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Giving with the head as well

Philanthropists today are using business principles to get more bang for their charitable buck.
Friday, November 18, 2016 - 05:50

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Mr Gunasekera says that "unless your charity is accountable and transparent, you can't go that far in the long term".

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For Mr Kee, running a successful charity means putting in place proper processes and procedures to prevent fraud and to maximise the benefit-to-cost ratio.

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Mr De Ferrari says Credit Suisse's Higher Education Notes have enabled 2,500 students from underprivileged backgrounds in over 70 countries to acquire a university education in the last three years.

THE business of charitable giving is changing as more progressive philanthropists focus not merely on giving to worthy causes, but ensuring that the impact of their investments is both effective and measurable.

This has given rise to greater interest in trends such as impact investing - which aims to deliver investment returns as well as social outcomes - venture philanthropy, and technology-based measurements of giving.

Yet, finding the right balance between making money and doing good can be a tricky proposition. There is also the issue of how to measure "impact" meaningfully.

Three Asian philanthropists explored this topic at a panel session at the Credit Suisse Philanthropists Forum 2016, held in Singapore on Thursday. The trio use their business acumen acquired from earlier careers to run their charitable foundations.

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"To run a charity, you have to apply business techniques," said Kushil Gunasekera, founder & chief trustee, Foundation of Goodness.

"Donors want to see the impact of their investments. So, unless your charity is accountable and transparent, you can't go that far in the long term.

"But there must be a balance; you have to run it like a CEO, but you still have to be passionate about your cause."

Mr Gunasekera was an entrepreneur in the sugar trade for 15 years before selling his business to start his philanthropic activities. His not-for-profit NGO was set up in 1999 to provide essential services to his ancestral village of Seenigama in Sri Lanka. Its work has now been extended to other parts of the country.

For Robert Kee, a former entrepreneur and founder of the Operation Hope Foundation (OHF), running a successful charity means putting in place proper processes and procedures to prevent fraud and to maximise the benefit-to-cost ratio.

He founded OHF in 1995 with the mission to help the poor in developing countries. The foundation has operations in Cambodia and Nepal in the fields of community development, skills training, and childcare.

"In every operation, you need processes and standard operating procedures to prevent fraud. Our donors have a desire to see their money being used properly," said Mr Kee.

He added: "You can apply a lot of entrepreneurial skills to get more bang for your buck."

Mr Kee's biggest challenge now is to find a successor to take over the running of his foundation. So he is spending much of his time now sharing his knowledge with others in areas such as detecting fraud, conducting audits, and managing teams.

Edward Man, a former private equity professional, believes delivering both profit and social impact is a tough task. "Doing either a startup or charity is tough, but to do a hybrid model is quite a challenging proposition," said Mr Man, founder of the ChickenSoup Foundation.

On its part, Credit Suisse has also been actively involved in developing solutions in the area of impact investing.

Said Francesco de Ferrari, Credit Suisse's head of private banking, Asia Pacific: "Specifically in the area of education, impact investment can help underprivileged and talented students from low-income countries get loans for advanced education, giving investors access to a diversified portfolio of bonds linked to these loans that generate financial returns when the loan is repaid.

"But there are also social returns: the students, and their home countries, all stand to benefit from their education."

In 2014, Credit Suisse in Switzerland launched the first ever Higher Education Note, in collaboration with Prodigy Finance, followed by two more such notes in the last two years. These notes have enabled 2,500 students from underprivileged backgrounds in over 70 countries to acquire a university education.

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