Saturday, November 5, 2011

Community Foundations and Trusteeship

I just attended the National Conference for Community Foundations in Delhi where I facilitated a dialogue session. Although the conference was small in numbers, there was a great exchange of ideas and inspiration among the diverse group of community foundations who were present. It was sponsored by the Sampradaan Indian Centre for Philanthropy (SICP) which is my primary host here during my Fulbright-Nehru Senior Scholar fellowship. From left in photo: Jyoti Sagar, President of the Board of Trustees; Pushpa Sundar, Founding Director and Visionary behind SICP; and Dr. Pradeepta Nayak, Executive Director.  

I have been researching the community foundation movement in India. There are only about a dozen and they differ greatly in terms of size, age, budget, focus and effectiveness. One idea that I think should underlie the work of philanthropy in general and community foundations in particular is that of “trusteeship.” The concept of trusteeship that Mahatma Gandhi wrote about was an ideal that he hoped would be realized. This blog entry will explain trusteeship, give some examples, connect this concept with the community foundation movement in India and conclude with some recommendations for the field of philanthropy.

What is Trusteeship?
The concept of trusteeship is the pillar of Gandhian economics. Gandhi was neither a capitalist nor a socialist, but the idea of trusteeship carefully towed the line between these two. He writes, “What I would personally prefer would be not a centralization of power in the hands of the State, but an extension of the sense of trusteeship, as, in my opinion, the violence of private ownership is less injurious than the violence of the State.” (The Modern Review, October, 1935, p. 412)

Trusteeship is possible if people think of themselves of mere trustees of their possessions and wealth. It is achieved when people earn money in non-violent ways, use what they require for their basic needs, then give the rest back to society.

To explain his concept, Gandhi employs a mantra from the Bhagavad Gita translated as “Enjoy thy wealth by renouncing it.” He goes on, “Expanded it means: ‘Earn your crores by all means. But understand that your wealth is not yours; it belongs to the people. Take what you require for your legitimate needs, and use the remainder for society.’” (Harijan, 1-2-1942, p. 20)

The money earned, if done so in honest ways, is meant to take care of your needs. Now those needs may legitimately differ from person to person.  Although he lived a very frugal life, Gandhi admits to these different needs by using the analogy that “the elephant needs a thousand times more food than the ant, but that is not an indication of inequality.” (Harijan, 31-3-1946, p. 63)

The key is that the rich must voluntarily give back to society and not in any way be coerced to give. Therefore legally mandating payment by businesses to NGOs under the name “Corporate Social Responsibility,” which has been proposed in the Indian Parliament on three or more occasions, would not be consistent with Gandhi’s trusteeship. Only voluntary philanthropy would be allowed under trusteeship. If involuntarily dispossessed of their riches that would surely constitute violence which would, of course, be abhorrent to Gandhi. He writes of his ideal state, “The rich man will be left in possession of his wealth, of which he will use what he reasonably requires for his personal needs and will act as a trustee for the remainder to be used for society. In this argument honesty on the part of the trustee is assumed.” (Harijan, 25-8-1940, p. 260)

The questions inherent in this theory of trusteeship are: Trustee of what? And trustee to whom? Gandhi answers that “everything belonged to God and was from God…. When an individual had more than his proportionate portion he became a trustee of that portion for God’s people.” (Harijan, 23-2-1947, p. 39)

Examples of Trusteeship
On a recent visit to Gujarat Vidyapith, the university that Gandhi started in the 1920s and at which he served as Chancellor until his death, I met with the current Vice Chancellor, Dr. Sudarshan Iyengar. He is probably the world’s foremost scholar on Gandhian economics and is intimately familiar with Gandhi’s writings. He told me that Gandhi “experimented with every one of his concepts” before he held them to be true… with one exception. “Trusteeship is unique in all of Gandhi’s writings. It is the exception to the Gandhi rule because he did not test this theory in practice. It is only a theoretical construct.”

I asked if Dr. Iyengar could cite examples of trusteeship in action. He said no one has fully lived this theory of trusteeship. But then he quickly added, “I think Warren Buffett would be the nearest to this trusteeship construct in practice.” Upon his death, Warren Buffett is giving away all his wealth to philanthropic causes. And he and Bill Gates have challenged fellow billionaires to sign the Giving Pledge in which they promise to give (at least) half their wealth back to society. Many people here have referenced – both positively and negatively – the recent visit of Buffett and Gates to this country to meet with Indian billionaires regarding the Giving Pledge.

Community Foundations and Trusteeship
What is the implication of this trusteeship for philanthropy? In the Question and Answer dialectical form that Gandhi often wrote in, he poses the question: “From your writings, one gathers the notion that your ‘trustee’ is not anything more than a very benevolent philanthropist or donor, such as the first Parsi Baronet, the Tatas, and Wadias, the Birlas, Shri Bajaj and the like. Is that so?” To which Gandhi, the writer, responds, “If the trusteeship idea catches, philanthropy, as we know it, will disappear…. A trustee has no heir but the public.” (Harijan, 16-2-1947, p. 25)

Although it is not quite what Gandhi postulated in terms of giving all of your wealth back to society, when I worked at the Omaha Community Foundation we would advise donors to “consider the community as your extra child.” So, if your will leaves assets to your two children, how about adding a fund at the community foundation and splitting your inheritance in thirds? After all, it is the community in which you work and live that is largely responsible for the good life that you and your family have been blessed to live.

In Gandhian theory, the economic system is subservient to and dependent on the larger social system. This does not matter whether it is applied to the industrial age or the information age. If the goal of human activity is materialistic then income is meant for consumption. Although they have different constructs for the ownership of capital, both socialists and capitalists agree that ‘the good life’ is had through seeking to meet material needs. Gandhi rejects this assumption in theory, but sees the reality of society driving people to desire wealth enough to meet basic needs (and beyond). So he writes, “I accept the proposition that it is better not to desire wealth, than to acquire it and become its trustee. But what I am to advise those who are already wealthy or who would not shed their desire for wealth? I can only say to them, that they should use their wealth for service.” (Harijan, 8-3-1942, p. 67)

Recommendations for the Field
Three recommendations I would humbly offer to those colleagues and friends working in the philanthropic field in India:
  1. Consider using the language of Gandhi to frame philanthropy in an appropriately Indian context. Although we need to be cautious with quoting Gandhi out of context (so go and read the original writings for yourself!), using the language of Gandhi has great resonance here in India. 
  2. Do not push for legislation that would mandate CSR, trusteeship or any other form of giving. Gandhi was clearly against coercion of any kind by the state. If people give, it should not be because they must, but should be from the heart because they want to. 
  3. The theory of trusteeship has many nuances relevant far beyond philanthropy. It is important to understand this deeper critique of the capitalist and socialist economic systems in order to truly under Gandhi. His economic theory was and still is revolutionary. While we might not buy all of Gandhian economics, the theory does challenge us to think critically about so-called development, our own choices of livelihood and social justice.  

I have learned so much from my association with SICP and value the partnerships we have formed. My colleagues here at SICP have challenged me, taught me and befriended me over these last 5 months. For that I will always cherish them.

I want to see the community foundation movement thrive in India and believe that SICP can continue to play an inspirational role. However, this is not a case in which, as they say in that modern classic film, Field of Dreams, “Build it and they shall come.” No. It is not enough to simply build the institutions of community philanthropy without a parallel effort in the local villages, towns and cities to recruit donors who have a trusteeship mindset, willing and wanting to contribute back to society all their wealth beyond what is required for their basic needs.