Goh Chok Tong: Singapore as a philanthropy hub
Keynote speech by Mr Goh Chok Tong, Senior Minister and Chairman of the Board of
Directors of the Monetary Authority of Singapore, at the Credit Suisse Philanthropists Forum
2011, Singapore, 7 April 2011.
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Ladies and Gentlemen
1. I welcome the launch of the inaugural Credit Suisse Philanthropists Forum in Asia.
Importance of philanthropy
2. In recent years, the problems facing the world have been getting more acute. The
World Bank estimated that the recent Global Financial Crisis pushed an additional 64 million
people into extreme poverty. Rising energy and food prices have put additional stress on the
most vulnerable, who spend more than half their income on food. The New Zealand, Japan
and Myanmar earthquakes are the latest in a line of disasters to plague the Asia-Pacific.
Climate change and natural disasters are creating new and pressing needs on an
unprecedented scale.
3. Fortunately, philanthropy has risen to play an important role in dealing with these
problems. Generous donations have brought about immediate relief in the aftermath of
disasters, and have also funded medium to long term programmes, such as education and
health services, to improve the well-being of communities.
4. Perhaps more critically, giving back to society is an important way to help maintain
cohesiveness in our society as the income gap widens. All around the world, the gap
between the rich and the poor is growing, particularly in fast growing emerging economies.
Unless the successful demonstrate compassion and help the less successful, it will be
difficult to maintain social cohesion and harmony.
5. Philanthropy complements government measures to help the weak and the poor. As
a voluntary act, it has the potential to be much more targeted, and if done correctly, creates
meaning and social value for the giver and the recipient.
Growth in philanthropy
6. Today, the world's philanthropists are in a better position to help than ever before.
The World Wealth Report by Capgemini and Merrill Lynch estimated that the world's wealth
grew 72% over the past decade to US$200 trillion; Forbes magazine now counts more than
1,200 billionaires on the planet.
7. I am glad to say that philanthropists worldwide have been stepping up and giving
generously. Leading the way is the United States, where annual giving rose from a mere
US$170 million to more than US$300 billion over the last 20 years. Rising wealth in Asia has
also led to greater giving. The 2010 Hurun Philanthropy List in China found that its top
100 philanthropists gave an average of 6 percent of their wealth to charity, totalling
US$3.3 billion over the previous five years. Similarly, in India, many of the ultra-rich are
giving part of their wealth to charitable causes. Among them, Mr Azim Premji, the third
richest man in India, pledged US$2 billion last year to fund rural education and development
programmes.
8. Philanthropy in Singapore is also growing. Some recent foundations that have been
set up in Singapore include the Wee Foundation. Most recently, a US$100 million donation
was made by the family of the late Mr Ng Teng Fong to set up a fund for needy patients and
other worthy causes at a new hospital in Singapore. To encourage more giving, the
Singapore Government has created a very conducive giving environment in Singapore. We
allow 2.5 times tax deduction for donations to Institutions of a Public Character. We have
also increased the leverage effect of donations, with matching grants for donations to key
causes such as universities and charities providing long term care for the elderly.
Asian philanthropy is evolving
9. Asian philanthropy has deep roots, both in tradition and religion. Giving across Asia
is typically accomplished without fanfare, with many donors quietly donating millions on an
anonymous basis. There is a tendency to prize modesty, and many are averse to what
others may view as "flaunting wealth". However, such private giving may have held us back
from developing a more structured and sustainable way of giving.
10. This is changing, as Asian donors have observed that Western philanthropy has
developed innovative structures which may be very efficient and effective. More and more,
we are seeing the evolution of Asian philanthropy from ad hoc cheque book donations to
more sophisticated philanthropic models such as foundations and venture philanthropy. This
has helped to bring about greater accountability and efficiency in grant making.
11. Another change is the shift from the traditional model of leaving behind legacies,
towards "giving while living". This has resulted in more active and engaged philanthropy in
Asia, leading to an increased demand for more philanthropy-related advisory services by
wealthy individuals and families. More of the rich are incorporating philanthropy into their
wealth management plans and want professional advice in their philanthropic commitments.
As a result, Asia is seeing the growth of professional and institutionalized philanthropy
foundations. China alone now has an estimated 900 philanthropic entities.
Key challenges remain
12. However, there remain challenges to giving in Asia, mainly because philanthropy is
developing at varying stages across Asia, in line with the progress of Asian countries. There
are two key issues which donors face: the nascent charity infrastructure to support donors,
and weak governance practices by fund recipients.
13. In Asia, there are many causes that need championing, and many problems that
need addressing. Donors planning to give in Asia have to first understand the needs of the
region, decide on the cause they intend to support, identify the worthy projects, and navigate
the giving procedures in each country.
14. The success of giving greatly depends on both the giver and the receiver. Clearly,
throwing money at charities does not guarantee success of giving. There needs to be
followthrough on the charity's part to ensure that the money is channelled successfully to the
cause.
15. The reality in Asia is that many of the domestic charities are small, and are not
equipped to handle large amounts of funds efficiently and accountably. The levels of
transparency and governance controls in many countries are also not prescribed by law, and
may vary across charities. As a result, giving in Asian countries suffers from a lack of trust.
Such suspicion holds back donors who are concerned that their gifts should be used
appropriately and effectively, rather than going to waste funding inefficient expenses.
16. Donors have found ways to work around the trust issue. Some have set up their own
charities or are working together with reliable charities to see through the giving process from
start to end. Such efforts demonstrate that donors can be an integral part of the solution, but
this will take time, and it can be a very challenging process for donors.
Singapore as a philanthropy hub
17. Singapore can make it easier for international donors to give in Asia. Our
infrastructure, connectivity and regulatory framework form a strong foundation to support
local and regional philanthropy.
Infrastructure
18. As a leading international financial centre, Singapore can provide a full suite of
wealth advisory services ranging from fund management to philanthropic advisory. We have
recently seen a growing number of private banks in Singapore building up their philanthropy
advisory capabilities, either in-house or leveraging on third party expertise. SymAsia, which
was set up by Credit Suisse, is an example of an umbrella foundation that provides grant
making, project review and investment management for donors who do not wish to set up
their own foundations.
19. To support philanthropy and non-profit organisations seeking to invest in Asia, the
International Organisations Programme Office was set up in 2007 by the Singapore
Economic Development Board as a whole-of-government effort to facilitate international
organisations planning to locate in Singapore. The Government has also developed
supporting physical infrastructure, such as the Tanglin International Centre for clustering and
shared services.
Connectivity
20. In addition, Singapore has excellent international transport and communications
connectivity, and can serve as an intermediary for giving in the region. Our location and
stable and safe environment provide international donors with a convenient base from which
to oversee their giving in the region.
Governance
21. Lastly, we cannot over-emphasise the importance of good governance in charities.
Governments are working to address this issue. For example, last year, China launched the
China Foundation Centre (CFC) to promote greater transparency and accountability among
foundations. But there is still much that countries in Asia can do to improve charity
governance.
22. Singapore, too, is working on improving governance. We have put in place a sound
regulatory framework and a code of governance to ensure transparency and accountability of
our local charity sector. In addition, the National Volunteer and Philanthropy Centre will also
be introducing an independent charity analysis system this year.
Conclusion
23. In closing, I would like to say that philanthropy makes the world a better place. It
balances our emphasis on economic growth and the pursuit of profits with our warm, human
side. Hence, it is crucial that we continue to give generously, to local and foreign deserving
causes.
24. Yet giving is also difficult to do well because it must not lead to waste and leakage
or diminish the spirit of self-reliance. I am pleased that Singapore is playing host to this
global forum which brings together leading philanthropists and thought leaders to discuss
how to better accomplish giving, and to push the frontiers of philanthropy in Asia.
25. I commend Credit Suisse for playing an active role in developing philanthropy
capabilities in Singapore, and I wish you a fruitful meeting.