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The opposite of greed

Resource type: News

Financial Mail | [ View Original Source (opens in new window) ]

By Carol Paton.  Jay Naidoo, co-founder of investment holding company J&J Group, has given away a third of his wealth to charitable causes — echoing the “giving campaign” of US billionaires Warren Buffett and Bill Gates.

Naidoo, who with fellow former trade unionist Jayendra Naidoo, started the company in 2000 after the two quit politics, has sold a third of his shares and donated the proceeds to two charitable trusts.

He has also resigned his executive role and will serve as a non executive director, leaving him free to concentrate on local and international good causes.

Another third of his shareholding will be used to pay his salary for the rest of his life and he has set a third aside to be used as vendor financing to bring new investors into J&J.

“I’ve completely withdrawn from business,” Naidoo says. “I always maintained that as soon as I could pay my salary, I would go back to what gets me up in the morning.

“I don’t aspire to any position, I don’t want to have any business interests. I want to promote the idea of volunteerism.”

Naidoo serves on the Gates Foundation Global Health Advisory Panel and is chairman of the Global Alliance for Improved Nutrition, a Swiss foundation that aims to combat malnutrition, also supported by the Bill and Melinda Gates Foundation.

Though he says his giving can’t be compared in scale with that of Gates and Buffett, whom he has never met, he says he wants to start a debate among SA business people on “how much is enough?”.

“When do you decide that it is time to give back?” he asks. “It’s very important from a business point of view. The motivation is to accumulate, accumulate. But what do people want to do with all that money?

“Close to 1,1bn people are hungry. Yet we have the technology, the science and the knowledge to feed them all.”

This doesn’t mean that business plays no positive role in development. “It’s also my firm conviction that there is a role for business and a role for social development. There is a convergence between what Jayendra is doing and what I am doing. We all want a sustainable economy,” says Naidoo.

Unlike US billionaires who discovered philanthropy after making their money, Naidoo — the first general secretary of Cosatu and a former cabinet minister — has spent most of his life motivated by the ideal of social justice. He’s impressed with the Buffett-Gates giving campaign because it goes beyond corporate social responsibility programmes that “keep our consciences satisfied”.

“Corporate social responsibility is not enough,” Naidoo says. “What we need is for every business person to be a leader and leadership should be at every level.

“There is a growing global movement of wealthy people who realise that it is not sufficient for them to just make money and who are committed to giving not just money, but time, towards the objectives of, for instance, eradicating disease and strengthening health care.”

The giving campaign was initiated by Bill and Melinda Gates and Buffett a year ago. They invited philanthropic-minded members of the US super-rich to a series of dinners at which they shared their ideal that the wealthy dramatically step up the amounts they donate.

Starting with the Forbes list of the wealthiest 400 Americans, they are committed to getting individuals to pledge at least 50% of their net worth to charity during their lifetimes or at death.

So far, 38 US billionaires have signed up, pledging US$115bn. They include banker David Rockefeller ; founder of business software giant Oracle, Larry Ellison; New York mayor Michael Bloomberg, the billionaire founder of Bloomberg ; hotel heir Barron Hilton; CNN founder Ted Turner; and film director George Lucas.

The movement has prompted the adoption of a new term — “philanthrocapitalism” — because of the scale of money involved.

The Gates Foundation had, before the giving campaign, amassed $3bn/ year, mostly contributions made by Gates and Buffett. Naidoo says the work of the foundation has “gone beyond philanthropy, into social development”.

“My policy is I work with anyone who wants to save lives and fight poverty,” he says. “I find that the Gates Foundation is playing an important role in dealing with the public health challenges that face the poor. I want to be there and influence what happens with philanthropists like that … we must be able to work in environments where not everybody thinks the same.”

Naidoo’s statements in recent weeks, made at the launches of his autobiography , are clearly intended to provoke SA’s new elite into self-reflection. Some of SA’s richest families have a tradition of philanthropy. But the evolution of a “predatory elite”, which includes gatekeepers who buy and sell government tenders, business people who steal licences and corporations that collude on prices, poses a serious threat to democracy.

“The twin evils of greed and entitlement are destroying us,” Naidoo says. “This is something we have to confront. It really disturbs me when I see the way that greed has gripped our society. That is the kind of discussion we should have as a country.”

Business, in particular, needs to speak out about corruption.

“Corruption can destroy the industrial capacity of our country. Because if a good company that employs people consistently fails to get a contract because it refuses to pay a bribe or is not politically connected, that company will close.

“The shoddy houses and the roads that get washed away after one rain will become the norm. This is not just about corrupt individuals, it’s about destroying our country. If we don’t take a stand against that, we will be destroying ourselves.”

Naidoo says he doesn’t want a job or a position in politics, but intends to speak up as an independent and critical voice. The main reason for his decision to quit an active role in business was to ensure he has no conflicts of interest.

But unlike other independent voices in the business sphere — former AngloGold CEO Bobby Godsell and former World Bank MD Mamphela Ramphele — with whom he shares a similar outlook, Naidoo is an ANC insider whose outspokenness will not easily be dismissed.

Two trusts will be the beneficiaries of Naidoo’s giving: the Jay & Jay Group Development Trust, which was established several years ago and supports education and skills initiatives and promotes entrepreneurial models of development; and the Angamma Charitable Trust, named after his grandmother.

Since the two Naidoos founded their company 10 years ago, they have significantly diluted their ownership, bringing in institutional and broad-based empowerment and community investors. The group has interests in the ICT, financial, infrastructure and health sectors.

Naidoo says he has been selling down over the past few years to raise funding for the trusts, and to return to his life of activism. 


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