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The Straits Times
The Straits Times Willie Cheng



Mr Willie Cheng has written an
authoritative tome
on the charity sector, covering everything from nonprofit management to philanthropic giving, called Doing Good Well, which will be launched on Wednesday.
-- ST PHOTO: CHEW SENG KIM

FIVE years after the eruption of the National Kidney Foundation scandal, Mr Willie Cheng, who blew the whistle on its then-$189 million reserves, breaks his silence. With a book, no less.

He has written an authoritative tome on the charity sector, covering everything from nonprofit management to philanthropic giving, called Doing Good Well, which will be launched on Wednesday.

It has a chapter containing what Mr Gerard Ee, chairman of today's NKF, calls 'the most complete and insightful account' of the NKF fall-out.

Here are excerpts of ST's interview with him, where he talks about the most memorable lessons he has learnt in the last five years.

Q. After five years in non-profit work, what's the most memorable lesson you've learnt?

A. One thing that struck me quite a fair bit recently is that you don't need to be immersed in charities to be charitable or make an impact on charity.

The likes of William Hewlett and David Packard probably made a much bigger impact than say, even Professor Muhammad Yunus who founded Grameen Bank, a community development bank in Bangladesh that makes small loans to the impoverished without requiring collateral.

Prof Yunus has been widely celebrated, winning the 2006 Nobel Peace Prize, deservedly so, for his contributions to microfinance.

Hewlett and Packard founded HP which changed the way the world works and live through technology. In addition, they left behind two charitable foundations with more than $15 billion in assets and which have been making grants of $500 million every year.

What wrapped it up for me was billionaire investor Warren Buffet. When asked by Fortune in 2006 why he waited so long to give away his money, he said he thought the person compounding money at a faster rate than most people was in a better position to give to charity 20 years later.

Having compounded his fortune to US$37 billion then, he pledged it to charity mainly through the Bill & Melinda Gates Foundation, rather than do it on his own. Instead, he will stay focused on compounding that money further - and he has been.

Basically he was saying: 'This is my talent - growing money at a faster rate than everyone else. Therefore I let the people who can spend the money best for charity, do that job. I will focus on my talent of growing the money.'

The charitable impact that he is making by doing this, is a great deal more than if he were to roll up his sleeves and go and work in the charity field.

Because of Buffet, I changed my tack. Since my retirement five years ago, a number of friends have called me up to chat prior to their own retirements, some asking how they can get into charity. One of questions I always ask them now is: 'Do you enjoy what you're doing? If you do and you're earning that kind of money, why not continue to do so and just give the money to someone who can use it better? Seriously, you can make a much greater impact on the charity scene.'

But if they want to get into charity, I ask them to get involved in ways that leverage their strengths as well as their interests. For professionals, that often means helping out with the capacity building side of charities - marketing, finance or just good governance and management.

But there is a caveat. Five years on, I have also learnt that being involved in the bowels of charity help you stay rooted and aligned with the reality and humility of what charity is about.

So I also advise that it is good to get away occasionally and do things that might be seen to beneath one's 'station in life' - scrubbing floors and carrying bricks etc. As my priest says, it is important to be 'with' the needy rather than just being 'for' them.

So, I guess it surprises some of my friends that I tell them, if you are happy doing what you are doing in the commercial world, but are also charitable, it's good. Just continue doing that. Work hard, actively give and give more. Occasionally, get into the grind of charity work to keep your perspective, but keep earning that money.

We should be using our talents as best as interests us. It's the heart that counts, more so than the work we do. That, for me, was a revelation.

Q: Anything else that struck you?

A:The other lesson was that, in the charity world, the journey is often more important than the destination.

First, quite frankly, the destination for many charities is never really clear. That's been one of the grievances of those who advocate better governance in charities.

But that aside, the sector is peopled by those with hearts, passions and feelings. So, how you get there, the relationships and experiences along the way, count for as much as the end point.

There is a strong need to make people feel good even if, from an objective standpoint, their performance could be a lot better.

Q: Is 'philanthrocapitalism' the next big thing? How will it all play out?

A: I think the jury is out on how this will play out.

Philanthrocapitalism is basically about the charity sector embracing business principles and practices. It's emerging in various forms such as social enterprises and venture philanthropy.

Social enterprises are businesses with a social mission. There's a lot of press and hype around this. With governments and foundations encouraging their formation, social enterprises have mushroomed in Singapore and around the world these past few years.

But when you really get into them and behind the numbers, they have not been very successful. The 'unfair business advantages' they enjoy do not seem to translate to tangible business results.

When you set up a social enterprise, often the seed money comes from donors or foundations or governments, where there are no demands for a return or payback.

You can also get free or discounted labour, volunteers or people willing to help out for less than full wages because it is a charitable set-up. Also, you will likely find sympathetic buyers who like the idea of buying for a good cause.

But look at the numbers, most social enterprises are struggling to survive. The question is why.

One argument is that it's hard to operate with multiple bottom lines. You can't be both a charity and a business. Many - though not all - of these enterprises employ beneficiaries.

So the argument is that there are conflicting priorities - taking care of employees who are handicapped in some way but whom you cannot hire and fire as regular employees, and at the same time trying to make money. The counter argument is that you do have socially responsible businesses that do a decent job of employing the disabled and yet are profitable.

My view is that it boils down to the mindset of the people who run the enterprises. A lot of social enterprises are run by charity players, who are used to a hand-out.

They are not so much thinking of creating a financially sustainable business, but often are hoping, looking for a continual stream of grants to fund the enterprise. You need a businessman with a business mind to run a business, even if the profits ultimately are meant for a charity.

But it's early days yet for social enterprises, and I think this will sort itself out over time.

It is even earlier days for venture philanthropy. It's not happened here yet. At the Lien Centre For Social Innovation, we are working to see if we can help to catalyze this.

Q. How can we get Singapore companies to take Corporate Social Responsibility (CSR) more seriously, now that the earnings of big ones like SingTel have started dwarfing the income of small nations?

A: The question is: Is CSR about business or responsibility?

If the answer is 'business', then the majority of companies are saying 'It's not good business and not worth our while to be doing all this'. There are, of course, a small minority who say it's good business and thus they do it - these are the champions of CSR.

The business argument is the prevailing one. But the right argument for CSR should be 'responsibility' - the responsibility of power. As you pointed out, if companies like SingTel dwarf countries, their impact on the communities they operate in is significant and their power sometimes larger than what the governments of those countries can do to keep them in line.

In Joe Balkan's 2004 book, The Corporation: The Pathological Pursuit Of Profit And Power, he says the company is a pathological creature, created to be pathologically selfish because it's constituted to be primarily accountable to its owners and operates for their maximum financial interests.

If you follow that line of argument, the solution is to either change the constitution of companies or to create regulations to compel companies to be socially responsible.

Interestingly, advocates of free enterprise such as The Economist magazine are against CSR and for regulations. Their view is that companies should do what they need to do in their maximum financial interests, but it's the role of government, as the protector of the community, to put in place regulations that will constrain companies from damaging the environment, from behaving unethically and from engaging in unhealthy financial practices.

But pushed to the extreme, such dependence on regulation becomes all about wrong doing, rather than right doing.

The other approach is to redefine the constitution of companies so that they are not so selfish. You could say that social enterprises and cooperatives have led the way. There is a global movement by Corporation 20/20 to redefine how the 21st century corporation should behave.

The best long-term solution, in my view, is to change the culture of society and business community, as to what is acceptable and what is not. So that in time, corporations and their owners are expected to be community-minded, everyone knows how to behave themselves and it's just the done thing. The principles of Corporation 20/20 then become not so much law, but how companies are expected to operate.

Incidentally, at the Lien Centre For Social Innovation, we are looking at understanding the Asian context for CSR and hopefully help to foster it.

Q. Do you think Singapore is behind the curve in giving to our less well-off neighbours?

A. Yes. Now, Singaporeans are driven by compassion and are quite compassionate by and large. Witness the response to the tsunami. Many people have told me that they prefer to give money overseas because they perceive the need in the poorer countries to be greater.

But I do think there is too much hindrance to giving abroad - the 80/20 rule, permits for overseas fundraising and just a general lack of mechanisms to support overseas giving. In my view, the legal requirements for fundraising for overseas purposes are not practical or sustainable.

Fundamentally, the issue boils down to what our philosophy of charity is. Right now, our policies are written such that charity does not just begin but largely stays at home. It's a measured approach based on national and foreign policy interests.

Our notion of charitableness needs to change. Charity is not quid pro quo. It should not be a foreign policy tool and an expression of national interests. Being measured in our giving undermines the very character of charity. Giving is love and compassion, not bounded by what you lose or get back.

One of most remarkable things about Americans is their philosophy of sharing and giving. This is not just in charity, but in the whole way they operate. At Accenture, I grew up in a corporate culture heavily influenced by Americans. Their spirit of sharing is very evident and pervasive.

In Asia, we operate according to this order of loyalties: me, my family, my friends, my company or my clan, then my country. That's how we've been brought up and taught here. In America, there is a strong individualistic streak but also a strong spirit of helping out. It's me and my rights, then it's other people. And other people could include those living far away, in another country.

The good news is that we can well afford to be generous, as a people and as a country. We are better off. We have surpluses. We are a first world country. It's time we are first world too in our attitudes towards charity.

Read the full story in The Straits Times today.

www.straitstimes.com

 

 

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