10 Nov 2023
SINGAPORE – An act of kindness by a worker who helped a lost, panicking mother hen and her chicks to safety has catapulted him into the limelight.
April 12, 2016
Showing posts with label Altruism. Show all posts
Showing posts with label Altruism. Show all posts
Friday, November 10, 2023
Friday, April 19, 2019
Thai king confers awards on two Australian divers for rescue of cave boys
19 April, 2019
BANGKOK — Two Australian cave divers who were instrumental in the rescue last year of 12 Thai boys and their soccer coach from a flooded cave received on Friday a royal honour from King Maha Vajiralongkorn in a ceremony in Bangkok.
The “Wild Boars” soccer team, aged between 11 and 16, and their 25-year-old coach became trapped on June 23 while exploring the cave complex in the northern province of Chiang Rai when a rainy season downpour flooded the tunnels.
A 17-day effort to rescue them gripped the world with experts from various countries volunteering to help.
Mr Richard Harris and Mr Craig Challen were members of the main rescue team, made up of 13 foreign divers and five Thai navy divers, that brought the boys and their coach out to safety.
BANGKOK — Two Australian cave divers who were instrumental in the rescue last year of 12 Thai boys and their soccer coach from a flooded cave received on Friday a royal honour from King Maha Vajiralongkorn in a ceremony in Bangkok.
The “Wild Boars” soccer team, aged between 11 and 16, and their 25-year-old coach became trapped on June 23 while exploring the cave complex in the northern province of Chiang Rai when a rainy season downpour flooded the tunnels.
A 17-day effort to rescue them gripped the world with experts from various countries volunteering to help.
Mr Richard Harris and Mr Craig Challen were members of the main rescue team, made up of 13 foreign divers and five Thai navy divers, that brought the boys and their coach out to safety.
Friday, March 29, 2019
Debt-relief can help poor make better decisions: Study
TODAY
By LOW YOUJIN
26 MARCH, 2019
SINGAPORE — A group of academics has called for a debt-relief programme to be made available to the less well-off here, after a comprehensive study showed that debt takes a huge toll on their ability to make good decisions.
Participants of a first-of-its-kind study by the Social Service Research Centre (SSR) at the National University of Singapore (NUS) viewed each debt as a separate “mental account”, according to the study released on Tuesday (March 26).
Being in the red in many debt accounts was “psychologically painful”, said the study’s authors, who are researchers from the NUS and the Singapore University of Social Sciences (SUSS). Thinking about their debts also increased their anxiety and worsened cognitive performance.
“This psychological impact may prevent the poor from making the right decisions to get out of poverty, further contributing to the poverty trap,” said the study. Its findings were published in the Proceedings of the National Academy of Sciences of the United States of America scientific journal.
By LOW YOUJIN
26 MARCH, 2019
SINGAPORE — A group of academics has called for a debt-relief programme to be made available to the less well-off here, after a comprehensive study showed that debt takes a huge toll on their ability to make good decisions.
Participants of a first-of-its-kind study by the Social Service Research Centre (SSR) at the National University of Singapore (NUS) viewed each debt as a separate “mental account”, according to the study released on Tuesday (March 26).
Being in the red in many debt accounts was “psychologically painful”, said the study’s authors, who are researchers from the NUS and the Singapore University of Social Sciences (SUSS). Thinking about their debts also increased their anxiety and worsened cognitive performance.
“This psychological impact may prevent the poor from making the right decisions to get out of poverty, further contributing to the poverty trap,” said the study. Its findings were published in the Proceedings of the National Academy of Sciences of the United States of America scientific journal.
Monday, March 13, 2017
Why paying people for not having jobs is a bad idea
Jonathan Eyal
Europe Correspondent
Mar 13 2017
Support for a universal basic income is growing but the idea is as ill-conceived as communism
LONDON • Would you like to live in a country where the government pays you a salary from the moment you're born and continues to transfer into your bank account each month a sum of money sufficient to cover all your necessary expenses for the rest of your life, regardless of whether you work or not?
Some would no doubt view such an arrangement as the nearest thing to paradise, while others would recoil with horror, dismissing such a vision as a classic example of the welfare state gone mad. But the idea of providing everyone with a "universal basic income" (or UBI as it is now known) has already gone beyond utopia, and is now all the rage among politicians.
It is touted by Mr Benoit Hamon, the Socialist candidate in France's presidential elections. It is also a central plank in the electoral campaign of Mr Lee Jae Myung, one of South Korea's three leading presidential candidates.
Europe Correspondent
Mar 13 2017
Support for a universal basic income is growing but the idea is as ill-conceived as communism
LONDON • Would you like to live in a country where the government pays you a salary from the moment you're born and continues to transfer into your bank account each month a sum of money sufficient to cover all your necessary expenses for the rest of your life, regardless of whether you work or not?
Some would no doubt view such an arrangement as the nearest thing to paradise, while others would recoil with horror, dismissing such a vision as a classic example of the welfare state gone mad. But the idea of providing everyone with a "universal basic income" (or UBI as it is now known) has already gone beyond utopia, and is now all the rage among politicians.
It is touted by Mr Benoit Hamon, the Socialist candidate in France's presidential elections. It is also a central plank in the electoral campaign of Mr Lee Jae Myung, one of South Korea's three leading presidential candidates.
Monday, May 23, 2016
Positive News - 23 May 2016
News of Hope and Love, Monday 23 May 2016
These were the "Good" News of love and hope from Facebook
1) Sad news. In Sabah, a 15-yr-old girl died while trying to save her grandmother from a fire.
2) In Singapore, an ex-drug addict gave his girlfriend the gift of one of his kidney. They will be getting married soon. She had been on the waiting list for a kidney for 10 years after an autoimmune disease cause hers to fail.
3) Construction worker (FW) publishes book of poetry.
4) Sisters' Island Marine Park
These were the "Good" News of love and hope from Facebook
1) Sad news. In Sabah, a 15-yr-old girl died while trying to save her grandmother from a fire.
"The charred remains of Nurul Farhana Zulkifli, 15, was found in an embrace with her 86-year-old grandmother, Tiah Awang near the main door."Selfless love.
2) In Singapore, an ex-drug addict gave his girlfriend the gift of one of his kidney. They will be getting married soon. She had been on the waiting list for a kidney for 10 years after an autoimmune disease cause hers to fail.
"I figured that even if my health fails after that, better to have two of us around for that short span of time than me having two kidneys yet end up losing her,"Maybe you don't believe in "True Love". But the path of this "love" did not run smooth. The couple are 47 years old. Not old, but certainly no spring chickens. But their story is inspiring and heartwarming. "May they be so completely One."
3) Construction worker (FW) publishes book of poetry.
struck by the "universality" of Mr Mukul's thoughts on loneliness, missing home and being invisible in a different land. "I am reminded of some Singapore pioneers who came from China and built a new Singapore, yet never lost their culture and love for the country of their birth and the memories there."
4) Sisters' Island Marine Park
The 40ha Sisters' Islands Marine Park... supports corals, anemones, seahorses, fish and other marine life.
With the help of a $500,000 donation from HSBC, a turtle hatchery will be set up on Small Sister's Island by the end of next year.
Friday, May 13, 2016
How grade obsession harms children
David Brooks
May 13, 2016
We all know why it exists, but the grade point average (GPA) is one of the more destructive elements in American education.
Success is about being passionately good at one or two things, but students who want to get close to that 4.0 have to be prudentially balanced about every subject. In life, we want independent thinking and risk-taking, but the GPA system encourages students to be deferential and risk-averse, giving their teachers what they want.
Creative people are good at asking new questions, but the GPA rewards those who can answer other people's questions. The modern economy rewards those who can think in ways computers can't, but the GPA rewards people who can grind away at mental tasks they find boring. People are happiest when motivated intrinsically, but the GPA is the mother of all extrinsic motivations.
May 13, 2016
We all know why it exists, but the grade point average (GPA) is one of the more destructive elements in American education.
Success is about being passionately good at one or two things, but students who want to get close to that 4.0 have to be prudentially balanced about every subject. In life, we want independent thinking and risk-taking, but the GPA system encourages students to be deferential and risk-averse, giving their teachers what they want.
Creative people are good at asking new questions, but the GPA rewards those who can answer other people's questions. The modern economy rewards those who can think in ways computers can't, but the GPA rewards people who can grind away at mental tasks they find boring. People are happiest when motivated intrinsically, but the GPA is the mother of all extrinsic motivations.
Wednesday, April 13, 2016
French beggar gets a life after saving one
Michel Flamant (left) and Jerome (right) working in their bakery.
DOLE (France) — French baker Michel Flamant, who owes his life to the homeless man who begged for handouts outside his bakery, knows more than anyone that man does not live by bread alone.
To show his gratitude, Mr Flamant is selling the business in the eastern town of Dole to Mr Jerome Aucant for a symbolic one euro (S$1.53).
Thursday, October 29, 2015
People Don't Actually Want Equality
They want fairness.
PAUL BLOOM
OCT 22, 2015
Bernie Sanders talks about economic inequality all the time, and it’s a message that resonates. You don’t need to be a socialist to worry about the divide between rich and poor in America. Many Americans across the political spectrum claim to be deeply troubled by economic inequality, and many say they support changes that would yield a more equal distribution of income and wealth.
But in his just-published book, On Inequality, the philosopher Harry Frankfurt argues that economic equality has no intrinsic value. This is a moral claim, but it’s also a psychological one: Frankfurt suggests that if people take the time to reflect, they’ll realize that inequality isn’t really what’s bothering them.
People might be troubled by what they see as unjust causes of economic inequality, a perfectly reasonable concern given how much your income and wealth are determined by accidents of birth, including how much money your parents had, your sex, and the color of your skin. We are troubled as well by potential consequences of economic inequality. We may think it corrodes democracy, or increases crime, or diminishes overall happiness. Most of all, people worry about poverty—not that some have less, but rather “that those with less have too little.”
Frankfurt argues, though, that we aren’t really bothered by inequality for its own sake. He points out that few worry about inequalities between the very rich and the very well off, even though these might be greater, both absolutely and proportionately, than inequalities between the moderately well-off and the poor. A world in which everyone suffered from horrible poverty would be a perfectly equal one, he says, but few would prefer that to the world in which we now live. Therefore, “equality” can’t be what we really value.
PAUL BLOOM
OCT 22, 2015
Bernie Sanders talks about economic inequality all the time, and it’s a message that resonates. You don’t need to be a socialist to worry about the divide between rich and poor in America. Many Americans across the political spectrum claim to be deeply troubled by economic inequality, and many say they support changes that would yield a more equal distribution of income and wealth.
But in his just-published book, On Inequality, the philosopher Harry Frankfurt argues that economic equality has no intrinsic value. This is a moral claim, but it’s also a psychological one: Frankfurt suggests that if people take the time to reflect, they’ll realize that inequality isn’t really what’s bothering them.
People might be troubled by what they see as unjust causes of economic inequality, a perfectly reasonable concern given how much your income and wealth are determined by accidents of birth, including how much money your parents had, your sex, and the color of your skin. We are troubled as well by potential consequences of economic inequality. We may think it corrodes democracy, or increases crime, or diminishes overall happiness. Most of all, people worry about poverty—not that some have less, but rather “that those with less have too little.”
Frankfurt argues, though, that we aren’t really bothered by inequality for its own sake. He points out that few worry about inequalities between the very rich and the very well off, even though these might be greater, both absolutely and proportionately, than inequalities between the moderately well-off and the poor. A world in which everyone suffered from horrible poverty would be a perfectly equal one, he says, but few would prefer that to the world in which we now live. Therefore, “equality” can’t be what we really value.
Wednesday, September 23, 2015
Kind 'uncle' on MRT train lauded for his acts
SEP 4, 2015,
S'pore Kindness Movement honours man who told foreign workers to keep their seats
Melody Zaccheus
A Singaporean "uncle" who told three foreign labourers on a train to keep their seats when they offered to give them up to local commuters was honoured by the Singapore Kindness Movement yesterday.
Mr Rimy Lau, 68, was presented with a certificate commending his gesture and a figurine of Singa the Courtesy Lion by the movement's general secretary William Wan at the organisation's Hill Street office.
The movement said Mr Lau's caring gesture "helped to make Singapore a nation of kindness and graciousness".
S'pore Kindness Movement honours man who told foreign workers to keep their seats
Melody Zaccheus
A Singaporean "uncle" who told three foreign labourers on a train to keep their seats when they offered to give them up to local commuters was honoured by the Singapore Kindness Movement yesterday.
Mr Rimy Lau, 68, was presented with a certificate commending his gesture and a figurine of Singa the Courtesy Lion by the movement's general secretary William Wan at the organisation's Hill Street office.
The movement said Mr Lau's caring gesture "helped to make Singapore a nation of kindness and graciousness".
Sunday, August 2, 2015
Move to raise employees' minimum salary to US$70,000 reportedly backfires on US company
2 Aug 2015
SEATTLE - Things are not looking quite so rosy at US company Gravity Payments, less than four months after it made the news for a groundbreaking move to erase income inequality.
In April, the Seattle-based credit card payment firm announced it would be raising its employees' pay to a minimum of US$70,000 (S$96,028) across the board, earning praise from its 120 workers.
CEO Dan Price, who took a US$930,000 paycut to sanction the move, had said then: "Everyone started screaming and cheering and just going crazy."
But The New York Times, which first broke the story, is now reporting that Mr Price's decision has generated internal strife within the company.
In April, the Seattle-based credit card payment firm announced it would be raising its employees' pay to a minimum of US$70,000 (S$96,028) across the board, earning praise from its 120 workers.
CEO Dan Price, who took a US$930,000 paycut to sanction the move, had said then: "Everyone started screaming and cheering and just going crazy."
But The New York Times, which first broke the story, is now reporting that Mr Price's decision has generated internal strife within the company.
Thursday, April 23, 2015
Building a culture of collective responsibility
RICHARD HARTUNG
APRIL 23, 2015
As Singapore goes about what some have called a shift to the left, with greater social spending in the 2015 Budget, there has been debate both inside and outside of Parliament on the wider implications of such a change. Among the questions are whether the shift will lead to Singaporeans developing a “crutch mentality” that was eschewed in the past, where the line between individual responsibility and collective responsibility ends, and whether the new policies can address the nagging problem of inequality.
A recent report by the Commission on Inclusive Prosperity, which was co-chaired by renowned American economist Lawrence Summers and the United Kingdom Labour Party’s Shadow Chancellor of the Exchequer Ed Balls, may be helpful in considering these vital issues.
The commission, which examined reforms the US and UK need to undertake to generate more high-wage jobs for the future, espouses the principle of putting people first and recommends new policies for today’s globalised and highly competitive economic environment to reduce the negative impact of inequality.
Several new initiatives in the 2015 Budget are in line with the commission’s recommendations, including the focus on early childhood education, improving the quality of schools, eliminating financial barriers to higher education and providing support for apprenticeship programmes.
APRIL 23, 2015
As Singapore goes about what some have called a shift to the left, with greater social spending in the 2015 Budget, there has been debate both inside and outside of Parliament on the wider implications of such a change. Among the questions are whether the shift will lead to Singaporeans developing a “crutch mentality” that was eschewed in the past, where the line between individual responsibility and collective responsibility ends, and whether the new policies can address the nagging problem of inequality.
A recent report by the Commission on Inclusive Prosperity, which was co-chaired by renowned American economist Lawrence Summers and the United Kingdom Labour Party’s Shadow Chancellor of the Exchequer Ed Balls, may be helpful in considering these vital issues.
The commission, which examined reforms the US and UK need to undertake to generate more high-wage jobs for the future, espouses the principle of putting people first and recommends new policies for today’s globalised and highly competitive economic environment to reduce the negative impact of inequality.
Several new initiatives in the 2015 Budget are in line with the commission’s recommendations, including the focus on early childhood education, improving the quality of schools, eliminating financial barriers to higher education and providing support for apprenticeship programmes.
Wednesday, April 22, 2015
Meet the lifesaving giant HeroRats
BY NICHOLAS KRISTOF -
APRIL 21
I am walking through a minefield here in rural Angola, tailing a monster rat. This is a Gambian pouched rat, a breed almost 1m from nose to tail, the kind of rat that gives cats nightmares. However, this rat is a genius as well as a giant, for it has learnt how to detect landmines by scent — and it is doing its best to save humans such as me from being blown up.
These rodent mine detectors have been dubbed HeroRats, and when you are in a minefield with one that seems about right. You are very respectful and you only hope this HeroRat does not have a stuffed nose.
APRIL 21
I am walking through a minefield here in rural Angola, tailing a monster rat. This is a Gambian pouched rat, a breed almost 1m from nose to tail, the kind of rat that gives cats nightmares. However, this rat is a genius as well as a giant, for it has learnt how to detect landmines by scent — and it is doing its best to save humans such as me from being blown up.
These rodent mine detectors have been dubbed HeroRats, and when you are in a minefield with one that seems about right. You are very respectful and you only hope this HeroRat does not have a stuffed nose.
Monday, February 23, 2015
If the elderly need help, let's provide what they need
Feb 22, 2015
By Han Fook Kwang
Editor At Large
It is Chinese New Year, and a good time to talk about elderly people.
They have always had a special place during this festive period, when families show respect to them in time-honoured tradition.
For Singapore, it has also been a time when more people are asking for more to be done for them.
The Government has said it will be introducing a Silver Support Scheme during the Budget statement tomorrow.
When the Prime Minister first mentioned it last year, he said it was aimed at helping the bottom 10 per cent to 20 per cent of the elderly who have limited means because they did not save up enough in their Central Provident Fund accounts, or are without family support.
Together with the Pioneer Generation Package, these schemes signal a growing acceptance that older Singaporeans need more help from the community.
It is a welcome development and part of how the Government's views on welfare and assistance have changed in recent years.
As more such schemes are being introduced, it is important for Singaporeans to have a common understanding on the broad approach to this issue.
You could start with answering the basic question: Why do we want to help the old?
I can think of three good reasons.
By Han Fook Kwang
Editor At Large
It is Chinese New Year, and a good time to talk about elderly people.
They have always had a special place during this festive period, when families show respect to them in time-honoured tradition.
For Singapore, it has also been a time when more people are asking for more to be done for them.
The Government has said it will be introducing a Silver Support Scheme during the Budget statement tomorrow.
When the Prime Minister first mentioned it last year, he said it was aimed at helping the bottom 10 per cent to 20 per cent of the elderly who have limited means because they did not save up enough in their Central Provident Fund accounts, or are without family support.
Together with the Pioneer Generation Package, these schemes signal a growing acceptance that older Singaporeans need more help from the community.
It is a welcome development and part of how the Government's views on welfare and assistance have changed in recent years.
As more such schemes are being introduced, it is important for Singaporeans to have a common understanding on the broad approach to this issue.
You could start with answering the basic question: Why do we want to help the old?
I can think of three good reasons.
Tuesday, February 17, 2015
Liak Teng Lit: 5 million people, 70,000 cleaners...that’s ridiculous!
FEB 16, 2015
BY RACHEL CHANG
Prime Minister Lee Hsien Loong ticked off Singaporeans earlier this month over the trash left after the Laneway music festival. Cue Mr Liak Teng Lit, 61, chairman of the Public Hygiene Council, which leads the Keep Singapore Clean Movement. The group chief executive of Alexandra Health System tells Rachel Chang that his interest in cleanliness started out as a fear of communicable diseases spreading. Now, he fears that the disease is in Singapore’s societal values.
Prime Minister Lee Hsien Loong ticked off Singaporeans earlier this month over the trash left after the Laneway music festival. Cue Mr Liak Teng Lit, 61, chairman of the Public Hygiene Council, which leads the Keep Singapore Clean Movement. The group chief executive of Alexandra Health System tells Rachel Chang that his interest in cleanliness started out as a fear of communicable diseases spreading. Now, he fears that the disease is in Singapore’s societal values.
Monday, January 5, 2015
Indonesia deploys Usman Harun to help in search
JANUARY 5
SINGAPORE — Singapore offered its help to Indonesia in the wake of the AirAsia crash as part of a humanitarian effort, and will continue providing its assistance professionally, the Ministry of Defence (MINDEF) said yesterday in response to Jakarta’s deployment of KRI Usman Harun, the naming of which sparked a diplomatic row between the two countries last February.
Indonesia media reported that KRI Usman Harun, a Bung Tomo-class corvette, was deployed because it is equipped with advanced underwater sonar capabilities — the Thales Underwater Systems TMS 4130C1 hull-mounted sonar.
A MINDEF spokesperson said: “Singapore offered its help for this humanitarian effort arising from a tragic accident of AirAsia flight QZ8501 which has befallen our Indonesian neighbour. We offer our deepest condolences to the bereaved families of the passengers and crew. The Singapore Armed Forces will continue to assist in this search effort professionally.”
Jakarta’s decision to name the ship after two marines who carried out a bombing at MacDonald House in 1965 had led the Singapore Government to send a Third Person Note — a formal diplomatic note — to its Indonesian counterparts to register its regret.
Subsequently, Defence Minister Ng Eng Hen said the KRI Usman Harun would not be allowed to dock in Singapore and the Republic’s navy would not sail with it in joint exercises.
SINGAPORE — Singapore offered its help to Indonesia in the wake of the AirAsia crash as part of a humanitarian effort, and will continue providing its assistance professionally, the Ministry of Defence (MINDEF) said yesterday in response to Jakarta’s deployment of KRI Usman Harun, the naming of which sparked a diplomatic row between the two countries last February.
Indonesia media reported that KRI Usman Harun, a Bung Tomo-class corvette, was deployed because it is equipped with advanced underwater sonar capabilities — the Thales Underwater Systems TMS 4130C1 hull-mounted sonar.
A MINDEF spokesperson said: “Singapore offered its help for this humanitarian effort arising from a tragic accident of AirAsia flight QZ8501 which has befallen our Indonesian neighbour. We offer our deepest condolences to the bereaved families of the passengers and crew. The Singapore Armed Forces will continue to assist in this search effort professionally.”
Jakarta’s decision to name the ship after two marines who carried out a bombing at MacDonald House in 1965 had led the Singapore Government to send a Third Person Note — a formal diplomatic note — to its Indonesian counterparts to register its regret.
Subsequently, Defence Minister Ng Eng Hen said the KRI Usman Harun would not be allowed to dock in Singapore and the Republic’s navy would not sail with it in joint exercises.
Thursday, November 27, 2014
Stop Trying to Save the World (or How to Pave the Road to Hell with Good Intentions)
Big ideas are destroying international development
By Michael Hobbes
It seemed like such a good idea at the time: A merry-go-round hooked up to a water pump. In rural sub-Saharan Africa, where children are plentiful but clean water is scarce, the PlayPump harnessed one to provide the other. Every time the kids spun around on the big colorful wheel, water filled an elevated tank a few yards away, providing fresh, clean water anyone in the village could use all day.
PlayPump International, the NGO that came up with the idea and developed the technology, seemed to have thought of everything. To pay for maintenance, the elevated water tanks sold advertising, becoming billboards for companies seeking access to rural markets. If the ads didn’t sell, they would feature HIV/AIDS-prevention campaigns. The whole package cost just $7,000 to install in each village and could provide water for up to 2,500 people.
The donations gushed in. In 2006, the U.S. government and two major foundations pledged $16.4 million in a public ceremony emceed by Bill Clinton and Laura Bush. The technology was touted by the World Bank and made a cameo in America’s 2007 Water for the Poor Act. Jay-Z personally pledged $400,000. PlayPump set the goal of installing 4,000 pumps in Africa by 2010. “That would mean clean drinking water for some ten million people,” a “Frontline” reporter announced.
By 2007, less than two years after the grants came in, it was already clear these aspirations weren’t going to be met. A UNICEF report found pumps abandoned, broken, unmaintained. Of the more than 1,500 pumps that had been installed with the initial burst of grant money in Zambia, one-quarter already needed repair. The Guardian said the pumps were “reliant on child labour.”
By Michael Hobbes
It seemed like such a good idea at the time: A merry-go-round hooked up to a water pump. In rural sub-Saharan Africa, where children are plentiful but clean water is scarce, the PlayPump harnessed one to provide the other. Every time the kids spun around on the big colorful wheel, water filled an elevated tank a few yards away, providing fresh, clean water anyone in the village could use all day.
PlayPump International, the NGO that came up with the idea and developed the technology, seemed to have thought of everything. To pay for maintenance, the elevated water tanks sold advertising, becoming billboards for companies seeking access to rural markets. If the ads didn’t sell, they would feature HIV/AIDS-prevention campaigns. The whole package cost just $7,000 to install in each village and could provide water for up to 2,500 people.
The donations gushed in. In 2006, the U.S. government and two major foundations pledged $16.4 million in a public ceremony emceed by Bill Clinton and Laura Bush. The technology was touted by the World Bank and made a cameo in America’s 2007 Water for the Poor Act. Jay-Z personally pledged $400,000. PlayPump set the goal of installing 4,000 pumps in Africa by 2010. “That would mean clean drinking water for some ten million people,” a “Frontline” reporter announced.
By 2007, less than two years after the grants came in, it was already clear these aspirations weren’t going to be met. A UNICEF report found pumps abandoned, broken, unmaintained. Of the more than 1,500 pumps that had been installed with the initial burst of grant money in Zambia, one-quarter already needed repair. The Guardian said the pumps were “reliant on child labour.”
Wednesday, October 15, 2014
An Unconventional Billionaire Is Revolutionizing Philanthropy By Closing His Foundation
Should charity go on forever? For Chuck Feeney, the answer is an emphatic no--and fellow billionaires, from newly minted Silicon Valley entrepreneurs to Bill Gates and Warren Buffett, are learning from his example.
Some people are into extreme sports, others extreme eating. You could call self-made billionaire Chuck Feeney an extreme philanthropist.
Feeney, the 83-year-old co-founder of the pioneering retail business Duty Free Shoppers (the company that sells the tax-free alcohol and perfume in airports), is practically unknown as a public figure. Though Forbes once ranked him the 23rd-richest person alive, you wouldn’t realize it if you met him on the street: In his prime, he famously wore a $15 watch and flew economy. You certainly won’t find his name on any buildings. Yet his foundation, Atlantic Philanthropies, will soon become the largest ever foundation to purposefully give away all its money--seeded by almost Feeney’s entire fortune, which was worth about $4 billion when he donated it anonymously three decades ago--and then go about shutting its doors.
Big bucks philanthropy was once defined by benevolent barons like Rockefeller, Carnegie, and Ford, men who plastered their names on brick walls and established foundations with large endowments meant to carry on their legacy forever. In 1984, when Feeney gave away nearly all his wealth, he became an early, outsized example of a new breed of philanthropist, a forefather of a style of giving that is becoming more and more popular with today's rich and ultra-rich.
The current class of high-profile wealthy elite, people like Bill Gates, Michael Bloomberg, Richard Branson, and Mark Zuckerberg, are giving away money earlier in their life than their predecessors. Some are setting up their donations or foundations in a way that their funds won’t last for generations. In many cases, they’re also becoming what you might call philanthropic entrepreneurs, devoting energies in their prime to directing their charities either alongside--or instead of--their businesses.
Take Dustin Moskovitz, a Facebook co-founder and current startup CEO who was once the world’s youngest billionaire. Saying that he was merely a “steward” of capital that really “belongs to the world,” he set up Good Ventures, an endeavor run by he and his wife that aims redistribute his wealth in his lifetime: “I see no strong reasons to try to set up a system that perpetually invests this capital after I die, so I'd like to be rid of it before then,” he wrote in a forum on Quora. This engaged attitude is also trickling down: Universities, ranging from Yale and Harvard to Northwestern, are offering courses that give the world’s future elite real-world practice at the surprisingly difficult work of giving away hard cash.
“We’re seeing all this new wealth, especially West Coast wealth and technology wealth, which doesn’t necessarily have a place tied to it. They just have very different sensibilities,” says Ben Hecht, CEO of Living Cities, a New York City non-profit that works directly with many of the world’s largest foundations. “Many of them don’t have any interest in building a perpetual institution. I think it’s not in their culture. They want to give it away, and they want to be active in giving it away.”
Though Feeney, who couldn’t be interviewed for this article because he was recovering from surgery, was never in tech industry or a rockstar name in business, his “giving while living” motto is an influential early example of this mindset. As his foundation winds down its work and evaluates its own impact, its story illustrates the upsides and downsides of this ethos.
GIVING WHILE LIVING
Atlantic Philanthropies is what’s called a limited life foundation, which it formally became in 2002 when the board voted to spend all its money by 2020, as an extension of Feeney’s philosophy about wealth. Limited life foundations aren’t new--Julius Rosenwald, the head of Sears, Roebuck and Company set one up in 1917, for example--but the idea has become a buzzword in the philanthropy world only within the last decade. Atlantic Philanthropies will soon be the largest foundation to complete such a “sunsetting” process, but the Bill and Melinda Gates Foundation, formed in 2000, is another massive example of the model. It's spending down on a longer timeline, with the goal of giving away its now-$40 billion endowment within 20 years of the deaths of Bill and Melinda Gates. Warren Buffett also stipulated that his $31 billion donation to the foundation be spent quickly in year installments.
If the goal is to increase charitable giving, Feeney’s “giving while living” philosophy may be particularly well-suited for today’s generation of philanthropists, who live at a time when growing income inequality is a global flashpoint. “Giving while living” is a more radical version of Gates’ and Buffett’s Giving Pledge, which asks billionaires to donate at least half their wealth, but not necessarily to have it spent in their lifetimes or become deeply involved in how it’s used. (Buffett reportedly described Feeney as the “spiritual leader” of the Giving Pledge a few years ago.) It’s also a reflection of the more recent mindset of consumers who grapple with the broader social repercussions of all their spending--whether that means buying fair-trade coffee and greener energy or launching a social good venture.
“More people are giving more. I think that is heavily a function of the structure of our economy. There has been a great expansion and a great concentration of wealth,” says Jane Wales, vice president of philanthropy and society at the Aspen Institute. “Those that have benefited from that economy feel a very strong desire to ensure that the benefits are more evenly shared, and they see philanthropy as one of the ways of achieving that goal.”
Influenced by the writings of Andrew Carnegie, who believed "the man who dies wealthy, dies disgraced," Feeney’s decision to donate his wealth came from almost a selfish impulse. A classic rags-to-riches entrepreneur who grew up in a poor Irish-American family and remained deeply uncomfortable with the trappings of luxury, Feeney's transfer of the legal ownership of his business assets to a charitable cause relieved a burden. This was apparent in the way Feeney would talk about philanthropy to his wealthy peers, according to the current CEO of Atlantic Philanthropies, Chris Oeschli: “Chuck would say 'Try it, you’ll like it. You’ll get more satisfaction from that then having houses you’ll never live in, or yachts that you can’t spend your time on.'”
But the desire to die poor is where the similarities with Carnegie end. Today, a century after its founding with a $135 million endowment (equivalent to $2 billion today), Carnegie’s foundation, the Carnegie Corporation, lives on “in perpetuity,” in keeping with the steel magnate’s wishes for his wealth to “continue to benefit humanity for generations untold.” By law, nonprofit foundations must pay out at least 5% of their endowment’s value every year; the Carnegie Corporation carefully tracks its assets’ market value to meet its yearly spending target of 5.5%--the rest is reinvested back into the foundation to keep it running forever. Since 1913, the Carnegie Corporation has given away nearly $3 billion dollars (not adjusted for inflation), including about $108 million per year in the last decade. Whereas Atlantic’s work has taken place over a much shorter time frame: In 30 years, it’s made about $6.7 billion in grants, averaging about $360 million a year this past decade. It aims to allocate the remaining $1.1 billion of its endowment to grantees by 2016 and shut its doors soon after.
While stretched over forever, Carnegie’s dollar figure legacy may end up larger, there can be benefits to having a deadline. To Feeney, who believed substantial wealth can create problems for future generations, donors can do the most good addressing the urgent and large problems of their time, rather than slowly meting out the profits from invested endowments into the far-off future (or, worse, leaving extremely wealthy heirs). He felt a deadline gives the foundation’s work a sense of urgency and do-or-die startup mentality that many organizations lack. “There’s a bit more of an entrepreneurial instinct. A little more risk taking. Which can give you a great upside when you hit the mark, and a downside when you miss,” says Atlantic CEO Oeschli. “Absolutely, it does focus the mind.”
THE LIFE OF A LIMITED LIFE FOUNDATION
In its beginning, Atlantic Philanthropies was indeed a startup with a small staff. Like Carnegie’s foundation, its earliest funding decisions were driven partly by circumstance and partly by Feeney’s passions--say for building new scientific research institutions in Ireland (Feeney is a dual citizen), or helping his alma mater, Cornell University (He’s the school’s largest single donor to date). Over time, as Atlantic’s staff and endowment grew, it focused on leveraging its existing expertise and experience in particular countries, like building on its work on peace and reconciliation between Protestants and Catholics in Northern Ireland and making donations to help solve the challenges of post-apartheid South Africa.
To Tony Proscio, associate director of the Center for Strategic Philanthropy and Civil Society at Duke University, who has been paid as a consultant to help evaluate Atlantic’s work, the foundation has been effective because it limited the scope of its work to discrete, solvable issues, rather than open-ended ones, like climate change or school reform. From its work to stop the death penalty to its human rights focus in Northern Ireland and South Africa, he says: “The theme is these are all things that could be done in a discrete period of time and where the technology, to use the term broadly ... of what needed to be done was not all that obscure.”
By contrast, limited life foundations can run into trouble when they are unfocused or fixated on questions that aren't easily solved. “The strongest argument against time limits is the ability of an institution to learn and adapt as it works on complex problems,” he says. In this, one of Carnegie Corporation’s biggest mistakes is instructive: Infamously, it funded a 1932 study on white poverty in South Africa that later became a blueprint for apartheid. But because of its perpetual model, it has been able to change with the times and learn from its errors--decades later it funded studies and court cases that sought to take down the apartheid regime.
Proponents of the limited life foundation say that one of the biggest upsides is the donor’s typically high level of involvement in giving decisions, much like a startup founder would direct the vision and strategy of his company. The idea is that people who had the talent and discipline to earn or manage lots of wealth in their careers might also be effective at using those same skills to making a difference. “Chuck has always expected a high level of discipline and evidence of results,” says Oeschli. What much of Atlantic’s work in different locales had in common was a connection to Feeney’s entrepreneurial instincts, says Oeschli--a kind of “ripeness in the people, in the economy, and in the culture--a sense there was an opportunity there to build on momentum and leverage value.”
This can be seen in Atlantic’s work to improve the community health care system in Vietnam, both by funding physical and technology infrastructure but, more importantly, by supporting organizations that educated and trained medical staff to sustain long-term gains. Le Ngoc Bao, who heads the Vietnam program of one Atlantic grantee, Pathfinder International, says Atlantic’s investments had a “critical” impact on the nation’s health care capacities just as Vietnam was transitioning from a developing to a middle income economy--in part, because Atlantic was able to forge cooperation among many different groups. “It hasn’t been a one-off intervention,” he says.
Inequality is an increasingly destabilizing force in today’s global economy, and in to answer that, today high net-worth philanthropists are giving more than ever. But it's worth questioning the system that creates billionaires, even those with the best philanthropic intentions. Wouldn’t it be better to have a society that mitigates the accumulation or inheritance of massive wealth and creates more equality through government investments and policy, rather than relying on voluntary gestures and individual whims?
Feeney’s own story is the embodiment of the tensions between the desire to give away a fortune and the necessary fact that, to do this, fortunes must first be accumulated. He hated paying taxes and, according to a 2007 biography, The Billionaire Who Wasn’t: How Chuck Feeney Made and Gave Away a Fortune Without Anyone Knowing, he went to great lengths to avoid doing so. In one of the more extreme tax dodges in his business life, he and his co-founder transferred ownership of Duty Free Shoppers to each of their wives, who were born outside of the U.S.
Yet creating a more equal society isn’t the answer to every social problem; only large budgets and the hard work of experts is going to cure HIV, eliminate nuclear weapons, or end the death penalty.
WHAT IT’S LIKE TO SHUT DOWN
Today, Atlantic is focused on tapering off its work with grantees, evaluating the impact of its grants and its tactics, and drawing up lessons it can leave behind for others. Though it’s operated without seeking much media attention for decades (Feeney himself went to great lengths to remain anonymous for many years, and only disclosed his donations in 1997 due to a business-related lawsuit), lately it is seeking out more attention with the idea of inspiring other philanthropists. Meanwhile, its final grants will be with an eye towards getting the biggest bang for their last few bucks while helping existing groups, like the Social Justice Initiative in South Africa, find additional funding sources to continue their work. Atlantic has already closed its offices in several countries, including Vietnam, where groups like Pathfinder now need to make strategic choices about their future in the country.
How Atlantic spends the end of its money and then shuts its doors is also instructive for what it can tell us about how The Gates Foundation will end its works after the deaths of its founders and how the giving while living philosophy affects decisions. Spending vast sums of money wisely and quickly is a challenge. The Gates Foundation, with a staff of about 1,200 people, paid out $3.6 billion in 2013 alone. This is more than the annual budget of the entire United Nations, an organization with more than a ten times larger staff size. It helps that the Gates’s have a clear vision for the goals they want to achieve in reducing global poverty and ending infectious diseases like polio, malaria, and HIV. Because they are not exactly limited as far as dollar resources go, John Hoover, senior vice president of the Andrea and Charles Bronfman Philanthropies, points out that the Gates’ Foundation wisely uses “impact” to measure the rate at which it funds projects. The opportunity to quickly reduce polio cases using known cures, for example, merits all the funds needed to do this quickly. More far fetched projects may get less money until they can prove they are close to a solution.
Perhaps the biggest operational challenge for Atlantic isn't in funding decisions, but in HR. Oechsli is often consumed with the realities of managing a shrinking organization (It peaked three years ago at about 138 full-time employees. Today, there are about 70.) Being transparent and fair, while retaining talent and encouraging ambition and creativity is a challenge. “Each person has their own vision of their professional opportunities and future as well as their desire to do as much as they can while they’re here at Atlantic. And that’s a bit of a tension,” he says. One discussion involved whether to tell staff when exactly their job will end. Atlantic opted for providing clarity and removing anxiety, creating “a roadmap plan” for the end of every staff position based on the needs of the organization. Finance, communications, evaluation employees, and “a lawyer or two,” will eventually be the last few staff that remain.
Diane Feeney, who says her father set up his five children to lead a “comfortable” life and gave them funds to set up their own, smaller charity, hopes her father will serve as a role model to the millennial generation. “I think the fact that my father spoke up very early on about giving while living will inspire people in years to come,” she says. “This is much more something that comes from entrepreneurs. They tend to be much more of risk takers, and want to spend their money in their lifetime. I think my father represents a model for many young, up-and-coming entrepreneurs.”
However, despite everyone’s desire that Feeney serve as a role model, it may turn out to be that his legacy remains extraordinary and largely unknown. Says Proscio: “I would love to think that someone like Feeney would be a widespread model of what to do with wealth. But his story is pretty remarkable. And I think it’s going to stay remarkable. Nobody sits down and in a single day gives away his life fortune. Except for Chuck Feeney.”
Wednesday, September 24, 2014
Kind helper bonds with ah ma
Sep 24, 2014
By Corrie Tan
My grandmother died a few weeks ago. She went very peacefully, in the comfort of home, at the grand old age of 96.
Ah ma, as we called her in Teochew, was diagnosed with dementia nearly 20 years ago, and she also had Parkinson's disease, which meant that her motor skills eventually degenerated and that she moved from being wheelchair-bound to bedridden.
We started hiring domestic helpers who had the physical strength to help her move around and use the shower and bathroom. She eventually became completely uncommunicative verbally - she could not hold conversations or express how she felt.
This was around the time we hired our final domestic helper, a young woman from Indonesia named Yuli. She had never worked abroad. She giggled incessantly at first when my mother taught her how to care for my grandmother and how to do basic household chores.
But she was sweet and earnest - and despite having no common language with which to connect with my grandmother emotionally, Yuli grew very fond of her.
When my grandmother was admitted to the hospital last month for developing an auto-immune disease, Yuli was deeply worried. She approached my mother and asked if she could give her $100 for my grandmother's hospital fees.
My mother declined this, of course. The amount was nearly 20 per cent of Yuli's pay, a huge sacrifice for a young woman supporting a family back home.
Earlier this week, I watched a video put together by my colleagues at The Straits Times Digital team about 60-year-old Richard Ashworth, who had hired a male helper from Myanmar to care for his elderly adopted father John, 81, who had dementia.
The younger Ashworth said, teary-eyed and voice cracking, that he had considered suicide because he just could not cope with the demands of caring for his father, whose behaviour was getting more and more difficult to manage - even turning violent.
Laminn Koko, the young man from Myanmar that Mr Ashworth had hired, was disappointed at the standards of the nursing homes they visited, and said he could take care of Uncle John better on his own.
He said: "I told my boss - I'm still here. I can take care of both Uncle John and you."
There is a gratitude I am not sure I will ever know how to express to the men and women who treat our grandparents - and parents - like their own.
When the undertaker and his assistants arrived to take my grandmother's body and prepare it for the funeral, Yuli cried silently, standing vigil by the doorway, shoulders shaking in quiet sobs. She scrolled through pictures of herself and my grandmother that she had taken on her mobile phone.
In her broken English, she told us, haltingly: "Ah ma and ah kong (grandfather) are together now."
Yuli reminded me of humanity's ability to look past the borders of culture, nationality, skin colour and language, to be able to adopt another person as part of our own emotional family - moving from the divide of employee-employer to the realm of kith and kin.
My youngest sister, who is 19, rarely had the chance to communicate with my grandmother in her lifetime; the past decade of ah ma's life was spent drifting in and out of lucid moments.
She told me wistfully: "It's so strange - ah ma is my biological grandmother, but Yuli is closer to her than I ever was."
I, too, felt a deep twinge of guilt and regret. I had been so fixated on how I would never be able to communicate with my grandmother - she spoke only Teochew and I spoke none - that I had forgotten about how to connect with her by simply being there. Holding her hand. Taking her out for some fresh air.
So many of the domestic helpers who flock to Singapore in search of a better life eventually form deep bonds with the people they meet here. Their employers, initial strangers, soon become the bedrock of their new life.
These helpers might live with a single family for years and years, watching the children in their care grow up, or they might, like Yuli, spend a short but intense period with the employer.
Yuli has since changed employers - she will be caring for another elderly woman with dementia.
I wish her all the best, and I hope she will bring as much kindness and generosity to her new family as she did mine.
By Corrie Tan
My grandmother died a few weeks ago. She went very peacefully, in the comfort of home, at the grand old age of 96.
Ah ma, as we called her in Teochew, was diagnosed with dementia nearly 20 years ago, and she also had Parkinson's disease, which meant that her motor skills eventually degenerated and that she moved from being wheelchair-bound to bedridden.
We started hiring domestic helpers who had the physical strength to help her move around and use the shower and bathroom. She eventually became completely uncommunicative verbally - she could not hold conversations or express how she felt.
This was around the time we hired our final domestic helper, a young woman from Indonesia named Yuli. She had never worked abroad. She giggled incessantly at first when my mother taught her how to care for my grandmother and how to do basic household chores.
But she was sweet and earnest - and despite having no common language with which to connect with my grandmother emotionally, Yuli grew very fond of her.
When my grandmother was admitted to the hospital last month for developing an auto-immune disease, Yuli was deeply worried. She approached my mother and asked if she could give her $100 for my grandmother's hospital fees.
My mother declined this, of course. The amount was nearly 20 per cent of Yuli's pay, a huge sacrifice for a young woman supporting a family back home.
Earlier this week, I watched a video put together by my colleagues at The Straits Times Digital team about 60-year-old Richard Ashworth, who had hired a male helper from Myanmar to care for his elderly adopted father John, 81, who had dementia.
The younger Ashworth said, teary-eyed and voice cracking, that he had considered suicide because he just could not cope with the demands of caring for his father, whose behaviour was getting more and more difficult to manage - even turning violent.
Laminn Koko, the young man from Myanmar that Mr Ashworth had hired, was disappointed at the standards of the nursing homes they visited, and said he could take care of Uncle John better on his own.
He said: "I told my boss - I'm still here. I can take care of both Uncle John and you."
There is a gratitude I am not sure I will ever know how to express to the men and women who treat our grandparents - and parents - like their own.
When the undertaker and his assistants arrived to take my grandmother's body and prepare it for the funeral, Yuli cried silently, standing vigil by the doorway, shoulders shaking in quiet sobs. She scrolled through pictures of herself and my grandmother that she had taken on her mobile phone.
In her broken English, she told us, haltingly: "Ah ma and ah kong (grandfather) are together now."
Yuli reminded me of humanity's ability to look past the borders of culture, nationality, skin colour and language, to be able to adopt another person as part of our own emotional family - moving from the divide of employee-employer to the realm of kith and kin.
My youngest sister, who is 19, rarely had the chance to communicate with my grandmother in her lifetime; the past decade of ah ma's life was spent drifting in and out of lucid moments.
She told me wistfully: "It's so strange - ah ma is my biological grandmother, but Yuli is closer to her than I ever was."
I, too, felt a deep twinge of guilt and regret. I had been so fixated on how I would never be able to communicate with my grandmother - she spoke only Teochew and I spoke none - that I had forgotten about how to connect with her by simply being there. Holding her hand. Taking her out for some fresh air.
So many of the domestic helpers who flock to Singapore in search of a better life eventually form deep bonds with the people they meet here. Their employers, initial strangers, soon become the bedrock of their new life.
These helpers might live with a single family for years and years, watching the children in their care grow up, or they might, like Yuli, spend a short but intense period with the employer.
Yuli has since changed employers - she will be caring for another elderly woman with dementia.
I wish her all the best, and I hope she will bring as much kindness and generosity to her new family as she did mine.
Sunday, July 6, 2014
$400,000 Life Savings (Singaporeans help)
Jun 29, 2014
She scrimped and saved all her life...
Elderly cleaner Goh Kah Keow, who was cheated of her life savings by con artists from China, was afraid of growing old with no money
By Bryna Singh
It took her more than 60 years of sweat and toil to squirrel away $400,000. But in less than half a day, Madam Goh Kah Keow, 74, lost her entire life savings to five con artists from China last November.
Her case hit the headlines about a week ago, after two of the five Chinese nationals were jailed more than eight years in total for their heartless scam. The other three grifters remain at large.
While many Singaporeans felt for Madam Goh, there were also those who wondered how an uneducated and unskilled worker came to have so much savings.
She scrimped and saved all her life...
$400,000 gone in a day
Elderly cleaner Goh Kah Keow, who was cheated of her life savings by con artists from China, was afraid of growing old with no money
By Bryna Singh
It took her more than 60 years of sweat and toil to squirrel away $400,000. But in less than half a day, Madam Goh Kah Keow, 74, lost her entire life savings to five con artists from China last November.
Her case hit the headlines about a week ago, after two of the five Chinese nationals were jailed more than eight years in total for their heartless scam. The other three grifters remain at large.
While many Singaporeans felt for Madam Goh, there were also those who wondered how an uneducated and unskilled worker came to have so much savings.
Sunday, June 22, 2014
Getting 50% profit when 7 in 10 customers don’t pay
June 21
When something seems too good to be true, it usually is. And management techniques, practices and strategies are no different. When you read a business book or attend a presentation on a particular management practice, it is a good habit to explicitly ask, “What might it not be good for?” When might it not work; what could be its drawbacks?
If the presenter’s answer is “there are none,” a healthy dose of skepticism is warranted. Because that’s unfortunately not how life works, and that’s not how organisations work. It relates to what Michael Porter meant with being “stuck in the middle”: if you try to come up with a strategy that does everything for everyone, you will likely end up achieving nothing. If you focus your strategy on, for instance, achieving low costs, you will likely have to sacrifice delivering superior value on other dimensions, and vice versa.
THE MCDONALDS’ MODEL
Similarly, “doing well by doing good” - enhancing your firm’s financial performance by achieving superior corporate social responsibility - is often easier said than done. When confronted with an ethical decision -for instance, whether to dump toxic waste in a developing country, where it may not be illegal, when all your competitors do so as well - it sometimes costs you (a lot of) money to do the right thing.
Dozens of academic studies have tried to establish a positive link between corporate social performance and profitability, but for every study that finds a (modest) positive correlation, there is one that doesn’t. But it seems some organisations do pull it off.
Take the company Aravind Eye Care in India. It was founded in 1976 specifically to provide cataract eye surgery. They modelled their operations on McDonalds: high volume, highly efficient operations, based on division of labour and cost efficiency.
It is a very profitable operation; the company has a gross margin of 50 per cent. Yet the remarkable thing is that they treat 70 percent of their customers for free. The 30 per cent that do pay are relatively affluent people who can afford the operation, but who receive pretty much the same service. In fact, the company goes out of its way to actively recruit nonpaying customers. It goes to look for them systematically in the countryside and transports them to their clinics for free.
This, while the clinical quality of their service - the cataract operation - is second to none.
Similarly, other medical clinics are operating in India - for instance in heart surgery - that combine extremely efficient, low-cost operations, but at very high quality in terms of clinical outcome. To such an extent that various National Health Service hospitals in the United Kingdom are considering sending their patients to India; to save money, while providing them with superior quality treatment.
THOSE WHO PAY BENEFIT FROM THOSE WHO DON’T
How can these organisations combine higher quality with lower costs? How can they combine doing well by doing good, and treat 70 per cent of patients for free at 50 per cent gross margins?
The trick is that their business models are built for the long-term.
Paradoxically, in the long-run, the lower costs enable them to provide better quality.
Ask yourself this: Could Aravind Eye Care make more money if it did not treat the 70 per cent nonpaying patients? Although it may seem that this would save them a lot of costs, in fact, the answer is very likely no.
Every organisation learns with experience. We call this effect “the learning curve.” With experience, firms increase the efficiency and quality of their production. These curves have been documented for airplanes, cars, bottles, pizzas and so on. And cataract eye surgery is no exception. It is because these clinics treat such very large number of patients, the company runs down its learning curve very quickly, giving it a substantial competitive advantage.
Moreover, the vast number of patients enables it to divide labor to the extreme, creating specialist roles and highly-experienced people in all parts of the procedure. The 70 per cent nonpaying customers form the basis of this advantage. Consequently, the company would likely not be able to attract the 30 per cent paying customers without them.
It is often said that Aravind’s paying customers subsidise the 70 per cent that get the operation for free, yet, in many ways, it is the other way around: Treating the vast numbers of nonpaying patients enables the company to deliver the quality that attracts the ones that do pay. What enables companies such as Aravind to combine all of these things?
Didn’t I say at the beginning of this piece that “when something seems too good to be true, it usually is?” and that “it is always a good habit to explicitly ask what might it not be good for?” Yes, but that is because there is a second question you should always ask, when considering a particular management technique, practice, or strategy,and that is: “What might its long-term effects be?”
What might seem a good idea in the short-run does not always work in the long term - and vice versa. Unfortunately, most companies make decisions based on their short-term consequences, because that is what they can see and measure.
If, like Aravind, you optimize your business model for the long haul, you might be able to deliver superior quality at lower costs. And even do some good for society in the process.
© 2014 Harvard Business School Publishing Corp
ABOUT THE AUTHOR:
Prof Freek Vermeulen is an associate professor of strategy and entrepreneurship at the London Business School. He is the author of the book “Business Exposed: The Naked Truth about What Really Goes on in the World of Business.”
When something seems too good to be true, it usually is. And management techniques, practices and strategies are no different. When you read a business book or attend a presentation on a particular management practice, it is a good habit to explicitly ask, “What might it not be good for?” When might it not work; what could be its drawbacks?
If the presenter’s answer is “there are none,” a healthy dose of skepticism is warranted. Because that’s unfortunately not how life works, and that’s not how organisations work. It relates to what Michael Porter meant with being “stuck in the middle”: if you try to come up with a strategy that does everything for everyone, you will likely end up achieving nothing. If you focus your strategy on, for instance, achieving low costs, you will likely have to sacrifice delivering superior value on other dimensions, and vice versa.
THE MCDONALDS’ MODEL
Similarly, “doing well by doing good” - enhancing your firm’s financial performance by achieving superior corporate social responsibility - is often easier said than done. When confronted with an ethical decision -for instance, whether to dump toxic waste in a developing country, where it may not be illegal, when all your competitors do so as well - it sometimes costs you (a lot of) money to do the right thing.
Dozens of academic studies have tried to establish a positive link between corporate social performance and profitability, but for every study that finds a (modest) positive correlation, there is one that doesn’t. But it seems some organisations do pull it off.
Take the company Aravind Eye Care in India. It was founded in 1976 specifically to provide cataract eye surgery. They modelled their operations on McDonalds: high volume, highly efficient operations, based on division of labour and cost efficiency.
It is a very profitable operation; the company has a gross margin of 50 per cent. Yet the remarkable thing is that they treat 70 percent of their customers for free. The 30 per cent that do pay are relatively affluent people who can afford the operation, but who receive pretty much the same service. In fact, the company goes out of its way to actively recruit nonpaying customers. It goes to look for them systematically in the countryside and transports them to their clinics for free.
This, while the clinical quality of their service - the cataract operation - is second to none.
Similarly, other medical clinics are operating in India - for instance in heart surgery - that combine extremely efficient, low-cost operations, but at very high quality in terms of clinical outcome. To such an extent that various National Health Service hospitals in the United Kingdom are considering sending their patients to India; to save money, while providing them with superior quality treatment.
THOSE WHO PAY BENEFIT FROM THOSE WHO DON’T
How can these organisations combine higher quality with lower costs? How can they combine doing well by doing good, and treat 70 per cent of patients for free at 50 per cent gross margins?
The trick is that their business models are built for the long-term.
Paradoxically, in the long-run, the lower costs enable them to provide better quality.
Ask yourself this: Could Aravind Eye Care make more money if it did not treat the 70 per cent nonpaying patients? Although it may seem that this would save them a lot of costs, in fact, the answer is very likely no.
Every organisation learns with experience. We call this effect “the learning curve.” With experience, firms increase the efficiency and quality of their production. These curves have been documented for airplanes, cars, bottles, pizzas and so on. And cataract eye surgery is no exception. It is because these clinics treat such very large number of patients, the company runs down its learning curve very quickly, giving it a substantial competitive advantage.
Moreover, the vast number of patients enables it to divide labor to the extreme, creating specialist roles and highly-experienced people in all parts of the procedure. The 70 per cent nonpaying customers form the basis of this advantage. Consequently, the company would likely not be able to attract the 30 per cent paying customers without them.
It is often said that Aravind’s paying customers subsidise the 70 per cent that get the operation for free, yet, in many ways, it is the other way around: Treating the vast numbers of nonpaying patients enables the company to deliver the quality that attracts the ones that do pay. What enables companies such as Aravind to combine all of these things?
Didn’t I say at the beginning of this piece that “when something seems too good to be true, it usually is?” and that “it is always a good habit to explicitly ask what might it not be good for?” Yes, but that is because there is a second question you should always ask, when considering a particular management technique, practice, or strategy,and that is: “What might its long-term effects be?”
What might seem a good idea in the short-run does not always work in the long term - and vice versa. Unfortunately, most companies make decisions based on their short-term consequences, because that is what they can see and measure.
If, like Aravind, you optimize your business model for the long haul, you might be able to deliver superior quality at lower costs. And even do some good for society in the process.
© 2014 Harvard Business School Publishing Corp
ABOUT THE AUTHOR:
Prof Freek Vermeulen is an associate professor of strategy and entrepreneurship at the London Business School. He is the author of the book “Business Exposed: The Naked Truth about What Really Goes on in the World of Business.”
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