Nov 27

Nov 27 Indian billionaires and millionaires in the USA give little to philanthropy

November 27, 2021

In May, Seattle for India launched Oxygen for India, a campaign to raise funds in the U.S. to supply 10,000 oxygen cylinders to help COVID-19 patients in India. “We have deep ties to India and with the human crisis unfolding now, it’s incredibly important to lend a helping hand,” Sudhir Steven (Steve) Singh, managing director of Madrona Venture Group states on the Seattle-based philanthropy’s website.

Madrona, based in Seattle, manages more than $2 billion in venture funds. Several Indian entrepreneurs in the U.S. joined Steve Singh, 60-years-old, in backing Oxygen for India. For instance, Sachin (Sunny) Gupta and Kabir Shahani joined Singh in making a video appeal for funds.

Gupta, 51-years-old, is co-founder and chief executive of Apptio, a software which helps companies plan, analyze and optimize their information technology. In 2019, Apptio, based in a Seattle suburb, was bought by Vista Equity Partners for $1.94 billion. Following the purchase, Gupta got a “$196 million payday”, based on Apptio stock he owned, GeekWire reported. Serial entrepreneur Shahani, 38-years-old, is co-founder and CEO of Amperity, a customer data software platform for consumer brands. At its latest funding round in July, the Seattle-based company was valued at over $1 billion.

Not easy raising funds

Another Oxygen for India backer is Rajeev (Raj) Singh, an Amperity board member. In 1993, he co-founded Concur with Steve Singh and Mike Hilton. Based near Seattle, it was a cloud-based travel and expense management software firm. In 2014, Concur was bought by German software vendor SAP for $8.3 billion. When the purchase closed, Steve Singh, Concur’s CEO, made $81 million on the stock he owned, according to the Puget Sound Business Journal. According to a 2020 regulatory filing, Singh owned stock in other companies, including in DocuSign, a cloud-based e-signature platform. The San Francisco based company has a market value of $49 billion. Singh served on Docusign’s board from 2017 to 2020.

Raj Singh, 53-years-old, runs health care company Accolade, which has a market value of $2.1 billion. His stock ownership in the company, based near Philadelphia, is worth an estimated $84 million.

Presumably, given the backing of major Indian American entrepreneurs, Oxygen for India ought to have easily exceeded its $10 million fund raising goal. Yet, so far, it has raised only $2.3 million from 521 donors.

The Indian-run philanthropy’s inability to meet its relatively small fundraising goal raises the larger question: Why are not more Indians giving back to India, where Indian immigrants earned high quality engineering and other college education at a negligible cost, as well as, to the U.S., where they have attained major financial success?

“We work hard; the poor are lazy”

Indeed, Indian founders of medium and large companies in America have earned lucrative financial rewards, collectively worth more than $55 billion, according to a study by The Global Indian Times. This is mainly in the form of ownership stakes in at least 60 medium and large companies they founded or co-founded, with an estimated combined market value of more than $430 billion, the study found. The founders collective net worth is far higher due to income from previous sales of stocks as well as companies and sizeable annual salaries and cash bonuses.

Several studies, including by the MacArthur Foundation, confirm what is widely known in India, namely that many wealthy Indians give back little to their communities. Over the ten-year period, 2010-2019, India ranked 82nd among 126 countries in The World Giving Index, behind South Asian neighbors Sri Lanka, ranked 9, Nepal, 53, and Afghanistan, 63. The index is compiled by the United Kingdom based Charities Aid Foundation, which supports philanthropies around the world.

Many successful Indians, including in the U.S., believe that the poor and unfortunate do not have a good work ethic - are “lazy” - and hence do not deserve help. This belief, in turn, indicates a self-perception that their own success is based on hard work, with no help from the government, society or others. So, unlike other Americans – the U.S. ranked first on the 2010-2019 World Giving Index - many Indians in the U.S. typically do not support philanthropies, even ones that aim to provide wider opportunity for education, healthcare, job training and other social programs.

The excuse given by the wealthy in India, for their lack of giving, is that they wish to avoid harassment by tax officials. Successful Indians in America though do not have this excuse since their wealth comes mostly from publicly disclosed stock holdings in the companies they founded or where they work. Instead, Indians in the U.S. come up with excuses like they lack information and contacts with philanthropies. Yet, some of them have endowed professorships and made other sizeable donations to some of the top American universities, which may help if their children seek admission to these prestigious institutions.

Secrecy over giving

Jagtar (Jay) Chaudhry, co-founder of Zscaler, has a net worth of $21 billion, which ranks him 45th on the Forbes list of 400 richest Americans. He is by far the richest Indian American. In April, Chaudhry, 62-years-old, donated $3 million to fight COVID-19 in India. He and his wife Jyoti have also set up a philanthropic foundation.

Annual contributions to charities made by U.S. foundations run by most Indians, including Chaudhry, are not publicly disclosed on grounds that they are private entities. This secrecy is contrary to the practice of most American Foundations, which publish their annual financial statements, including the Bill and Melinda Gates foundation, set up by the Microsoft founder Bill Gates. The secrecy of most Indians, rightly or wrongly, reinforces the impression that they are trying to hide the fact that perhaps they donate miniscule amounts each year in relationship to their overall wealth.

Steve Singh, of Madrona Venture Group, is one of the few Indians whose education-focused Singh Family Foundation apparently discloses its annual giving. In 2019, it had assets of $9.5 million and made grants to seven philanthropies totaling $788,000, according to GrantMakers.io, a free database for non-profit professionals.

In 2018, Romesh Wadhwani, 74-years-old, and his brother Sunil donated $30 million to set up an artificial intelligence research center at the Indian Institute of Technology (IIT) Bombay. Romesh earned a B.S. in electrical engineering from IIT, Bombay, and a master’s of science and Ph.D. in electrical engineering from Carnegie Mellon University. Romesh Wadhwani is founder of Symphony Technology Group, a private company based in Los Altos, California. He has a net worth of $3.5 billion, according to Forbes.

In September, Niraj Shah, together with his wife Jill, donated $5 million to Cornell University’s computer science department, where he earned a degree in 1995. Shah, 47-years-old, is co-founder of Boston-based Wayfair, an online furniture and home goods retailer. He has a net worth of $3.4 billion and, like Wadhwani, is on the Forbes 400 list.

In June 2020, Axel Kearns, a 20-year-old college student trading options, committed suicide after seeing a negative $730,000 balance in his Robinhood account, according to Forbes. Following this news, Robinhood co-founders Baiju Bhatt and Vlad Tenev announced a donation of $250,000 to the American Foundation for Suicide Prevention. Bhatt, 36-years-old, owns Robinhood stock worth an estimated $2.3 billion. He is ranked 389 on the Forbes’ list of 400 richest Americans.

Role model: Azim Premji

Indians do have good role models of philanthropy. In India there is Azim Premji and the Tata family and in the U.S. there was Amar Bose. Premji, 76-years-old, a Stanford University graduate, is founder of information technology services firm Wipro. The Bangalore, India, based firm has a market value of $46 billion. Premji has committed $21 billion, over 80% of his net worth, to fund mainly early education programs in India.

The Tata group of companies, run by the Tata family, which have a combined market value of $242 billion, sell a wide range of goods from soaps to cars. The Tata Trusts, which receive the bulk of the profits of the Tata companies, have been running hospitals, advanced learning institutes and funding education since 1892.

In 2015, Indian Americans Chandrika Tandon and husband Ranjan Tandon (in photo) donated $100 million to New York University’s school of engineering, which was renamed the Tandon School. Chandrika, a grammy award nominated musician, runs Tandon Capital Associates. Ranjan was founder of hedge fund Libra advisors. The Tandons have also endowed the post of a Professor in psychology at Yale University.

Role model: Amar Bose

So far, the biggest donation by an Indian American to philanthropy came from Amar Bose, who passed away in 2013 at the age of 83. He held numerous patents in acoustics, electronics and other fields, invented noise-cancelling headphones, the wave radio and an innovative suspension system for cars. Bose got his bachelor’s, master’s and Ph.D. from the Massachusetts Institute of Technology (MIT), all in electrical engineering. He then taught at MIT for 45 years.

Bose Corp., the private company he founded, which is based near Boston, supplies high-quality speakers used in the Sistine Chapel in Italy, the Grand Mosque in Mecca and other public spaces and auditoriums, as well as in homes and in Mercedes Benz, Porsche and other luxury cars. “I never went into business to make money. I went into business so that I could do interesting things that hadn’t been done before,” Bose told Popular Science magazine in 2004.

In 2011, Bose donated a majority of shares in Bose Corp to MIT, without any publicity; the exact percentage of shares he gave is not publicly disclosed. Bose Corp., with 2020 revenues of $3.6 billion, is estimated to have a value of $4 billion. So, Bose’s donation to MIT is currently worth more than $2 billion. The total value of his donation is likely far higher, given annual dividends paid by Bose Corp. to MIT since 2011.

“I would have been fired a hundred times at a company run by M.B.A.’s,” Bose told Popular Science. “Without character and integrity, you can make a lot of money, but I don’t think you can be proud of it.”

Ankur Gopal, founder of Interapt, is unique among Indian entrepreneurs in the U.S. in publicly disclosing a target for his philanthropic goal. Through Interapt, he offers a free data analytics training program in Kentucky, in collaboration with the consulting firm Ernst and Young. “My vision has always been to create 10,000 technology jobs” in Kentucky, Gopal said in a statement. Gopal, 47 years old, also set up a foundation to raise funds to support technology training programs to “attract the unfound talent then train them. The talent gap is our opportunity.”

Founded in 2011, Interapt is a mobile and web application development firm based in Louisville, Kentucky, with around 300 employees. Clients include local businesses as well as local operations of GE Appliances and other major companies.

Gopal says his father taught him to dream big and persevere while his mother taught him empathy. “My mother helped thousands of patients, most of whom would not be seen by other doctors since they could not pay. She also ran a free clinic for thousands.”