It has reported that Tata Consultancy Services (TCS) is expected to contribute a sizable portion of its corporate social responsibility (CSR) fund to Tata Trusts, a bunch of philanthropic organisations that owns a majority stake in the group holding firm, two people familiar with the matter said.
Economic Times reported that, the technology firm, the most profitable in the salt-to-software conglomerate, is the first Tata company to consider such a move and it aligns with Ratan Tata’s call for a unified philanthropic programme for the entire group and chairman N Chandrasekaran’s ‘One Tata’ approach.
Ratan Tata wants Tata Trusts to work with the group companies on social development goals for “one powerful set of initiatives”, breaking away from a four-year tradition under former chairman Cyrus Mistry where companies charted their individual CSR roadmap — separate from that of Tata Trusts. Before Mistry, Ratan Tata as the group chairman had tried to bring in a more unified approach.
Ratan Tata wants Tata Trusts to work with the group companies on social development goals for “one powerful set of initiatives”, breaking away from a four-year tradition under former chairman Cyrus Mistry where companies charted their individual CSR roadmap — separate from that of Tata Trusts. Before Mistry, Ratan Tata as the group chairman had tried to bring in a more unified approach.
“We are working out the details and nitty-gritties. We are discussing how much of TCS corporate social responsibility spend will be given away to Tata Trusts’ initiatives and for how long,” said a person familiar with the matter. “The rationale of this is to leverage our spend better and work on bigger projects with Tata Trusts.”
Economic Times also said that, Ratan Tata-chaired Tata Trusts own two-thirds of Tata Sons, the holding company and promoter to all Tata Group companies. It is a cluster of 14 charity organisations that use dividend income from Tata Sons to work on social welfare projects in education, healthcare, livelihood and sanitation.
Tata Trusts disbursed Rs 808 crore in the FY16, according to its latest available annual report. The government mandates companies to spend every year at least an average 2% of net profits of the three preceding financial years on CSR activities. Contributions from Tata companies would provide a major boost the Trusts’ fund pool.
The top 16 Tata companies spent Rs 1,198 crore on CSR in the last two fiscal years, according to data from Thinkthrough Consulting, a professional services firm that specialises in providing advisory support to social development initiatives. TCS, the second-largest listed company in India based on market capitalisation, alone spent Rs 380 crore on CSR projects last financial year.
“In the years I was chairman of the group, I tried to bring companies together to have a more unified approach in this regard. The last four years have seen the dismantling of that approach and a return to individual companies doing their bit,” Ratan Tata wrote in an in house magazine recently. “Consequently, instead of one powerful set of initiatives, we could end up having disparate projects run by various com ..
