Donation Culture!

 

donate1Since time immemorial people have been donating for various causes. Some people have been wealthyprosperous to average persons like you and me. But many people who themselves are monetarily challenged have also been donating. Causes for each individual and organisations have been different. I would prefer to use a phrase sharing of resources for the monetarily challenged people.  

I had written a blog previously about Donation Culture.

https://panvalkarpramod.wordpress.com/2018/01/12/let-us-all-become-bill-gates/

The largest of the donor known to us has been Bill Gates. Through his foundation Bill and Melinda Gates Foundation he has donated the US $ 60/ billion or maybe even more. When asked by someone about his still being in the top five wealthiest people in the world, he replied, “Maybe I am not donating enough money!” Warren Buffet and many superrich people have been donating funds for the causes they believe. Recently, the Titanic actor Leonardo Decaprio donated the US $ 30/ million to help douse the fires that have erupted in the Amazon River jungle.  

The list will go on and on, but I have one grouse. Why do people advertise what they donate? I have nothing against Bill Gates because along with donations, he personally and with his team ensures that funds are utilised efficiently. He is giving his management expertise along with the money. The team working on these projects get paid by Gate’s foundation. In case you are not aware, he donates money mainly for the eradication of diseases like AIDS, Malaria; he does this by sending expert doctors and scientists to these areas. He also negotiates and convinces pharmaceutical companies to keep their profits to reasonable levels for the medicines they buy, and not at the normal extravagant levels. By negotiations, he ensures that the money he donates reaches more people.  

I have been observing over a period the trend of donating money during national calamities like floods and earthquake people enthusiastically give by way of money and material. But do we have to advertise this by posing for photographs, while handing over the donations? Every day, I see in the newspapers individuals or group of people being photographed while handing over the money to authorities. Is there any need to publicise this?  

There are reasons to donate. You donate to charity, donate for a specific causeGiving culture is very important in our life, it boosts our morale, and it makes one feel good. It introduces children to donation culture, the importance of donation. Nobody wants to live on charity, but the circumstance in some cases force people to live on charity. Some are born in deprived family, where parents may be uneducated, sick or may have some other cause which leads them to opt to live on charity. Some people simply don’t want to take efforts of doing any work and would rather live on charity. But my judgement tells me that there would be very few people in this world who would prefer to live on charity.  

In India, the donation culture is started and pushed forward by the Marwari community. They are a business community, and there are many moneyed families. They have been donating to hospitals, the food kitchens for needy on round the year basis.  

The Sikh community has a superb method of “giving”. Sikhs perform Kar Seva; it means that people offer physical services in Gurudwaras, like cleaning, sweeping, cooking, and whatever work is available. Such services are provided by the poorest of the poor and the richest of the rich. You may find a Managing Director of a company and a peon from that company sweeping floors at the Gurudwara at the same time. The basic theory behind this is that in front of Him, everybody is equal. Another system in Gurudwaras is Langar. Food is provided to all those who want to avail of the facility, irrespective of one’s social status. Jaya and I were lucky to have langar food at the Harmandir saheb in Amritsar!  

Birla family has donated crores of rupees to build beautiful Mandirs at various places in India. Unfortunately, these Mandir’s are not called Ram Mandir but Birla Mandir! I can understand a plaque being mounted, or a board hung, giving the names of large donors. But naming the structure, especially a Mandir, in the donors name does not suit my tastes.  

There is another tendency that is cropping up these days. During the calamities, thousands of people donate material, money or services. I am pleased and proud of this gesture. But every day in newspapers, photographs of families, members of organisations handing over the cheques to authorities are displayedI feel that it is incorrect to display one’s good deeds. Are you doing it for publicity? Are you donating to show off? Do you want the whole world to know that you have given funds to a cause? I don’t think it is essential. Why can such acts not be done discreetly? For someone Rs 200/ or 2000/ maybe a large sum but to me, it need not be publicised.   

Do the soldiers in the rescue operation publicise their photos, every day? Do the disaster relief team members advertise their deeds? They know that they must take over rescue operations in the time of disasters. In the same vein, it is the responsibility of people to support the way they want to, discreetly. What do you gain by printing your photos, other than a boost to your ego?  

One exciting act I have started noticing in recent times. A group of motorcycle mechanics from the Aurangabad area shut their shop for 15 days and went to the worst flood-affected areas of Sangli. They stayed put in that area for about two weeks and serviced the vehicles which could not even start as these were under floodwater for a long time. They did this work for fifteen days, free of cost! What magnanimity? Don’t forget that the mechanics earn their bread on the day to day work they get in their shops.  

There have other groups who have also offered their services free. Some of these are doctors and nursesI always say that I do not bother about political affinities. But I must praise the volunteers of the RSS who rush to spots the moment they realise the need for support. Let us not forget that these people are like you and me. They are clerks, engineers, accountants, and maybe even vegetable vendors too! But they all come under the umbrella of RSS and take the lion’s share in helping people irrespective of the caste and creed!  

I would like to share two interesting news items. During Kerala floods, the UAE government had offered a massive amount of funds to India. It is because a large number of Keralites work in UAE. But the Indian Government politely declined the aid after thanking the UAE government, saying, “We have enough funds!” 

There is always a grouse that private organisations do not do much during disaster situations. Walmart has proven everybody wrong. When there was severe flooding in New Orleans, after the storm Katrina, for the first few hours, everything was paralysed. Before US government agencies could organise rescue operations, Walmart gave instructions to their New Orleans office to use whatever was needed from their stock in New Orleans, including small boats, to be allowed to be used for rescue. For the first two full days, only Walmart team were doing the rescue operations!  

Disasters will come and go, people will help, but I hope day by day the tendency to self-publicise will come down.  

 

 

 

 

 

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Deep Discounts or Deep Distress?

DeepDiscounts1

I am as usual caught in a conundrum when I read some stories. On the 15th of August National Restaurant Association of India (NRAI) launched a logout campaign against the deep discount coupons that are offered by these five aggregators Zomato, EazyDinerNearbuyMagicPin and DineoutSince then, more than 2300 restaurants across the country de-listed themselves from these food apps claiming that “discount structure, terms and conditions, by the food tech companies are unjust and unsustainable.” The president of NRAI said that to stay competitive in the market, some aggregators give discount of buy one and get one free. Others have done the same thing differently; they have straight away offered a 50% discount, which means the same.  

The story does not end here. On particular Gold Card membership, such discounts are allowed on one itemBut our desi brain works interestingly. The people go to restaurant A and take starters- 50% discount. They go to another restaurant to take drinks- buy two get two free! Finally, they go to the third restaurant and order the main course- buy one get one free! Using this method, they get the whole meal at 50% discount which kills the business.   

The worst part of the whole thing is that the discounts are being borne by the restaurants and not the aggregators. The association wants these discounts to be removed so that customers get used to not getting high discounts. It is a sort of detox action that is essential, according to the association. It appears that both the sides have understood the problems created by deep discounts and they also know that it will take some time to reach normalcy and come out of the deep discount issue.  

You and I are naturally going to be unhappy with these changes. We have to now look for happy hours or special days to get good discounts. Now, these changes are going to take my outflow back to normal, which I do not like. But we should not forget that such gimmicks never work in the long term.  

I always felt as if I am an uneducated person, though I have run a small business for more than 35 years. Giant organisations like Amazon and Flipkart have been in the deep discount game for quite some time. The difference is that they give deep discounts from their pocket. For years, they offer deep discounts, give Prime memberships and so on. They keep on investing billions of dollars for years. Amazon has never made profits in the last twenty years. But they continue to invest in the business to get more and more customers all the time. Uber CEO has recently made a statement that Uber may never make profits. What is the business model of such companies? Jeff Bozos has become “poor” when he settled his divorce, and his wealth is at lowly US $ 65/ billions. He bought some time back Washington post for an all-cash deal of US $ 250/ million.  

Uneducated me does not understand the principles used in these businesses. Uber charges higher rates when demand is up. But I have seen that as a routine, they charge about 10 to 15 % more than an Auto Riksha in Pune. The price difference between an Auto Riksha and a car can be three lacs of rupees. Many Rikshas give mileage about 1.5 times more than the cars. 

On top of that, Uber takes 30% of the amount we pay to the driver. To me, the driver may break even, Uber’s figures show that they make losses. Other than making vehicles available quickly to us, are they running a charity organisation? Is it not similar to deep discounts offered by Zomato or Amazon?  Or for that matter, Oyo?

Venture capitalists, angel investors, put in their money in such companies. Venture capital is defined as capital invested in a project in which there is a substantial element of risk, typically a new or expanding business. I am sure that those who invest in such companies expect reasonable returns on their capital. By what I have described above, there are no returns, then why are the investments continued? Where is the source for such unlimited funds?  

There is no doubt that Amazon, Uber, Zomato are market disruptors. They have shown the world a new way of doing business, which even 25 years back did not exist. New methods, new ways of doing things make a lot of difference in day to day life. Consider AirbnbThe concept is so good that it is helping people all over the worldIt reduces the cost of travel and uses people’s assets which have been remaining idle.  

Amazon, WalmartJio are gamechanging companies which have made a big difference in our lives. But they are making these changes with their own money or at the cost of competitors. They are disrupting the market and making their competitors think; I am sure the competitors will come up with even newer ideas.  

But this deep discount business with own money or someone else’s money is not sustainable business model. I am not surprised that NRAI has revolted against it. I was talking to someone about these aggregators. It was felt that the aggregators probably sell the data of their customers to make money! When companies like Facebook have done it, what will stop the aggregators from selling data!  

Ultimately, market disruptors come with ideas and business models which were never seen before. But one thing will never changeSuch organisations have to make profits at some stage. Unless, of course, you are an Amazon or an Uber. But don’t forget that Amazon is the market leader in Cloud Computing business; so as a group, they make profitsBecoming Unicorn company (market value exceeding One Billion US $) is fine for publicity; it will help companies get more VC fundingBut if they don’t start making profits, such companies fall in the group of 95 % plus companies, which close down sometimes even without a whimper.