HDFC debt fund for cancer cure — mixing finance with philanthrophy

HDFC Mutual Fund, mutual fund company of HDFC fund has launched an interesting mutual fund product – HDFC debt fund for cancer cure. The product mixes finance/mutual fund management with philanthropy.

The scheme idea is:

  • It will take money from investors and issue mutual fund units to them
  • The money would be invested purely in debt markets (80-100% money market and 0-20% in Government bond market)
  • The idea would be to protect the capital and hence it is a capital protection fund
  • It is close ended for 3 years, means one cannot withdraw till 3 years
  • The dividends earned from the scheme would be passed to Indian Cancer society. The investors can choose whether to send half or full dividend amount to the society.

Deepak Parekh of HDFC says it could bring companies who want to give but do not have the people to manage it:

Parekh feels that individuals, trusts as well as companies to move towards such philanthropic initiatives, and this innovative fund is one such step. “We know most of the top companies, like which are ranked 1-25, do philanthropic works on their own. But what about companies which are, say between 26 and 100, who cannot afford to have dedicated staff for such works?” Parekh said. He feels this fund could be a vehicle for such companies to give back to society. “We have worked with Sebi for this plan, and we hope to go back to the regulator to come out with many such plans,” Parekh added.

Further, prospectus reveals more details:

The genesis of the idea of launching HDFC Debt Fund for Cancer Cure in association with Indian Cancer Society is to provide financial assistance to the needy cancer patients for their treatment by tapping those investors who would be willing to donate part of the dividend or entire dividend declared, if any, under the Scheme for this purpose. The money raised through donation of dividend income by Unit holders of “HDFC Debt Fund for Cancer Cure” would be  utilized by ICS for the following purpose:

  • Fund the  treatment costs of needy and under-privileged cancer patients in established hospitals.
  • Provide medically recommended food and nutritional support to the cancer patients undergoing treatment.
  • Meet direct expenses of carrying out the above activities, limited to 5% of the total donations.

Providing financial aid for cancer treatment is the most critical need of the underprivileged part of the society, which ICS currently trives to fulfill in a limited way. There are approximately 400 cancer patients every year that come to ICS, Mumbai alone for financial ssistance for their treatment, which on an average would cost them R 2 lacs each. ICS presently with its limited resources, is able to fund only Rs 0 – 10,000 to each of these patients.

These patients, therefore, go from door to door trying to collect the balance unds. Their efforts are seldom successful and as a result, their continuous treatment and survival becomes extremely difficult. The donation received from Unit holders would directly go to fund the treatment cost of a cancer patient and thereby provide a new hope and life to an individual suffering from this disease.

There is also a tax incentive:

The Unit holder shall be eligible to receive deduction under Section 80G of the Income-tax Act, 1961 on the amount of donation made to ICS from the dividends declared under the Scheme. For more details refer to section ‘Eligibility for claiming Deduction under Section 80G of Income-tax Act, 1961’ on Page No. 39 of the Scheme Information Document (SID).

Superb idea. Will be interesting to see its corpus size. Will throw some light into whether philanthropy can be made to work in India.

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3 Responses to “HDFC debt fund for cancer cure — mixing finance with philanthrophy”

  1. Tata Jagriti Yatra….what an initiative « Mostly Economics Says:

    […] these developments, it is no wonder employees in Tatas feel differently for their company. Even the Cancer society is one of their many such […]

  2. Bipin Chandarana Says:

    The thought & idea behind starting such scheme is good. But what is differance between the donation chanalised through this fund & the same made directly to the receipient society. One can directly send donation to any of such institutions of his/her own choice.

  3. Mutual Funds Says:

    Love your site very informative information.

    Ben

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