Raju's 'social' orphan learns to manage on its own

Byrraju Foundation, the non-governmental organisation set up by Satyam Computer Services founder B Ramalinga Raju and his family, was left orphaned in January 2009.

That was when the chairman of the information technology outsourcing company (then the country's fourth-largest IT exporter) confessed to fudging the company's accounts for several years and the funding from the family ceased to flow in.

However, the NGO, set up in the memory of Raju's father Byrraju Satyanarayana Raju in July 2001, got over many a problem and has become an almost self-sufficient organisation.

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Byrraju's lead partner Verghese Jacob talks about the NGO's turnaround journey: "We did four-five things to make Byrraju more or less self-sustaining.

"One, for our healthcare programme, which accounts for 60 per cent of our expenses, we had found a partner in CARE Foundation. It is investing about Rs 1.5 crore a year to run this programme in 150 villages of Andhra Pradesh."
In the last two years, Raju, who is currently cooling his heels behind bars since September 2009, lost all of his 'pet' projects.

The first to go under the hammer was his bits and bytes business Satyam Computer Services, which was took over by Tech Mahindra in April 2009.

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This was followed by the taking over of the 108 ambulance service, Emergency Management and Research Institute, by GVK Group in June 2009, and Maytas Infras and Maytas Properties -- companies promoted by Raju's family members -- going into the fold of infrastructure finance company IL&FS in September 2009 and January 2011, respectively.

Earlier, Raju's last castle, Byrraju Foundation, received half of its annual funds from his family members.

"We used to get about Rs 1 crore (Rs 10 million) a month from the Raju family to run almost 45 services in 200 villages.

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"But, for the last 24 months (since the scam was uncovered), we received nothing from them. Hence, we have decided what needs to be continued and what needs to be discontinued for a while," says Jacob.

Putting an end to long-term activities like research and training, Byrraju Foundation zeroed in on core programmes like health, drinking water, education and livelihood.

The finance minister's mandate (as part of his Budget speech last year) -- that any commercial activity should not be part of an NGO's programme -- also forced the foundation to spin off some of its programmes into separate entities.

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"The Budget speech talked about NGOs that were mixing commercial activities with social sector programmes. So, we decided to spin off our GramIT (rural business process outsourcing units) into a separate entity. All the four BPO centres -- one each in Jallikakinada, Kazipally, Athreyapuram and Ethakota -- are running successfully.

In fact, an American company bought into that BPO operations (except the unit in Ethakota, which was bought by the Tatas eight months ago) and named it eGramIT," Jacob adds.
The foundation had so far invested Rs 2.4 crore (Rs 24 million) in the BPO division.

It got back Rs 1.7 crore (Rs 17 million) through the sale. It formed a corpus out of this fund to run its other social service initiatives.

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But, how is the foundation managing to run its operations with this corpus?

Jacob says its 57 water treatment plants in 150 villages have been generating surplus to the tune of Rs 400,000 a month, which is sufficient for it to carry out its activities continuously for the next five years, without any external funding.
The foundation has considerably reduced its staff on its campus in the outskirts of the city.

"The Raju family has donated the land, besides constructing the building. Of the 30,000 sq ft, almost 25,000 sq ft of office space is now available for us to rent out, if we want to earn additional revenues. We are waiting for a suitable tenant whose objectives coincide with ours," Jacob says.

According to him, Raju and his family had invested almost Rs 60 crore (Rs 600 million) in the land over eight years and they always had the option to sell the foundation to some other funder.

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Their intention, however, is not that, as this was done with a noble purpose, he adds.

Jacob says that the fraud at Satyam had not adversely affected the running of the foundation, and, it is a matter of time to remove the malice.

"It cannot happen immediately. It will certainly take at least four-five years. . . till the Satyam trial is over."

"Theoretically speaking, this (Byrraju Foundation) should have been the first to close down, as it was 100 per cent funded by the Raju family. And, the funding stopped abruptly all of a sudden.

"From that stage to making sure that the programmes continue has taken a lot of personal sacrifice from our staff. The spirit was not to disappoint the communities," Jacob says.