Acknowledgement


Session 4 : Diaspora and International Philanthropy



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Session 4 : Diaspora and International Philanthropy

Presentation by Dirk Eilinghoff, Bertelsmann Foundation, Germany
The study of philanthropy in Europe has not been as extensive as in the United States, where the project by the Kennedy School of Government is seen as a landmark study. The Bertelsmann Foundation is one example of foundation philanthropy in Europe. A study done at the end of the 1990s noted that there were 100,000 foundations in Europe, although some just give to family members. Another half a million limited companies and half a million charitable associations engage in philanthropic work. Eighty per cent of foundations do not have professional staff. As there is very little research done on philanthropy in Europe and there is no university research institute on this subject, there are few benchmarks, and standards for reference for this activity.
Bertelsmann Foundation has some features in common with foundations in Europe. Some foundations only make grants, but about two-thirds have an operating division, which spends money generating their own projects.
Most foundations do not work internationally, and are restricted to local causes. Bertelsmann Foundation works with a fairly limited number of institutions, mostly European. In Europe, most foundations have a link to a parent company.
Bertelsmann Foundation has 55% non-voting stock in Bertelsmann AG, the family owns 20%, and outside investors, 25%. The Foundation is not allowed to run the company.
A study done on the effectiveness of philanthropic foundations in Europe drew on 55 experts in 25 countries and resulted in a publication for which people in Bertelsmann Foundation’s network wrote the articles. The study made the observation that after 45 years of philanthropic work by the Foundation, there were no final answers to the challenges that were being addressed.
It should be noted that the corporate sector is more homogenous than the foundation sector. It has been said that if you know one foundation, you know one foundation. In view of its global business, the foundation wanted to have an international network, drawing on its pool of contacts to find additional experts in different regions, including Michael Liffman in Australia, and others in Brazil, etc.
Discussion:

  • Diaspora philanthropy became a topic of discussion just five years ago. The discussion is still on-going, as not even the term is agreed upon. A more definitive term is being sought. The common understanding is that it refers to a group originating from one country that is supporting people in their home country, as stated in the Kennedy School of Government study.




  • A paper on diaspora philanthropy provides a definition of diaspora as people who still have contact with communities from which they have originated. Examples include the Mexican community in the US, sending remittances to Mexico, or Chinese in the US giving to causes in China. At the root of this activity is a sense of attachment to the country of their origin.




  • Diaspora remittances amounted to US$80 billion in 2002, according to the World Bank, reflecting the importance of this movement. This is a substantial amount, and in some countries, it is comparable to FDI and private lending. This provides a stable fiscal environment for some receiving countries.




  • The significance of diaspora philanthropy for NGOs in receiving countries has not been researched well. There are legal and taxation issues, such as double taxation. But even in the EU the rules are not clear. Sometimes, local governments can suddenly impose taxes on donations. It can sometimes become a political issue, e.g. if you support human rights in a country where the government does not support these rights. The other issue is that it is not clear whether money sent home to families is part of diaspora philanthropy.




  • Preliminary research by Universiti Sains Malaysia on the philanthropy phenomenon showed that during the colonial period, Chinese and Indians raised money for causes in their countries of origin. Migrant workers in Malaysia and elsewhere save up for investing in businesses in their home countries.




  • In Indonesia it is common to raise money from the community for religious purposes. But it is more difficult to collect funds for issues like human rights, consumer rights, etc. It is the same in Germany and other countries. It is not easy to raise money for such things as human rights, but easier to save an opera house or community facilities.




  • On the other hand, foundations like NOVIB in the Netherlands, etc support human rights in the developing world, using taxpayers’ money. The public do not object to this, in fact, support such causes. Some 8 to 9 percent of the tax goes to churches, which they contribute to causes.





Dinner Presentation: Whose Earth is This Anyway?

By Sri Ganesh Gopal, Manager, Corporate Affairs Policy and Planning, PETRONAS, Malaysia
The dinner presentation was focused on the philanthropic activities of Malaysia’s national oil company, PETRONAS. Established 31 years ago, this company has a presence in around 30 countries in the world. PETRONAS, which is also a Fortune 500 company, believes that natural resources of oil and gas are entrusted to it for the benefit of the people. It believes its profits must be shared with the people. The philanthropic activities have a social objective and go beyond charity.
The company invests in building the human and social capital in the countries where its businesses are located. Its investments in education, economic and social opportunities are for the long-term. Further as a responsible corporate citizen, PETRONAS adopts healthy, safe and environmentally benign management practices.
PETRONAS also contributes to culture and the arts, such as support for the Malaysian Philharmonic Orchestra. “Prosper thy neighbour” is the PETRONAS principles for ventures in host countries. This means that it contributes to socio-economic development in countries like Vietnam, Sudan and South Africa.
The presentation was ended with a poem entitled Whose Earth is This?



Whose earth is this anyway?

These rivers of sand so eager to escape my fingers,

When they fall and form the land…

Can I really call this sea of soil mine?

Can the ground that has seen a million years,

belong to someone who has barely seen seventy?

If I call this earth mine, why is that when I go,

I will not take it with me, but instead, it will take me?

Whose earth is this anyway? Who is the ultimate master?

O Lord of the universe, Your earth will never be mine,

But give me leave to take from its whispering rivers, its silent oceans,

its temperamental sky, its intemperate people, its impalpable energy…

And give me the wisdom not just to take but also to give

With integrity, humility and compassion

my industry and the fruits of its labour

The energy I receive

With energy I must return.

May others aspire to do the same

May others ask the question

Which has long since answered itself…
Whose earth is this anyway?





Source: Whose earth is this? The essence of PETRONAS (2001)



Session 1 : Corporate Philanthropy and Social Responsibility

By Yazdi Jehangir Bankwala, Director, Arpitha Associates
A key objective of this presentation is to show how corporate language has begun to reflect the case for a values-based business approach to ensure well-rounded and sustainable growth.

Examples of current trends in ethical business conduct, reflected in the mass media, are:



  • A dispute between Indonesia and Singapore about sand mining arising out of the official condoning of unsanctioned extraction. (Fortune magazine, Sept 16, 2002)

  • Public-listed company Chartered Semiconductor allegedly misleading investors that it did not need to raise funds shortly before announcing a rights issue for that very purpose. This caused small investors to lose money.

  • Ethical Corporation magazine, published to provide information about corporate social responsibility practices.

  • A Malaysian Business magazine cover story focusing on unresolved issues in corporate governance.

  • A global survey of 60 companies showing that corporations see graft as a greater risk than terrorism, according to the Economist Intelligence Unit.

  • Three officials of a pilgrimage fund run by the Malaysian government being charged with cheating the board of over Ringgit Malaysia (RM) 400 million (US$107 million) in 2000.

  • Transparency International Malaysia awarding National Integrity Medals to three long-departed public figures as a message to Malaysians on the high standards of ethical behaviour demonstrated by these recipients (implying the lack of candidates currently in the public arena).

  • Global indexes for fund managers using investment criteria like economic freedom, global competitiveness, legal framework, business environment, standard of corporate governance, justice system and level of corruption.

  • A report on corporate governance that rated Malaysian companies saying that in five years from 1997 to 2001, the public listed companies it surveyed fell by 40% in its assessment

  • Management trends in progressive organisations including: corporate governance, corporate social responsibility, balanced score card, social accountability 8000, triple bottom line (profit-people-planet), ethics (ethical investing, SRI), culture, values, stakeholders, in the European Union (finance - limited liability)

  • A study by Social Investment Forum in 1997 showing that over US$1.2 trillion is invested using some social criteria and 9% of professionally managed funds were assets in socially responsible portfolios.

  • Financial Market Trends: From its inception in 1990 till end 1998, the DOMINI 400 Social Index has outpaced the S&P 500 with a total return of 442% compared with 336% with S&P index. (Source: Investing with your Values, Feigeub B & B)

  • The emergence of new methods of measuring employee fulfillment. Employee fulfillment occurs when the culture of an organisation supports individuals’ physical, emotional, mental and spiritual needs.



  • Profiles of 100 Best Companies To Work For, which show that outstanding performance is closely linked to high morale and employee fulfillment. The Average Annual Shareholder Returns over 10 years show that the 100 Best earned 23% for shareholders, while The Russell 3000 showed 14%. Source: Fortune Magazine, January 1998

  • The evolution of Business Paradigms is postulated as: Agrarian Age, Industrial Age (Quality and Skilled Labor), Information Age (Intellectual Capital), and Consciousness Age (Cultural Capital).

  • “Spirituality and Ethics in Management”, published 2004, indicates growing focus on this area of study.

  • Survival in the 21st Century: Who you are and What you stand for are becoming just as important as What you sell.

The two routes to Corporate Governance:








Practical Approach

Reflective Approach

Basis

Economic Rationality

Who are we ... what we stand for

Focus

External - Corporate Image

Internal - what we want to be

Goals

Shareholder Value

Stakeholder Value

Instruments

Stakeholders

Profits (a means to serve)

Attitude

Defensive/reactive

Proactive (as serving)

Promoted by

Public relations experts, management

consultants



Visionary Leaders & spiritual seekers

Pressure from

NGOs, Media, employees

The voice within

Tools

Public relations, advertising, surveys

Dialogue, social & ethical accounting, reflection practices

Source: Prof Dr Peter Pruzan, Copenhagen Business School
According to Prof Dr Peter Pruzan, the Reflective approach need not be in opposition to the Practical approach. The Reflective approach is supportive of the Practical but not vise versa. The question that arises is what is the current state of ethical business practices?
Another opinion that sheds light on this is given by Peter Drucker: “Whether a business should run for short term results or with a focus on the long term is a question of values. This is … not a disagreement about economics. It is fundamentally a value conflict regarding the function of a business and the responsibility of management.” (Peter Drucker, Harvard Business Review, March-April 1999)

In “Built to Last”, by J Collins & I Porras, a survey on practices of Visionary Companies found that: “Visionary companies articulated a core ideology defined as: Consistency of Core Values and Purpose”. This validates the ethical approach to business.


More corroboration is found in a survey of corporate headhunters:
The Characteristics Organizations look for in their Managers:

  1. Strategic Vision

  2. Excellent people skills

  3. Knowledge of Market needs

  4. Innovativeness/openness to new ideas

  5. Good understanding of technology

  6. International Knowledge

  7. Honesty and Integrity

  8. Management Experience

  9. Functional Knowledge of Business

  10. Deal making ability

  11. Communication Skills

  12. Financial knowledge

  13. Management education

  14. Other

(60% of respondents – the highest score – said “honesty and integrity” were critical in selecting people for managerial positions, followed by 50% each for “excellent people skills” and “communications skills”.)

Source: Economist Intelligence Unit, March 2005
In the Malaysian context, integrity has become a national issue that has been championed by the new Prime Minister Abdullah Ahmad Badawi. The government’s National Integrity Plan sets a 5-year target 2004-2008. The targets include: enhancing corporate management and business ethics, conducting research and education and training pertaining to integrity
Do business ethics pay? The following examples provide some answers:

  • In a sample of FTSE 350 firms, “ethical” companies outperformed those which made no such claims on three out of four financial measures (market value added [MVA], economic value added [EVA] and price/earnings ratio).




  • Between 1997 and 2001, “there is strong indicative evidence that large UK companies with codes of business ethics/conduct produced an above-average performance when measured against a similar group without codes”.




  • A report by the UK’s Institute of Business Ethics (IBE) claims to have added substantially to the evidence that virtue pays.

A historical example from the East is illuminating. The founder of the TATA Group of Companies Jamsetji Tata said in “The Creation of Wealth”, 1895: “We do not claim to be more unselfish, more generous or more philanthropic than other people. But we think we started on sound and straightforward business principles, considering the interests of the shareholders our own, and the health and welfare of the employees the sure foundation of our prosperity.”


Some TATA firsts in welfare:


 

Introduced by TATA

Enforced by Law

8-hour working day

1912

1948

Free medical aid

1915

1948

Committee for complaints service

1919

1947

Provident fund

1920

1952

Leave with pay

1920

1948

Technical training institute

1921

1961

Maternity benefit

1928

1946

Profit sharing bonus

1934

1965

Retiring gratuity

1937

1972

Comments from presenters at the Managing Ethics in Organizations course provided by the Ethics Officers Association and the Center for Business Ethics, June 2001 suggests that the most successful programmes are those:



  • Based on values rather than on compliance with a set of rules.

  • In order to be effective, these values must be an integral part of how the company operates. Enron reportedly had good statements of values but it is questionable whether they really lived the values they expressed.

  • Adhering to an organisation’s values sets the tone for daily operations and establishes the company's culture. By acting consistently within its values, a business demonstrates its concern with all the relationships it develops and maintains.

  • A successful business conveys these values in its activities and reaps the reward for doing the right thing.

(See Ethics Officers Association: www.eoa.org)
Some noteworthy initiatives are:

  1. Bridging Corporate and Social Agendas

  2. A Giving Society? The State of Philanthropy in Malaysia” by Josie Fernandez and Abdul Rahim Ibrahim

  3. Our Malaysia : www.valuesinitiative.org

Some reflections to guide CSR are:



  • Assessing the importance of connecting with the Corporate World … Where am I?

  • How convinced am I about the need for Social Investment?

  • Is Philanthropy a Value that I cherish?





Session 2: Arguments For and Against Corporate Social Investment
Presentation by Dr Michael Liffman
Charity is a gift made with no expectation beyond the immediate alleviation of need.

Philanthropy implies a more thoughtful or strategic approach. The donor may want to correct the causes of need, rather than just relieve problems. Strategic philanthropy implies an even more considered approach. Social investment introduces the notion that the donor gets a reward, as well as the recipient.


According to Stan Mather, Australian Shareholders Association, philanthropy is not the business of corporations. Investment is normally made for the purpose of generating gain or wealth. Directors of companies are appointed by shareholders to look after the interests of the shareholders. The shareholders may well want to be philanthropic but that’s their choice and it should come out of the income that has been delivered to them.
However, Leon Davis, chairman of Westpac Bank, holds a different view. Communities can and will punish organisations that fail to meet modern expectations, he opines. But the biggest and most enduring benefit of all lies in their heightened appeal to potential employees. The best people – the people that companies want to attract and keep – are the people who like to feel proud about going to work every day. They come to work to earn a living – but they also want to feel good about it. Those corporations that fail to adapt will fail to succeed. Corporations that embrace this new era will be rewarded by employees, customers and investors.

This view finds support in Peter Singer, who says: “We need to challenge the idea that you can live a morally decent life just by looking after your own family and not actually causing harm to others. We need to develop a sense that if we have abundance, we are actually doing wrong if we don’t share it.”


Several centuries ago, Maimonides discusses the various levels of giving:


  1. To give sadly. (To give for purely self-interested commercial reasons.)

  2. To give less than is fitting, but with good humour. (To make a token donation.)

  3. To give only when asked. (To respond to individual fundraising approaches.)

  4. To give before being asked. (To have a programme of strategic philanthropy or CSI.)

  5. To give so the donor does not know who the recipient is. (To give non-judgementally.)

  6. To give so the recipient does not know who the donor is. (To give without seeking publicity or other external benefit. [But internal stakeholders might know and react]).

  7. To give so that neither the donor nor the recipient knows the identity of the other. (To give without any conditions or expectations.)

  8. To give a loan or a job rather than a gift, so preserving the recipient’s self-respect and encouraging self-help. (To give as part of a programme of strategic social investment, which has been developed in consultation with stakeholders, is consistent with other aspects of the corporation’s conduct, and is informed by a wider vision of sustainable social improvement.)





Session 3 : Philanthropy as a Catalyst in Appropriate Technology Adoption

By Joseph Antony, Trustee, Bitsunami Foundation, India
In the present global economy, the key drivers of change can be seen as the development of the market system, the advent of technology and the invention of the corporate limited company. Today, we are seeing the effects of technology being driven by corporations, some of which is good and some bad. Already, the people are responding to the negative effects of technology as driven by corporations.
Observing that a belt of casuarinas trees protected a coastal hamlet where other villages were wiped out by the tsunami, alumni of the Birla Institute of Technology and Science, embarked on a project to plant these trees as protection against future disasters. The local area administrator who is an alumni of the institute was instrumental in endorsing the project, giving it the support necessary for implementation. Without his clearance, the proposal would have been trapped in a jurisdictional morass and would in all probability not have seen the light of day.
The foundation was started as a reaction to the tsunami of Dec 26, 2004 by the alumni of Birla Institute of Technology and Science, Pilani (BITS). It was formed almost fully over the internet with participants from all over the world.
A ‘quick’ medium term plan was drawn up after BITS alumni realised that they could raise fairly substantial funding from within India and outside India through their alumni network. It was decided not to focus on immediate relief but on longer term rehabilitation. Furthermore, the effort had the active backing of BITS, Pilani University.
The plan covered the Pushpavanam and Naluvedapathy villages, and involved agricultural land rehabilitation, provision of boats and nets, planting of casuarina trees in the coastal belt, dairy farming, community infrastructure, housing, scholarships and endowments and village knowledge centres. The total cost of these projects was Rs42.6 million, towards which Rs7 million had been spent and a further Rs23.9 million pledged. This left a shortfall of Rs11.6 million.
Agricultural land reclamation had to be done because the tsunami had washed up debris up to 1km inshore, and where there is a river up to 2-4km inland. Nothing could be cultivated as the land had become saline. The government said it would take up to five years to rehabilitate the land. However, BITS alumni did a soil analysis and found that the salinity had penetrated only 6 inches deep. This was removed in one week by tractor.
Boats that were repaired hastily by other quarters did not inspire confidence in the fishermen who saw that they would spring leaks after a short while in the water. So bitsunami made custom-built ones according to the villagers’ specifications.
Twelve schools were upgraded or constructed in the two villages. It was found that after age 14, there was a 100% dropout rate in these schools because of the lack of toilet facilities. The Trust has constructed toilet blocks for girl students in each of the 12 schools and is in the process of constructing toilet blocks for boy students in all the schools. This is the beginning of a major sanitation initiative for the whole village.

The Trust is constructing 37 houses of 300 square feet each in Naluvedapathy village where many villagers living along the coast had lost their houses to the fury of the tsunami. A disaster relief community centre is also being built.


At another coastal belt, the villagers wanted a coastal buffer, so 254,462 trees were planted in 24 hours. (The previous Guinness record of 80,244 trees in 24 hours was achieved in 2003, incidentally, also in Tamil Nadu.)
Village knowledge centres are being built as an initiative of the M.S. Swaminathan Trust. The centre has a Malaysian connection, namely that one person called the centre to warn of the tsunami. The message was relayed by megaphone to villagers and no lives lost to the tsunami in this village. Village Knowledge Centres are on the anvil for both the villages that will disseminate valuable information to the villagers. Also in the works are Dairy Farm Units, designed to be an alternative means of livelihood for the agriculture-dependent villagers.
In terms of financial performance, the Trust has kept administrative costs 3%, as all volunteers pay their own expenses. Accountability is ensured by directly monitoring of projects by the Steering Committee. Donors can actively monitor the projects on an on-going basis and can have varying levels of involvement:


  • Direct and active involvement (e.g. WeP has hands-on involvement at the village level within the Bitsunami framework).

  • Partial involvement (e.g. Wipro)

  • Contributions only (e.g. HP, Allsec Technologies, iSOFT R&D, Redhat India and Sugal & Damani)

  • All major financial decisions are directly cleared with the donors.

  • Total transparency in accounts. All accounts are also put up on the net (www.bitsunami.in)

In educational efforts, two projects have been started. In Practice School I, students of BITS Pilani are involved in the village as part of their academic curricula. In Practice school 2, GIS-based resource mapping is used to identify water surplus areas that are being developed as fish hatcheries for bigger suppliers. A paying sanitation and water resource plan and information structures for village knowledge centres are also in the pipeline.


Village knowledge structures with several key components are being developed. These include a Village Knowledge Centre, vernacular website for the village, the development of development benchmarks for the village and the implementation of monitoring mechanisms
Future plans include:


  • An integrated, holistic and sustainable development of the two villages over a medium term horizon.

  • Village development plans that can boost and transform every sector of the village economy.

  • Development of village economy intervention models from direct experience – that are replicable across rural India and elsewhere.

The use of technology to enhance Philanthropy has several advantages. Technology can help in the establishment of clear benchmarks, such as in facilitating measurable progress. Immediate and direct monitoring can be undertaken. For example, with a mobile phone, a volunteer can take an image, enter relevant data, and send the report to the coordinating centre when connectivity is possible. The technology is non-intrusive and easy to use. Furthermore, philanthropy directed at appropriate technology can have a transformational impact. Technology also multiplies benefits through its network effects. There are many technologies that can be harnessed for philanthropic uses.


The use of technology in disaster management can involve such avenues as call centres, web-based initiatives, mobile phones and community radio. Even worldwide networking is made easy and extremely effective as was seen when the actor Vivek Oberoi did a show and raised Rs14 million for tsunami victims in a week. (Contributions were made via short-message-service(SMS) costing each contributor Rs10.)
Technology can bring about rural transformation through applications like telemedicine, ‘upgrade and recycle’ programmes (such as the Goonj model) where older equipment is refurbished for target groups that are lower down the technology ladder. GIS-based mapping systems for resource use and GIS-based systems for fishermen can enhance incomes and help communities bounce back from disasters more quickly. Rural automated teller machines (ATMs) and village triple play systems (tv, phone, data) in one line, are other benefits.
Discussion:


  • Technology should benefit the poor, but it is necessary to ensure that the scientist/ inventor is rewarded. There are pros and cons when ownership shifts from the inventor to the private sector, e.g. when a bank buys the technology for ATMs, it can use its resources to spread the benefits quickly, but access to the technology is restricted.




  • Reconstruction should benefit rebuilt communities so that villagers can continue living there. Reconstruction should not make people leave. An interesting development is that jobs that had shifted from Chicago to Chennai are now moving to villages as a result of the reconstruction work. Relief groups are now trying to upscale.




  • It is important to get the consensus of villagers on their needs. However, there can be aberrations, including non-appropriate requests for such things as electrical goods which are a luxury, and dowry for weddings, which is illegal and oppressive.




  • It is good to allow small NGOs to pioneer reconstruction activities to avoid the burdensome bureaucracy of official aid. The government’s role is to replicate the projects through smart partnerships.


  • Donors can play the role of technology infusers. An example is the L-CDI’s job training schools started by Raj Ridvan Singh in Cambodia. The resources are indigenous, the schools have trained a total of 26,000 students, and the idea is now being taken to East Timor.




  • Philanthropy has a role in the start-up phase of a project. The project design must factor in capacity building, so that it can stand on its own. So the project must yield measurable results, such as the number of people trained, number of students educated, so that the project would be more attractive to funders.




  • A question arises whether the philanthropic support from the developed world will be phased out. There is a growing inequality between those with surpluses (corporations) and those without. A crisis is developing, and philanthropy is the effort to bridge the gap. But is the gap closing? There is no indication that it is.




  • Malaysian companies, such as the telco Maxis and waste management firm Alam Flora are moving from community relations to CSR. So Alam Flora is in transition from its core programme, viz. recycling, to environmental education, with the support of the housing ministry. It has produced a book for children on the environment, because there is no existing publication. CSR is a quantum leap for the company. Maxis believes in capacity building for children through its computer lab project in schools.




  • Endowment funds have been operating in Indonesia for some 35 years. They primarily give towards children’s programmes. Such funds give mostly towards “safe” causes which do not question the status quo. Silent donations have been provided to support political prisoners and other human rights causes.




  • There is a need to examine the use of technology in the development of CSR, such as measuring companies CSR commitments through a share index on CSR. The magazine Malaysian Business gave corporate governance awards for five years, and in 2006, it will be giving for the first time a CSR award. Bursa Malaysia, the Kuala Lumpur bourse, had given out CSR awards in the past, but withdrew the awards when it became a public-listed company.




Session 4 : Professionalising Grantmaking for the 21st Century

Moderated by Dr Michael Liffman


Towards professionalising grant-making, postgraduate courses in the subject are offered at the Asia-Pacific Centre for Philanthropy and Social Investment, Swinburne University of Technology, Melbourne, Australia. The centre is pioneering the education of the Australian community in these areas, and now offers courses from Graduate Certificate to PhD level.
The programmes offered are directed at a diverse range of individuals and employers, including personnel in public affairs, marketing, sponsorship and investment in major corporations, solicitors and legal advisers, fund managers and trustees, commercial entrepreneurs and investors, foundation personnel, accountants, community workers, social planners and public servants, as well as students planning careers in these fields and individuals who are in a position to make personal benefactions to the community.
The topics they study include the history, purpose and achievements of philanthropic giving, in Australia and beyond, and some of the key forces driving the future of philanthropy. They consider the benefits of social investment for their business or their family, their workforce, the community, and for themselves.
Other subjects deal with the various mechanisms through which an intelligently managed giving programme can be run, and the organisational and personal dynamics which it will encounter, whether in a personal, family or corporate setting. Questions of ethics are discussed. Technical matters, including tax - where change is currently occurring - are covered. Participants are introduced to success stories featuring rewarding instances of personal philanthropy, and win/win examples of partnerships between community or cultural not-for-profits and businesses. They learn of the vision, achievements and hopes of some of those community leaders who are taking Australia into the future.
Programmes offered are:
• Graduate Certificate of Social Science (Philanthropy and Social Investment)

• Graduate Diploma of Social Science (Philanthropy and Social Investment)

• Master of Social Science (Philanthropy and Social Investment)

The programmes develop management and administrative knowledge, and the conceptual and analytical skills required for effective and strategic grant-making. The knowledge bases involved are diverse, ranging from public policy and management through to values and ethics, and family dynamics.


Further details are available at:

http://www.sisr.net/philanthropy/teaching.htm

Comments:
Future efforts should concentrate on building capacity and ethical standards, by enhancing transparency and accountability. Moral education is one way to raise the profile of ethics in grant-making.
The guiding principles of philanthropy should include sustainable development so that resources that are used to produce harmonious growth and efforts do not aggravate socio-economic imbalances and degradation of natural resources.
A regional framework for philanthropic work should be developed as many problems have international dimensions.
Philanthropy Malaysia should develop a register of philanthropic organisations to serve as a database of NGOs operating in this field. It should produce a directory of grant-makers at the national level.




This paper prepared for this workshop was circulated as the author was unable to attend.
The Opportunities And Challenges For Giving Of Private Wealth For Philanthropic Purposes In India And Its South Asian Neighborhood: An Overview

Dr. Sandeep Deshmukh,

Sampradaan Indian Centre for Philanthropy, New Delhi, India.

Email: icp@ndb.vsnl.net.in
A paper prepared for the workshop in Philanthropy in the New Millennium in Asia-Pacific Region (7th – 8th December 2005, Kuala Lampur)
Dear colleagues in the august audience, first let me take the opportunity to thank the Asia – Pacific Centre for Philanthropy and Social Investment, Swinburne University, the Asia-Pacific Philanthropy Consortium and fellow sponsors of this workshop to create an opportunity for me to present my views and exchange with the learned persons participating in this workshop. Indeed an opportunity to me is certainly an opportunity to my country and perhaps to the entire South Asian region to relate our experiences and thoughts on the subject ‘private wealth and giving’ to the wider Asia-Pacific community of nations. Our colleagues from the Pakistan Centre for Philanthropy have expressed inability to attend this event as they are fully engaged in the gigantic task of relief and rehabilitation along with the government of Pakistan, the no-profit sector in that country and the international community.
I. The complex form of Philanthropy in South Asia
I would propose to look at the opportunities and challenges of sharing private wealth for public benefit in a cross-sectional ‘historical-functional’ perspective. When I am saying ‘historical’, it essentially means the historical conditions of the past and present that have created the opportunities and challenges for giving to society. While using the concept ‘functional’ I am alluding to the systemic function philanthropic giving performs or can perform in the contemporary South Asian society. Someone may wonder, why such a complex approach to perhaps an apparently simple act like voluntary giving of wealth to society?
Let me explain the reason behind the broad perspective. The complexity in approach basically stems from the complexity of form of giving and complexity of the problems that form the context of this giving. Perhaps, charitable giving happens in a much more – desirably – simpler and straightforward manner in many parts of the world where philanthropy is a strong institutionalised form of giving. The situation in India and generally in the South Asian region is different from this. Philanthropy in this part is complex in form and substance. One, both formal and institutionalised giving and informal giving coexist in that society even today in comparable proportion. Second, in spite of many of my distinguished colleagues in India preferring to distinguish between ‘religious’ and ‘secular’ motives behind giving, I think one needs to adapt to the inseparable connection between ‘religious’ and ‘social’ aspects of giving behavior in that part of the world.

Perhaps an example would illustrate my point. Let us compare the two categories of giving in India called as daan and dakshina.1 Daan is generally translated as donation in English. When a daan is made to a brahmin the traditional priest in Hindu society, the daan becomes his property. The donor looses his emotional, legal ties with it. This act of giving has a strong spiritual aspect to it. A daan could be either for religious fame (given in public and to attain heaven after death) or it could be undisclosed (for moksha, salvation). Daan given to a Brahmin ranks highest among preferred traditional ways of giving. The same social class also receives dakshina on the performance of certain religious rituals, say officiating a puja or a marriage. A dakshina differs from daan though it is given to the same class of persons. It is an honorarium paid to the priestly class in lieu of their ritualistic services. It is not fixed and cannot be negotiated. Basically both are acts of giving, to the same category of people but serving two different functions in spiritual-social life of a person giving daan and dakshina. At the same time the strong spiritual value attached to both binds the two varying forms of behaviour together. So, there is a unity of opposites among certain forms of giving in a typical Hindu society through principles and rules underlining them. Third factor that adds to the complexity is the transitional nature of class and caste based relations in the contemporary Indian society.2


Though caste is to be found mainly in India, and not present in the same form and as strongly in other countries of the region, there are other cultural, ethnic identities that are subject to similar dynamics. The post-independence social change in the region has been strongly influenced by industry-based modernisation, redistribution of land (thus, affecting the traditional land based social hierarchy), and increasing use of the coercive power of the State for negotiating interests by competing social groups. The last factor definitely marks the erosion of traditional community based mechanisms of negotiation and arbitration. The class, caste and other social identities and social relationships based on them are in a flux. The fourth factor that compounds that act of giving is largely of an institutional nature and that is the uncertain relationship between the State and the no-profit sector.3 The no-profit sector is only lately showing signs of becoming a truly sector-based force and at the same time the State has also started taking cognizance of the presence of the no-profit sector. This was evident during the recent earthquake in Pakistan, where the role performed by no-profit organisations in relief and the authorities in that country have accepted rehabilitation. The Pakistan government, to implement an impressive credibility programme, has engaged the Pakistan Centre for Philanthropy, a national level grant-maker support institution. In India also the Planning Commission of India, the planning arm of the Indian State, has started formulating the National Voluntary Sector Policy (2004), which tried to articulate the perception of the State vis-à-vis the no-profit sector. But, if we do not want to deceive ourselves, efforts in this direction will take long time to realise the fruits. The example is the debate raging in India about the proposed Finance Management and Control Bill proposed by the Home Ministry of the Union Government of India. Opinion leaders in the no-profit sector of India view this move by the government as a means of further tightening the belt around the necks of the no-profit organisations.
For a philanthropy movement to grow and evolve in a complex political social and cultural environment like the one discussed here, it is an exciting opportunity in the form of a challenge. There is no doubt that philanthropic instincts among the people in the region are strong and this behavior is deeply rooted in their ethos. Indeed people have created myriad forms of giving of private wealth for public benefit in this society.4 They share wealth, time, knowledge, and skills for both religious and ‘secular’ subjects. The challenge to promote philanthropy in the region is double-fold. One, there is a need to sustain a nourishing cultural, political, and operative environment for plural forms of sharing of private wealth to exist and grow, and at the same time the need is also to turn sharing of private wealth more strategic. The challenge in the form of strategic philanthropy will have essential ingredients of partnership between public and private resources, State accepting the necessity of private wealth and other voluntary resources in bringing goals of sustainable development closer, and the no-profit sector attaining mature qualities of professionalism, effective governance, transparency and sectoral solidarity.
II. Opportunities for sharing of private wealth for public benefit:
Private wealth exists in the form of food; land, water bodies, property, money and business assets in South Asia since long periods in history. In the agrarian society of the region, land, water bodies, and property are still dominant forms of wealth and food in the form of grain is still used as a medium of payment in certain instances.5 Thus, any attempt at innovating new forms of sharing of wealth would benefit maximum from taking these forms of wealth as equally important to money. On the other side, the urban centers in the region show predominance of money and business assets as the dominant form of wealth. Basically this bipolar model of wealth serves as a heuristic model of comprehending the situations on ground with their inherent complexities. This would finally help in devising better strategies for use of private wealth for public benefit. For example, in urban centers that exist as administrative – market centers of a mainly rural agrarian hinterland, there may be a composite pattern of giving involving money and grain in a transactional form. For example, in Mewat area in the north - west part of India, members of the predominantly Muslim, ethnic Meo community donate to the mosques and Islamic seminaries (madrassa) in fixed amount of grain. If a family in a particular year is unable to pay in grain, they donate money in ash equivalent in value to the grain. Grain so donated to the religious institutions in Mewat, is by custom converted by the clerics and other trustees in cash assets. This money is supposed to be used for the benefit of the local community.
The opportunities for use of private wealth for philanthropic purpose exist in plenty in the region. This is evident in the richness of form and purpose for which private wealth has already been put to use to. One can find traditional forms of philanthropy that are strikingly similar to some modern forms of philanthropy. For example, the ancient and still existent tradition of Temple Trust (sthanattar)6 or the democratic, community based institution of village assembly (gaonki).
Both these forms of philanthropy have striking similarity in characteristics and functions to modern forms like a Community Foundation. On the other hand, the recent natural disasters like the 2004 Tsunami saw young Information Technology professionals mobilizing massive financial resources through networks (blogs) within unusually short amount of time.
Let us look at some of the opportunities for giving private wealth for public benefit in the South Asian region in details.


  1. The emergent urban, upper and middle class: The decline in State regulation of economy and augmentation of local and foreign investment flows for creation of more wealth has created an enormous potential for giving. It is especially in the form of the Middle Class, which is better educated and aware of social issues that deserve assistance. A short – represented but detailed study conducted by Sampradaan Indian Centre for Philanthropy indicated that 96% of upper and middle class households in urban area donate for a charitable purpose.7 The estimated amount donated for philanthropy was USD360 million in one year. Another middle class source of giving is in the form of the South Asian Diaspora. I strongly believe that if there is a marked improvement in the governance of charitable activities both by the State and the no-profits then the chances are increased that the upper and middle class donors would give more from their private wealth.




  1. In India there is a rural parallel to the urban middle class phenomenon. The phenomenon commonly known as ‘Green Revolution’ in India augmented the productivity of agriculture sector in many parts of the country. The GR phenomenon was made possible due to breeding technology, redistribution of land, spread of basic education among farmers, establishing of market facilities, and a wide spread network of agricultural universities and extension centres. Conducive external environment for farming sector was matched by the innate entrepreneurship among farmers of the GR parts of the country. This upwardly mobile segment of the peasantry tried out cooperative and other forms of professional organization, and now it is capable of even trying out corporate mode of production and marketing. Remarkably these changes have created forces that are capable of either strengthening or breaking of social fabric in the rural society. Indeed it would be a great opportunity for donor educators to tap the wealth of the emerging rural middle class for strategic purposes.




  1. India changed its policy of highly regulated economy in the early 1990s. It has moved since then towards practice of liberal economy. The story since then is a fairly well known one that is of rapid economic growth with diversification of manufacturing and service sector. Especially the story of the phenomenal growth of the Information Technology sector is a well-known fact. Therefore, it is not a surprise to find that some of the outstanding and large sized development related programs are supported in a big way by the IT industries in India. There is no doubt a need to match the private resources within the purview of the State by the private resources of the corporate sector. In the past there have been many examples of business houses patronizing causes like heritage conservation, arts education, spread of science and technology.8 For example, one of the finest world-class centers of research in mathematics and pure sciences, the Tata Institute of Fundamental Research, was borne out of the vision of the Tata House in 1940s.

One more form of business prevalent today is a community development program. Many big and medium sized companies are either running or supporting no-profits managing these programs. The rural communities covered in the CD programs often end up as islands of prosperity and over – dependence.


Sharing of wealth accumulated through profit is a precondition for economic growth of the South Asian region, which hosts a huge population marked by hue disparities of wealth and social opportunities. This is not to suggest even slightly that the rich people should be divested of their private wealth. Rather it is to suggest that a partnership between State and business with a focus on poverty alleviation, health and education would boost the productivity and economic growth of the local population. In other words, proactive role of the business community could set off a positive cycle of growth, better quality of life and productivity.
Sharing of wealth by companies could happen in more than one ways. Corporate sector can donate to the high performance path related activities in education, health and agriculture sector. They could also assist in developing governance, management and service in rural sectors. For example, they could patronize rural youth in undertaking enterprising projects with potential for creation of wealth and satisfying the needs of the bigger population. This is easier said than done. To properly evolve this patronizing relationship into fruition, a support system of education, training, marketing and credit will have to be created. Another important domain mentioned above needs little elaboration and that is agriculture sector. The last decade has a steady decline of contribution of agriculture to GDP of India. This is paralleled by a proportionate rise in the contribution of manufacturing and service industry to the GDP. Every development has pros and cons. The positive part of the story is that the industrial performance of India has got disconnected with the performance of monsoon and agriculture. It has got connected with the larger global economy. The depressing angle to the story is that the agriculture and allied sectors that are mainstay for more than 70% population of that country is starved of the much needed inner energy, support and reform. Why cannot the business sector think of investing in the agriculture sector of India? Why cannot we connect it with the industrial sector on the one hand and on the other hand, create an internal market for quality agriculture produce?
The corporate sector can at least help in building the knowledge society that would enable achieve all that is expected of the agriculture sector in South Asia. I cannot stop myself from mentioning the PURA model at this point. The word pura in Hindi means ‘accomplishment’ ‘whole’ denoting a thing in entirety and not in parts. The word PURA here is an acronym for the model of development advocated by India’s President, Dr. APJ Abdul Kalam. The acronym PURA stands for a conceptual model called ‘Providing Urban Amenities in Rural Areas’. The model is being tried out in Madurai district of South India. In his words, “The PURA model suggests designing, developing and deploying the high technology tools and methods in agriculture sector. The direct outcome of this model will be twofold – an increase in productivity and release of surplus person power from traditional agriculture sector. The benefits of higher productivity can be converted into wealth with establishment of agro-based industries. The surplus person power can be upgraded with proper education and training and be re-deployed in agro-based and other industries and service sector including IT” (address to the delegates of the Confederation of Indian Industries, 2001).
Private business need to take a risk by investing in these kind of path-breaking projects, which could only bring benefits to not only India or the South Asian region but also to the larger Asia – Pacific polity. This is not philanthropy for the sake of philanthropy. It implies much more than that. It implies that sharing of wealth is a key to create more wealth. This way the corporate sector could create stakes in investing for development.
III. Thinking of new forms of giving in South Asia:
The problem of sharing of private wealth for public benefit is analogous to a Network wherein goods, information, knowledge, emotions keep flowing from point to point. A network could be actually much complex than what meets one’s eyes. There could be unidirectional or bi-directional flows between points, flows of varying magnitude and innate properties of network that control its behavior.
Sharing of private wealth for public benefit is a network problem. However, we need to move beyond the conventional concept of unidirectional donor-centered network. We need to think about a network of donors and their partners, which is based on the principles of equity and responsibility. This network will (a) create more opportunities to create private wealth; and (b) achieve balance between costs expended on sharing of private wealth with social, economic and environmental returns.
The challenge of sharing of private wealth for maximum public benefit calls for a variety of forms of giving. To recollect the statement in the first part of the paper, the traditional forms of giving need to be preserved, nourished, and new forms of giving need to be explored. Three models of philanthropy that could help in meeting the goals of sustainable development in South Asia have been discussed briefly here.


  1. Community Foundations: As a model of resource mobilization and social distribution it has been successfully implemented in North America, Western and Central Europe. I understood from the WINGS communication that it has made inroads in developing societies of Latin America and Eastern Africa. It already has a noticeable presence in the developed economies of Southeast Asia and Pacific region. This is still a relatively new term introduced in the philanthropy and development repertoire of South Asia. This is still a relatively new term introduced in the philanthropy and development repertoire of South Asia. It is conspicuous by its near absence in the region. There are only four mentionable CFs in India. The question at stake is whether Community Foundation could emerge as an alternate model of development support – an alternative to models based on external support? Le me briefly inform the new initiative by Sampradaan Indian Centre for Philanthropy in an action-research mode to promote CF in Mewat area near Delhi. This is one of the economically most backward areas of the country. It is fragmented into three big states though the people share ethnic history, language and culture. Alwar district (total population of 3 million) in part of Mewat in Rajsthan state is worst off economically and socially in the entire Mewat zone. The small upper-middle class section (13%) is concentrated in four Blocks out of total 12 in the district. We are trying to build a network of members of this segment of the population along with the dominant local Muslim clergy (controlling the local donations) who would take up establishment of a CF in a project mode. At the second level, we are planning to link up the local network and their CF with external Foundation donors, government agencies and corporate donors as a leveraging strategy. The implementation of this project is based on certain anthropological presumptions. The outcomes of this project will be shared with the larger philanthropy and development community in the region for the purpose of replication.




  1. Community assets through endowments: in the pre-colonial period, the typical agrarian community in south Asia was bestowed with assets in the form of buildings, land, water bodies, forest and cattle. The use of these assets for community benefit was delicately intertwined in the social fabric of the community. It was enmeshed in a complex of rights, duties, privileges and rituals. The government protected it. This pattern of philanthropy consisting of myriad forms is now almost extinct. For example, the extinction of the community institution of ‘sacred grove’ is almost complete from most parts of the country since the colonial days. A sacred grove used to serve as a platform for community philanthropy in the traditional society. The sacred grove formed a major link in the social, economic relationships in the community.

Therefore, we need a bold approach to philanthropy and study the traditional forms of giving in South Asia from the point of view of social sciences and developmental concerns. It may be possible to revive some of these asset - based forms of philanthropy. These may have the key to some of our worst developmental problems.


© Grain Bank: India achieved self-sufficiency in food production in the last decade of last century. Ironically, one still encounters large pockets of inadequate nutrition in the country in spite of the declared self-sufficiency. The solution to the problem of under nutrition in large pockets is through (i) improving the performance of the Public Distribution System; and (ii) establishing community based Grain Banks. A Grain Bank is not a solution to the nutrition problem alone, but it could also prove to be a key for much wider development too. Village Darphal is located in a drought-ravaged part of Maharashtra state in Western India. The village established a Grain bank in 1961. Today the collection of the Bank runs into many thousands of kilograms of grain. The village has financed its own development projects, including the school, instead of depending upon the government and other external sources.
These examples are only indicative and definitely not the last ones of private wealth for philanthropy. Nevertheless, they have a strong feasibility and cultural appeal to them that should help spread them on a large scale.

IV. Summary:
The philanthropy in South Asia is complex in form and rich in substance due to particular pattern of historical evolution. The pluralistic values have always dominated the evolution of philanthropy in this part of the world. The nature of no-profit sector and its unsteady relationship with the State is one of the major constraints in the evolution of the philanthropy as a strategic form of social intervention in the region. The future endeavors to develop philanthropy in a strategic manner ought to take into account the peculiarity of forms of wealth in urban and rural areas and even between regions. The future endeavors in strategic philanthropy in South Asia need to integrate the ‘vertical’ (corporate donors) as well as ‘horizontal’ (Community Foundation, Grain Bank) forms of sharing of private wealth.


Programme
WEDNESDAY, 7 DECEMBER
8.00 – 9.00 Registration
9.00 – 10.00 Welcome and Introductions
10.00 – 10.30 Coffee Break
10.30 – 12.00 The Shape of Philanthropy in the 21st Century

Philanthropy Trends in Asia: An Overview



  • Josie Fernandez

Convenor, Philanthropy Malaysia

  • Dr Michael Liffman

Director, Asia-Pacific Centre for Philanthropy and Social

Investment, Swinburne University, Australia
Various powerful forces are driving a new and invigorated philanthropy the world over. In this session these forces will be identified and their relevance to the Asian context discussed.
12.00 – 13.00 Foundation Philanthropy: New Roads Ahead

Steve McCoy

Force of Nature Foundation, Malaysia
13.00 – 14.00 Lunch
14.00 – 15.30 Disasters and Philanthropy: Recent Experiences

  • Emma Williams,

World Vision, Australia

This discussion will commence with a report on the recent APPC conference on ‘Philanthropy in Disasters: Tsunami and After‘ and on World Vision’s approach to the issue.

M. A. Harold,

Transparency International Sri Lanka
15.45 – 16.00 Coffee break
16.00 – 17.00 Diaspora Philanthropy

Dirk Eilinghoff

Bertelsmann Foundation, Germany
Diaspora philanthropy, whether in the form of donations from successful expatriates or remittances from overseas workers, is an increasingly important source of resources for Asian communities. This discussion will commence with an account of the findings of a recent study before inviting participants to discuss the Asian experience.

    1. Welcoming Dinner and Address

Sri Ganesh Gopal, Petronas, Malaysia

Programme


THURSDAY, 8 DECEMBER

9.00 – 10.30 Corporate Philanthropy and Social Responsibility

Yazdi Jehangir Bankwala

Director, Arpitha Associates, Malaysia

The opportunity and expectation of corporations to recognise the triple bottom line, and to include support for community as part of this, is transforming corporate behaviour around the world. This session will examine the Asian dimensions of this experience.


Arguments For and Against Corporate Social Investment

Dr Michael Liffman



11.00 – 11.15 Coffee Break
11.15 – 1.00 Philanthropy as a Catalyst for Technology

Joseph Antony

Trustee, Bitsunami Foundation, India

1.00 – 2.00 Lunch



2.00 – 3.30 Professionalising Grantmaking for the 21st Century

Dr Michael Liffman
Philanthropy and social investment are set to become major forces shaping the societies of Asia over the coming decades. To date there have been virtually no opportunities anywhere in the world for donors, companies, advisors and others who make decisions about philanthropic distributions to develop the appropriate skills and understandings for effective grantmaking practice.
This session will describe the courses offered by the Asia-Pacific Centre for Philanthropy and Social Investment at Swinburne University, and inquire into the possibilities for local capacity-building in the Asian region.
3.30 – 4.00 Reflections and Conclusion



1 Agrawal, Sanjay; Daan: A Tradition of Giving, Sampradaan, July – August 2005; Number 45

2 Lalit Kumar; Emerging Ethnic Enclaves as an Ensemble for Nation building; Journal of Social Sciences, 1(2): 137 – 141 (1997)

3 Lalit Kumar; Shifting Relationships between the State and Nonprofit Sector – Role of Contracts Under the New Governance Paradigm; paper presented at the sixth International Conference of the International Society for the Third – Sector Research (ISTR) held at the Ryerson University, Toronto, Canada during July 11-14, 2004

4 Majumdar, R.C.; Corporate Activities in Political Life in Corporate Life in Ancient India; 3rd edition; Firma K. L. Mukhopadhyaya; 1969

5 Bloch, Maurice; Marxism and Anthropology – The History of a Relationship; pp.38-39; Oxford University Press; 1985

6 Sampradaan Idian Centre for Philathropy; For God’s Sake – Religious Charity and Social Development in India, Ed. Pushpa Sundar; 2001

7 Sampradaan Indian Centre for Philanthropy; Giving and Fund Raising in India; New Delhi; 2001

8 Lala, R.M.; The Heartbeat of a Trust – The Story of the Sir Dorabji Tata Trust; Tata McGraw Hill Publishing Company Limited, New Delhi; revised third edition 1998




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