The pitfalls of donor bias

SINGAPORE - Two universities grabbed the headlines last week for raising a hefty $100 million each for their programmes, scholarships and bursaries.

Yet the cash coup by the National University of Singapore (NUS) and the Singapore University of Technology and Design (SUTD) was just one of many multimillion-dollar donations from philanthropists to the cause of education that have made the front page in the past decade.

While universities and big-time donors hog the limelight, charities for less popular causes plod along quietly, wondering if they will be in the black for the new financial year or have adequate reserves for a rainy day.

As Singapore moves to become a more inclusive society, most donors are giving to uplift the poor through, first, education, and then to health, the elderly and the disabled. Some may support the arts, sports, and causes for the environment and animal welfare.

But where is the place for less attractive social concerns - migrant workers, ex-offenders, people with HIV and those with mental illnesses - and their charities?

Insight looks at the issues around how the charity pie is sliced.

Pecking order of charity

Charity begins at home, but who is favoured and who is overlooked in the family of social causes is telling from the most recent annual report of the Commissioner of Charities.

Figures from 2011, the latest available, show that education received the third-largest piece of the donation pie (12 per cent, $247 million), coming after social services (14 per cent, $280 million) and the main charity drawcard, the religious sector (54 per cent, $1.1 billion). At the other end, sports got 4 per cent ($85 million), and arts and heritage, just 2 per cent ($42 million).

Given that the religious sector has 10 times more charities than education, and the social sector three times more, proportionally, education still gets the largest share per charity, which, by definition, includes universities.

The donor bias is more evident in last year's tax-deductible donations. Education got the biggest share, 40 per cent ($413 million), while arts and heritage received just 3 per cent ($28.7 million), and sports, under 1 per cent ($6 million).

A similar pecking order of social causes emerges in the annual giving survey of the National Volunteer and Philanthropy Centre (NVPC), which polled about 1,500 individuals on their giving habits over a year. The environment and animals rank around the same level as the arts and sports.

However, there is no further breakdown for social services and health, to show if those causes in sectors which suffer from a social stigma get relatively less donations.

It is no wonder education attracts donors; in Asia, education is the holy grail in helping the poor help themselves, something that philanthropists and founders of family foundations here can attest to with personal experience.

But the problem is that such largesse, admirable though it is, may end up skewed too much towards education. The issue is particularly pertinent as Singapore society debates more about not leaving people behind in its progress.

Less-favoured charities themselves are part of the problem in not being proactive enough to sell their cause in a way that appeals to donors, as charity scene veteran Gerard Ee and NVPC's chief executive Laurence Lien both point out.

Mr Ee, former president of the National Council of Social Service and chairman of the National Kidney Foundation, notes: "Charities cannot just sit back and say, 'I'm doing good work and people should support me.' They have to sell their cause, tell people what they do and why they need the money."

Unlike universities, these charities do not have an army of full-time fund-raisers who stage sleek presentations and pitch their cause to potential givers.

Mr Ee suggests charities enlist volunteers who have marketing know-how. Finding the right board members - who can sell the cause to donors - is crucial as well. Unfortunately, he says, charities often "arm-twist people they happen to know" to be board members, but who may not have the skill-sets.

The other side of the problem are the donors, who give where their hearts tell them to, but fail to consider lesser-known, more pressing areas of needs such as mental health and migrant workers, says Mr Lien.

This is why his NVPC focuses on donor education and "informed giving", by publishing reports on unmet social needs and gathering grant-makers in a roundtable to learn about giving strategically.

The neglect of some causes also prompted former banker and fund manager Teng Ngiek Lian to set up The Silent Foundation in 2010 for "silent sufferers". He has committed $30 million to it from his own pocket for overlooked causes. Projects have included funding an animal welfare group and setting up a relief fund for foreign workers in need. Yes, there is an education cause - a bursary at NUS - but it is specifically for a degree in environmental studies.

His dedicated focus to such causes is rare among philanthropists here.

Global trends in philanthropy are also now focusing on the fact that giving according to one's pet causes through the usual channels may not necessarily yield the maximum impact.

The head of philanthropy services for Asia-Pacific at Swiss bank UBS Wealth Management, Mr David Evans, says clients who wish to give scholarships in China - a popular desire among those of Chinese ancestry - instead may be shown data of the greater impact of financing early childhood education for children of migrant workers there.

And clients keen to build schools in China will be advised about the proliferation of "mosquito schools" where the only pupils in these buildings are mosquitoes, quips Mr Evans. Many of the Chinese diaspora do this, not realising that the poor cannot afford to send their children to school.

His own bank's charity foundation invests in giving children in China nutritional supplements so they are healthy enough to go to school. "There's no point having a great school if the kids have no lunch and are tired and listless. People are realising many of these things link together," he says.

Such an approach, which nudges donors to donate in new ways which still serve pet causes, is a work in progress here. There are cases, though, notes chief executive officer Catherine Loh of the Community Foundation of Singapore, which manages more than 50 donor funds.

Tapping the arts and sports areas, some donors reach out to children with special needs using art, and to at-risk youth through soccer, instead of taking the usual route of scholarships and bursaries, she says.

It is an approach that Associate Professor Daniel Fung, president of the Singapore Association of Mental Health, also wants to explore to raise funds for his charity sector. "One pitch is that serious mental illnesses start in the late teens, which affects their education, so they need help to get better to continue learning," says the child psychiatrist.

Funds in the wrong place?

The Government's call for the well-off to do more for society is well and good, but some wonder if it could do more to help charities that lack funds.

As one director of a charity foundation notes of the new rich here: "They say the Government has so much money in the GLCs (government-linked companies), why come to us?"

Observers note, however, that doing more entails dipping into the country's reserves or raising taxes. Instead of paying taxes to the Government to redistribute as it wishes, the well-to-do would be better off giving to their own causes and gaining mileage from their gifts.

For some causes such as HIV/Aids and migrant workers, moral and political factors constrain the use of public funds. HIV workers say a prevalent view among the public is that people who contract the contagious disease out of their own moral failure are less deserving of help. So government grants are for prevention programmes, but not for HIV drugs.

Those who work among migrant workers say the host people in any country also tend to fend for themselves first, rather than allocate their tax dollars to guest workers. There is another political dimension to this particular cause: Historically, there have been questions about the agenda of those outside the establishment who advocate workers' rights.

Meanwhile, the education sector receives $4.4 billion in government grants, based on latest available 2011 figures, including grants to subsidise university tuition fees. Arts and heritage's share of grants, the second-largest, is far lower at $318 million. Social and welfare get $238 million.

The universities, in particular, have since 1991 built up substantial billion-dollar endowments with government grants that match donations dollar for dollar. These are invested, but suffered losses in the 2009 global financial crisis.

In 2010, they received a boost when the Government pledged to give $3 for every $1 raised for the first 10 years of new institutions, and $1.50 for every $1 raised for all universities up to 20 years. This amounted to a commitment of close to $4 billion over 20 years, with $2 billion set aside for a Singapore Universities Trust so that matching grants can continue through economic downturns.

On why universities need to raise so much money from donors, given their huge endowment funds and grants, an Education Ministry spokesman says it is important they have a "sustainable funding model from multiple sources", including government grants, student fees and income from endowment funds. Universities use the income from endowment funds to defray a small part of operating costs and meet future needs, he says.

For its part, he adds, the Government is positioning the university sector for the future and expanding university places, while ensuring affordability by subsidising about 75 per cent of the cost of a degree programme, and giving bursaries and loans.

NUS says donations have benefited needy students and academic programmes, and contributed to "high impact" research. Support for students also came from the endowed fund.

Government help to build up endowments enables universities to launch new initiatives that will benefit students and be less dependent directly on government support, NUS adds.

As a young university, SUTD says it is starting from a low endowment base with no alumni for support, so government grants grow its kitty to secure its future.

Still, some will compare the $100 million each raised by the two universities with the sums raised by other charities. The Community Chest's $72.3 million raised last year is much more modest, considering that it is for 83 voluntary welfare groups under its umbrella with more than 300,000 beneficiaries.

Even so, not all charities fall under its ambit, and those who get partial funding from it for their programmes must raise their own portion as well.

Meanwhile, migrant worker groups like Humanitarian Organisation for Migration Economics (Home) generally have to rely on the generosity of private donors, says its chief executive, Ms Bridget Tan. While her group is able to raise the $1 million a year it needs to cover operating expenses, including a shelter for migrant women workers, its reserves can last for just a year.

The Catholic Aids Response Effort, which runs a shelter for people with HIV/Aids, needs about half a million dollars a year, says its executive director Michael Loh. He reckons that with $100,000 more, he could put about 40 people through an addiction rehabilitation programme.

Currently, the Catholic Church provides the funds. But he also has an eye on the future: "As the pie gets smaller, and with more players in the field, we will have to start looking at solving our own funding issues."

Growing pot of money

The good news for charities, however, is that the ranks of wealthy Singaporeans are expected to grow. A study by Wealth-X and UBS released this week found that Singapore has 1,355 individuals with at least US$30 million (S$38 million) in assets. Their combined wealth of US$160 billion rose 3.2 per cent from last year. Adding to this mix are corporate foundations and foreign donors.

NVPC's Mr Lien believes that the new rich here are more socially conscious than their forefathers. They will also be more entrepreneurial in their philanthropy - trying new forms of giving and being results-oriented.

As to what will move the wealthy-with-a-conscience to causes beyond education, those on the donor scene agree: The less-favoured children in the charity family need to speak up, for a bigger share of patronage pie.

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