|
.... in 1999 THE National Kidney Foundation has tracked down and taken legal action against a woman who sent a defamatory e-mail about the organisation. Madam Tan Kiat Noi will have to pay NKF $50,000 in damages and legal costs and is making a public apology in today's edition of The Straits Times and Lianhe Zaobao. Another 48 others who circulated her e-mail would also find themselves the subject of legal action, said the NKF yesterday. While this is not the first case of legal action taken against defamatory remarks made over the Internet here, it is perhaps the first against a person who used e-mail -- conventionally perceived as a private and direct form of electronic communication -- to make such allegations. The NKF would not say how they tracked down Madam Tan, who sent out her e-mail on April 5 to a group of people, save that it used her e-mail address. As for the 48 others, two-thirds had used their company's Internet accounts. In her e-mail, Madam Tan claimed that her brother-in-law's application to NKF for dialysis treatment had been rejected. She claimed that the NKF did not help the poor and needy, paid its staff unrealistically high bonuses and urged members of the public not to donate money to it. Ms Matilda Chua, NKF's senior associate director, said concerned donors had alerted the NKF to the e-mail. "On average, about 10 to 12 donors would call us up a day to tell us about it." She said that Madam Tan's claims were baseless, malicious and untrue. Madam Tan's brother-in-law never applied for treatment and, contrary to her claims, NKF employees were paid an average bonus of 1.4 months last year and were not given a 13th month bonus. Madam Tan said in her apology notice that she "thoroughly" regretted her irresponsible conduct and unconditionally retracted the statements in her e-mail. She could not be reached for comment yesterday. NKF's Ms Chua said that the rest who had used their company accounts to broadcast Madam Tan's e-mail were "putting their companies in trouble". "It's the same as using the company letterhead," she said. Some firms had actually helped the NKF in their investigations into the matter, she added. She declined to give further details. In a statement issued yesterday, the NKF said that it needed to take legal action as the constant assault on its reputation might deter patients from approaching the organisation for assistance. Mr Rajesh Sreenivasan, of the law firm Rajan & Tann, which has been engaged by the NKF to pursue legal action, reckons that the number of people who have received the defamatory e-mail reached into the hundreds. "The e-mail is forwarded again and again. It catches on like wildfire and obtains a certain degree of credibility. That is why it is important to stop it," he said. This is the third time the NKF has taken legal action against people who had defamed it. In August 1997 and again, in December last year, it took two men to task for alleging that NKF CEO T.T. Durai travelled first class on Singapore Airlines, and for insinuating that he had used NKF funds meant for patients. Both issued public apologies and paid out undisclosed sums in damages and legal costs. The New Paper May 1999 |
| Return to top |
|
Acting Health Minister Khaw Boon Wan has come out in support of the National Kidney Foundation in the wake of recent publicity surrounding its reserves. Mr Khaw, a regular donor to the NKF himself, says it would be a sad day in Singapore if, as a result, there was a donation backlash, and this affected patients. In recent days, there has been much publicity on the NKF and the amount of reserves it has. But the Minister said the NKF has been innovative in its fund-raising and that is why it has been able to encourage a lot of regular donors, like himself. And donations must be continuous. Mr Khaw said: "It is a continuous process. It is a large operation now. I don't know how much they spend but with a thousand over dialysis patients on continuous dialysis, the demand is big and you can never be sure when the donation will dry up. I hope the publicity will lead in the correct direction - that is to cause more awareness of the problem of dialysis, of people with kidney failure, and by all means donate. I continue to donate." The Minister, who has made transparency his trademark since he took over the health portfolio, urged the NKF to continue to remain transparent about the donations. And he said while donors want 100 percent of donations to go to the beneficiary, that was not possible as some money needs to go to pay for further fund-raising. Charities must also abide by the rules of fund-raising. He said: "I'm sure the Commissioner if Charities has certain rules and code of conduct and if they are not fulfilling it, then the MOF will react but in this case, I don't think so. Otherwise, they have been around for many years, MOF would have reacted many years ago." Mr Khaw added that donating to charities should be encouraged. "It's good for Singaporeans to promote, be encouraged to give to charity. It's good for you. I take my hat off to the NKF. They have been able to raise that kind of money over the years and we wish them well."
|
| Return to top |
|
Non Profit Organisations (Guidelines on raising funds) Dr Mohamad Maliki Bin Osman asked the Deputy Prime Minister and Minister for Finance (a) whether there are clear guidelines for non-profit organisations on raising funds from the public and on the utilisation of these funds; and (b) if there are, what is the monitoring mechanism in place to ensure compliance with these guidelines and thereby to ensure public confidence in such organisations. The Second Minister for Finance (Mr Lim Hng Kiang) (for the Deputy Prime Minister and Minister for Finance): Mr Speaker Sir, it is important to have clear guidelines on the raising and utilisation of funds to maintain public confidence in our non-profit organisations and their programmes. There are essentially three questions the public is most interested in. First, what methods are used to raise the money? Second, how much of the charity dollar is used to raise funds? And, finally, how is the money spent or saved? The Government launched the Council on Governance for IPCs in January this year to look at best practices for IPCs. IPC stands for Institution of a Public Character. IPC status is conferred under the Income Tax Act. IPCs are authorised to accept tax deductible donations from the public. They are regulated by IRAS or by central fund administrators, which are organisations authorised by IRAS to grant IPC status to other organisations whose objectives are similar to theirs. The Council is chaired by Ms Lim Soo Hoon, Permanent Secretary of the Ministry of Community Development and Sports. It has seven members from the people sector with wide experience in the local charity scene, and three members from the public sector. The Council is studying ways to better improve fund-raising practices and ensure that IPCs' use of funds is transparent and in line with international best practices. It is working on a code of best practices for the IPCs, and will also recommend how existing fund-raising regulations could be refined to better support informed giving. Let me now describe what the current rules are, which the Council will improve upon, as appropriate. First, on fund raising methods. Today, we do not regulate fund-raising methods, except when fund-raising is conducted in public places. This is then regulated by the Police under the House to House and Street Collections Act. Under the House to House and Street Collections Act, any individual or organisation wishing to solicit donations in the streets or other public places is required to obtain a licence from the Police. One of the conditions is that fund-raising expenses must not exceed 30% of the total funds raised. Enforcement comes under the Police. Second, on fund-raising efficiency. IRAS also imposes a 30% limit on all fund-raising expenses by IPCs. The 30% limit is stipulated under Income Tax Regulations 2004 and enforcement is by IRAS and the central fund administrators. Third, on effecitive use of funds. Currently, there are no benchmarks for measuring the effectiveness of IPCs as they cover a wide range of activities and charitable sectors. The Council on Governance for IPCs will be studying this matter. All IPCs are required to submit their audited financial accounts to IRAS and their central fund administrators every year. IPCs are also required to post their financial reports online, hyperlinked to IRAS' website, so that the public can better scrutinise their use of funds. This requirement to post financial information online began in 2002. At that time, only about 15% of the IPCs or 170 of the bigger IPCs were required to post their key information online. However, from 1st January 2004, all IPCs are required to post their financial information online to allow free public access. Today, all 821 organisations with IPC status have done so. Donors have an important role to play in demanding accountability for the way their donations are used. They should be aware of the financial needs of different IPCs, choose the charities they wish to support, and be satisfied about how their donations flow through to the beneficiaries. IPCs, on the other hand, must understand that increasing accountability to the public is critical for ensuring a continuing flow of donations for their causes. The Government believes that charity dollars will go up with informed giving. Dr Mohamad Maliki Bin Osman (Sembawang): Sir, can I ask the Minister what is the basis for the 30% cap on the funds that can be used for fund-raising expenses? Does the Minister think that this is high, eg, if we take a donation of $6 million which allows the organisation to use up to $1.8 million just for fund-raising expenses alone? What is the basis and whether this is high in his opinion? Mr Lim Hng Kiang: Mr Speaker, Sir, our general approach to regulating the charities is to adopt a very light approach. I think we do not want to over burden the charity sector with very tight regulations. As Members know, the charity sector comprises a wide range of causes. Some are very small organisations, others are larger organisations. So, when we had this rule of 30% for fund-raising expenses, we were looking more at the majority of charities, which are much smaller organisations, and therefore to stipulate a 30% rule is not unreasonable, because the amounts they raise are small and the costs of overheads of raising funds are also high. But, of course, if the organisation is large, then I will agree with the Member that 30% seems on the high side. We urge all organisations to always look carefully at the amount they spend in raising each donation dollar and to make sure that this expense is kept as low as possible. Mr Sin Boon Ann (Tampines): Sir, do I take it that it is also not within the remit of the Council on Governance to determine how much a charity or an IPC can keep as its reserve in its accounts in order to meet its future expenditures? Mr Lim Hng Kiang: Sir, as I mentioned, there is a wide range of charitable causes. Some require long-term commitments when they take on the role of looking after their beneficiaries and, therefore, it is prudent for them to have a sensible policy, especially those which are able to raise sufficient funds that will see them through multi-year projects. So, we do not have a specific rule on how much charities should set aside for their reserves. But we urge all charities to disclose this adequately in their statments. Mr Charles Chong (Pasir Ris-Punggol): Sir, could the Minister tell us whether the National Kidney Foundation is in full compliance with all the current guidelines that he mentioned just now in the collection and utilisation of the funds that it receives from the public? Mr Lim Hng Kiang: Mr Speaker, Sir, the NKF is in full compliance with the regulations. Mr Sin Boon An: Sir, while I understand that the Minister wants the IPCs to have some say in how they want to use the money, surely, within the spirit of good governance, would they not want also to give an indication of how they plan to spend the money, so that they will know how much money they are going to keep, what they are keeping the money for the future, to give an indication why so much money is kept? Mr Lim Hng Kiang: Sir, I would not disagree with that motherhood statement. We would like all charities to disclose fully. I think what the Member is probably referring to is the NKF. As the NKF has explained in their press releases, when they take on a kidney dialysis patient, it is not for one month, it is not for one year. They are committed to the patient for the rest of his life. And I think it is a very prudent policy for them to maintain sufficient reserves to keep the organisation going for many years. If we look at the reserves of the NKF in relation to their annual expenditure, their annual expenditure is in the region of $50-$60 million, and their reserve is about three or four years' worth, that, in my opinion, is not unduly large. Parliament 19 Apr 2004 Ms Braema Mathiaparanam: Thank you, Mr Deputy Speaker, Sir, for granting me this opportunity to speak on this topic, and to all Members of this House for being charitable enough to listen as it is already past six o'clock. I wish to speak on this issue of charity practices as the recent developments over the National Kidney Foundation (NKF)'s reserves have highlighted practices that are too varying in nature, too polarised and, I think, this has already been spoken on twice this year, in dire need of better governance. It is my hope that some of the issues I have raised here can be taken on board by the Council of Governance as they mediate on the guidelines that will be announced soon. Firstly, NKF needs to be applauded for being creative, having long-term vision and for branding itself so well that so many people immediately can recognise what it does and donate generously. There are inherent good practices that one can learn from. Forward-planning and amazing reserves up to $189 million is not wrong in itself. But when it comes to such large charities, it must also be seen as an equal responsibility to exhibit good corporate social responsibility and be accountable to all their shareholders, that is, each and every donor. In reference to this particular comment, I would like to point out a few areas where I think corporate social responsibility means sharing with the public clear information. The most important criterion to a member of the public is what comes back to the beneficiary. In this case, NKF, in the public domain, has made two announcements of 52 cents coming back to the beneficiary, as well as 56 cents. One has been passed off as a computing error and the other has been accounted for as well. What I am raising here with this incident is that different definitions do go into making up what comes back to the beneficiary in terms of a precise dollar value. There needs to be greater consistency in the factors that go into such computation. Another example - operational costs. Comparing an apple for apple, NKF cites an example of $31,200 per annum to help a patient on dialysis. Kidney Dialysis Foundation (KDF)'s figure is $15,079. The manpower resource for NKF is one person to two beneficiaries. And KDF works with a much smaller manpower pool. The subsidies granted to the beneficiaries are also not very clear, from both the websites. Therefore, it becomes imperative that as these guidelines are being mediated by the Council, it is my hope that very clear criteria are spelt out so that the public will know once and for all what are the factors to look for, what goes into the computing, and then make a considered decision. I do not wish to knock NKF here. But what I would like to point out, using them as a case study, is that it is difficult for the public to become a wise donor if basic issues on monetary value on each charity dollar given to the organisation, or operational and administrative costs, as depicted by the organisation, are not consistently applied. This includes transparency issues on salaries of top management - the CEOs. After all, public listed companies - the banks - recently announced what their CEOs are earning. And when we talk about mega dollar charity organisations, transparency issues should cover such areas too. The second part of this is to highlight the proportion that is allocated to fund-raisers. It is currently at 70% back to the organisation and 30% - up to 30% - back to the fund-raiser. The recent NKF shows over the two weekends have reaped about $14 million from the very generous public - well and good! Thirty percent of that can roughly amount to $4 million, which is also well and good. Because this means we can really churn a good fund-raising industry. However, there are some outcomes that one must be a bit cautious about. Bigger charities can throw bigger money to lure more money; sometimes crowding out, in the absence of enlightened donors, the smaller charities. Secondly, fund-raisers' creativity - after all, they have a 30% stake in this business - can lead to a staple fair of stunts in some particular cases, as we recently saw, each more demanding than the last in an effort to lure the charity dollar. Thirdly, the most important - what are we then leaving as our heritage to our children or to the next generation? A warped sense of values - as we are now dangerously close to linking charity-giving to how hard or how well they perform their stunts, what kind of celebrity performs the stunt. In the whole issue, as already mentioned by the Minister, there are issues here for governance on how funds are raised, if we are going to remain watchful on how values are going to be transmitted to our younger people. Another area of fund-raising is cross-selling. The recent one, as in the papers, is Aviva (the insurance company) and NKF. Cross-selling and sharing of databases - this is an area which I would also hope that the Council will look into. The third part of this that I would like to raise is the attention on how the charity dollar is used. We have seen in some organisations aquariums galore, in some instances, TV sets, plasma screens, plush surroundings, water features - nothing wrong with that at all. What is more important is the system with which the dollar was lured. Was the donor given a whole spectrum of things that are needed by the charity, so that the donor can make a considered choice of where to put his or her one dollar? And it was not told instead that, "Here, this is our need. Could you please donate to this item? We need it badly." What I am talking about here is enhancing the capabilities such that the individual donor can make good and well-considered decisions. And, fourthly, the whole issue of the IPC status. We have big umbrella funds - health endowment fund and the education endowment fund - and it is sometimes an auto registration if you come from a particular field closely related to health or education that you do get your IPC status. Maybe this needs a review under the guidelines that are to come. We have asked earlier when these guidelines are due. It is my hope that, in the interim, when the new set of guidelines comes on board, we still have instruments that will govern any practice that may not be so conducive, as it has already been acknowledged that the current guidelines are a little bit too broad. At the end of the day, I totally agree with what the Minister said earlier. It is important to note that as Singaporeans become more sophisticated and ask the right questions, they want to know where to park the precious charity dollar. If Singaporeans themselves are too easy going on where they would like to place their charity dollar, then we are just opening the doors to charities which will work less hard in being as transparent as they ought to be in sharing the information with the public. And, lastly, it is my hope that bigger charities will allow smaller charities to piggyback on their fund-raising efforts so that both can share proportionately the goodies that Singaporeans are willing to give them. The Second Minister for Finance (Mr Lim Hng Kiang):Mr Deputy Speaker, Sir, we have gone through this debate a couple of times, once in the Committee of Supply and, also, this afternoon during the Questions for Oral Answer. In responding to the Member, I would just like to clarify a few points. First, on the press release put up by NKF. I am not aware of the details. I think they put up the press release and explained the differences between 52% and 56% go to the beneficiaries. I recall also that they indicated in the press release that about 26% goes to the reserves. So, actually, if you add up the two numbers, nearly 80% goes to the beneficiaries. I think that puts NKF on quite a sound record. The vast bulk of the money goes to the beneficiaries, both immediately as well as in the reserves. Secondly, on the operation cost of running a dialysis centre. From my experience in the Ministry of Health, I can tell you that running a dialysis centre is very, very expensive. The NKF looks after more than 2,500 patients and the average cost is more than $25,000 or $30,000 per patient. That is the reason why the NKF requires a budget of $50 million to $60 million. These are not small sums to run the centres. As I mentioned this afternoon, when NKF takes on a patient, it is committed to the patient for life. I have met patients, both locally and overseas, who have been on dialysis for more than 20 years. The medical record of NKF is extremely good, better than world standards. So, the patients that go to NKF are actually treated to very high medical standards and therefore they live much longer. That is the reason why they need more funds. And there is nothing wrong in putting these funds in the reserves because they are committed to the patients for their lifetime. On the point about cost and salaries of CEOs, this is a decision by NKF whether to disclose the salaries of the CEOs. Here, I have some sympathy for their dilemma. If they do not disclose, then there will be critics who say they are not transparent. If they disclose, there will also be critics who will say that whatever they pay are too high. So I think they are caught between a rock and a hard place. I think it is their decision not to disclose. We also discussed earlier this afternoon about the proportion of expenses towards fund-raising. And the reason why we set the 20% rule is to have a reasonable cap that will facilitate fund-raising for the smaller charities. Smaller charities require high overheads in fund raising. So if we were to lower the cap to something below 20%, then I think we will constrain the smaller charities. On the issue of cross-selling and the sharing of databases, I think NKF has come up to clarify its position. So I see nothing objectionable to its position. What they are saying is that they will only release this data if there is consent from the donors. I think that is a very sensible position to take. On aquariums and TV sets, if you have been attending dialysis three times and each time it takes long duration, I think it is nothing wrong actually to have aquariums and TV sets to keep the dialysis patients occupied. We do have aquariums and TV sets also in our blood donation centres. So these are not unusual, I would say, distractions for the patients to keep them busy. On the running of the IPCs, our administration is to appoint administrators for different groups. So it is not true to say that if you belong to the education or the health group, you get your IPC status automatically. The fund administrator in each group has certain criteria by which he evaluates applicants who want IPC status, and these criteria are set by IRAS, and we make sure that people who apply have to qualify before they are given this IPC status. Let me conclude by saying that it is not a zero sum game. I think there is room for the big charity organisations and there is room for the smaller charity organisations. And if both groups go out and convince Singaporeans, I think Singaporeans have big hearts and are willing to donate to the wide range of charities. We have 1,300 charities registered in Singapore and we have 820 IPCs. So there are more than 2,000 organisations out there doing good for Singaporeans, largely run by volunteers. And Singaporeans, by and large, if you convince them of the worthiness of the causes, will open up their wallets. So I do not see this as a zero sum game. I urge all the VWOs to continue their good work and continue to solicit the donations from Singaporeans. One way to do so is, of course, to have good corporate governance and to be transparent as to how the donation dollar is going towards the beneficiaries. The more people are convinced that the money which they contribute goes directly to the beneficiaries, I think the more they will be willing to donate. As for the smaller charities, I think there is a case to be made for them by combining their resources so that they go out and operate as a group or as a cluster. I think there are efforts made by the Community Chest and other groupings so that clusters of smaller charities can go out and solicit the donation dollar as a group. So these are some of the ways in which they can get a bigger share of the pie. Parliament 19 Apr 2004 |
| Return to top |
|
By Susan Long THE article that provoked the lawsuit Controversy stalks the National Kidney Foundation, with critics lambasting its fund-raising methods, brazen self-promotion and work practices. Is the NKF just a cutting-edge charity ahead of its time, or is there more to those rumblings? A RETIRED contractor who wants to be known only as Mr Tan used to be a National Kidney Foundation (NKF) donor until he was hired to install some bathroom fittings for its new headquarters at Kim Keat Road in 1995. Inside chief executive T.T. Durai's office suite on the 12th floor of the $21 million building, he says he 'lost it' when he had to install, among other things, a glass-panelled shower, a pricey German toilet bowl and a gold-plated tap. 'I started screaming my head off. The gold-plated tap alone cost at least $1,000. It was crazy. If you're Bill Gates and own your own multinational, whatever you want, fine. But you're a charity, using donors' money,' he huffs. After his outburst, he was told to 'just do' his job. The shower stall remained, but the taps he eventually installed were 'scaled down' to an upmarket chrome-plated model. To this day, the 54-year-old belongs to NKF's die-hard detractor camp, unmoved by its shining success in social entrepreneurship and its track record in saving lives. As he puts it: 'After that day, not a cent from me. I'm not going to pay for gold-plated taps.' Asked for its response to the contractor's story, the NKF's public relations arm sidestepped the details and said yesterday: 'Since you can't give us details of the contractor... it is difficult for us to give an answer to enlighten your readers.' In the past fortnight, the NKF has hogged the headlines. Propitiously, the news of its amazing $189 million in reserves broke the very day it celebrated its 35th anniversary on April 7. Since then, a stream of more than 130 people - former employees, former donors and disgruntled members of the public - have e-mailed or called this newspaper to let off steam about its hard-sell tactics, thick carpets and controversial chieftain. At the same time, about 30 others, individuals and organisations, have sent in letters of support for the organisation, praising its dialysis programmes and pledging continued donations. So far, the NKF kitty appears none the worse for wear despite all the caterwauling. On April 11, its 11th NKF Charity show raised $6.7 million, just a fraction short of last year's $6.8 million. Last night, it netted another $6.4 million. These serious sums of money - how the NKF gets it, spends it and accounts for it - have been a well-gnawed bone of contention among its naysayers. Way before details of its $5 million tie-up with insurance giant Aviva unleashed a ferocious debate on donor privacy issues, charges of 'invasive' fund-raising have dogged the outfit. But the NKF has made no bones about gunning for the charity dollar - the more the merrier, just like any other profit-and-loss business. Relentless innovation over the years has brought new ways of fund-raising: greeting cards, live charity shows, donations via SMS, consultancy services, even selling its spare telemarketing capacity to private companies. In the social service sector, the NKF is the unparalleled paragon of the art of 'heartsell'. Most impressive of all, notes Mrs Tan Chee Koon, executive director of the National Volunteer and Philanthropy Centre, is its ability to tap on the health screening it conducts for heartlanders to ensure a 'sustained pool of regular givers'. Unlike many charities which rely on large, one-off infusions from wealthy foundations, NKF's bread and butter is the $3 to $5 monthly Giro donations from about one million ordinary Singaporeans. With such a big base of small heartland givers - its website says nearly two out of every three Singaporeans are donors - the pennies add up. Every day, seven days a week, some 100 'prevention evangelists' and nurses fan out to companies, army camps, condominiums and churches islandwide to test the blood, body fat and urine of at least 1,600 people daily. Since 1997, more than one million Singaporeans have undergone these free health screenings, which are followed typically by an impassioned pitch: 'This is something we're doing for you; is there something you'd like to do for us?' A voluntary sector consultant notes: 'Even old grannies are not spared the spiel. Most are pressured to do a Giro contribution for a minimum of six months. Nothing they do is illegal, but it's all very aggressive. Nothing wrong with that, but when they push the fund-raising envelope, they tend to be insensitive to the larger consequences for the charity sector.' But the NKF's head of what it calls 'prevention marketing', Ms Shirley Tan, makes no apologies for the 'heartfelt pleas' it delivers along with its basic health checks, which she notes would cost at least $60 in private clinics. She says these are 'free-will offerings' and the 'evangelists' have no financial targets to meet at each venue.
NKF chairman Richard Yong, 63, a former private banker who has been on the NKF board for 18 years, makes clear that lucre is the necessary lifeblood of the organisation. Every cent literally buys time for each patient. And the NKF's mission to save the lives of those with kidney failure is undeniably daunting, which explains why there are no other self-funded, non-profit dialysis providers in the world. Each patient is admitted for life - or until they are lucky enough to get a kidney transplant. The average life expectancy of those on dialysis is 10 to 15 years, at a cost of $150,000 upwards a head to the foundation. Mr Yong says patients themselves pay from nothing to $800 each month for three-times-a-week dialysis which would cost at least $3,000 each month outside. The incidence of kidney failure here - increasingly a lifestyle disease closely associated with diabetes and hypertension - is now the third highest in the world, trailing only affluent countries like the United States and Japan. This, coupled with a fast growing grey-haired population, means that the NKF has plenty of costly work cut out for it. Its money-minting machinery, however, was not always so hard-nosed or well-oiled. Starting out in an unprepossessing Singapore General Hospital attic with just two beds and one metal tray in 1969, Mr Yong says, it battled the same growing pains that less publicised, cash-strapped charities face today. When it set up its first dialysis programme in 1982 in Kwong Wai Shiu Hospital, it dispensed free treatment with little regard for outcomes and costs. In 1986, it ran out of money, so he and other board members had to make the heart-wrenching decision of who among their 32 patients should continue with dialysis, and who would have to be sent home with morphine to die. 'I couldn't sleep; I couldn't eat. Who were we to play God?' he recalls. It hit home then: It was important to have 'healthy reserves that can withstand even the most dire economic times', and self-generated income 'so that we can be independent, instead of on our knees, poor and begging for life'. So the irony is that, despite being one of the oldest, the NKF is yet one of the most progressive charities here. As a mature 35-year-old, it is looking at sustainability and continuity issues for the next 100 years, even as most other voluntary welfare organisations (VWOs) grapple with day-to-day survival issues. In the international arena, it is such a trail-blazing model of social entrepreneurship that American universities like Harvard, Johns Hopkins and the Massachusetts Institute of Technology have done case studies on it. Locally, however, it is so far ahead of its time that society has yet to keep pace. Unlike in the West - where charities aggressively campaign for the charity dollar, professional fund-raising is a bona fide industry and tie-ups with commercial entities are old news - the social sector here unfortunately is still in its infancy. According to Mr Terry Farris, head of charity management for Asia at European private bank MeesPierson, the fact that it costs money to raise money - the accepted norm, he says, is now 15 to 20 cents out of every dollar - may not have sunk in here yet. Many VWO chiefs note there still exists an arcane expectation that non-profits should survive on the 'goodwill and sacrifice' of volunteers, even though it is recognised worldwide that the public good is much better served by hiring professional managers at market rates.
THE NKF has tried to break away from the 'third-tier' image charities suffer from, by sourcing for talent worldwide and paying them fair market value. According to NKF's honorary treasurer Loo Say San: 'Many Singaporeans prefer not to work for charitable organisations, so we go overseas to hire.' It does its recruitment drives at top institutions like the Indian Institutes of Management and Beijing University, competing with the likes of General Electric and Morgan Stanley for the best brains money can buy. Since 2001, it has also tapped the skills of a steady stream of MBA interns from top business schools like Harvard and Stanford. It staff strength is 947, a figure that NKF defends as necessary to man the three shifts of dialysis sessions, each lasting four hours, which its 22 centres around the island run daily. Pressed for details on staff composition, Mr Yong said 'more than half are medical personnel'. The rest are spread among the administrative, marketing, fund-raising and communications departments. The taboo it seeks to break is that charity is synonymous with poor quality. As Dr Gerard Chuah, an eye surgeon and chairman of the NKF Children's Medical Fund, says: 'What bothers me is when people say, why can't you continue to function out of containers? Hello, just because we're a charity doesn't mean we have to operate in a hovel out in the rain. 'Would you ask a family member of yours who has an honours degree to work in a container? We want to get the best people we can find who will run good programmes to save more lives.' Even when administering its dialysis and patient rehabilitation programmes, the NKF approach is controversial. You might call it 'tough love'. According to Mr Job Loei, a dialysis patient who also helps counsel new admissions at NKF, those wallowing in self-pity are set straight. NKF demands that patients co-pay for dialysis, hold down jobs and stick to their diet - or pay more. Patients' fees, for example, are reduced by $50 to $100 as an incentive, if they find a job, get promoted, tie the knot, give birth, or even when their school-going children score As. It helps patients find jobs, provides courses to upgrade their qualifications and holds personal grooming classes to help them remain attractive to their spouses. If their children's grades slide, it even helps engage, and provides subsidies of up to 80 per cent for, tuition teachers to coach them. As Mr Yong says: 'We don't dialyse them to go home and sleep. We want them to have jobs, bring home the bacon, contribute to the economy, have normal relations with their spouses and their children to do well in school. We say openly to them: 'If you want to die, go and die by yourself; don't come to us'.' As a result, 93 per cent of NKF dialysis patients work, support their families and lead productive lives, compared to less than 60 per cent worldwide. The general philosophy is: No free rides.
LIKEWISE for employees, adds Mr Loo. They are constantly reminded that their wages come from donor dollars. To prevent wastage, there is an extensive list of fines, from $5 for getting to work five minutes late, to $30 for forgetting to switch off the lights. All staff functions are held in the in-house auditorium 'for fear of being labelled spend-thrift' if they venture outside. For the record, Mr Yong says, there is no such thing as 'first-class travel'. Senior executives, from directors up, including CEO Mr Durai, fly business class. The rest fly economy. Little is known of Mr Durai, 56, apart from the fact that his name T.T. (Thambirajah Tharmadurai) means a charitable man in Tamil. A former president of the then University of Singapore Students' Union, he graduated with a law degree and worked in the government legal service for six years until 1977. The elegant and eloquent man eschews publicity and, despite 3 1/2 hours spent with top officials at the NKF last week, this reporter received only a handshake from him. No quotes. His staff know him as a 'visionary' who cares deeply for NKF patients and knows each one by name. He is also a 'tough taskmaster' who works from 6am to 10pm, and eats and showers in his office. He is said to run a tight, results-oriented ship, with a labyrinth of departments within departments and units within units. But even the most embittered acknowledge it is a 'dynamic' workplace and training ground. Its staff turnover is high; employees are so often poached that managers now have to sign three-year contracts. One downside cited by former employees is a corporate culture described as 'cagey', in which staff are discouraged from discussing finances. Despite much public prodding and the Finance Ministry's encouragement to charities to reveal the salaries and benefits of their top employees, NKF top guns are sticking to their guns not to allow more public disclosure. What they keep reiterating is: 'Although the NKF is a non-profit organisation, the people who have chosen to work in the NKF are private individuals, who are entitled to their privacy.' But therein lies the chink in an otherwise spiffy armour: NKF's forward-looking business model lacks the financial transparency that would enable it to stand tall and get out of its controversy-laden shell. After all, if it is governed by the creed of the marketplace, it should also appply rigorous standards of disclosure and accountability. As a VWO analyst notes: 'You can find out how much any CEO of a public company makes, so why not them? How can it be that when they feel like it, they can be 'private', but when raising funds, they are 'non-profit' and 'public'? If any member of the public asks, why shouldn't the information be made available to them?' As society matures, says Mr Farris, people will have higher expectations of non-profit governance. 'Like it or not, if you turn over as much as $67.5 million a year, you're a business, though it be the business of doing good,' he says. 'As a charity, you have to always remember: You are spending other people's money.' On the NKF's part, so often has it been bad-mouthed - which it attributes to 'professional jealousy' - that it seems to have developed a persecution complex of sorts. 'Why is it us, always us?' is a plaintive cry its board members often utter. It has also gone beyond plaintive cries, to being the plaintiff in defamation suits - at least three times. In 1999, for instance, it sued Madam Tan Kiat Noi for sending out an e-mail message accusing it of paying ridiculously high bonuses to its staff. An estimated 100,000 people received it. The case was settled after she apologised publicly, and paid $50,000 in damages, as well as NKF's legal costs. Whither the NKF from here? Although it continues to bid the public judge it by its works and its effectiveness, detractors will continue to be fixated by the shroud over its numbers. Like it or not, rumblings are likely to persist until there is more publicly-transparent accounting. The Straits Times 19 Apr 2004 |
| Return to top |
|
Defamation Suit, Day 1 LAST April, the National Kidney Foundation (NKF) made headlines in The Straits Times' (ST) on several occasions: First, for its corporate tie-up with insurance company Aviva, then for its $189-million reserves and again on April 19 - a day after an NKF fund-raising charity show - in a report that mentioned a "gold-plated tap" that cost "at least $1,000" at its Kim Keat Road headquarters. The non-profit organisation is now making headlines again as it commences, along with its chief executive T T Durai, 57, a libel suit against the Singapore Press Holdings (SPH) and Ms Susan Long, 32, ST senior writer and author of the April 19 report, "The NKF: Controversially ahead of its time?". In the first six paragraphs of the report, Ms Long set out that her source - "a retired contractor … known only as Mr Tan" - told her of a "gold-plated tap" costing "at least $1,000", as well as a glass-panelled shower and a "pricey German toilet bowl", that he had to install on the "12th floor of the $21-million building". She recounted how the contractor had "scream(ed) his head off" on learning of the assignment at the NKF's "new headquarters at Kim Keat Road in 1995", but was told to "just do" his job. According to the report, the taps he eventually installed were "scaled down" to an "upmarket chrome-plated model". These allegations implied that the NKF had - under Mr Durai's management - misused public funds, said the NKF in the Supreme Court yesterday. It is arguing that the newspaper had an agenda against it. Following the report, the NKF had sought an apology and retraction of this allegation from SPH. But as none was forthcoming, the case will be heard out in court over the next nine days. The NKF statement cited that in 1995, it was not yet housed in its current 12-storey premises, but instead, in a two-storey block on site. The statement also said that there was no "gold-plated tap" nor any tap which "alone cost at least $1,000" in that building. During his full-day cross-examination session by SPH's Senior Counsel Davinder Singh, Mr Durai stated that in 1994, a shower mixer and basin mixer had been installed in his absence. He "gave instructions for that to be removed" upon his return from an overseas trip. Mr Durai did not want the office interior to appear luxurious. But, according to the NKF, Ms Long's report had implied that the alleged "gold-plated taps" were "scaled down" only because of the contractor's protestations. Mr Singh said this incident supported his argument that the report was factual and that the "expensive bathroom fittings" were, in fact, installed and then removed. Mr Singh also said that SPH had a duty to comment on the NKF's financial affairs in the interest of the public and questioned Mr Durai on his salary package and whether he had flown first class on NKF funds collected from the public. Mr Durai, who initially told the court he preferred to keep his salary private, said he earned an average of about $550,000 a year, including bonuses varying from 10 months to a year's salary. Over the last three years, he earned a total of around $1.8 million. Two years ago, when Mr Durai earned nearly $600,000, the NKF had an annual turnover of $100 million. Mr Durai explained that his pay package and bonus was a decision made by the foundation's board and that the board had also pegged the flight entitlement for senior staff at Singapore Airlines business class prices. Mr Durai said that he had flown all classes before and only started travelling first-class in the past two years. He said he would pay the difference for any first class upgrades and that sometimes, it was cheaper for him to fly first class than on business class. In the public gallery was Mrs Goh Chok Tong, patron of the foundation, and SPH chief executive Alan Chan. TodayOnline 12 Jul 2005 Defamation Suit, Day 1 The National Kidney Foundation's (NKF) defamation suit against the Singapore Press Holdings has opened in the High Court. The case centres around an article in the Straits Times published on 19 April 2004 entitled "The NKF Controversially ahead of its time". And first to take the stand was the NKF's CEO, TT Durai who made some startling revelations during cross examination by SPH's Senior Counsel Davinder Singh. The article in question was written by SPH's journalist Susan Long, whom NKF is also suing. It had an account of a contractor who had been hired to install some bathroom fittings for its new headquarters in 1995. NKF says the article had many falsehoods and half truths. But Monday's hearing was more than just about toilet fittings. It was a public scrutiny of how the NKF is administered and run, the travel patterns of its senior executives and the chief executive officer, and what salaries were paid to the CEO in the last three years. The court heard that CEO Durai got a twelve month bonus last year. And between 2002 and 2004, he would have earned close to S$1.8 million. From the outset, Senior Counsel Davinder Singh who is acting for SPH, emphasized the importance of transparency and public accountability on NKF's part as every cent which NKF spent came from public donations. Several senior officials from NKF were in court to follow the proceedings, including its patron Mrs Goh Chok Tong. ChannelNewsAsia 11 Jul 2005 Defamation Suit, Day 1 A CLOSELY-GUARDED secret of the National Kidney Foundation was finally made public on Monday: the salary of its chief executive Mr T.T. Durai. On Day 1 of NKF's defamation suit against Singapore Press Holdings, it was revealed that on top of his S$25,000 a month salary, Mr Durai also received 10 to 12 months in yearly bonuses. That makes his annual salary between S$550,000 and S$600,000, or S$1.8 million in total, over the past three years. The NKF, which is entirely dependent on public funds, offers dialysis treatment to kidney patients. It is taking issue with an article published in The Straits Times by senior correspondent Susan Long on April 19 last year headlined 'The NKF: Controversially ahead of its time?'. The NKF and Mr Durai contend that the words in the article had damaged their reputation by implying that donors' funds were being misused. The article stated that a gold-plated tap had been installed and later replaced in the private bathroom in Mr Durai's office suite. During the hearing before Justice Tan Lee Meng, Senior Counsel Davinder Singh, acting for SPH, sought to show that the NKF was neither honest nor transparent about the way it uses donors' funds. He told the court he had to ask the NKF three times, including twice through the courts, to have the salary of its CEO made public. Mr Durai, represented by Senior Counsel Michael Khoo, argued that he was not required by law to tell the public what he earned. Also, he wanted to protect his personal privacy, he said. Under questioning on Monday, he also admitted that he had flown First Class on some airlines, even though the NKF had maintained consistently that none of its executives flew First Class and had threatened to sue people who said Mr Durai did so. His explanation: The NKF Board allowed this as long as he did not bust the Singapore Airlines Business Class rate. Mr Singh countered: 'Isn't it your duty as a trustee of people's monies to make sure that you get best value on a business class seat instead of deploying this clever device... using it for First Class on another plane?' Mr Durai replied: 'This is a decision made by the board. I used the entitlement.' The Straits Times 11 Jul 2005 Defamation Suit, Day 1 A CLOSELY guarded secret of the National Kidney Foundation (NKF) was finally made public yesterday the salary of its chief executive T.T. Durai. Gasps could be heard in the courtroom when it was revealed that on top of his $25,000 a month salary, he also received 10 to 12 months in yearly bonuses. That makes his annual salary between $550,000 and $600,000, or $1.8 million in total over the past three years. This fact, and the disclosure that he had flown first class on NKF's funds, emerged on Day 1 of NKF's defamation suit against Singapore Press Holdings (SPH). The NKF, which is entirely dependent on public funds, offers dialysis treatment to kidney patients. Two out of every three Singaporeans contribute to it. It is taking issue with a Straits Times article by senior correspondent Susan Long published on April 19 last year, which stated that a gold-plated tap had been installed and later replaced in the private bathroom in Mr Durai's office suite. The NKF and Mr Durai contend that this was not the case and that the words in the article, 'The NKF Controversially ahead of its time', had damaged their reputation by implying that donors' funds were being misused. The hearing yesterday was delayed by the NKF's application for special damages of $3.24 million, which it claimed was what it lost in donations following the publication of the article. Justice Tan Lee Meng threw out the application and ordered the NKF to pay SPH's legal cost for its last-minute move. At the hearing, Senior Counsel Davinder Singh, acting for SPH, noted that the tap in question cost $990, expensive by his standards although Mr Durai did not agree. The lawyer sought to show that the NKF was neither honest nor transparent about the way it uses donors' funds. He told the court he had to ask the NKF three times, twice through the courts, to have the salary of its CEO made public. Mr Durai, represented by Senior Counsel Michael Khoo, was the only witness who took the stand yesterday. Among those in the gallery was NKF patron, Mrs Goh Chok Tong, wife of the Senior Minister, who left midway through the hearing. Mr Durai argued that he was not required by law to tell the public what he earned, even though he conceded that they paid his salary. Also, he wanted to protect his personal privacy. Mr Singh asked 'The man who earns $1,000 a month who donates $50... every month thinking that it is going to save lives, should they not know that that is the kind of money you earn' Replied Mr Durai 'I don't see the need for him to know.' He denied Mr Singh's charge that he refused to disclose his salary as he knew he would lose moral authority with donors. Mr Durai's travel perks also came under scrutiny. Not only had the NKF maintained consistently - as recently as in the April 19 article - that none of its executives flew first class, it had threatened to sue people who said Mr Durai did so. At least two people have had to apologise publicly and pay damages and costs for saying they had seen Mr Durai travel first class, as the NKF said this implied he was wasting donors' funds. Under questioning, he admitted he had flown first class on some airlines. His explanation The NKF board allowed this as long as he did not bust the Singapore Airlines business-class rate. Mr Singh countered 'Isn't it your duty as a trustee of people's monies to make sure that you get best value on a business-class seat instead of deploying this clever tactic... using it for first class on another plane' Mr Durai replied 'This is a decision made by the board. I used the entitlement.' The entitlement, he added, kicked in only in the past two years. Previously, when he flew first class, he had paid the difference out of his own pocket, he maintained. Mr Singh noted that although he now flew first class, Mr Durai did not correct his chairman Richard Yong's assertion in the April 19 article that 'there is no such thing as first-class travel'. 'The reason you hide the truth is because you know that that is the wrong thing to do, using people's money, and you know that is mismanagement of donations.' Mr Durai was asked if he should now 'do the right thing' by the two individuals who had paid him damages and costs for saying what he had now admitted in court. He said no, sticking to his claim that at that time, he did not travel first class using NKF funds and when he did so, he paid the difference himself. The Straits Times 12 Jul 2005 Defamation Suit, Day 1 Click here to toggle full text
NKF VS SPH: ST'S COURT TRANSCRIPT FOR JULY 11 - MORNING SESSION
MR KHOO: My name is Mr Michael Khoo. I appear for the plaintiffs, both the plaintiffs. With me are Ms Low and Mr Chiok, and we also have Mr Peter Gabriel; he is seated behind me, he is also with me. And on behalf of the defendants are my learned friends, Mr Davinder Singh and Mr Adrian Tan. MR SINGH: And Mr Peter Wadeley, your Honour.
MR KHOO: Mr Durai, we have here two bundles. Can you please look at the two bundles of documents? The first one is headed or entitled 'Affidavit of Evidence-in-chief of TT Durai'.
MR KHOO: There is a second volume to that affidavit which comprises exhibits.
MR KHOO: Your honour, may I just object? He is going into advice. MR SINGH: I am happy to rephrase that, to save time. MR KHOO: Because it is viewed as privileged. MR SINGH: You believed that the article carried the four meanings which are described at paragraph 4?
MR KHOO: Your Honour, may I object to this question? "Has not come clean'' … is that the same as "non-transparency''? Transparency and controversy have somehow been translated into "has not come clean''. It is something different. MR SINGH: I wish to avoid controversy between my learned friend and me, and I will be as transparent as possible with the witness, so I will rephase the question. MR KHOO: Thank you. MR SINGH: You are aware, are you not, that it is the defendants' case that NKF, under your management, has been less than transparent about its financial affairs? You are aware?
MR KHOO: Your Honour, my learned friend insists on peppering his questions with words "after great difficulty''. These documents were disclosed by us voluntarily in the course of discovery. To put it to this witness that he had obtained these documents after great difficulty is a misstatement, to say the least. MR SINGH: I stand by what I say. I will demonstrate, your Honour, that the invoice in relation to this or what I would think is a very expensive tap, was not disclosed at all in the original list of documents filed by the NKF, although that is the central issue according to the plaintiffs in this claim. We then had to write a letter to ask for further discovery, and when we asked for that further discovery, NKF then came up with this invoice. But I will also show your Honour in due course that when we applied for further and better particulars of the installation in that bathroom, the further and better particulars were of the replaced fittings and not the original ones. We will come to that. Mr Durai, the reason you changed your position, I think I said for the fourth time, is this. You originally thought that there is no way that SPH would produce the evidence. When you saw that SPH actually had the evidence, and that in any event, there is an invoice of the value of the taps for that bathroom of yours, you decided to change the meaning and now emphasise the $21 million building and the 12th floor, is that not right?
MR KHOO: I hope my learned friend, I do not like to interrupt, but are we talking of the same thing? There were two installations. The article refers to a wash basin tap, a mixer, which does not cost $990, but $660, subject to a 10 per cent discount. MR SINGH: Thank you, Mr Khoo. I am glad my learned friend talks about the article saying wash basin mixer. But on the plaintiffs' own case, as far as meaning goes, it does not matter whether it was a wash basin, shower or any other mixer, meaning is a gold-plated tap that cost at least $1,000. MR KHOO: Sorry, there are two installations. Is he referring to the correct one which the article refers to or is he referring to something else? If it is something else, then that is not a wash basin tap. It is a mixer, shower mixer with a shower bar. That totally costs $990, subject to a 10 per cent discount. MR SINGH: Right. Your Honour, I am just flummoxed that we are into this detail. I would have thought that if I was going to buy a tap, or wherever, based on public donation from people who earn $1,000 a month, it would not matter whether it was $600 or $900. I would be very careful with how I spent that money. But Mr Durai, the reason I put to you again is that you have now changed your meaning in paragraph 3 to shift the focus to the $21 million building and the 12th floor because you know you have problems on the value of the fittings.
COURT: Yes. MR SINGH: This is dated 27th April, about eight days after the article appeared; right?
MR KHOO: Again, forgive me for interrupting, your Honour. When Mr Singh asks this question, he must make reference to the question being asked. The question being asked at that time was: "Of paragraph 18(b) of the defence, in respect of paragraph (b)(ii) is it admitted that fittings were installed in the said private bathroom but the plaintiffs deny that the fittings were "expensive'.'' If you look at 18(b)(ii), the original pleading they referred to what was installed, and then they amended that to add in a new (iii), the removal of expensive fittings. MR SINGH: Your Honour, Mr Michael Khoo can try as much as he wants to help the witness, but I would invite the court, now that he had done me a favour, to also look at the defence. Can I ask your Honour to go to tab 2? We appear to be in two different cases. Under the original defence, paragraph 18, page 33, the present 22, it comes after the word "Justification''; in other words, we are going to justify the article. It says: "The words were true in substance and in fact. Particulars of justification. (b) The plaintiffs have used funds donated to the 1st plaintiff on: (1) the construction and/or renovation of a private office suite with an attached bathroom for the use of the 2nd plaintiff in the 1st plaintiff's offices in the two-storey block in Kim Keat Road; (2) installation of expensive fittings in the said private bathroom.'' So the question was asked in relation to (2), your Honour. There was a reply to 18(2), and if your Honour can go to the reply at tab 3, page 8, this is the relevant reply in relation to which particulars were sought. It reads: "In respect of paragraph 22(b)(ii) it is admitted that fittings were installed in the said private bathroom but the plaintiffs deny that the fittings can properly or fairly be described as "expensive'. In any event, the plaintiffs deny that any fittings installed in the private bathroom were of the description stated in the words complained of and contained in the article written and published by the defendants.'' I respectfully submit that nobody can be in any doubt at that stage as to what these pleadings are about, and which fittings are being talked about. Then at tab 5, the question at page 12 is asked about these fittings. Mr Durai and the NKF were asked to identify each and every fitting that was installed, identify the cost of each and every fitting that was installed, and is it not correct, Mr Durai, that you deliberately suppressed the information in that answer?
|