9 Indonesian Philanthropists and Bill Gates Agree to Fund Multi-Million Dollar Sustainable Health Initiative in Indonesia

Anh Ton

Anh Ton

One common concern many people share about the current state of Asian philanthropy is that it’s not very transparent. Much philanthropy in Asia is still done ad hoc, and a cultural emphasis on modesty that is pervasive in many Asian countries means that details of who’s giving to what, where, and when can be difficult to come by.

But things have been changing as of late. Back in 2010, Bill Gates and Warren Buffet, arguably the world’s most well-known philanthropists at this time, visited China to encourage the country’s new class of billionaires to give more publicly and generously a la The Giving Pledge. Their efforts are believed to have been effective. 

Image: Jakarta Post

Now, Gates is once again lending his social capital to make philanthropy part of the mainstream chatter in Asia. The Jakarta Post reports that Gates and nine Indonesian philanthropists have signed a memorandum of understanding to fund a multi-million sustainable health initiative in Indonesia. The funding initiative is being co-led locally by Dato’ Sri Dr Tahir, an Indonesian philanthropists who is himself a signatory of the Giving Pledge.

According to the Jakarta Posts:

At the [signing] ceremony, Gates handed over US$40 million to the Indonesia Health Fund. The program is part of the joint philanthropic efforts of the Bill & Melinda Gates Foundation and the Tahir Foundation.

Last year, both Gates and Tahir, who is also chairman and CEO of the Mayapada Group, donated a total of $207 million, with each of them providing $103.5 million.

The other Indonesian philanthropists who have signed onto the memorandum include: Adrian Bramantyo Musyanif (Samali Hotels and Resorts); Hendro Gondokusumo (PT Intiland Development); Ted Sioeng (Sioeng Group); Edward Suryadjaya (Ortus Holdings); Benny Tjokrosaputro (PT Hanson International); Anne Patricia Sutanto (Pancaprima Ekabrothers); Henry Jaya Gunawan (PT Gala Bumi Perkasa); and Luntungan Honoris (PT Modernland Realty). They have all committed to providing $5 million for the next five years.

It’s absolutely wonderful to hear of more Asian philanthropists giving back publicly, and we hope to see more of this happening in other Asian countries.

Anh Ton, is the communications and development coordinator at Vietnam Health, Education & Literature Projects (VNHELP).

This article was originally published on the Asian Philanthropy Forum blog on 5 April 2014. The original article can be found here>

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Social investment: great hype or great hope?

Caroline Hartnell

Caroline Hartnell

‘Social enterprises say, where’s the money? Social investors say where are the deals? Is social investment a great hype or a great hope?’ asked Michael Green, executive director of the Social Progress Imperative, introducing the first event in STEP/Philanthropy Impact’s new Philanthropy Programme, held in London on 19 March – the same day that UK Chancellor of the Exchequer announced a new 30 per cent tax relief for social investment.

Philanthropy has tiny resources compared to government or business, said Green, quoting Bill Gates saying that his own foundation is tiny! Social investment is all about making the most out of limited resources and leveraging larger amounts of capitals.

The event took the form of a case study of Impact Ventures UK (IVUK), formed in December 2013 by Berenberg and LGT Venture Philanthropy and managed by LGTVP. The fund aims to support social enterprises to improve the quality of life of disadvantaged people in the UK – LGTVP is experienced in quality of life measures – and to cover its costs: it offers its investors a net annual return of 7 per cent. Speakers were Richard Brass of Berenberg; Nick Jenkins, philanthropist and founder of Moonpig.com, and one of four volunteer advisers for IVUK; Andrew Purvis, director of K10 (formerly Reds10), IVUK’s first investment, and Luke Fletcher of law firm Bates, Wells Braithwaite, an expert on social investment.

‘There is demand for social investment,’ said Brass, ‘we just need to get the money in.’ Berenberg and LGT are the current investors. They have approached 350 people and 7 have signed up – generally agreed to be a great achievement. A particular achievement is having the London Borough of Waltham Forest Pension Fund among its investors.

K10 is a for-profit business with social purpose, said Purvis. The problem it exists to solve is the decline in the numbers of apprentices in construction. K10 now has 190 apprentices on its books; construction firms pay to have them for whatever time they want while K10 looks after the apprentices, arranges their college training, etc. They are now breaking even, and the money from IVUK will enable them to scale up the business. K10 has always been a business, he said; the social impact element has evolved, and they are now embedding it in everything.

What are the challenges of receiving this sort of funding? Purvis dwelt on the rigorous due diligence. But this wasn’t all negative: the relationship with the fund was stronger afterwards, he said.

The big challenge for the fund is clearly the difficulties of raising capital – the discussion kept coming back to this. IVUK is now £20.8 million, and it could reach £30 million to £40 million, said Brass. One big question is whether Waltham Forest is a one-off institutional investor or a beginning. The lack of established track records for social investment is an issue, he said: what will risk-adjusted returns look like? Deals are expensive to make and the values of deals is low, so costs need to be brought down. Another issue is that investees are not used to collecting the data investors want: how can investors enable this to happen? Fletcher talked about the legal environment for social investment, still a challenge for investors with fiduciary duties, with interpretations of the recent Charity Commission CC14 guidance still uncertain.

Jenkins talked of the need to move away from the two-lane approach to life – destroying the world from 9 to 5 and repairing it and doing some good from 6 to 6.30 – and hoped to see a more intelligent approach to investing. It was clear from hearing him talk that it will be much easier to get money direct from asset owners like him, who have the freedom to make their own decisions and take risks if they want, rather than advisers, who are naturally more cautious as they are looking after other people’s money. But wealth managers can start to move things by asking clients what they want to achieve with their money. Jenkins remembered asking advisers if there were any products like IVUK 5 years ago and the answer was no.

Does he see social investment in terms of a trade-off, accepting the possibility of lower financial returns alongside the social impact? While this is a huge issue for institutional investors, including foundations and pension funders, it clearly isn’t a big issue for Jenkins. He would be happy to establish a fund for building boreholes in villages in Africa and to see less than 100% repayment, he said, or to support start-ups and not see his money back. He is happy with a whole spectrum of results – he can please himself!

Caroline Hartnell, is editor of Alliance magazine.

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Interview with He Daofeng, winner of the Olga Alexeeva Memorial Prize

He Daofeng

He Daofeng

The winner of the Olga Alexeeva Memorial Prize was announced on 27 March at WINGSForum in Istanbul. After the announcement, He Daofeng, who is executive president of the China Foundation for Poverty Alleviation (CFPA) and chair of the China Foundation Center, talked to Caroline Hartnell about philanthropy in China and his own role in its development. Below is the transcript of the interview.

Could you very briefly describe the state of philanthropy in China today? How many genuinely independent foundations are there (as opposed to GONGOs)? Are these mainly corporate foundations or foundations formed by wealthy individuals and their families?

Chinese philanthropy is too complex to describe briefly. There are more than 240,000 registered NGOs including GONGOs (government-organized NGOs) and independent NGOs, plus over 200,000 NPOs, which are involved in various kinds of philanthropic activities.[1]

According to China Foundation Center data, there are 3,700 registered foundations in the country. Among them, 1,400 are independent, and the other 2,300 are GONGOs. Among 1,400 independent foundations, more than 400 are formed by companies, and 900 are formed by celebrities such as famous artists and scholars. Less than 100 are formed by wealthy individuals and families.

How much giving to charitable causes is there among ordinary Chinese people?

In 2013, 3,700 foundations raised a total donation of RMB 35 billion (US$ 5.8 billion). Among them, ordinary individuals contributed RMB 7 billion, accounting for 20% of total donations.

What do you see as the main barriers to the expansion of private philanthropy in China?

I think the barriers are very complicated.

First, selfishness and ideology driven by market economic mechanisms.

Second, lack of religious faith and shared values in society after the huge shocks of the Cultural Revolution and market economic mechanism, influenced by an ideological tide of materialism and money worship.

Third, GONGOs’ bad reputation. This includes poor programmes missing targets for the needy, poor management, a bureaucratic, top-down work style, lack of information on beneficiaries, lack of transparency, lack of independent evaluation and monitoring on effective use of charitable resources, etc.

Fourth, there are not enough good independent NGOs with a good reputation that can mobilize more social resources and deliver more services with effective social interactions with people.

I understand that the China Foundation for Poverty Alleviation, of which you are executive president, is the first GONGO to be transformed into a fully independent foundation. You say in your interview in the Alliance supplement that this was very difficult because you were breaking new ground: ‘If I didn’t tread carefully, I felt it would incur the hostility of many parties, provoke a crisis for the whole sector, and maybe even put us in physical danger.’ Can you tell us about the difficulties you faced and how you overcame them?

The system called the ‘iron rice bowl’ protects people with official identity from any kind of management pressure. This means that nobody, including CEOs of GONGOs, has the right to fire anybody who has a formal official identity except for criminal activity. Therefore people’s relationships are frozen. You cannot let inefficient people leave and get intelligent people in.

In such a system, how can you upgrade the organization’s performance? I transformed the foundation by introducing market rules into the system, including employment. You can imagine that the people who lost their ‘iron rice bowl’ protection hated me and even wanted to kill me. The other 99.9% of GONGOS saw this as rebellion. So I felt lonely and under great social pressure for a long time under such circumstances. In overcoming the barriers, certain things helped me, including: my deep faith in the social reform of China; persuading the government to sign a contract with me to protect me; doing my best to do everything as a true volunteer, and not getting any payment from the foundation; not speaking to the mass media.

Barry Gaberman embraces He Daofeng after announcing the winner

Barry Gaberman embraces He Daofeng after announcing the winner

You talk in your Alliance interview about deciding as a young man to focus on ‘promoting philanthropy and cultivating social self-governance, the civil society spirit and citizen obligation’. How revolutionary is this approach in China?

Looking at the experience of modernization in East Asia countries such as Japan, Taiwan (of China) and South Korea, fostering of social self-governance organizations and civil society must follow transformation of the economic structure. China is at the turning point of civil society transformation now (namely the urbanization rate is over 50%). More and more people feel unhappy when simply making more money instead of helping others by means of social self-governance organizations. The new generation begin to seek for significant meaning in life. So citizen participation and civil society development is inevitable. Some things are happening now. A new social self-governance movement has been developing in China in recent years.

The China Foundation for Poverty Alleviation works across borders, in Africa, Indonesia, Kenya and Cambodia? Can you tell us a bit about this? How many Chinese foundations support causes outside China?

CFPA has been providing cross-border aid to vulnerable groups and communities since 2005, including aid to victims of the tsunami in Indonesia, earthquakes in Pakistan and Haiti, the typhoon in Myanmar, hunger in Horn of Africa, building a hospital in Sudan, providing ambulances to Guinea-Bissau, a school feeding programme in Cambodia, etc. The total aid is about $15 million. So far, about 50 foundations are involved in overseas aid to varying degrees, and CFPA is the earliest and the best.

What have you done to encourage the practice of philanthropy both among high net worth individuals and among more modest givers?

I have established two fundraising departments in CFPA since 2006: one targets wealthy individuals and companies in different industries, and the other one targets modest givers. For different targets, we use different methodologies.

Can you tell us about the work of the China Foundation Center, and in particular the Self-Regulation Alliance for Chinese Foundations, in addressing issues of lack of transparency and lack of trust in foundations and NGOs in China and in promoting collaboration and greater democratic self-governance among Chinese foundations.

A huge movement for public accountability by GONGOs has been taking place since 2011 when total giving decreased by almost 50% all over the country. The China Foundation Center persists in requesting all registered foundations to make a pledge and commitment to open their operating information to the public. At the first level, the China Foundation Center presents the basic information automatically collected from the government’s legal registration department for each registered foundation on its website. At the second level, the China Foundation Center asks every foundation to disclose its financial and audit report. If anyone refuses, its window on the website will be kept empty. On the third level, the China Foundation Center asks for open information on programmes, donors and management and so on for its website.

More open information brings more transparency and higher public reputation. In accordance with the collected information, we can do some ranking, comparative study and research, and leadership training by means of mass media, to push China’s philanthropy sector to be transparent. Based on this platform, we can call on some foundations which value their public reputation to collaborate as the Self-Regulation Alliance for Chinese Foundations

You have also been instrumental in bringing a group of experts to help the provincial government of Yunnan to develop its first local charity law and in promoting media coverage of philanthropy. Taken all together, your work has done a great deal to help to make philanthropy into a more integral part of life in China. What is needed now to modernize philanthropy in China?

China’s new generation leaders have been firmly determined to deepen reform of the economic system and social restructuring, but power struggles among ministers have always been barriers to deepening reform at every turning point since 1978. Therefore reform pioneers have always sought cooperation with provincial government to break down barriers as a kind of response to the top leaders in the central government. This has always been the political wisdom of reform in China.

So I made use of this kind of political wisdom in Yunnan province to respond to President Xi Jinping and Premier Li Keqiang’s social sector reform policy. It means that the Yunnan Provincial Government will withdraw from the role of collecting and being the recipient of donations, and will encourage social donation giving to equal NGOS instead of to local government by issuing new legislation.

For modernization of philanthropy and civil society in China, we need to deepen reform as follows:

  • All levels of government must withdraw from the role of collecting and receiving donations.
  • Reform all official organizations including universities, hospitals and all kinds of industrial associations and turn them into NPOs.
  • Transform all GONGOs into independent NGOs.
  • Develop a legal system to maintain a fully competitive and enabling policy environment, so that more efficient NPOS and NGOs can grow up and drive the least efficient ones out of the charitable sector.
  • Develop an ecosystem and value chain in the philanthropy sector including training, research, evaluation, audit and accountability.

So we have a long way to go. We must go the way of striving for social civilization upgrading and for changing of the generations, building a modern civil society at this turning point of modernization of China. We must stand for the deepening reform of China’s rigid social mechanism.

That will be China’ responsibility for the world; that will be every single Chinese citizen’s responsibility for our nation; that will be every excellent Chinese NGO’s responsibility for mankind. Those jobs are worth our sacrifice for generations!!! Philanthropy is without borders of nation.

Do you have any plan for the prize money?

I have never thought about applying for any kind of reward or thought that what I do is worth any kind of reward. Today I am here surprised at what has happened right now. I don’t know what to say at this moment. I do not think what I have done is as good as your prize committee has judged. I am only one common person among thousands of contributors in the philanthropy sector. I just do some little things that I ought to do following my heart.

Therefore I think that the prize is not for me; it is for everybody who wants and tries to do something to help someone or to change our painful world. The prize is just to encourage me, my colleagues and everybody in this field to learn from Olga, to adopt the spiritual heritage Olga left us, to contribute more, and to do our best for world peace, goodness, honesty, beauty and all philanthropy. So I will represent your love by donating the prize money to the Hungry Children Program of the China Foundation for Poverty Alleviation. Thanks again!

1 NGOs (non-governmental organizations), also known as civil society organizations, are created by legal persons that are not part of the government. NPOs (non-profit organizations), also known as endowments or foundations, aim to raise substantial funds to use for the organization’s purposes, eg public arts organizations, trade unions and charitable organizations.

Caroline Hartnell, is editor of Alliance magazine.

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Philanthropy’s two cents: how some foundations are contributing to development policy dialogue

David Crook

David Crook

Today in Mexico City, the Global Partnership for Effective Development Cooperation holds its first ministerial meeting. The ministers, bilateral donors, multilateral agencies, NGO leaders, private sector peak bodies and foundations in attendance expect an event billed as the space to institutionalize effective development cooperation at the global level.

Though much of the attention has rightly focused on more and better inclusion of civil society in development governance and cooperation moving forward, foundations’ contribution to the global cooperation project will be introduced in the form of the Guidelines for Effective Philanthropic Engagement.

Led by the global Network of Foundations Working for Development (netFWD; housed in the OECD) and with the support of WINGS, EFC, Rockefeller Foundation, myself and colleagues at Stars, the Guidelines are meant to act as a bridge across the collaboration divide separating foundations and governments in particular.

Under three broad headlines – Dialogue; Data/Knowledge Sharing; Partnering – the Guidelines offer an early blueprint for foundations with an appetite to collaborate to engage with governments in a meaningful way.

Read the Guidelines here.

Read an early blog on the relevance of the Guidelines here.

The Guidelines have undergone wide consultations, including an intimate ‘focus group’ discussion held by Stars under Chatham House rules to receive feedback and gain greater insight into the ‘collaboration aspirations’ of UK foundations that support international development.

Participants’ reactions broadly fell under four critical questions to the Guidelines’ authors. The more salient, provocative and representative responses follow.

Who are the Guidelines speaking to?

  • Who is ‘we’? All foundations? A coalition of the willing?
  • Who is this for? It feels very government-driven, and our relationships are rarely with governments, they are with civil society.
  • Development is about people. If we want these Guidelines to win hearts and minds, they need to answer what the impact will be on people, not just talk about governments.

What do UK foundations think of the Guidelines themselves?

  • It’s right to recognize foundations as ‘independent’ and to list our comparative advantages in development.
  • The Guidelines could be divided into ‘what would improve our practice as foundations’ and ‘how better to engage with governments’. The latter ‘might not be for everyone’.
  • They’re generally constructive, and nothing feels that controversial. But nothing feels really exciting either.

Why is a set of cooperation guidelines necessary for the sector?

  • If foundations are going to be more effective development actors, we need to do some things better. Cooperation is one of them, and this document provides a route to cooperation that resonates with and reinforces our own mission.
  • It’s important for development actors to understand the roles of others, but the degree to which it results in ‘rather prescriptive guidelines’ is unclear.
  • From the point of view of a very small trust, ‘the Guidelines are great’; we could first use them to reflect on our own practice, and they might help us to think about working with other networks and coalitions to achieve our aims.
  • Our sector should not be dictated to; we are the only free-will, experimental thing that still exists in international development, and it needs to stay that way.
  • There is a leap of faith here: we can choose to see this as a tool to constrain or limit our sector, or as a way to help us amplify our impact.
  • This isn’t about us being ‘Liza Minelli in the Oscars selfie’; we’re making a proposal about how we could work with governments, but we should make it clear that governments will be expected to do things differently as well.
  • These Guidelines make it easier for inclined foundations to find each other, and for inclined governments to find those foundations interested in collaboration.

How would the Guidelines be implemented?

  • Foundations may simply not have the time, capacity or budget to invest in ‘living’ all of the Guidelines.
  • It will be a challenge to get foundations to ‘walk the talk’, without undermining the energy and dynamism of the sector.
  • This feels like a ‘nudge’ in the right direction, buy my fear is, in practice we’ll be brought into the bureaucracy – in-country meetings between governments and foundations every few months.
  • If this could result in greater enabling environments for civil society organizations, that’s great, but I’m less clear how that would really happen.
  • This effort could move towards a set of indicators so foundations can identify where they stand and where their collaboration aspirations lie.
  • Perhaps the way forward is for philanthropy to have its own sector guidelines, before we bring in other actors?
  • If the only thing that comes out of this is greater collaboration between foundations, then that would be useful in its own right.

The Guidelines have since been refined, and will be formally recognized at the GPEDC meeting this week.

With this political legitimacy, advocates and allies of the Guidelines will be expected to move to a more practical discussion, building momentum towards field-level ‘country pilots’. This will be the real test; whether the Guidelines will be orphaned once they are pushed out into the world, or whether foundations writ large and governments will recognize enough of themselves and their aspirations in the document to actively embrace them.

David Crook, is development director at Stars Foundation.

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

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New cross-sector collaborations to address global problems

Alliance magazine

Alliance magazine

A new cross-sector partnership, US Global Development Lab, aims to end extreme poverty by 2030 by adopting a science-and-technology-based approach to international development. The partnership, led by USAID, draws in just about every other sector, involving corporations, foundations, universities and non-profit organizations. It will work on solutions to challenges in water, health, food security and nutrition, energy, education and climate change; according to a press release, it will benefit 200 million people over the next five years.

USAID has also announced a new Research and Innovation Fellowships programme which, this year, will send more than 60 young scientists, technology experts and innovators to work on development challenges at universities, research institutions, non-governmental organizations, and private-sector companies in 12 developing countries. Partners include the Bill & Melinda Gates and Skoll Foundations, Save the Children, World Vision, the Smithsonian Institution, University of California, Berkeley and Duke, Johns Hopkins, Michigan State and Texas A&M Universities.

Meanwhile an existing partnership, Uniting to Combat NTDs, spearheaded by the Gates Foundation and also involving USAID, the UK’s DFID and foundations, global health organizations and pharmaceutical companies, has pledged a further $240 million to fight neglected tropical diseases (NTDs). The commitments include $50 million from the Children’s Investment Fund Foundation (CIFF) to provide technical assistance to national deworming programmes and $50 million from the Gates Foundation to explore the feasibility of interrupting transmission and mitigating the risks of drug resistance. At the same time, Dubai Cares will design programmes to integrate nutrition, deworming, and water, sanitation, and hygiene (WASH) interventions in schools, while WaterAid will deliver WASH programmes in NTD-endemic areas. ‘We’re taking the “neglect” out of neglected tropical diseases, thanks to the commitment of partners from across the public and private sectors,’ said Gates Foundation co-chair Bill Gates in a new report on the group’s progress, adding, ‘If we stay focused, we can reach the London Declaration’s 2020 goals and help provide millions with access to health.’

Bill Gates again – this time signing a memorandum of understanding with eight Indonesian business leaders to establish a public-private partnership that will fight infectious diseases and work to expand access to family planning services in the Indonesian archipelago. Gates will contribute $40 million and the eight local business leaders $8 million each to the Indonesia Health Fund to tackle dengue fever, HIV/AIDS, malaria and tuberculosis in the country and to expand access to contraception.

For more information

“U.S. Agency for International Development and 32 Partner Organizations Launch U.S. Global Development Lab to Help End Extreme Poverty by 2030.” US Agency for International Development Press Release, 3 April 2014.

“Global Partners Are Taking the ‘Neglect’ Out of ‘Neglected Tropical Diseases’.” Uniting to Combat Neglected Tropical Diseases Press Release, 2 April 2014.

“Gates, Conglomerates Sign MOU on Philanthropy.” Jakarta Post, 6 April 2014.

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

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