Creating a Vibrant Nonprofit Sector in Singapore

The CSR Digest’s correspondent, Jean-Michel Piedagnel, recently sat down with Willie Cheng, author of “Doing Good Well, What Does (And Does Not) Make Sense in the Nonprofit Sector” in an interview in Singapore. Cheng spoke candidly about corporate social responsibility and Singapore’s ambitions to be a hub for NGOs.

CSRD: You wrote about CSR in your book. Do you have any recent perspectives on CSR that you would like to share with The CSR Digest?

WC: There is an evolution of CSR which is actually quite positive. There are a number of initiatives to use the investing world to push companies to be more socially responsible. As part of this, there are moves to get companies to internalize the external cost of their impact on the community and the environment.

That will be good for CSR. Currently, when companies do something that has an adverse impact on a community or the environment, the cost of that impact is rarely reflected in their financials. There are now attempts to find ways of measuring and presenting those costs.

It’s like the early days of stock options, when they were used excessively to reward management until their costs were reflected in the income statements that were presented to investors. Similarly, companies will then have to measure, for example, the impact their actions have on the environment. Before, it was “free,” so it was not captured in the company’s operating costs. Thus, the move to account for those costs in the company’s financials will change companies’ behaviours.

For a while now, various people and organizations have been working hard to find ways to assess how socially responsible companies are. They seek to get companies to disclose on how they perform against environmental, social and governance (ESG) factors. At the same time, they get fund managers, the investment community to factor these in as criteria for investment. When you do that, you press one of the main buttons that motivate companies to act. The UN-backed Principles for Responsible Investment or PRI is one major initiative in this direction.

These are positive developments because they are market based. It’s using the market to move companies in the right direction.

CSRD: Do you think the Copenhagen conference had an impact in term of pushing the CSR agenda?

WC: The Copenhagen Conference greatly increased the visibility of the issues of climate change. Environment was already an issue that the NGO world had been pushing hard on, but Copenhagen took it a whole new level – even though there was no substantive accord coming out of it.

I thought a greater factor that helped pushed the CSR agenda is the global financial crisis. The crisis raised the question of whether unfettered capitalism, an extreme form of capitalism without regard for values and principles, is the right way for the world to develop. Since the Berlin wall came down, ‘greed is good’ has too often been the mantra.

We are likely moving towards a gentler form of capitalism. I didn’t think it was possible when I wrote the book. But now, you can see that there is widespread thinking by the world at large, and by political leaders to move towards this compassionate capitalism. And, it’s the global financial crisis that has been the wake-up call.

CSRD: What do you think about Singapore’s ambition to become an international hub for the non-profit sector?

WC: Again, I am more optimistic than when I wrote the book. It is better now because I can see a group of progressive thinking people within government that are trying to work around the limitations and structures of the system. Fundamentally, the basic core policy[i] and restrictions are still wrong. The notion that charity begins at home and should stay at home goes against the grain of what charity should be.

However, what the government has now done is to introduce a lighter regime for what is called International Organizations. These organizations will be spared from some of the restrictions. The government’s focus is to bring in some of the prominent brand-name NGOs like MSF, Ashoka, WWF, [ii] etc. These organizations will bring ideas, leadership, best practices and expertise which hopefully will then flow to the rest of the nonprofit sector in Singapore. It’s a bit of an elitist approach but there will be follow-through benefits for the sector.

CSRD: Some people highlight that the Singapore is not seen as progressive enough in policy areas to be able to become an international hub for NGOs. Take HIV/aids treatment where Singapore is lagging behind other countries like Thailand or Malaysia. Those countries have more leadership in term of free access or use of generic for example. What do you think?

WC:  When it comes to policy areas like HIV, human rights, etc, the policy decisions are made by the government based on different considerations which are not related to the development of a hub. I think what would impact the development of a hub is more the vibrancy of Singapore’s civil society. The question is: can we be a hub when the vibrancy of civil society is not at the same level as what those international NGOs would expect or like it to be?

Traditionally, the nonprofit sector here is involved primarily in the delivery of services. The government actively supports what it calls the “many helping hands” approach. It helps the government too, in terms of covering some of the welfare gaps. However, when it comes to advocating for changes to rules and policies, it is a lot more difficult for the nonprofit organizations in Singapore. But that is what the international NGOs are used to. Some of them are primarily advocacy organizations.

So the jury is still out on how successful we will be as an international hub for NGOs. Yes, I think, the government will meet its ambitions of bringing their target number of NGOs, but that is because the target is pretty modest and the number include trade associations and the like. We need to see if that number is enough to make it an international NGO hub. More importantly, we need to see if that number can help level up and create a vibrant nonprofit sector here in Singapore.

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[i] It is a legal requirement in Singapore that the majority of the funds collected in Singapore should be spent in Singapore.

[ii] Medecins Sans Frontieres www.msf.org; Ashoka www.ashoka.org; WWF www.worldwildlife.org

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