Acknowledgement

Major funding support was provided by the Bertelsmann Foundation (Germany) and the Myer Foundation (Australia). Local funding was offered by Airtime Management and Programming (Astro Radio), Alam Flora and an anonymous benefactor.

The programme was undertaken under the overall direction of Dr Michael Liffman, Director of the Asia-Pacific Centre for Philanthropy and Social Investment, Australia. Josie Fernandez and Rash Behari Bhattacharjee of the pro-tem Philanthropy Malaysia were responsible for the marketing, implementation and management of the workshop and the compilation of these proceedings, which was produced with the assistance of Tania Jo Maliamauv. Rory Tolentino of the Asia-Pacific Philanthropy Consortium, and Dirk Eilinghoff of the Bertelsmann Foundation provided valuable counsel, and Brigitte Claney assisted with the promotion and administration of the workshop in Australia and in Kuala Lumpur. Petronas Malaysia, represented by Sri Ganesh Gopal, made a dinner presentation. Cheah Chee Ho and Yarina Ahmad also assisted during the workshop. Acknowledgments are also due to Universiti Sains Malaysia (USM), Malaysian Business, Alam Flora, Yayasan Sosial Indonesia Untuk Kemanusiaan, Koichi Kaneda of Daiwa Securities Group, Japan and Dr Sandeep Deshmukh for their materials. We thank Shah’s Village Hotel for their assistance during the workshop.






Executive Summary

It is a long-held view that all philanthropy is good and that giving should be done with your gut, not your head. But as the need, scale and impact of philanthropy increases, and calls for greater grant recipient efficiency and effectiveness become increasingly louder, it is perhaps inevitable that many grant makers are beginning to turn the spotlight on themselves, questioning if and how they can become better at what they do.

The opportunities for individuals and families to have a real impact on their community through their giving are greater than ever, and so are the challenges.

Corporate Philanthropy and Social Responsibility

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 examines the Asian dimensions of this experience.

A full list of participants is appended.

In considering the future of philanthropy in Asia, the question arises, how will “global philanthropy” affect Asia? Increasing numbers of private banks have started to offer philanthropic services in direct response to a growing number of clients who want to put something back into society. This is coming to Asia too, according to the Asian Wall Street Journal 2002.

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   The government and business sectors are expected to cover major philanthropic activities, while civil society bridges what government and business do.
   
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   An increased emphasis on what is expected from the corporate sector – corporations feel there is a greater role to be played through corporate social investment.
   
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   There are new patterns of wealth distribution and inter-generational transfer of wealth. The world is seeing the largest movement of money from one generation to the other. This reflects the demographics of the baby boomers who have accumulated wealth through hard work and rising property values, and these are being passed onto a new generation.
   

These trends show that there is a renewed capacity and interest in being philanthropic and in undertaking social investment. This generation will do their giving in a different way. Donors of the future want big solutions, and will give more. They are more concerned with issues, such as the environment, and seek larger integrated solutions. They are changing notions of giving in the 21^st century as they think globally, want to see the impact of their contributions, are themselves from the business environment and apply the principles of the business world to philanthropy as well. They are strategic, clear about targets and demand evaluations and reviews. Access to information is therefore very important to meet the expectations of these modern day philanthropists.

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  In an earlier generation, philanthropy was understood as an obligation to do charitable deeds. However, the presentations show that the scope of philanthropy is much broader than just charity, and it covers a whole range of sectors and activities that need to be examined and engaged with for philanthropy to be truly effective.
  

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  Can the emergence of CSR be seen as a failure of market economics and the inability of governments to meet the basic needs of citizens, and what is the literature on this?
  

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  Three trends in philanthropic activities can be seen: One, 20 years ago the world saw the birth of social entrepreneurs. These were people on the ground who invested in the capacity-building of communities. For example, the Ashoka Foundation in the US (http://www.ashoka.org/home/index.cfm), has created about 4,000 entrepreneurs. Two, with the technology boom, many young people have become multi-millionaires in their 20s and 30s, and bankrupt by 30. Some of the new rich realised the limitations of such wealth-creation, and began to ask what more there is to achieve. This led them to inquire how they could contribute to society. Three, there has been a growing awareness of the resources of the baby boomers. This is a huge resource available worldwide, which organisations such as RSVP (Retirees Social Volunteer Program) have harnessed.
  

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  Tracking altruism is very difficult. If it is defined as giving without expecting returns, then much of corporate giving would not qualify, because these activities typically are meant to earn goodwill and mindshare. If a corporation gives to generate brand recall, is that philanthropy or a marketing activity?
  

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  In Malaysia, government-linked companies tend to give back a lot to society, as a result of government encouragement. Government policies influence companies’ patterns of giving. This raises the question of the purpose of giving: Is it from the goodness of the heart or because of government policy? In the west, the corporate sector has developed its philanthropic activities, but in this part of world, it is a recent phenomenon. The telco Maxis has supported the indigenous communities of Sabah.
  

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  One view is that if altruism benefits society, it does not matter whether the motives are unimpeachable.
  

Three core activities of the foundation are fundraising, grant-making and awareness raising. Evaluation is important, including internal evaluation. It is the central organising principle of the foundation. With natural disasters compounded by poverty and civil conflict, operational costs balloon when transparency, accountability and evaluation are added on.

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  How do you evaluate where the money is going? The Foundation has very specific goals. It operates on restricted funds – i.e. the tsunami, the earthquake in Pakistan and Hurricane Katrina funds. This is money that has been entrusted to us for dedicated purposes only.
  

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  The Foundation funds projects, not individuals or organisations. It works on the ground with a project and tries to get other funds on board. Each partner has different responsibilities and different reporting structures. If things don’t go right there are mechanisms to correct this.
  

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  Three ways to operate as a foundation are:
  

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  ­Give money and leave project implementers to do the work;
  
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  Look at the project and work closely to control it;
  
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  Spend money on strong reporting for transparency and accountability.
  

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  Transparency about administrative costs is not generally practised in projects funded through philanthropic giving. Some institutions charge 90 per cent as administrative costs, which is ridiculous. However, one cannot have a specific percentage because it varies from one project to another.
  

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  While getting funds is one challenge, managing it is another. So external auditing would help and should be made a legal requirement. However, statutory audits are only one part of the picture; measuring effectiveness has to be a continuous process.
  

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  Transparency and evaluation need not be expensive. It is possible to have continuous evaluation with the use of technology. With a mobile phone, a relief official can record details even where there is no connectivity, and transmit them later. However, urgent emergency situations are not amenable to auditing and reporting.
  

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  Tele-evangelical NGOs were required to submit to auditing after the scandals involving a few of them in the US. This was done so that donors can see what purposes their contributions are used for. This is a role that Philanthropy Malaysia could play. The Pakistan Philanthropy Centre, for example, does accreditation of charities.
  

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  While transparency is desirable, over-reliance on measurement needs to be avoided. In the business sector, corporate governance is a by-word, yet there are a many issues related to credibility. Standards are important, but internal values are indispensable. External monitoring has its limits.
  

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  NGOs have been asked to move up to corporate standards, because NGOs have their Enrons too. So, minimum standards for NGOs too are necessary.
  

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  In the FoN Foundation, the organisational culture is that integrity and trust are its greatest assets. When accountability issues are raised, NGOs tend to become defensive. Accountability should be the hallmark of any organisation, without the need for an external auditor. “I want to know in order to do better next year” should be the maxim. This culture must be embedded in organisations from the beginning.
  

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  NGOs have to be accountable to the public too. They also need to learn how to fund-raise for long-term work. In Aceh, NGOs are doing capacity building, and donors support such projects, but the public lacks understanding of this, and needs education.
  

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  Fundraising must be matched with needs for the greatest efficiency. Once that is in place, it is a matter of disseminating information on the usage of the funds. Celebrities are useful as a vehicle for conveying messages to the public. For example, the FoN Foundation does a quarterly video documentary on its project in Sri Lanka, where the Malaysian celebrity Ida Narina is sent to record the progress of psychological rehabilitation work. The video is released to the public through media partners to tell people how their money is being used.
  

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  The Bertelsmann Foundation has 25 years of experience in dealing with accountability. It was once asked by a living donor to show what had been done, but the foundation struggled to prove the effectiveness of its work. In examining accountability, the limits of the business analogy are soon apparent. Philanthropy is unlike selling soft drinks, which are countable. Long-term issues like poverty are big in relation to the available resources. You cannot use the business analogy to measure change in the community over 15 years.
  

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  Philanthropy should have transformational goals
  

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  One point for discussion is that if philanthropy is measurable, why can’t it be monitored? Evaluation becomes much more tricky if the goals are broad. If they are focused, they are easier to measure, e.g. if the goal is reducing teenage pregnancies.
  

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  Each NGO needs to sort out for themselves the standards of accountability that are relevant to them. A lot of work of NGOs is about providing hope and love. In desperate cases of victimisation and helplessness, providing a sense of hope to victims is very important. How do you measure this?
  

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  An example of NGO philosophy is that the donor benefits more than the recipient. So the giver bows to the recipient, thanking him for the opportunity to serve. Instead of focusing on NGOs concerns, we are narrowing our attention to the donor’s requirements.
  

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  All stakeholders should sign an MoU that spells out their different roles and responsibilities, including the public. Then all these challenges become easier.