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A closer walk with philanthropy today
MANY are aware of the different forms of charity-giving. But sometimes we can't distinguish between charity-giving and philanthropy.
Have you heard of impact investment, venture philanthropy, strategic philanthropy or social enterprises? These are the new generations of philanthropy that have used successful business models to address global challenges like poverty, health issues, natural disasters and ageing.
Charity-giving is usually more spontaneous and reactive to an event, such as raising money for earthquake victims, while philanthropy is purpose-driven, usually by values and passion, and involves a higher degree of commitment.
In a new frontier of philanthropy, there's impact investment, where a philanthropist actively pumps in capital into investment or business to generate income, and the returns are given to charity. Impact investment requires risk-taking, strategy, determination, humility and passion.
There's also venture philanthropy - it emphasises on capacity-building in an organisation and the grants given to non-profit organisations as a form of investment.
With strategic philanthropy, a client's charitable intent is better-planned. He gets to understand the ground issues and can decide how much he wants to engage in the philanthropy causes. By having a goal and a strategy, the client is able to gauge the impact of his philanthropic giving - making it measurable for him for future contributions.
Whatever the form of philanthropy, it usually starts from an individual and expands into the family and possibly a pillar in a corporation's mission.
From an individual, it starts with a passion to improve someone's life or create an impact socially.
Within a family, members may set up their family philanthropy mission and vision. Where possible, they involve all the family members, including the young ones, in the philanthropic cause. This keeps the family together and strengthens their bond. It is also one way of establishing family legacy and identifying shared values in the family.
Expanding the philanthropic vision and mission to the corporation is a way of giving back to the community where money was made. It also enhances the company's standing in the community, creating a positive image.
But there are challenges faced by the individual and the family at large. The different upbringing, such as children who received foreign education, and the family dynamics and values can create tension within the family.
Let's look at the challenges facing philanthropy today - without taking into account the amount of contributions.
Creating awareness of the need for philanthropic effort is limited. There are limited government tax policies to attract donors. There is scepticism of accountability on how funds are distributed. So there is a need to apply innovative approaches to sustainable development - stressing on transparency, accountability and long-lasting outcome.
At a higher level, countries may come to work together and align their interests to encourage more philanthropy. Governments may set policies that encourage philanthropic accountability and improve data collection. Transformation impact can be achieved with strategic analysis, community engagement and emphasis on this shared philanthropic vision and mission. These will encourage the society to show more compassion towards the less fortunate.
Time, talent and treasure are means to help realise a person's philanthropic cause. Here are some ways a philanthropist can go about it:
Discussing philanthropy with clients
Most of the time, in an estate-planning discussion, a client would talk about his personal affairs including his life and death. The list of beneficiaries in estate planning usually includes immediate and extended family members, and sometimes close friends and loyal employees.
Estate planners should at this point prompt the client on questions such as his interests and values in life. They can be followed by questions on his charitable beneficiaries and how he spends his time and/or money on them. Ask if the whole family is involved, if his company spends time and money on corporate social responsibility.
Do not focus too much on technical issues like tax efficiency or tax deductions. Instead, work towards a holistic approach on the client's philanthropic goals. Assisting the client to build his philanthropy mission and vision for himself and his family should be top priority.
Creating a bigger social impact with DBS Foundation
As a corporate foundation in Asia solely dedicated to championing social entrepreneurship, DBS Foundation contributes towards building a more inclusive society in the region so that those at society's margins can enjoy productive and rewarding lives.
DBS Foundation works with social enterprises and entrepreneurs in Singapore, India, Indonesia, China, Taiwan and Hong Kong.
DBS Foundation's work aims to:
- Build awareness and advocacy for social enterprises, and support programmes that help spark ideas for social good.
- Nurture and strengthen innovative social enterprises through best-in-class incubation programmes with its partner network.
- Develop high-potential social enterprises and enable their success through mentoring, funding and support of skilled volunteers.
At DBS Private Bank, we connect our high-net-worth individual clients to the social enterprises supported by the foundation. The foundation partners social enterprise developers to facilitate knowledge-sharing and to build up the capacity of early-stage social enterprises to achieve social and commercial viability.
These partners also provide incubation, boot camps, workshops and some financial support to social enterprises.
Some of our grant partners include NUS Enterprise in Singapore, Village Capital and Tata Institute of Social Sciences in India, SE Insights in Taiwan, YouChange Foundation in China, and Hong Kong Council of Social Service.
DBS Foundation continues to support social enterprises with its annual Social Enterprise Grant Programme. This programme enables social enterprises to develop a prototype of their ideas, improve existing processes or add critical capabilities to achieve sustainability, or to scale up their existing businesses for greater social impact.
Doing more for society
Private bank clients increasingly have an interest in engaged and impactful giving programmes, especially in key areas of strategic philanthropy.
We have put in place quarterly sessions to share with our clients ways they can help to make a difference and to connect them to individuals or speakers from the charitable organisations that they wish to support.
In 2017, our focus was on education, ageing, health, and alleviation of poverty. This year, we continue our strong momentum with our clients as they see DBS as more than just a bank, but as an impactful organisation that helps those who help others.
- The writer is senior director of wealth planning, DBS Private Bank