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When empathy meets philanthropy
AS A PRIVATE equity veteran of more than two decades, it is fitting that Lam Nguyen- Phuong has chosen social entrepreneurship as his area of philanthropic focus.
But he is not in it for profit, even as interest in social entrepreneurship and social enterprises has risen alongside an intensifying interest in impact investments, particularly among the wealthy. Mr Nguyen-Phuong steers clear of impact investments for his personal portfolio, as he believes the sector carries inherent conflicts of interest.
Impact investing channels capital into companies, organisations or funds with the objective of generating a measurable social or environmental impact as well as a financial return.
"I've been approached by social impact (investment) firms to invest and I refused ... Impact investments have a built-in conflict, as investors may say - why can't we limit the social impact for a higher return? But profit has to come after purpose, and only to make it self-sustainable. When I used to make investments for (private equity) clients, the main objective was to make a profit. If in the process there was a social benefit, that was good."
He was co-founder and senior managing partner of the private markets division of the Capital Group before he retired in January this year. For roughly 24 years between 1992 and 2016, he served as the firm's chief investment officer and oversaw the recruitment of nearly 30 investment professionals and the investment of over US$5 billion in more than 80 investee companies spanning Asia, Latin America, Eastern Europe and Africa.
In his personal capacity, Mr Nguyen-Phuong has supported non-profit organisation Ashoka, and is a donor through an Ashoka endowment fund set up in his family's name, the Nguyen- Phuong Family Endowment, to support entrepreneurs in emerging markets.
Ashoka scouts for and supports early stage social entrepreneurs who are taking action to address social, human and environmental problems. Ashoka was founded in 1980 by Bill Drayton, who is widely described as the father of social entrepreneurship. Ashoka Fellows are referred to as "changemakers". There are currently over 3,800 Fellows in 89 countries, selected through a rigorous process. Of these, 83 per cent have changed national policies and 93 per cent have seen their innovations replicated within five years of selection.
Mr Nguyen-Phuong describes his philanthropic activities through the years as "eclectic". He has, for instance, established fellowships at the US universities attended by his three children, to support students from developing countries. He has donated a "significant" amount to a Jesuit mission in Myanmar and to support Rohingya refugees in Bangladesh. He has also helped to fund the establishment of a meditation centre in France. He also supports Endeavor, a global organisation that selects, mentors and helps to accelerate high-impact entrepreneurs. He grew up in Vietnam in modest circumstances, and not without difficulties. "My father was in politics and there was a period of 18 months to two years where he was a fugitive. It was very difficult for our family."
When he was in Brazil at 15, however, he had an awakening of sorts. "There in Brazil I was shocked. I saw abject poverty and extreme wealth. To me that was wrong. How can people live with their conscience when others suffer next door? My consciousness changed; I became more proactive."
He believes that philanthropy and empathy are the proverbial peas in a pod. "Philanthropy is like love, but it's a much abused word. It goes handin- hand with empathy; or else you are simply helping yourself - you do it to feel better. If you have empathy for someone, you suffer with the person, and out of compassion comes real giving. It's not simply an act of giving. To give with the hand is easy; to give with the heart is tougher."
He adds: "The poor will be with us forever, but we need to do something sustainable as we do not have enough resources ... Social entrepreneurs try to do as much systemic work as possible."
Mr Nguyen-Phuong aims to spend time in retirement to mentor social entrepreneurs. He has begun to do that with some Ashoka Fellows, and with entrepreneurs under the Endeavor umbrella. Among the Ashoka Fellows that he supports through his endowment is Matrika Devkota, who had set out to break the stigma and the "incurable" label attached to mental illness, by giving them a voice through self-advocacy.
Mr Devkota set up Koshish in Nepal, a mental health organisation whose management is led by the beneficiaries themselves. Koshish has created a decentralised model for care by using existing government structures such as awareness programmes and peer support models, and building capabilities within local primary health centres to provide holistic care for the mentally ill.
Koshish's efforts have succeeded in rescuing and reintegrating 300 people with chronic mental illness with a 90 per cent success rate. Through outpatient services in two districts, they have provided holistic care to another 600 patients.
Another beneficiary is John-Son Oei of Malaysia, who was recently elected an Ashoka Fellow in a Singapore event. Mr Oei founded EPIC Collective (Extraordinary People Impacting Community), whose flagship project is a non-profit initiative called EPIC Homes. This is a system that empowers ordinary people to build sustainable homes for families in as quickly as three days.
Inspired by Lego and Ikea, he developed his idea with the help of friends and over 40 architects, engineers and designers, which culminated in a modular building system. With this system and a volunteer framework, EPIC has built more than 100 homes while working with over 5,000 volunteers from more than 50 countries and 40 organisations, including Prudential, GE, Energizer and Nestle. W