India's second-most-valued company, Tata Consultancy Services (TCS), has planned to contribute a considerable portion of the firm's corporate social responsibility (CSR) fund to Tata Trusts, the Economic Times reported on Friday.
Tata Trust is a philanthropic organisation that owns a majority stake in the group holding firm.
The country's biggest software exporter is the first Tata company to considering such a move, which in line with former chairman Ratan Tata's idea to unify the parent company's philanthropic programme into one. Earlier Chairman N Chandrasekaran had also advocated for a "One Tata" approach.
The 79-year-old industry veteran, Ratan Tata, wants Tata Trusts to work with the group companies on social development goals for "one powerful set of initiatives", changing the path of how CSR is used worked in Tata Group under ousted chairman Cyrus Mistry, where companies underwent their individual CSR roadmaps, often different from that of Tata Trusts.
A source familiar with the development told ET that the rationale of this move is to leverage the company's spending in a better way and work on bigger projects.
"We are working out the details. We are discussing how much of TCS corporate social responsibility spend will be given away to Tata Trusts' initiatives and for how long," the source said.
Currently, Ratan Tata chairs Tata Trusts — a cluster of 14 charity organisations. Tata Sons works on different social welfare projects: mostly in education, healthcare, livelihood and sanitation.
The philanthropic organisation spent around Rs 808 crore in the financial year 2016. Contributions from different Tata companies to Tata Sons will help create a larger fund pool.
According to the government directive, every year private companies have to spend a minimum of 2 percent of the net profit of their three preceding financial years on CSR activities.
Ratan Tata recently wrote in the company's in-house magazine: "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."
