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Open Our Hearts

I read the recent reports about NKF having $189 million in reserves with great interest. The amount of money is mind-boggling and unexpected; who would have guessed NKF has such a fat piggy bank when celebrities performing in the NKF Charity Show made their earnest pleas for donations sounded as if NKF is on the verge of bankruptcy.

The save-for-rainy-days mentality is distinctly Singaporean, so one shouldn’t judge NKF too harshly. After all, Singapore has about $170 billion in foreign reserves — nearly 6 times our budget for this fiscal year. But like the chairman of NVPC Mr Willie Cheng said, it’s a lot of money.

Charity watchdog groups suggest a charity should devote at least 60% of its annual expenditure to good works, leaving the rest for fundraising and administration. NKF explained that $0.56 out of every dollar went to its beneficiaries and administration of its programmes. At first glance, this seems like a reasonable proportion considering the fact that NKF is such a large organisation — and we all know bureaucratic red tapes and inefficiencies increase with organisational size — so falling slightly below the 60% mark is acceptable.

However, notice that NKF have grouped expenses for both charitable works and administration together; all is not what it appears to be. I decided to check out some financial information from its website, hoping to get a clearer picture.

Once again, NKF has included salary cost and other running expenses in its direct charitable expenses. And interestingly, its $26-million employee costs are disclosed right at the bottom of the page; apparently it’s considered to be other information, rather than expenses. But I digress.

Assuming that NKF spent all the direct charitable expenses on its beneficiaries — not an unreasonable assumption since dialysis treatments require professional healthcare workers and expensive equipments — $0.37 out of every dollar went to the patients. If the same proportion of funds is spent on charitable works from its reserves, patients will receive $0.10 more out of every dollar. This means 47% of all funds NKF collected will eventually benefit its beneficiaries.

In addition, NKF’s investment income and gains contributed $3 million to its bottom line. This sounds like quite a large sum of money. But if you consider its $189 million piggy bank, the return on its investments is only a paltry 1.6% — a far cry from the 6% return SM Lee requires SIA to achieve.

However, no comparable data is available on other charities, making it difficult to gauge the performance and efficiency of NKF objectively. I strongly support NVPC’s plan to set up an online portal that lists Singapore’s non-profit groups, what they spend and what funds they raise. This will not only foster an environment where non-profit organisations are more transparent and accountable to their donors, but also pressure these organisations to become more efficient in order to attract donors, who will be well-informed on how their contributions are spent.

While many national charities in Canada managed to stay well above the 60% level — such as Heart and Stroke Foundation of Canada (72%) and the Canadian Cystic Fibrosis Foundation (80%) — conditions faced by local charities in Singapore must be taken into consideration.

According to a CBC report, Canadians donated an average of $327 per person in 2000; in comparison, Singaporeans gave nearly $382 million to charity in 2002 — an average of $86 per person. Arguing that Canada is a more affluent country is a lame excuse, since Singapore’s GDP per capita is only $8,400 less than that of Canada. Putting the numbers in perspective, Singaporeans will have to donate $281 per person annually in order to match Canadians’ generosity towards charitable causes. No wonder local charities like NKF have to spend so much money on fundraising events to encourage Singaporeans to donate.

Gambling is undoubtedly Singaporeans’ favourite pastime, and we gambled away $6.2 billion in 2002. When the lion’s share of donations went to charities that ran lotteries — giving donors a chance at winning expensive prizes — one wonders if we Singaporeans are motivated to donate because we truly want to help the less fortunate, or we just wanted to get a shot at winning a $500,000 condominium in District 10.

Now if only we open our hearts — and our wallets — and donate 5% of what we spent on gambling to charity, the needy will receive an additional $310 million every year.

To us, it is just a contribution; to the less fortunate, it means everything.

11 April 2004 · Money

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