Narayana Murthy gives to Charity

Q: We hear you've become quite a philanthropist, that you're making large donations with money from sales of your personal Infosys stock. Can you tell us about the money you're giving away?
A: I'm somewhat reticent talking about it. I'd be happier skipping to another topic.
Q: Can you give us an idea of how much it is? Millions? Tens of millions?
A: Well, more, but let me not talk about it. These are topics that are best not discussed. They're best done. (Note: I made the 'Well, more' part bold.)
- N.R. Narayana Murthy in an interview in New York with BusinessWeek editors including International Managing Editor Bob Dowling, Assistant International Managing Editor Christopher Power, and Asia Editor Sheri Prasso. (published in its July 19, 2000 issue)

While he earns the money, I spend it, mostly through the charity. - N.R. Narayana Murthy's wife Sudha Murthy in a much circulated article.

Murthys and Charity

Earnings vs Wealth

What percent of their wealth they give to charity is a better indicator of people's generosity than percent of their income. For example, Google's cofounders are giving themselves US dollar 1 (45 rupees) annual salary; Steve Jobs of Apple computer is getting paid similar amount. (Rest of thousands of crores of rupees they are getting paid or already have in stocks.) Does this mean that when they spend 45 rupees a year on charity, they are great philanthropists because they are giving away 100 percent of their earnings? Of course, not.

Narayan Murthy and Sudha Murthy's Income

Sudha Murthy's income (about 50-60 thousand rupees) is spent on their household expenses. Since Infosys is a public company listed on NASDAQ, Narayana Murthy's income is publicly available. It is around USD 50,000 per annum - or about 23 lakhs rupees. Since Mr. Murthy seems to travel a lot abroad, assuming most of it on his own money, I don't expect much savings there. Even if I give him benefit of doubt and assume that all of his earnings is spent on philanthropy - 25 lakhs rupees a year, while a big amount for most of us, is small change for a family like Murthy's with wealth of about 4,000 crore rupees (in form of Infosys shares) at the end of 2004. To put it in proper perspective, just the tuition for their son Rohan Murthy at Cornell (13 lakhs each year) and their daughter Akshata for Stanford MBA (18 lakhs each year ) add up to 31 lakh rupees each year - more than Mr. Murthy's yearly income. Therefore, I will concentrate on Narayan and Sudha Murthy's wealth in form of Infosys shares and see how they have contributed to charity.

Murthy's Wealth

At the end of 2004, N.R. Narayana Murthy held about 20 lakh shares of Infosys, while his wife held 58 lakh share, resulting in a market value wealth of about 1,700 crore rupees. (Akshata Murthy and Rohan Murthy held 50 lakh shares of Infosys each for a total wealth of about 2,200 crore rupees but I will exclude them from my calculations.)

Note: PDF Files: Infosys Share Holdings towards the bottom of page containing small files for each quarter is the main reference for years 2004, 2003, 2002 and 2001.

Murthy Charity in 2005

April 20, 2005. By the end of March 2005, Narayana Murthy and Sudha Murthy haven't sold a single share from their Infosys holding of about 80,00,000 shares at the end of December 2004, leading me to conclude that the Murthy couple plans to do the same in 2005 what it did in 2004 - that is give more speeches for publicity while doing almost nothing for the poor.

Murthys' Charity in 2004 from Infosys Shares

N.R. Narayana Murthy's Infosys Share Holding:

End of December 2004: 19,87,840
September 2004: 19,87,840
June 2004: 19,87,840 (=4 times 4,96,960 for 4:1 stock split)
March 2004: 19,87,840 (=4 times 4,96,960)
December 2003: 19,87,840 (=4 times 4,96,960)

Sudha Murthy's Infosys Share Holding:

December 2004: 58,18,740
September 2004: 58,18,740
June 2004: 58,18,740 (=4 times 14,54,685)
March 2004: 58,18,740 (=4 times 14,54,685)
December 2003: 58,18,740 (=4 times 14,54,685)

Conclusion: In entire 2004, Narayana and Sudha Murthy contributed zero (0) rupees to charity from any partial sale of their over 1,700 crore rupees wealth in Infosys shares .

Murthys' Charity in 2003 from Infosys Shares

N.R. Narayana Murthy's Infosys Share Holding:

End of December 2003: 4,96,960
September 2003: 4,96,960
June 2003: 5,27,900
March 2003: 5,27,900
December 2002: 5,27,900

Sudha Murthy's Infosys Share Holding:

December 2003: 14,54,685
September 2003: 14,58,685
June 2003: 15,495,000
March 2003: 15,495,000
December 2002: 15,495,000

Murthys did shed a few Infosys shares this year. M.R. Naranyana Murthy reduced his holding by 30,940 shares (5,27,900 - 4,96,960) and Sudha Murthy by 94,815 shares (15,49,500 - 14,54,685). All but 4,000 of this reduction in holding happened in the July to September 2003 period. Share prices on post-split basis varied from about Rs. 800 to Rs 1100 during July to September with still lower prices just prior to this period. In terms of prices prevailing during that period, it comes to about Rs. 3,200 to Rs. 4,400 per share since split ratio in July 2004 was 4 to 1.

Assuming average selling price of about Rs. 3,600, Mr. Murthy reduced his holdings by about 11 crore rupees, and Mrs. Murthy by about 34 crore rupees. How this money was spent, we are not certain. Was it used to help out relatives who surely must be expecting a lot from this couple, or was it spent on educational institutions like the IIT Kanpur, with which Mr. Narayana Murthy has in past and present associated a lot?

IIT Kanpur, IIT Bombay, Cornell?

Thanks to Vinod Khosla's gift of about 25 crore rupees to IIT Delhi, Narayan Murthy might have had to at least match it in order not to be overshadowed by him. We have read about 25 crore rupees gifted by Mr. Murthy to IIT Kanapur with great fanfare. As Times of India reported: Mr murthy clearly stated, 'money is not the constraint...take as much money as you want from me...but give all kinds of standard facilities to the students here in my institute.' Mr murthy said that he was desirous of seeing a separate telephone connection for each student in his hostel room so that communication was no hindrance. (My guess is that 'the objective is to make sure our institutions of higher learning regain their glory of the '60s and '70s' as told by Murthy to the BusinessWeek in 2000.)

Two other pieces of news caught my eyes. One was the on August 8, 2003, IIT Bombay conferred a Degree of Doctor of Science (Honoris Causa) to him and the citation read by the director of IIT Bombay 'portrayed him as the leader of one of the most successful business ventures of the country, an entrepreneur, a visionary, and a philanthropist.' An article on IIT Bombay's website went on to praise him by stating: He is also a champion of quality, ethical business practices, as well as social commitment, which has earned the respect and admiration of all sections of the community, in India and all over the world. What is the current market rate for a Degree of Doctor of Science (Honoris Causa) from IIT Mumbai, anybody knows?

In the second piece of news, Cornell university mentioned that Keshav K. Pingali, a computer science professor was elected as the India Professor of Computer Science, effective July 1, 2003. It also mentioned that 'he (Keshav Pingali) is the first person to hold the chair, which has been endowed by an anonymous benefactor of Cornell in India.' Has Murthy something to do with this annonymous donor. (For those of you who don't know Murthy was elected trustee of Cornell and his son got admission to its computer science program. By the way a typical endowment of such kind should cost about 10 crore rupees.) Also 'Pingali earned a bachelor of technology degree from the Indian Institute of Technology in Kanpur, India, in 1978.

How much did Narayan Murthy Give in 2003, 2004

During the entire years 2003 and 2004, except for a few crore rupees that Murthy might have been obligated to pay to academic institutions for things like providing separate telephones connection to students at IITK, there is no evidence that he (or even his wife Sudha Murthy) contributed any significant money to charities for poor people that really needed their money. But those poor people cannot write software, and cannot give back anything to the Murthys except their gratitudes. And who needs that?

What about during earlier periods?

Narayan Murthy hinted (with modesty) to BusinessWeek editors that he has given more than tens of millions they were suggestings. 10 million dollars is about 44 crore rupees - tens of millions is multiple of that - say 100 crore rupees. Did he contribute that much to places like the IIT Kanpur prior to that interview? I doubt very much based on his recent past, their nature of publicizing even very small amounts of giving, and the fact that it is very difficult to hide a large multi-crore rupees gift at places like IIT Kanpur. There is no record of large gifts by 'annonymous donors' there. At Cornell university, it is a different matter, if Murthy gave any such gifts or plans to give in future. Discreetly, of course.

A few well-known quotes:

I have always said that the real power of money is the power to give it away. - Narayan Murthy

The vast majority still does not have freedom from hunger, from disease and from illiteracy. Our adult literacy is only 58 percent, 26 percent of the population lives below the poverty line, 24 percent of Indians are under nourished, we have been ranked 127th out of 175 nations in the human development index. Clearly my young friends, we have a long way to go. - Narayana Murthy in a speech at IIT Bombay

I come from a religious family where education is important, money is not; charity is important, holding is not... - Sudha Murthy

I take pleasure in giving. I feel that I have a reasonably good amount of money for all of which I don't have much use. So I thought I should share it with my poorer countrymen . - Sudha Murthy, wife of Infosys' Narayana Murthy

And then JRD turned almost a soothsayer to say, 'If you make lots of money you must give it back to society as you have received so much love from it.' - Sudha Murthy

I am trustee of this money and not the owner. I always thought this money belongs to someone else. The money goes to someone else. - Sudha Murthy

A few internal links

Sudha Murthy and Infosys Foundation

Cornell loves Narayana Murthy (Infosys)

Narayana Murthy starts Infosys on 10,000 rupees!

Narayan Murthy was too poor to attend IIT after clearing IIT-JEE with fairly high rank

Nandan Nilekani - IIT Bombay days

People >
Narayana Murthy >

Well, more, but let me not talk about it. These are topics that are best not discussed. They're best done. _ Narayana Murthy telling BusinessWeek in 2000 that he had spent more than 'tens of millions' of US dollars (50 crore rupees +) on charity.

(Last Updated: April 12, 2005)

Reform IIT