Philanthropy has been much featured in this magazine over the past three to four years. One of the repeated messages has been that the philanthropist should not underestimate the challenges of executing their plan.
In the past couple of years I have had a chance to experience this for myself. HereÆs how.
In the wake of the devastating Tsunami that hit Asia at the end of 2004, FinanceAsia was approached by banker Mark Bucknall with the idea of raising money to help with the reconstruction. The initial vision was to build a school in Sri Lanka in an area that had been affected by the Tsunami.
Bucknall committed to raise individual donations from bankers in London and Hong Kong, and FinanceAsia raised money from its 2005 black tie awards dinner. Eight banks agreed to sponsor a special Tsunami tombstone bond. They were: ABN AMRO, Barclays, Citigroup, Credit Suisse, Goldman Sachs, JPMorgan, Merrill Lynch and Morgan Stanley. Between the individual donors and the banks we raised $348,000.
Terry Farris, who specialises in helping billionaires in their philanthropic activity, very kindly advised us on the practicalities of getting our charitable vehicle off the ground. He put us in touch with a local Hong Kong accountant that was expert in dealing with the inland revenue and could help with the application to get charitable status. What followed were a couple of months of paperwork, in which the charitable vehicle û which we named the Schools Relief Initiative (SRI) û was finally given tax-exempt status.
The next challenge was to open a bank account with HSBC. I do not use the word æchallengeÆ here lightly. With the advent of new anti-money laundering regulations, and with trustees in London as well as Hong Kong, this proved to be a more onerous process than anticipated.
It was not till the second half of the year that all of the bureaucratic aspects of setting up SRI were finally accomplished û and we finally had a bank account that donors could pay money into and get a receipt that made their donation tax exempt.
I stress this point because it was precisely the opposite of my expectation. Naively, I had assumed such paperwork would take a couple of months at most. Anyone who plans to do something similar should be aware that the bureaucratic hassles will test your patience.
Over the next few months the various donors began paying their monies. By the beginning of 2006 a large part of the committed funds had been paid. To have got this far, felt like something of a pyrrhic victory, however. For those of us involved in the project there was a sense of frustration that one year on from the Tsunami, we had not spent a penny. The best we could say was that none of the donorsÆ money had been wasted on the administrative expenses of setting up the charity, since this was covered by the individual trustees.
Throughout 2005 we had been in dialogue with established charities û with the idea being to work with them to spend the funds on our desired schoolrelated project. We had committed initially to work with Oxfam, and explored potential opportunities. These talks failed to lead to a concrete plan. We then opened discussions with Room to Read, a charity that specialises in building schools and libraries and had begun working in Sri Lanka. We liked the charity and its efficiency, but we werenÆt able to agree on how SRI could work with Room to Read on a standalone project û as opposed to just handing over all the cash we had raised.
In January 2006 we recognised that only so much could be achieved by email and so during Chinese New Year my then fellow FinanceAsia editor, Jackie Horne, and I made a trip to Sri Lanka. Our contacts at Oxfam put us in touch with various local charities and individuals whom we met in the Colombo area. We went to refugee camps, and were surprised to see how little had been achieved in a year. The word æcorruptionÆ was used repeatedly as an explanation for how the billions of dollars committed to Sri Lanka had somehow managed to have so limited an impact on the problem areas.
Our own delay in spending our funds û which could not be described as deliberate or part of any grand strategy û coincidentally proved to be no bad thing. The months immediately after the Tsunami had seen vast sums committed and a lot of seeming activity. But many of the real needs had yet to be addressed. While in Sri Lanka we found no shortage of people with proposals for how we could use our funds in an effective way.
Another naive assumption was quickly demolished in the early days of the trip. A former headmaster, now running a local charity, told us that our concept of building a school from scratch was not the best approach. For one thing, it would be very difficult to work with the educational authorities. For another, Sri Lanka did not lack schools, but rather needed to improve those it had. It particularly needed to improve skills in growth areas for the economy such as IT û and that meant building computer centres at schools, for example.
Our days in Colombo had been educational but we were keen to visit some of the more rural areas impacted by the Tsunami. A contact in Hong Kong had put us in touch with a local charity in the southeast of the country. The charity, the Environmental Community Trust (ECT), was based in the town of Tissamaharama, which is a 7-8 hour drive from Colombo along the coastal road.
ECT had been set up by a Sri Lankan, Patricia Parkin, who was based in England and was building a small hotel in the area. She had been devastated by what she saw when the Tsunami occurred and raised money in England to help. ECT was born and became registered as a local charity in Sri Lanka. Parkin had hired a local project manager, Jayasinghe, and they had started working on plans for potential projects with 19 local schools. We visited a number of schools with Jayasinghe who introduced us to the institutionsÆ principals and they explained their various needs. Some had more detailed plans than others. One of the more energetic principals was Mr Kithsiri at the Mahasenpura school who had land on which he had wanted to construct a computer centre. Other more rural schools had somewhat more basic needs, such as new toilets to replace the unsanitary shacks currently used, new desks, connection to the local electricity grid and the building of partitions to create separate classrooms (they were currently teaching in long rooms in which separate classes sat cheek by jowl in a noisy cacophony reminiscent of a Dickens novel). Many schools had the ambitions to build libraries and stock them with new books.
We returned to Hong Kong where we discussed the proposals with the other trustees, who included Bucknall and Hong Kong based banker, Rod Sykes. We eventually decided that the projects in Tissamaharama had a great deal of merit and could have a major impact on the education of the local children. We also elected to work with ECT as a strategic partner.
It also helped that in May, Jackie Horne û who had resigned from FinanceAsia û decided to go back to Tissamaharama and work as a volunteer teacher for a couple of months. Her experience became invaluable in helping us to further understand the local needs; and likewise in working with ECTÆs Jayasinghe to fully cost and implement the projects.
We eventually decided that our marquee project would be to construct the computer centre at Mahensenpura school. This would give us a chance to work closely with ECT and test the partnership. What followed were several months in which plans were finalised, government approvals sought for the structure (no building could be erected on a Sri Lankan schoolÆs land without approval from the district engineer) and competitive bids put out to local contractor. Once complete, we gave the go ahead, and began releasing funds in tranches, as and when they were required. We also released funds for a host of smaller projects at the other local schools.
Jackie Horne returned to Sri Lanka during this period, and again her help proved invaluable on the project execution side. It cannot be understated how difficult even the most seemingly straightforward things can prove in projects like these. Many things werenÆt available locally, and so eight-hour drives to Colombo would be required û such as to negotiate a price for and buy the computers. And as the computer centre planned to have its ceremonial opening in February, there was the key issue of connecting it to the power supply. This could take up to two months in Sri Lanka, but a determined Jackie and Jayasinghe managed to get all the relevant chops and approvals in a single day û though it required much driving and patience to do so.
Mark Bucknall and I joined Jackie in February for the opening. I donÆt think I was fully prepared for what an event this would prove, nor for how impressive the new centre is. The construction quality is way above my expectation, and the natural light extremely good. The centre is fitted out with 23 Dell PCs and desks, all networked to a central computer that the teacher can use to instruct from û with an additional two PCs in the centreÆs office. To ensure the computers function well there are a couple of airconditioning units. Apart from building the facility we have funded it and insured it for five years. SRI has hired four teachers, a manager and two security guards (both of whose children attend the school). The teachers also serve the role of troubleshooters who can help fix PCs at surrounding schools. Incorporated in the five-year funding plan are these seven (new) employeesÆ salaries.
What is particularly good about the project is the way the schoolÆs principal agreed from the outset to make it a æcommunityÆ facility. Hence, the schoolÆs children will be taught how to use computers in the mornings; while members of the local community can be taught in the evenings. And when broadband internet arrives (in the next six months) the plan is to allow members of the local community to use it on Sundays for internet surfing and email; while the schoolchildren can use it for homework on Saturdays.
On weekday afternoons, the initial plan is to bring in school teachers from the surrounding schools for computer training. ECT has donated 85 PCs from schools in England to 18 of the surrounding schools; but as yet the teachers do not even know how to switch them on. Once trained, even children in the surrounding schools will be able to start to learn computer skills. Not surprisingly, the demand from local teachers for this training has been heavily subscribed.
Given its likely impact on the local community, the opening ceremony was treated with some pomp. Local priests first blessed it. And we were honoured to have the centre officially opened by Minister for Irrigation and Water Management Chamal Rajapakse û who also happens to be the brother of Sri LankaÆs president. With the children all turned out in clean uniforms, or specially made outfits û indeed 800 children participated in the opening event û Rajapakse was greeted by a marching band, a flag-raising ceremony and then marched through a cortege of clapping schoolchildren to cut a ribbon and unveil a plaque. He then went in to the centre and symbolically switched on the first computer, and chatted with the new computer teachers. He later addressed an assembly hall of about 500 people û which included 50 local VIPs, 18 school principals, teachers, parents and schoolchildren û and spoke of how beneficial this project would prove. Indeed, he stated that with a new international airport and deepwater port being constructed in the area, the training of computer skills would be vital and lead to great job opportunities for those who attained the requisite skills. (Perhaps in an indication of how seriously Sri Lankans take education, the event was even featured on the eveningÆs national television news.)
Indeed, what makes this computer centre even more valuable is that it has established a blueprint. That is to say, having constructed it, it will be possible to build replicas around the Tissamaharama area in the coming years. The total cost of building and fitting out the computer centre was $55,000. The estimated funding cost for the next five years will be an estimated $60,000.
During this trip we also made a field trip to visit six other schools where we had funded smaller projects. The principals we met were largely pleased with what had been done, and normally had further requests û such as in one case to build a special classroom block for the areaÆs mentally handicapped schoolchildren. (In order to make the construction cost of this project more efficient, we plan to tack a library on to it to serve the rest of the school. This school has 3,190 pupils and quite incredibly, no library).
Ongoing projects (we are working on a total of 29) include the building of other libraries û with practically every school asking SRI for one. Among completed projects: classroom partitions had been finished; one school had been connected to the electricity grid and been wired; and playground equipment had been installed at four schools.
For anyone who has never been there, it is hard to imagine what Sri Lankan schools consist of. They are little more than shells, with no windows, doors, books or even desks and chairs in some cases. But this is not through lack of demand or effort on the part of the Sri Lankan people. It would be hard to find a country where the desire for education is so strong (except perhaps India) and the government so clearly lacking. At one school, the parents have built about eight classrooms themselves after giving up hope the government would ever give them some money. SRI is now going to provide the cash so that they can finish these classrooms. They have built brick shells and we are going to give them the money to plaster the walls and put wire mesh on the windows. At another school, we are going to hire the tools so that the parents can level off a playing field for the children.
Perhaps the most eye-opening experience of our recent field trip û and again, a key lesson I have learned û related to the new toilets that our funding had constructed. They were all designed to an identical plan, so as to be clean and functional. However, at one school we noted the toilets smelled and that the principal had lost the key to the padlock. The children were not instructed how to use the new toilets û even though they had been in use since December û and there was no cleaning rota in place. The principal had not even applied to the government to knock down the old toilet blocks. It was very disappointing, to say the least.
The next school we visited was precisely the opposite. The principal was a highly organised man, and both the boysÆ and girlsÆ toilets were both clean and odour-free. He explained how big a difference the new toilets had made to the children and how they had a rota for cleaning them each day. He had also applied to the government to tear down the old, and unsanitary toilets.
At the next school we visited, we were asked if we would build new toilet blocks. Armed with our morningÆs experience we asked how they would keep them clean and so forth. The principal û with similar vigour to his peer at the previous school û described how his rota system would work, and the importance he saw in teaching the children how to use the toilets in a sanitary fashion. The whole experience was an eye-opener. Two of the school principals clearly ægot itÆ, while the first one we had visited clearly did not. It was proof that no matter how good your intentions, the project will likely fail if the local principal fails. We resolved that in the case of that first principal, we would have Jayasinghe explain that his requests for new funding would only be considered when he had demonstrated that the toilets were being cleaned and used properly, and that the old toilets had been demolished.
I guess you could say SRI has now completed phase one of its projects in Tissamaharama. We still have funds for future projects, and that is no bad thing since the local need remains virtually bottomless. I am happy that one area that distinguishes SRI as a charity is that every dollar of the donorÆs money is being spent on the projects themselves. None of the administrative costs of the charity nor travel expenses have been paid for out of these funds.
It has been an instructional experience so far. Many initial, and somewhat naive assumptions were soon jettisoned. With the benefit of experience I can now attest that it is easy to have the urge to be philanthropic û however, executing that vision requires a whole different level of commitment. As the experts always warned: do not underestimate the difficulties of carrying out your plan. And probably most important of all: be prepared to adapt your plan to local needs.
I will end by talking about Osuwinna School, which is a great example of why charity is not just about giving money but empowerment. Before SRI turned up on the scene, the government was threatening to close Osuwinna School and the kids would have had to walk about an hour to the nearest school. ItÆs in a poor, rural community and had no facilities. SRI has provided classroom partitions and electricity, the principal has built a small toilet block with his own salary and we are renovating dilapidated staff quarters into a library and small computer room in association with the parents. The latter are doing all the brickwork, plastering and carpentry. So it has been a real community effort. As a result, the government is no longer going to close the school and Jayasinghe reports there was a 40% increase in the enrolment of class one students this January.
If you would like more information on SRI, or wish to donate funds, email [email protected]
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