Breakouts on Financial Capital: Grants-only Foundations

Wednesday 14

May
11:15am

Session reporter: Victor Kuo

Summary of the content of the session:

Lien Foundation (Lee Poh Wah)
Lien is a family foundation started by a banker started in 1980. 3 areas: 1) preschool
education, 2) elder care for the dying, and 3) clean water and sanitation for the poor. We try
to distinguish ourselves in 3 ways: 1) purpose driven foundation, 2) strive to do more from
ideation to implementation, and 3) not afraid to work with unconventional players, risk-
taking. We have professionals, not volunteers except on the board. We created the vehicles
for implementation.

Narada Foundation (Yanni Peng)
From China (Nan Du). Founded in 2007. Narada Group source. Founder is Project Hope,
which is famous, started in 1990s. The idea is that in China, we have strong public sector
and business sector growing quickly. But the societal sector is very weak, so our founders
and board members want to support the whole civil sector, so we dont have a specialized
sector. Our purpose is to support the grassroots NGOs. Also, GONGOs. We want to support
them and their innovation to build up the civil society sector. Our value is, we can take risk,
innovation. We want to take risk with social innovators. Our funding is limited: $100m
yuen. So we try to leverage, co-fund for social change.

C&A Foundation (Leslie Johnston)
C&A is a European retailer, based in Switzerland. Similar story in that it grew out of
traditional CSR but has a long history of philanthropic giving, back to 1841. So no lack of
experience and networks and giving, so what has happened recently is to make it more
strategic and aligned with sustainability of the company. Aspiration is an apparel
industry where everyone can thrive. In terms of beneficiaries, the farmers who make the
cotton seed, to the customers. Three pillars: sustainable product (fibers), sustainable
supply (reducing environmental footprint), and sustainable lives (peoples capabilities to
realize their full potential). We work by 1) funding interventions, incubate proof concept, 2)
scaling up, 3) convenings and 4) knowledge to capture lessons learned.

Vidya Shah (EdelGive Foundation)


EdelGive is a corporate foundation, set up by EdelWeiss, diversified financial services in India.
It is a 6-year old foundation. I use to be CEO of EdelWeiss and my job was to manage
philanthropy as well. The foundation was to bring together employees talents and other.
Completely Indian and very young in our journey. We wanted to develop a strong
philanthropy culture, so funding and capacity building and capacity building delivered by
employees of EdelWeiss. We started with education and workforce. Everyone felt these
topics would strike a chord. Over last few years, weve seen that our work is deep
community based and its hard to find one solution to problems. We felt we were getting
narrower, addressing only a sliver of the problem. So now, weve become much broader.
There is just no one solution. So were doing work around water, off-the-grid solutions to
electricity, family health and womens livelihood. We also develop a lot of pilots, to take risk.
$5,000 to $10,000 to experiment and try a few things.

AVPN (Naina Subberwal)
How do you balance strategic goals with empathy? Example is the Ford Foundations story,
Afghan women, a grant that did not fit the parameters. [Vidya] The investment committee
is business people; senior people who sit there. Often they would reject proposals in the first
2 years. It was give and take to bring understanding sector and an emotional connect which
we COULD NOT connect to the investment committee. They wanted investment criteria, and
if it fit. This led to a lot of tension. Then we started to evangelize proposals before the
committee meetings. We reached a point to realize what our job was. It was not just
emotionally connecting with our proposals but to get the delivery as well, in a more
commercial sense, to get the real need to broaden our engagement with the organizations
AND gave the investment committee hope that we were doing the right thing.

What have been some risks you took in making grants, especially with the lack of growth of
the social sector in China? How has the Narada Foundation taken these grantmaking
decisions? [Yanni] Grantmaking means risk. We have to take risk. For example, the GingHo
Fellowship Program is a strategic investment in young leaders. Inspired by Ashoka Fellows.
We give 100,000 yuen per year for 3 years and networking opportunities. Study tours to
other countries and open up their horizon. Funding is for themselves, to pay for their
mortgage or serve as salary. This could be a hilarious way to use grants! We researched in
2009, in human resources working in the philanthropy sector, we lack a lot of human
resources in the sector. Young people face a lot of challenges like low salary, family
misunderstanding. Our theory of change is to build up their support network to pursue their
passion and work on their projects and organizations. One example is, a fellow used my
money to bring my parents over the holiday to talk about why I do what I do. After that, the
parents understood and there was a positive support. The risk is that the fellow may leave
the sector, but thats the risk we take. So we build trust and relationships.



There is discussion of due diligence. All grantmakers have processes. When does this cross
the line and become a nightmare? And when is it required? How does the Lien Foundation
do this? [Poo Wah] There may be some here who say that some approaches to
grantmaking are better than others. Dont believe the hot water. Just different approaches,
like hammers or screw drivers. Grants can be enchanting when you understand its essence.
I have two comments: 1) dont make formality substitute.reams of data will not make you
smarter. Nothing more demoralizing than producing a report thats not read. USAID
$700,000 in Cambodia sanitation. We didnt want to continue the grant, because my
colleagues were turning into bean counters. Not worth the money. So we wanted to take a
different approach, without writing a single word. We dont have a formal application, but
rather talk and help solve problems. Its better to build relationships of trust and candor to
yield greater influence. Its more important to build a learning culture within the
foundation and extend it to your partners. Example, is preschools systems in Singapore.
Over 9 years, we have 13 projects, building on the previous project. We commissioned
journalists, academic, consultants to understand and disseminate the learnings. We give
assurances to fail; its an acceptable cost.

How do you measure impact? Has it changed as the foundation has evolved? [Leslie at C&A]
Were in an interesting context. Were moving from CSR to a more professional foundation,
aligned with a larger sustainable agenda. Moving from altruistic or reactive to proactive and
strategic. To be frank, we never really measured impact in the past. In the past, we took
what our partners told us. We were reactive and could tell a good story. It was disjointed,
since no KPIs stretched across the portfolio, no red thread. Also, being anchored to a broad
sustainability strategy means we need to align our impact with the KPIs with the business.
Its challenging to align with the business side. Lastly, were moving from a closed entity to
an open entity. We aspire to be a learning foundation, to be open about our successes
and failures. Merit for a corporate foundation being too marketing oriented. Its attractive
to tell the good stories, but to help the industry we need to tell the failures. Were working
through it. Inspired by GlassPockets initiatives.

Questions from the Audience:

I have noticed duplication of services throughout Asia. As the whole sector grows, 5 or 6
nonprofits doing exactly the same thing. What role can foundations play to compress those
numbers to just 2 good sized organizations, instead of 6 struggling organizations. [Vidya]
Weve had the exact same experience with programs being slightly different among
organizations. We try and get the NGOs together to dialogue if it makes sense, from our
perspective, if we should fund both. The only way is to get all the parties around the table.
We ended up funding both. We have had a similar experience with capacity building support,
and we were all providing conflicting advice. We said, lets get around the table and figure it


out. [Lee Poh] There are a lot of forces at work, like the jobs at stake, board prestige.
Example, an example of two hospice organizations that are literally side-by-side, across the
street. They have been talking about M&A, but ego, vanity blocking the way. The foundation
can improve the dead-lock is to find a program, focus on the horizon, parceling out activities
to strengths of organization. There is enough work to go around. [Yanni] Example is
BrightWay. There are many organizations and did research in 2009. Many NGOs are
overstretched to deliver projects for their donors. Because funders give project based
funding, the NGOs have no resources to support their own team building, review their own
capacity. So we initiated a 2010 project Bright Way is strategic grantmaking for NGOs with
potential to leave the sector, be a role model, or to scale up in the sector. This is 3 years of
unrestricted funding to support their own R&D, executive recruitment, team building. In the
3 years, its a highly engaged partnership with the grantees to mobilize resources among
grantees.

Credit Suisse. Lisa. I agree with trust, candor. But from a bank, it is data-driven.
Assessments are a way to sell the charities internally. If you had to chose the top 2-3 data
points for due diligence, what would they be? [Lee Poh] I tend to subscribe to the opinion
that impact assessment is impossible. Its difficult. But we do commission evaluation if
theres a knowledge gap, if you want to learn something. These are especially pertinent for
new projects or you want the government to take ownership and scale. Typically, we use
academics, but besides evaluation, we need to encourage nonprofits to do data-collection.
Example, medical informatics. I can see transformation happening on the ground. The
annual report is rich in data. Dont be too fixated with impact measurement, get them to
collect to use it. Also, I ask them what is important to you? We come to agreement. At the
end of the day, you have to support good people. Its about supporting good people doing
good work.

*Leslie C&A+. Were trying to develop 3 KPIs. 1) One is essentially an ROI. We believe if were
going to make an investment, we should get a return. 2) increasing in incomes or wages. You
can see statistical correlations with better lives. 3) Leverage. Other donors coming to invest.
We think it symbolizes our extent of influence to get others to come along. These help us
talk to the business side. 4) We have to have a strong business case behind it.

[Vidya] We need to build a picture of what kind of community were serving. So we used a
lot of social economic indicators (levels of education, health). That was very important,
because many had not seen work on the ground. We used a lot of photographs to give
them a real feel. 2) costs matter. We had to justify the costs and look at alternative costs.
Whether we were getting value for money. And 3) Were trying to see as a result of our
investments, both qualitative and quantitative. How will we see this organization change.



[Lee Poh] Share 3 additional ideas. 1) let them taste poverty. Bring them to the ground to
soften their hardened soul. Effectiveness is socially constructed. USAID project, 28,000
latrines, but with another lens, the organizations were harmed. Like the Foundation Center
has 150 measuring tools. You can find GEO. The highway to hell starts with good intentions.

*?+ Its alright to have a fetish about indicators. My own has 147. We struggle with
quantitative measures, and there is a lot going on behind the scenes. Self-esteem itself
might need 30 indicators. Any soft indicators, and you run into the number of variables will
drastically vary. Go for numbers that can be measured. And were constantly escaping from
this mirrored world of attributes that are on the softer side. But those are the game
changers in real-life. How much should we ride on quantitative?

Narada, how have you looked at softer side, non-quantifiables? [Leslie] We have not been
good at the softer side. Its probably because of our heritage, a large corporation. Were
now starting to get our heads around that, using storytelling and videos. I dont see myself
trying to plot

Poh Lee Tan, Baker McKenzie. You talked about the state in China. This morning we heard
about the cultural change. How can a foundation seed cultural change in a country like China
where that development is ripe for that change and mindset? [Yanni] In China, we have a
tremendous culture. All, Narada and NGOs, are working on this. We think that a pressing
issue for China is how we can get wisdom from our traditional culture. After the revolution,
our traditional culture was lost. Then after the opening up, the Western countries came, and
people were confused and lost. They were detached. Now foundations are working on
mainstream philanthropy issues but also cultural projects. How can we get the essence of
our traditional culture from the past? Also, the culture of the philanthropy sector is
something to work on, a modern culture of philanthropy. Not just about giving money.
Not just wealthy showing pity to the disadvantaged. But how we co-create a better future
for people in China.

Scale. Do you see small and effective as lacking ambition? [Lee Poh] Our work in water
sanitation is to bring clean water to 200,000. Scale is success in the eyes of a funder. That
puts you in a different league. Also in terms of advocacy projects, scale is important. We
want to demystify work on end-of-life. We have broadway like shows that can draw 6,000
people, mass media, to put it on. Government also wants to fund scale.

Due Diligence and Impact. I find it selective to measure. In the private sector, if I show faith
in the organization or board, how OK would a grant organization be about reporting annually
or quarterly, how OK would a collective grant reporting approach be? How open as
grantmakers are you to collaborate on reporting? [Leslie] That exists for large organizations.


How big do you need to get to be able to assert that. As a trend, were moving to more
consolidations. GRIIS, IRIS. Caroline Fines in UK, the cost to complete the reporting
exceeded the value of the grant. The onus is on the donors. [Vidya] When we insist on
indicators, I find that communities change. Therefore what youre tracking must also
change. There are few organizations that do that. Its also how you engage on indicators.
[Lee Poh] Have to come to the table open minded, especially in projects that have not been
done before. [Yanni] We do not require specific forms for grantees. You give us the annual
workplan. Alternatively, we meet with co-funders and meet with the grantees and
collectively ask for some indicators. Grantee will then submit one form, or specific
components can be reported on more intensively to a funder. We try to use our chairmans
reputation to get funders to work together.


Feedback/Take-Aways for the AVPN:
Its better to build relationships of trust and candor to yield greater influence. Its more
important to build a learning culture within the foundation and then extend it to your
partners.
Some foundations are aspiring to become learning foundation, to be open about successes
and failures. Its attractive to just tell the good stories, but to help the industry we need to
tell the failures.
Also, the culture of the philanthropy sector is something to work on; we need a modern
culture of philanthropy. It is not just about giving money; it is not just about the wealthy
showing pity to the disadvantaged. But how we co-create a better future for people.
Still, some foundations insist on indicators, because the indicators are not only useful for
tracking change in communities, but how you engage partners with using indicators is also
useful in itself.