Philanthropy
Contents
Definitions and Scope
What is philanthropy?
Philanthropy is traditionally seen as giving money to the less fortunate, charities, or civil society organisations (CSOs) (Chia, 2015). In the last 3 decades, however, philanthropy has evolved and is now taken to mean the giving of money, time, and talent to a specific cause, usually to aid those in need (Fieldmann 2014). Individuals, groups, and organizations can all engage in philanthropy (Zunz 2011).
The present-day definition of philanthropy includes not just the giving of money but also the sharing of time and expertise. This could perhaps reflect a change in how Philanthropy is structured or done. For example, expertise is shared when a professional accountant helps a charity to prepare its statement of accounts on a pro bono basis. It also takes place at the corporate level, as when Toyota applied its kaizen approach to help New York soup kitchens improve the efficiency of their operations (El-Naggar 2013). Volunteering of time occurs when people or organizations give time to a cause, such as when Keppel Volunteers (from Singapore’s Keppel Corporation) take members of their adopted charities out for nature treks or park visits. Sometimes, the same giver carries out all three kinds of giving. For example, a person can donate money to a child health program, volunteer to spend time and play with the children in that program, and also serve on the advisory board of the program.
Why philanthropy?
Compared to charity, philanthropy involves charitable giving initiatives that are altruistic, long-term and strategic. These are usually achieved through donations of money, property, or work to needy people by individuals or organisations that aim to ameliorate human welfare on a large scale. Typically, philanthropy tends to address the root cause of the problem. Some say charity is akin to giving a fish to a hungry man, whereas philanthropy is teaching the hungry man how to fish.[1]
Philanthropy also provides personal benefits to the participating individual and family. Learning to share and work with others is one of the first developmental stages in child development and enriches our lives. What is taught through philanthropic giving is applicable to life – stewardship, needs assessment, financial review, making choices, negotiation, collective decision-making and much more.[2]
History of Philanthropy in Singapore
Philanthropy was part of Singapore’s landscape from its earliest days, with earliest contributions recorded in 1820. Furthermore, the number of philanthropists in the settlement was far higher than was expected, with 28 men and women giving generously to various causes before 1867.[3]
Philanthropic Organisations in Singapore
1. Corporate foundations
Generally established by the corporate entity or the corporation’s founder, sometimes with a blurred line between the institution and the individual or family (Grady, 2014).
By 2013, there was growing recognition that corporate giving had the potential to contribute even more to societal needs. The 2012 Corporate Giving Survey data reported 3 in 5 Singapore corporate givers contributing less than 0.5% of pre-tax profits in 2011 and 2010. Though not strictly comparable, this is a low number compared to Fortune 500 companies’ median of 0.95% of pre-tax profits.
2. Family foundations
Although the term is used widely, there is no standard definition of family philanthropy in the research literature. Nor is there a standard definition of family foundation, because this type of entity is not part of the Internal Revenue Service’s legal classification system for nonprofit organizations and foundations.
In practice, however, family foundation typically connotes the active involvement of donors or members of the donors’ family in the foundation. Definitions emphasis the presence and impact of family in the foundation’s activities. These include donor intent and legacy, source of assets, self-identification as a family foundation including possibly having the family name or name of founder in the foundation’s name.[4]
3. Independent foundations
Distinct from other private foundations like family or corporate foundations, in that they are not governed by the benefactor, the benefactor’s family, or a corporation. Rather, they are usually funded by endowments from a single source such as an individual or group of individuals (Council on Foundations, 2016a).
4. Community foundations
They provide the means for a wide range of donors to create permanent funds to meet local needs. Community foundations grant funds to a wide variety of causes and offer donors many services and benefits (Community First Foundation, 2016)
5. Grassroots philanthropy
Grassroots philanthropy can mean the giving of time, money, and other forms of support by ordinary citizens to one another and to the collective activities of their own communities, defined either by geography, identity, or interest. Grassroots Philanthropy means an intention to bring benefits to the public in which the intention is not imposed but rather voluntary and bottom-up. Philanthropy also means sustained effort to push for social good rather than sporadic giving. [5]
Segments
Size of Philanthropic Organisations
Funding Gaps in Singapore's Social Sector
As Singapore tackles complex socio-economic challenges stemming from structural changes in the economy and demographic shifts, it would be timely to promote philanthropy. Indeed, such generosity and civic action can have a lasting impact in addressing emerging social challenges in Singapore. The first section will introduce various funding gaps and case studies in Singapore, while the second section will focus on possible factors behind funding gaps in Singapore's philanthropy scene.
What are some funding gaps within the social sector of Singapore? Where are more resources needed?
1. Arts Sector
The arts - which comprise theatre, dance, traditional arts, visual arts, music and literature - in Singapore are mainly funded by the state, unlike in other countries such as the United States, where they are largely supported through private donors and foundations. In 2015, according to the Singapore Cultural Statistics report, 80 per cent of arts and heritage funding in Singapore, or $595.7 million, was provided by the Government through state agencies such as the National Arts Council (NAC).
In a report examining the funding gaps within the arts sector of Singapore, Just Cause suggests that granters can best support the sector in the following ways:
- New forms of finance: offering “impact investment” style loans and equity investment of “patient capital” to fund new projects or infrastructure;
- Recruiting more top-level business professionals to join arts charity Boards and take up executive leadership roles within the sector;
- Helping non-profit arts groups to set up profit-making sister companies: these sister companies their organisation’s existing brand and customer base to generate new streams of revenue. This income could in turn cross-subsidise the non-profit work.
Why do funding gaps exist?
1. Restrictive Regulation
The first factor behind funding gaps could be the issue of restrictive state regulatory controls on civil society and funding. Due to out-of-bound-markers and restrictions on foreign interference in local politics, some causes in civic society may not be as well-funded despite Singapore’s conducive philanthropic landscape. According to the Doing Good Index 2018, Singapore has the highest rate of tax deductions for philanthropic giving in the region, although there are no incentives offered for donors around bequests. SDOs face little friction in registering and setting up, but the recruitment of skilled talent to the social sector is perceived to be challenging. SDOs largely agree that regulations in Singapore are easy to understand, signaling that the government has kept regulations relatively streamlined and straightforward.
2. Meritocracy
A second factor may be Singapore’s national ethos of meritocracy. At a panel discussion on privilege and giving back to society, Professor Paulin Straughan from Singapore Management University cited meritocracy as an obstacle to becoming a more generous society today.
By recognising individual merit alone, we attribute our capabilities to industry and effort. As Donald Low notes in his book, Hard Choices: Challenging The Singapore Consensus, meritocracy has long been widely regarded as "a core principle of governance in Singapore", and one that is close to "being a national ideology". The principle of meritocracy promotes "equalising opportunities not outcomes, and allocating rewards on the basis of an individual's merit, abilities and achievements". However, such narratives of self-reliance elide entrenched, systemic and intersectional inequalities - people may not have the same starting point, by virtue of their identity - be it their race, class, gender, age, disability, nationality, sexual orientation and more. As a result, many may fail to recognise that their position in society is closely tied to, even founded upon their privilege. Lien Foundation chairman Laurence Lien also concurred, raising the common "assumption that because we are a meritocratic society, if people are poor, it must be their fault; they must be not working hard.
3. A Culture of Self-Reliance
In Singapore, the prevailing policy landscape instills a strong culture of self-reliance. The onus of maintaining one’s welfare largely falls on the individual. In an article on Singapore’s social policies, the Brookings Institution’s Ron Haskins regards such a culture “as a necessary precursor to government responsibility”. Health policy expert John Goodman writes: “Think of all the reasons why people turn to government in other developed countries: retirement income, housing, education, medical care etc. In Singapore, people are required to save to take care of those needs themselves.” Through policies such as the Central Provident Fund, our “Many Helping Hands” approach to social support “holds individuals personally responsible for their old age and expects them to be self-reliant”.
4. The (Perceived) Role of the State
Another factor behind the persistent gap in funding could be the perception that the Government is wholly responsible for helping the needy. After decades of extensive government oversight and intervention in many spheres of society, Singaporeans share a common mentality that erodes the community ownership and shared sense of responsibility essential for a vibrant philanthropy scene. The delegation of funding and even caring for social causes to the state apparatus foments a paucity of incentives and motivation for Singaporeans to give back, resulting in funding gaps.
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Resource Directory
Tri-Sector Associates
Pay for success; social impact bonds
Grants for non-profits
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Resources for corporations keen on philanthropy
- Just Cause is a social impact consultancy that supports corporate foundations looking to give more strategically.
- The National Volunteer and Philanthropy Centre has set up the Company of Good, which provides support for companies interested in engaging in corporate giving. The Company of Good Fellowship is a programme designed for corporate leaders to get involved and learn how to incorporate sustainable giving within their corporate practices.
- The Southeast Community Development Council (CDC) provides opportunities for corporate volunteers to understand community issues and implement relevant community projects.
Resources for individuals starting out in philanthropy
- The giving compass, which is an accessible online resource for high net worth donors who are seeking materials on effective philanthropy.
- Wealth Advisor Toolkit is a practice resource for wealth advisors to help their high-net worth clients develop and implement their philanthropic plan.