Fu Tak Iam Foundation: Creating Donor-Grantee Synergies

SINGAPORE, October 17, 2010 (Press-News.org) Interview with: Rick Tang, Member of Board of Trustees, Fu Tak Iam Foundation

It is only by being engaged with grant applicants that foundations can understand the passion of the leadership and what the project really needs, says Rick Tang, Member of Board of Trustees at the Fu Tak Iam Foundation. While some are happy just writing cheques, getting involved with grantees ensures the programmes that have the right foundations and heart in place are given the necessary financial backing. A speaker at the marcus evans Private Wealth Management APAC Summit 2010 in Singapore, taking place 1 - 3 November, Tang discusses how to decide between funding applications and why close interaction with grantees could be critical to the programme.

What is the best way of assessing funding applications?

Rick Tang: There is what I call "head knowledge" and "heart knowledge". Head knowledge has to do with understanding the objective of the people which you want to help, the action plan, the outcome or the Key Performance Indicator, and last but not least the critical success factors. These help differentiate the applicants who are focused on putting together a programme that will bear maximum results.

Heart knowledge is as important. It is about understanding the passion of leadership. The donor should spend at least a few hours where the programme will take place as it is only there that they will feel the enthusiasm and passion which is very contagious in getting the work done. Three hours should be the minimum time spent together.

Why is synergy between the foundation and grantees important?

Rick Tang: Creating synergy with grantees is a very important question. There are two types of donors: those who are moved by a certain cause and simply write a cheque and those who get involved in the activities of the grantees, which is a more effective way.

The second type of donor does not necessarily control the roll-out or the progress of the activity, but they experience what the grantee is doing. It is only by being engaged that donors can understand what the project needs and perhaps match those needs with resources.

Many foundations and endowments have objectives set out in their legal documents that set out their priorities and perimeters; some have very broad objectives therefore the trustees narrow them down. At our foundation, our objectives are deliberately broad as we want to see what is out there before we decide where to direct funds. We set priorities on the geographic span of our donations and not the breadth of the areas of focus. Our focus is on China, Hong Kong, Macau and Taiwan but we have exceptions for emergencies such as natural disasters that cover areas outside Greater China.

What financial advice do you have for directors of foundations?

Rick Tang: The fundamental question is what sort of legacy the founders want to leave for future generations. Do they want to leave a legacy of wealth and finance, or a legacy of blessings that go beyond money?

A legacy beyond money is a sustainable blessing for the generations to come. I have seen how this has blessed extended families, by bonding them together and healing their wounds. Depending on the vision the founder has, he or she should put aside enough capital for the family to use only the return on investments for philanthropical purposes.

As a general rule it would be wise for any foundation to expect a conservative return on investments. It is not a hedge fund; they want the money to last forever, so they should use the same benchmarks as for pension funds. A return benchmark of about 7 - 8 per cent per annum is a reasonable expectation; 4 - 5 per cent of that can be set aside for giving away. The difference between them can be used for paying the expenses of the foundation and inflation costs.


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About the Private Wealth Management APAC Summit 2010

This unique forum will take place at the Marina Bay Sands, Singapore, 1 - 3 November 2010. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and solution providers to a highly focused and interactive networking event. The summit includes presentations on forecasting trends, embracing the new investment universe, exploring the potential for growth and mastering portfolio diversification.

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