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A Philanthropic Affair

Thursday, 29 Nov 2007 | 9:04 PM ET

The likes of Warren Buffett have put corporate philanthropy at the forefront.

In 2006, he made, what is probably the biggest philanthropic gift in history, pledging 85% of his wealth or roughly $37 billion to five foundations. Most of that money is going to world’s largest philanthropic organization, the $30 billion Bill & Melinda Gates Foundation.

Closer to home Li Ka-shing, Asia’s richest man, is doing the same. He recently went public with his big donations in China – where philanthropy remains a radical concept. The Chairman of Hong Kong conglomerate Hutchison Whampoa, says he will give away a third of his fortune. His gift is worth nearly $11 billion.

According to an article in The Australia, dozens of mainland Chinese are following his lead as Beijing is grows more accustomed to the idea of philanthropy.

We thought we’d back away from the usual theme this week of investing for monetary returns, and instead, focus on a selfless, non-profit fund for a change. A fund that lets you 'invest' and reap social returns.

Introducing the ADM Capital Foundation (ADMCF) – aptly dubbed 'The Philanthropic Fund'.

The Fund

ADMCF was established in 2005 by Hong Kong-based ADM Capital Limited - an investment advisor that has approximately $2 billion in assets under management.

As well as receiving generous annual donations from its parent company, ADMCF also provides corporate and private donators an opportunity to invest in charitable work.

As with any financial investment, ADMCF provides 'investors' with the due diligence and measurable results for each project it undertakes. It conducts tailored briefings and provides regular written reports to keep donors up-to-date with developments on various projects.

Lisa Genasci, Director at ADMCF says, "We should look at a philanthropic investment the way we look at a financial investment; to apply risk analysis, financial structures, etc. Why should there be a difference? Obviously, there are no returns like a financial investment. But there is a social return that should be measurable as well as quantifiable."

ADMCF’s projects target environmental degradation, support conservation and help children at risk across Asia.

But how does one make sure all the money is spent prudently? Indeed, most Asian countries have no comprehensive laws on charitable giving. Charities are not required to disclose information on their activities.

"A lot of fund investors want to be philanthropic in Asia. But obviously there are huge problems such as corruption. If you directly give to a large NGO, you don’t know how the money’s being spent – whether it’s going into administrative costs or into the actual project. You don’t know if the project will be accountable to individual donors," Genasci said.

Each dollar donated to the ADMCF goes directly to the projects with no hidden administrative or overhead costs. It is certainly this unique approach to philanthropy that attracts many individuals to 'invest' in ADMCF.

Genasci says, "When people saw our projects were successful and our foundation structure was unique, that we don’t just write a grant check to that large international or local NGO without proper follow-up, people started coming in to invest. So we didn’t really have to do a big sales pitch. People have just wanted to contribute to our projects."

And these donors not only include ADM Capital principals, staff and strategic partners – donors from financial institutions also poured into the fund. Moreover, ADMCF also provides more than just an opportunity to donate money.

Adds Genasci, "Some of our donors want to get involved in our projects, e.g. M’Lop Tapang. We provide access into these projects so that they are able to see the impact of their contribution. In a couple of cases, we had relatives or children of donors who also got involved. It’s not just a passive donation, but it can be as well."


ADMCF’s accolades speak for themselves. It was recently awarded a medal of honor for its efforts to transform the lives of many street children in Cambodia - where thousands of children are forced to live or work on the streets, often falling victim to the sex trade and/or drug abuse.


Genasci says, "Receiving the medal of honor from the Cambodian government for the work we have been doing to protect children at risk is extremely gratifying for the foundation and its contributing partners, particularly given that it is the second-highest honor granted."

The foundation’s other focus is to strive to have a positive impact on the environment. While it has conservation projects in Cambodia, Vietnam and China, it has also set it sights on the problems in its home base, Hong Kong.

The air quality in Hong Kong remains a huge problem. ADMCF’s role in tackling this issue is supporting breakthrough research on the source of the pollution. The findings have since forced the Hong Kong government to reconsider statements blaming the Pearl River Delta exclusively for the problems, and therefore facilitate the generation of possible solutions.

ADMCF says philanthropy in is still a very young concept in Asia and that charitable giving needs to step up.

It adds that for the amount of money companies are making in Asia, the philanthropic focus has not been as strong as it has been in the United States and Europe.

According to the New York Times for every three dollars given away to charity, the federal government gives up a dollar or more in tax revenue and does not collect estate taxes. Such a practice is not a common concept in Asia.

ADMCF says Hong Kong financial institutions in particular, "have not allocated as much in their budget to philanthropy. I think things have to change," Genasci said.

ADMCF’s recent study showed that multinational companies and banks in the territory allocate between $100,000 and $8.4 million annually to philanthropy.

That is still less than a third of what U.S. companies set aside for charity last year, according to a report by a New York-based non-profit advocacy group.

Genasci adds, "Asia is a very profitable environment for financial companies at the moment. So it must be realized that while making significant amounts of money, companies need to be good corporate citizens as well."

For more information on the foundation, log on to www.admcf.org.

We welcome your questions and comments. Write to us at fundaffair@cnbc.com.