VA
Insights

“Warm Finance 2013 CBN•Lujiazui Financial Institution Philanthropy Award” was initiated in April 2013. VA was invited to provide professional support and participate in the whole process including award setting, first-round selection and evaluation of award candidates, etc.

At the end of October, VA completed evaluation of 18 candidates. As you may wonder, how is the interaction between financial institutions and charitable organizations? We would like to highlight several findings as follows:

Service Area

Many financial institutions explore new areas besides traditional ones such as education and poverty alleviation. For instance, Standard Chartered “Seeing is believing” aims to provide the poor with precaution and treatment of preventable blindness including cataract, glaucoma and children’s eye diseases. Pramerica Fosun “Spirit of Community Awards” brought to China a program model with 18 years of successful history in the United States and internationally, aiming to promote volunteerism among the young generation.

Those engaged in traditional service areas also bring with them new energies. For example, in the field of serving children of migrant workers, OCBC Bank took the approach of debate contests while Hang Seng Bank provides musical instrument training to help children realize their potential, enhance confidence and integrate into society.

Program Design

Many financial institutions attempt to integrate their business strength into philanthropic activities. For example, AEGON-INDUSTRIAL Fund Management Co. explores financial sustainability by setting up a fund that devotes 5% of the profit to supporting philanthropic programs. China Merchants Bank (CMB) “Little credits & micro-philanthropy” makes best use of social media to promote public participation in philanthropy. Not only card owners can donate credits, normal people are also able to participate via Weibo and WeChat. CMB donates 25 credits for every Weibo message being forwarded, and 1 credit for every “blue lamp” got from Wechat “shaking”.

Program Implementation

Furthermore, financial institutions are applying their expertise to philanthropic programs to mitigate risk and enhance transparency and management efficiency. Creditease serves as a great example. Creditease applies financial capital management mechanism in the implementation of “Tailored Loans for Farmers” program, which develops local partners to investigate every loan application. This has led to a remarkable result of zero bad account. Besides, in accordance with financial institutions’ manner, transparency is always prioritized in program implementation. Many of them have invited third party to conduct independent evaluation. Also, when choosing charitable organizations as partners, financial institutions are particularly concerned with their organizational transparency. Moreover, they have set up a cautious approval process to ensure the effective use of fund.

The award ceremony was held in Shanghai on 22^nd November. We sincerely hope that winning institutions can serve as models to advance the development of CSR and the third sector in China.