September 17, 2004

Article at Wall Street Journal

Set For Life: Giving Wisely

A FRAMED PHOTO ON JENNIFER MOYER'S desk says a lot about her. Ms. Moyer, an executive director at a global investment bank in Hong Kong, enjoys hiking through remote parts of Asia. And whether it's in Bhutan or Cambodia, she particularly likes meeting children in the rural villages she passes through. But the poverty in such places, she says, is often "heartwrenching."

In the photo, taken in a provincial area of southern Vietnam, a group of kids stands smiling and waving in front of their new school. Ms. Moyer didn't take the picture. She's never been to that part of Vietnam, but she did help build the school, by donating to Room to Read, a charity that helps educate underprivileged children in Asia.

For Ms. Moyer, giving to the charity was a no-brainer. Besides being moved by the poverty she's seen first-hand in Asia, "I added up what my husband and I make and thought it was really pathetic how little we give away," she says. Though Ms. Moyer doesn't use a formula to determine how much money she should donate (such as 10% of her income, as some religions stipulate), she sees philanthropy as essential to wise personal financial management.

The problem for Ms. Moyer -- and many others -- is simply finding out about charities in Asia. Since moving to Hong Kong from New York six years ago, the amount Ms. Moyer donated had steadily decreased. One big reason: marketing. In the U.S., she says, finding a deserving cause can be as simple as opening your mailbox and reading the direct-mail appeals.

In Asia, by contrast, finding worthy charitable organizations can be a daunting research challenge. While there are thousands of regional and local charities -- in Taiwan alone, there are 530-plus registered with the government's Social Welfare Administration -- language barriers and lack of transparency in accounting practices can be showstoppers. Fortunately, there are some useful resources for finding good organizations -- and strategies for giving to them wisely.

Ms. Moyer learned about Room to Read through word of mouth, but for those without the benefit of wise counsel, one of the best sources of general information is the Web site of the not-for-profit Asia-Pacific Philanthropy Consortium (, according to Michael Liffman, director of the Melbourne-based Asia-Pacific Centre for Philanthropy and Social Investment. The site offers broad overviews and detailed information on philanthropy in 12 Asian countries, including the Philippines, Bangladesh and Indonesia. Links to other online resources, including specific charities, are provided under categories such as Health, Environment and Social Services.

The organizations linked to, however, are not necessarily endorsed by the Asia-Pacific Philanthropy Consortium. As a donor, it's your responsibility to ensure that your funds are being used wisely. That isn't easy. The accounting transparency found in many Western charities isn't as common in Asia, and even in the U.S. public confidence in charitable groups is significantly lower now than it was in the summer of 2001, according to the Brookings Institution, an independent research organization based in Washington.

It can help, therefore, to see which charities an Asia-based intermediary or umbrella organization trusts. On the Asia-Pacific Philanthropy Consortium site, a link entitled "Philanthropic Intermediaries and Voluntarism Promotion" leads to such organizations in each country. In this category under Hong Kong, for example, you'll learn about the Community Chest, a nonprofit organization that distributes donations to various types of local charities on behalf of contributors. By calling Community Chest, or visiting its site ( ), you can learn which organizations it contributes to.

Elsewhere on the Internet, there are sites that serve primarily to link to as many charities and volunteer organizations as possible within a particular country. In Asia, sites include ( ), which focuses on charities in Malaysia, and Ho-Sum ( ), which covers Hong Kong. For Ms. Moyer, Room to Read was a good match. Not only does it help educate kids like the ones she encounters on her hikes, she says, but it also "makes effective use of dollars, gets the community involved and has smart expansion plans."

Once you've decided on where to give, the question of how to give needs consideration. Ms. Moyer donated to Room to Read both by writing a check and using the credit-card form on its Web site ( ). But there are other strategies worth considering.

Elsa Pau, managing director of Hong Kong-based Tai Fook Wealth Management Group, suggests setting up a low-risk investment in which the charity is the beneficiary. The investment could be a combination of global equity, bond and reserve funds. After a 10-year period in which the investment grows at, say, 5% annually (turning US$35,000 into more than US$50,000), have small monthly increments sent out to the charity while the rest of the investment continues to accrue interest. This approach encourages fiscal discipline on the part of the charity, and leads to a larger donation overall.

You could also, Ms. Pau notes, take out a term life insurance policy, with a charity listed as a beneficiary. This option is particularly attractive for healthy singles who don't have large estates. Should you die prematurely, the charity will get the payout. Or, through a will, you can divvy up the insurance payout however you wish, perhaps giving to a mix of charities and relatives. The cost of the policy can be quite small, says Ms. Pau: if you're a healthy nonsmoker in your 40s, a payment of US$130 a year could generate US$130,000 in the event of your death. The drawback: you could outlive the term of the policy, in which case it loses its value.

Finally, if what's confusing you isn't how or where to give, but why, consider "Rambam's Ladder" (Workman Publishing, 2003), by Julie Salamon. The book draws upon the wisdom of a 12th-century Jewish sage to show how, in the end, we are measured not by what we have, but by what we give.

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Set for Life, Personal Journal's personal finance column, explores the more emotional aspects of wealth creation, from dealing with money conflicts within relationships and saving for your children's education, to collecting.