The Heartbeat of a Trust-Fifty Years of the Sir Donabji Tata Trust

By R.M Lata

Published by Tata McGraw-Hill Publishing Company Limited, New Delhi, India


Member, Law Society of England and Wales

In the Western world a pessimistic image of both human development and social and economic growth in the Third World is often presented. The emphasis is invariably on foreign aid and developmental efforts that are bestowed upon Third World countries to help them cope with their various predicaments.

It is therefore very refreshing to catch a glimpse of a less well-known phenomenon-philanthropic efforts to promote national development, since the 1890s, by individuals who form part of the fabric of one of those Third World countries.

The Heartbeat of a Trust is about the vision, and efforts to achieve that vision, of a prominent Indian Parsi family, the Tatas. The book professes to be the first published study of an Indian foundation and is, in part, a study of the Tata family and their tradition of setting up trusts. Another part consists of biographies of the many individuals who were instrumental in the execution of the trusts. Much of the book is dedicated to illustrating the issues the trustees faced and how they achieved a fine balance between satisfying immediate demands on trust assets and establishing a long-term approach to self-development projects on a national scale.

Tata Enterprises built up its industrial base in the late 19th century in India. The “founder”, Jamsetji Tata, was very clear-if somewhat ambitious-about the way he wanted his wealth to be used: he wanted it to bring about an industrial revolution in India. He believed that “patchwork philanthropy”was not a firm basis on which to do this and so he preferred “constructive philanthropy”, which he defined thus:

What advances a nation or a community is not to prop up its weakest and most helpless members but to lift up the best and most gifted, so as to make them of the greatest service to the country.

The J.N. Tata Endowment Fund, established in 1892, was the first step towards implementing this approach. Jamsetji’s own funds were used to provide Indian students with scholarships for higher studies abroad. The Endowment was subsequently formalized with a corpus, out of which similar scholarships continue to be awarded.

At Jamsetji’s death in 1904, Tata Enterprises owned three textile mills and the Taj Mahal Hotel in Bombay. At the time of the death of his son, Sir Dorabji Tata, in 1932, it had acquired an integrated steel plant, three hydro-electric power companies, a soap and edible oil company, two cement companies, an insurance company and an aviation unit which subsequently developed into Air India.

The Sir Dorabji Tata Trust maintained the family tradition of transcending communal and religious barriers. The Trust purposes included many that one could find in a comparable Canadian trust deed: the establishment, main­tenance and support of schools, educational institutions and hospitals; the relief of distress; the advancement ofleaming, etc. However, in practice, in a country where some 70 per cent of the people live below the poverty line, the trustees also had to consider many demands for individual assistance.

On the advice of F.S. Markham of the Museum Association, London, the trustees embarked on a policy which was designed to secure the greatest possible advances through projects that would contribute to the development of the nation. This resulted in the creation of four major institutions.

The Tata Institute of Social Science

This Institute had humble origins in one of the poorest neighborhoods in Bombay. Under the direction of Dr. Clifford Manshard, an American social worker, it quickly grew into a popular and respected school and is now deemed a university. The University Grants Council is now responsible for financial matters and the Trust makes annual contributions towards upkeep. The highly regarded Institute has undertaken many useful research projects, both on its own and in conjunction with other institutions, including United Nations agencies.

The Tata Memorial Centre

Sir Dorabji’s wife died ofleukemia and this turned his attention to the treat­ment of cancer. After his death, his trustees endeavoured to create a permanent institution which would undertake to fight the disease on a very large scale. Again, the trustees obtained much assistance from established experts in the field, notably from the United States. The 100-bed Tata Memorial Hospital opened in 1941. When the financial demands on the Trust became oner­ous, the trustees handed it over to the Ministry of Health in the hope that an injection of funds would continue its growth and expansion. Unfortunately the move had the opposite effect and eventually, following the trend in the United States, Jawaharlal Nehru, then Prime Minister of India, agreed to

transfer the running of the Tata Memorial Hospital to the Indian Atomic Energy Department. The new resources from this Department revived the hospital and in 1966, it merged with the Indian Cancer Centre to become the Tata Memorial Centre.

The emphasis continues to be on the “wider picture”. The Centre is not only a hospital but also a place for the training of doctors and other postgraduates for cancer research and for the rehabilitation of patients. With 300 beds, it is one of the larger comprehensive cancer facilities in the world.

The Tata Institute of Fundamental Research

This is the most innovative of all the Tata institutions. A young Indian scien­tist, Dr. Homi Bhabha, had established a reputation in Europe as a very talen­ted scientist in theoretical physics. On his return to India in 1940, Dr. Bhabha convinced the trustees of the need for a centre for the study of science in India, particularly one that was comparable to western standards, so that local talent could be cultivated and retained in India. He believed such a centre should incorporate fundamental research in physics, including nuclear physics and mathematics and should undertake research in all aspects of atomic science without reference to immediate utility or security regulations. We are told that some 18 months before the atomic blast at Hiroshima, Dr. Bhabha was con­templating the creative use of the splitting of the atom for the generation of nuclear power.

In view of the magnitude of such a venture, the trustees attached some con­ditions to their grant. These included support-both administrative and financial-from local governments and, in June 1945, the Tata Institute of Fundamental Science commenced operations in temporary accommodation. In 1961 the Institute moved to a custom-built permanent location. Currently, the Centre is involved in extensive studies of radio telescopes. Its mathematics faculty is reputedly one of the largest of its kind in the world.

The National Centre for the Performing Arts

This is the most recent of the Tata national projects. It was designed to encourage and preserve India’s heritage in music, dance and the performing arts. Indian music had no form of notation and was generally handed down from person to person, hence there was a real possibility that much of it would be lost if not recorded. This was the first Tata project for which active funding was sought from other institutions, trusts and individuals. UNESCO con­tributed high-fidelity recording equipment, the Ford Foundation made a grant of$200,000 to cover the cost of architectural and acoustic consulting services, and the John D. Rockefeller III Foundation provided high-fidelity mobile recording equipment which was installed in an acoustically treated van. This is now used in rural towns and villages to record India’s musical tradition and heritage.

The Board of Advisors for this project included Ravi Shankar, Satyajit Ray and Zubin Metha. Yehudi Menuhin was also involved.

Generally, The Heartbeat of a Trust makes good reading and can be com­mended as a chronicle of some of the philanthropic activities of the Tata family. However, one wonders if some aspects of the book should have been handled in a different way. For instance, much of the subject matter contains references to Western standards. Although the writer cannot be faulted for this, one would have liked to have been provided with details of other Third World philanthropy against which the work of the Trusts can be evaluated. All relevant figures are presented in Indian rupees and valued at the date the book was written, so a non-Indian reader may find it frustrating to convert each time a comparison is sought. Inevitably, there are mentions of local customs, politics and personalities which may also elude a Canadian audience.

One would also have liked a discussion of the trustees’ accountability under the Trust, particularly for financial decisions. The impression the reader may get—and perhaps this is really the case—is that there is little restriction on the discretion of the trustees. Further particulars would have been useful.

The author has also missed opportunities for discussion of some vital issues that affect the responsibilities of the trust vis a vis the nation. The Tata Institute of Fundamental Science is a case in point. There are many ethical issues that arise out of this project which, we are told, helped India make its leap into the Atomic Age. The possibility of increasing the proliferation of nuclear weapons is one and other issues could have been addressed to give a more balanced view of the Trust’s achievements.

Nevertheless, considering the volume of the subject matter and the wide audience he seems to want to reach, R.M. Lala can be commended for an enjoyable account of the many philanthropic activities of the Tata family.

Establishing a Private Foundation

By Wolfe Goodman and Howard Carr

Published by The Canadian Centre for Philanthropy, Toronto, 1987, $5 (Associates) and $7.50 (Others)


Member, The Ontario Bar

A few years ago, a Canadian lifestyle magazine suggested that if its readers wanted to show off, they should get themselves the real symbol of wealth and exclusivity: a private foundation. All the right—and rich-people had them.

Now two experienced Toronto lawyers have written a little book that explodes that image. It turns out that over 75 per cent of Canadian private foundations

have less than $500,000 in assets and over half give away less than $25,000 a year. What is more, the creation, care and feeding of a private foundation are not matters of obscure mystery or of enormous cost. While no readers of this book would be led to think they could dispense with legal services in setting up a foundation, they will be less intimidated by the process than they might have been.

Why would anyone want to set up a private foundation anyway? The authors say the main reasons for establishing a private foundation are: to organize the donor’s giving on rational lines; provide continuity of purpose and, perhaps, of control to the object of the donations; and to help preserve the good name of the donor in perpetuity. It is true also that income accrues tax-free in a founda­tion but donating the earnings from the capital that goes into a foundation to charity would also have tax advantages.

After a fairly brief discussion of motives, the book gets down to the mechanics. The writers explain incorporation (the usual legal structure for a foundation), charitable registration, the practical and legal duties of directors, and some of the administrative tasks that have to be performed in a foundation. Surprisingly, they do not address what might be thought a fairly obvious question for those considering a foundation: how much control can the founder/donor have over the operations? There is also nothing directly on the cost of starting up or carrying on a foundation. Perhaps the variety of possible structures and objects made such calculations impossible.

A short chapter on carrying on activities outside Canada is followed by a pair of technical appendices devoted to Revenue Canada forms and procedures.

Establishing a Private Foundation varies in tone between straight talk to the lay person and fairly dense law, though the book is short enough that most readers will be able to plough through it without getting mired down. Sometimes the book seems addressed to the lawyer of the donor rather than to the founder, and an inexperienced solicitor would be greatly helped by it. The authors do make a very useful contribution in pointing out that people who do not wish to set up their own private foundations can achieve much the same purposes by donating to one of the 21 community foundations in Canada.

Anything that serves to encourage regular, flexible charitable giving is to be welcomed, and an increase in the number of private foundations would serve those ends. Perhaps it is unfortunate that the authors were not more vigourous advocates but their commentary is both competent and useful. They and The Canadian Centre for Philanthropy are to be thanked for this contribution.


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