this new strategy. He wanted a funding mechanism that would make APF financially independent and allow it to attract good talent from outside. He came up with the idea of setting up an endowment modelled on the lines of US universities like Harvard and Stanford. Premji transferred 8.7 percent of his personal equity in Wipro to a trust, overseen by his family members, with an irrevocable clause that the money would be used only to fund APF’s work.
“It is perhaps the first time in India that the endowment model is being used to finance a not-for-profit entity,” says KR Lakshminarayana, chief endowment officer. Lakshminarayana’s instructions are to preserve capital and make investments that are safe and extremely liquid. The annual requirements of APF are met through dividend earned on these shares, around Rs 120-140 crore.
Premji was only 21 when he took over his family business. But even at that young age he was clear that professionals would run Wipro—it was the only way to create a sustainable organisation. Premji has used the same approach at APF. “I can’t emphasise this aspect enough… once good people are on board, you have to let them get on with it, you have to let go… there is no other way to build something which will outlast you, and that only can be a truly sustained contribution,” says Premji.
Just like at Wipro, he has left the running of APF to a professional team led by the two CEOs, Ranjekar and Anurag Behar. He periodically reviews operations, the talent pipeline and signs off on the annual strategic plan.
Premji is extremely sensitive of the fact that APF’s work is his personal work, and to send the right message to employees at Wipro, he only works for APF on holidays. Premji’s office at Wipro, APF’s building and his house are all located next to each other, but all board meetings are held only in APF’s office and only on Sundays. “Means extra work for all us,” quips Anurag Behar.
Sharad Chandra Behar, board member, APF and an expert in education, says what sets Premji apart from other philanthropists is the very practical way in which he is approaching a complex social issue. “I am very idealistic and speak at a very high level; he listens to me but is focussed on picking what is practical and doable,” says Behar.
For instance, Behar has been telling Premji for a long time that APF cannot only work in education, that it should pick more fields like health, nutrition and so on. “People’s lives are integrated, change cannot happen if you are only touching one aspect of it,” says Behar. He says Premji agrees with that construct but is clear that it cannot be done by one organisation and that adjacent areas should be taken up in stages.
“He gets this from Wipro; first consolidate and then expand,” adds Behar.
From businessman to philanthropist
Premji is a meticulous person, and he measures everything. The number of hours he spends talking to the media, the number of coffee cups the office boy serves, the number of miles his executives travel in a year. For a person who wants an account for every paisa and every minute spent on the business, giving away billions of dollars for work whose impact cannot be fully measured ought to be unnerving.
In the beginning Premji was a little impatient. “I remember a lunch meeting, seven-eight years ago, in which he asked me, ‘Mr Behar why is it taking so long to move things from the drawing board to production?’ Like in business, he wanted quick results,” says Behar. But gradually, he learnt that the gestation period in the social sector is long.
“You have to accept the reality that social issues are far more complex; if you don’t do that you will get nowhere… in fact, it may perhaps cause more harm than good,” says Premji.
When he is at Wipro, Premji relentlessly pushes for execution and action, but when he puts on his other hat as the chairman of APF, he is patient and willing to wait for results. “He has this subtle ability to shift time frame. In business he wants things to be done very quickly. But here he understands intuitively that the social process takes much longer,” says Lakshminarayana who has worked with him in Wipro and APF.
Sometimes this shift in his behaviour is confusing for others. Vaghul says that Premji and he have a sharp difference of opinion when it comes to measuring the impact of APF’s work.
Vaghul prefers to measure the result of every project before deciding on expansion. Premji on the other hand understands that not every decision here can be based on measurement. “Common sense and faith have a big role,” he says when asked how he makes decisions when it comes to his philanthropic work.
When Premji started his work in education it was clear that he was looking for long-term systemic change. Both Yasmeen and Rishad share that view. But there are subtle differences in their thinking. Yasmeen, for example, wouldn’t mind giving money for a project that impacts just 100 people. “She says, give to as many causes as you want, as many people as you can,” says Ranjekar.
Rishad says that there are constant debates in the family around this and they have thought about setting up a separate arm inside APF that could give to more short-term projects that yield immediate results.
Even though every member of the Premji family is involved with APF, they are careful of not stepping on anyone’s toes. “No one is constantly asking Anurag and Dileep how they are running the place; it is their ship to run,” says Rishad. But every now and then Premji, Rishad and Tariq sit down for informal lunches and meetings with APF employees. “I would have met at least 150 people there,” says Rishad.
Inside APF there is a clear sense that after Premji this work will pass on to Rishad. “Will he succeed AHP at Wipro? I don’t know. But I know for sure that he is going to be the chairman here one day,” says a senior functionary of APF.
I asked Rishad if he has ever thought of taking up philanthropy as a full-time occupation. “I have thought about it a lot. But I am not ready. I am having too much fun at Wipro and there is still so much to learn here,” he says.
Azim Premji: If We Want A Better Society, We Can’t Be Bystanders
Premji talks about his journey as a philanthropist
Mitu Jayashankar
When did you first start thinking about philanthropy, and what was playing on your mind at that time?
When I was in Stanford in the 1960s, I wanted to graduate and work in an international development agency. As events turned out, I had to leave Stanford mid way through my programme (I completed the programme and got my degree in 2000), to take charge of Wipro. While building Wipro was the most important thing for me for the next three decades, this basic notion that every one of us must do something for society stayed with me. In fact, way back in early ’70s when we wrote down our beliefs, one of them stated, “There is a social purpose of being in Business.” By the late 1990s, Wipro was not just successful but also a strong, stable organisation. I started thinking again seriously about how I could try to contribute to society.
My mother, who was a doctor, established a philanthropic children’s hospital in Bombay in the 1940s. I saw her run the hospital for decades, through all kinds of challenges, but never stepping back from her purpose. She was a determining influence on me. Also, growing up in the ’50s and ’60s, it was natural to get infected by the spirit of nation building.
Several other philanthropists we speak to say that choosing what to do is the hardest thing. How did you arrive at picking education as your focus area?
We were clear that we should focus our efforts rather than do many things. That’s because the nature of social issues is so complex and their challenges so large-scale that if one wants to make a genuine difference, one needs to focus. Once we decided to focus, it could have been only some fundamental issue. Education and health were the most fundamental issues that we could think of. We chose education because we felt that it has large and deep multiplier effect in making a society better… more ethical, more humane, more equitable… education empowers people, not only in a narrow economic sense, but as thinking, engaged and demanding citizens.
How much time do you devote to this work?
I devote enough time for this, more importantly I devote time for the relevant issues. We [the Foundation] are already a large operating organisation, and we will become bigger over time. So I must play the role that I must play, which is to help build a very strong, sustainable and vibrant organisation. This calls for my being engaged and involved, but in a manner by which the team at the Foundation owns the purpose and destiny of the organisation. That’s the only way it will sustain for a hundred years and more.
Were there any parallels or learning’s from your corporate career when creating the Azim Premji Foundation?
More important than money is people… so merely by committing money to a cause, change won’t happen. Getting good people is the crucial issue… and then let them do their jobs. I can’t emphasise this aspect enough… once good people are on board, you have to let them get on with it, you have to let go… there is no other way to build something which will outlast you, and that only can be a truly sustained contribution.
In business you have data to support or validate your decisions. But in the social sector it is difficult to measure impact. How then do you make decisions on where to invest, or get an idea about the work APF is doing?
First, you have to accept the reality that social issues are far more complex; if you don’t do that you will get nowhere. In fact, it may perhaps cause more harm than good. Second, in education what issues to work on are not so difficult to grasp—it’s on teachers’ capacity, curriculum, assessment, education leadership management and some other supporting dimensions. Third, there are clear and visible signs of change, if you are actually working on the ground, and not distant. Examples are: How teachers handle classrooms differently, changes in school culture, over time you can also see change in learning levels of children. However, all this takes very long, and you have to keep on going at it relentlessly. Common sense and faith have a big role.
The state is an important actor in education, what has been your experience in working with the government?
All our work in the past 11 years has been in collaboration with various state governments. We have found them to be good partners. The government is not a monolith… it has great people and the not-so-great people… it’s like any other large organisation. On the ground, we have found a real desire in the government to improve education, and they genuinely want to work with well-intentioned and competent organisations.
What are some of the key takeaways from the philanthropic work you have done? How has it changed you as a person?
Every one of us must contribute. If we want a better society, we can’t be bystanders. If we have wealth, then we have a greater obligation to contribute; we are trustees of this wealth, not its owners.
As a person I have become more hopeful and optimistic. There is reason for hope when you see teachers, government officials, my own colleagues in the Foundation, working in the toughest circumstances possible, day after day, and causing change. It reaffirms faith in the goodness of man, and hope for our country’s future.
Personally, what has been the hardest part of this work for you?
I wish I had started earlier, maybe in 1990, not in 2000.
You may not perhaps see the full impact of the investments you are making in education in your lifetime, how do you get comfortable with that idea?
I am not comfortable with the word “investment”. This is not an investment, you are not looking for any kind of return (neither economic nor psychological). This is about society and lives of millions of children. Once you understand this, you stop worrying about what you will see. Even the greatest of men—Jesus, Buddha, Gandhi—didn’t really get to see what they caused; I am just an average businessman.
Do you feel it is better to first focus on creating wealth so that there is more to give away later or do you wish you had started on this journey when you were younger?
[One] should probably do it together. Certainly you need to have a certain amount of wealth before you embark on this, but in my experience the earlier you do it the better it is. You can always keep increasing your commitment, but it’s best to start early. As I said before, I wish I had started earlier.
How important is the family’s role in your philanthropic work?
Absolutely critical. Your immediate family must resonate with the ideas, the purpose and philosophy. Else, the impact will be much less than it could be.
Are there other philanthropists whose work you respect and admire?
The Tatas are extraordinary. They have a century of purposeful contribution to society. It’s difficult to think of one business house anywhere in the world that has contributed more to its country than they have to India. I also admire the highly intelligent, persistent and large-scale work that Bill and Melinda Gates, and Warren Buffet are doing.
(This story appears in the 07 December, 2012 issue of Forbes India. To visit our Archives, click here.)
