Tata Trusts is reportedly initiating an internal restructuring effort aimed at streamlining operational and management costs, according to a report from The Economic Times citing sources familiar with the situation.
The report further reveals that as part of the restructuring, the roles of chief financial officer (CFO) and chief operating officer (COO) are being eliminated, along with a reduced reliance on external consultants. Sources indicated in the report that this cost-cutting initiative began well before the appointment of new Trusts chairman Noel Tata.
The decision comes after the trustees' internal audit and financial review revealed a substantial increase in staffing costs, estimated at approximately Rs 180 crore. Additional expenses associated with direct implementation projects raised the total workforce cost to Rs 400 crore in the years leading up to 2022, according to sources in the report.
Direct implementation projects—carried out by the trust through contractors as part of its donations—will also be significantly minimised and only undertaken to meet essential obligations, sources noted in the report.
Chief Executive Siddharth Sharma is implementing checks and balances to enhance governance, ensuring that the process is continuously monitored, states the report.
Tata Trusts seeks to streamline management roles to allocate resources better toward its core philanthropic missions while reducing administrative overhead. The organisation is expected to depend more on a leaner executive committee for decision-making and governance.
Tata Trust is yet to respond to the report.
“A trust is supposed to operate like a servant of the public. We have to be true custodians of the money and property within the trusts,” remarked one source in the report. “The charity is for the public at large and not for its own staff. We don’t need ceremonial posts at high costs and, hence, proper checks and controls are being put in place.” Tata Trusts is equipped with senior finance experts and internal talent to ensure smooth operations and effective account management, the sources said in the report.
Anand Desai, managing partner at DSK Legal, emphasised that while the size and scale of operations may necessitate operational costs, including senior staff, cost-consciousness is vital for philanthropic organisations.
“Organisations that benefit from such philanthropy can be made accountable through documentation, with appropriate oversight by the board and employees of the Trust. Cost pooling is also a method often used, and domain experts can also selectively add to efficiencies,” Desai said in the report.