The panoply of community development endeavours undertaken by Tata companies — embracing everything from health and education to art, sport and more — touches a multitude of Indians across the land

J. J. Irani recounts the story with a fair bit of relish. The time was some 10 years back and the occasion was a gathering of industrialists called by then prime minister P. V. Narasimha Rao. Representing the Tata Group were chairman Ratan Tata and Dr Irani, the managing director of Tata Steel at that point. "The prime minister proposed that we business people set aside 1 per cent of our net profit for community development projects totally unconnected to the workers and industry any of us was involved with," recalls Dr Irani. "Mr Tata and me looked at each other; we didn't make any comment. Later, we drew up a chart that quantified Tata Steel's contribution on Mr Rao's scale. We discovered that, over a 10-year period, the company had been dedicating between 3 and 20 per cent of its profits to social development causes. In the years since, depending on profit margins, the figure has continued to vacillate within this band."

The Tata Steel example is not an anomaly for a Tata company; it is the norm. If there is one attribute common to every Tata enterprise, it has to be the time, effort and resources each of them devotes to the wide spectrum of initiatives that come under the canopy of community development. The money numbers are staggering: by a rough estimate the Tata Group as a whole, through its trusts and its companies, spends about 30 per cent of its profits after tax (PAT) on social-uplift programmes. By the PAT figures for 2003-04, that amounts to Rs 1,700 crore.

The Tata culture in this critical segment of the overall corporate social responsibility matrix — inclusive of working for the benefit of the communities in which they operate, of building the country's capabilities in science and technology, of supporting art and sport — springs from an ingrained sense of giving back to society. "This is a matter of principle for us, it is in our bloodstream," says Dr Irani, "and it isn't something we like to shout about. Some people consider social responsibility as an additional cost; we don't. We see it as part of an essential cost of business, as much as land, power, raw materials and employees."

The Tata tradition in community development has, since the earliest days of the group's history, been defined by the values embedded in its core. It never was charity for its own sake or, as group founder Jamsetji Tata put it, "patchwork philanthropy". Sustainability, says Kishor Chaukar, a member of the Tata Group Corporate Centre, is of fundamental importance. "I don't believe charity makes a substantial impact on society," he explains. "All you are doing, then, is satisfying the mendicant mentality. The real contribution comes when communities are enabled in a manner that has a sustained developmental impact. That way you empower people, educate them, give them instruments of income, a feeling of self-respect and dignity, a reason to live."

Reinforcing the implicit beliefs the group brings to its mission of sustainable development is an explicit set of structures, embodied most notably by the Tata Council for Community Initiatives (TCCI). A centrally administered agency that helps Tata companies through specific processes, TCCI's charter embraces social development, environmental management, biodiversity restoration and employee volunteering.

The organisation, headed by Mr Chaukar and counting 43 chief executive officers of Tata companies among its members, coordinates the varied and widespread community development activities of Tata companies. TCCI has, in collaboration with the United Nations Development Programme (India), crafted the Tata Index for Sustainable Human Development, a pioneering effort aimed at directing, measuring and enhancing the community work that group enterprises undertake. TCCI is also involved in assisting Tata companies address the sustainability subject through the Global Reporting Initiative, a United Nations initiative that has guidelines for companies on social responsibility.

Speaking about the Tata Index, Anant G. Nadkarni, vice president, group corporate sustainability, says: "We have adopted a business model to drive social responsibility efforts within the group because that way you ensure a huge network. The Index helps structure our efforts and quantify their effect on the communities and people they are aimed at." The Index is actually a set of guidelines for Tata companies looking to fulfil their social responsibilities, and it is the third set of such guidelines fashioned by TCCI. It has been built around the Tata Business Excellence Model (TBEM), an open-ended framework that drives business excellence in Tata companies. Mr Nadkarni sees the Index as a work in progress, not some edict set in stone. "What we have here is a framework; that's the spirit in which the Index was drafted."

No matter how elaborate, systems and processes cannot really capture the magnitude and dispersion of all that the Tatas do in the field of community development. From health and education to livelihoods and women-children welfare, from tribal hamlets in Jharkhand and the rural outback of Gujarat to the high ranges of Kerala and disadvantaged villages in Andhra Pradesh — the community work being undertaken by Tata companies touches a multitude of Indians across the land. Beyond purely social work, this support extends to individuals and institutions pursuing artistic and sporting excellence.

The big boys in the group, the likes of Tata Steel, Tata Tea and Tata Chemicals, have in-house organisations dedicated to the task, but that does not mean smaller companies lag behind. "Each Tata company has its own priorities in social development," says Mr Chaukar. "They take up whatever is relevant to the communities and constituencies in which they function. Somebody is working in water management, somebody is in education, someone is in Aids containment, someone in income generation; the range is huge. You have to take on board different desires, anxieties, and requirements."

A different dimension of this social development doctrine shines through in the Tata support and backing that enriches the country's cultural and sporting spheres. In the field of art, this support has played a critical part in preserving and promoting every component of India's cultural heritage. The Tata backing for sports — in the form of academies for a variety of sporting disciplines, sponsorship of talented individuals, and organisations such as the Tata Sports Club — has helped countless Indian sportspeople realise their potential.

The panoply of the Tata engagement in community development encompasses much more than can be encapsulated in a few pages; that would require a pretty thick tome. As management guru Peter Drucker says: "A healthy society requires three vital sectors: a public sector of effective governments; a private sector of effective businesses; and a social sector of effective community organisations." While there's not much it can do about the first sector, the Tata Group is contributing all it can to the other two.