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*Original paper was amended to deal with only the issue of the ethics of NKF’s fundraising efforts. 2 Synopsis An article about the installation of gold taps sparked a chain of events that ultimately led to the uncovering of questionable practices at the NKF. We are concerned about the major public backlash and the resultant plunge in donations pledged. We will thus examine two highly contentious issues from an ethical standpoint: a) the fundraising efforts of the NKF; and b) the remuneration and perks accorded to Mr. Durai. Firstly, although the NKF was not honest in delineating their figures during fund-raising, we strongly believe that their efforts were largely ethical, albeit unconventional.
Secondly, although there was a case for remunerating a visionary leader his appropriate due, we postulate that his compensation package was over and beyond what was necessary. In conclusion, we irrevocably state that the NKF was largely ethical. The NKF has since revamped its management to be more accountable and transparent. We ask the public to exercise compassion and reconsider their reluctance to onate to the NKF. 3 Introduction “ Who were we to play God? ” recalled the former Chairman of National Kidney Foundation (NKF), Mr. Richard Yong1, when describing how the organization, due to the lack of funds, had to make excruciating decisions for which patients to be sent home with morphine to die. NKF is Singapore’s largest charitable healthcare organization and provides subsidized dialysis treatment to the underprivileged.
The NKF first started providing free treatment without considering its costs and consequences, landing itself into a financial quagmire in 1986. Learning its lesson the hard way, the NKF realized the importance of stocking an adequate amount of reserves from self-generated income. However, NKF CEO Mr. T. T. Durai could not have imagined a small gold tap to be the cause of angry graffiti splattered all over the walls of the National Kidney Foundation’s head office. Unfortunately, it had its veracity impugned the very day Straits Times reported that a gold-plated tap had been installed in NKF CEO Durai’s office bathroom.
This incident not only triggered rampant outrage among Singaporeans, it resulted in over 3800 donors withdrawing immediately. their monthly donations Amongst the many issues raised throughout the NKF saga, the most oft cited topics include the aggressive fundraising tactics of NKF and remunerations packages available 1 2 Adopted from http://noctalis. com/nocturne/alexandria/05nkfb. shtml, 2nd March 08 Adopted from http://www. channelnewsasia. com/stories/singaporelocalnews/view/157746/1/. html, 2nd March 08 4 for its CEO.
From an ethical perspective, are both the organization and Mr. Durai ethically culpable? Has NKF been ethical in their fundraising efforts? NKF has engaged in a wide variety of fundraising efforts, allowing it to establish itself as one of the leading non profit organizations. While this has led to the successful raising of tax deductible donations close to $35 million in 2007, many have casts doubt on its ethical values. 3 The following analysis will carefully consider 3 pertinent aspects – (a) NKF charity shows, (b) advertisements and (c) sourcing of donors athealthscreen centers. (a) NKF Charity Show Since 1994, the annual NKF charity show is one of the most significant charity campaigns in Singapore. Celebrities are invited to perform various acts and stunts while viewers are encouraged to donatemoneyby dialing in via a phone. One such event could generate up to 3.
2 million calls, an amazing feat considering Singapore’s population of 4 million. 5 Unfortunately, there were 2 particular aspects of the event that may not be ethically ideal. Firstly, donors are automatically drafted into a lucky draw where they stand to win a condominium and car worth S$750, 000. (Annex A) Some may deem this to be manipulative and attempting to capitalize on human greed. Essentially, it erodes the principle of donations – the act of giving without expecting anything in return; Making it unethical. NKF Annual Report 2007 Adopted from http://www. nkfs.
org/index. php? option= com_content&task= view&id= 183&Itemid= 98, 25th Feb 08 5 Asia Case Research Centre, “ National Kidney Foundation, CEO with a Golden Tap” 3 4 5 The second issue relates to a parliament session held on April 2004, where it was raised that the NKF show inculcates a warped sense of values in our children as it dangerously links donations to the quality of stuns performed and profile of celebrities performing. This association might be unhealthy and unethical as it creates unnecessary expectations to provide stellar entertainment when soliciting funds. Donations should be a function of needs and surely this is undesirable. On the other hand, one might easily argue that, based on a teleological perspective7, both these issues are ethically justifiable. The expensive prizes raise the profile of the event dramatically and thus serve to encourage a greater amount of donations. It is a win-win situation and we have witnessed similar practices in other charitable events such as the New Paper Big Walk8 (Annex B).
Furthermore, we should learn to appreciate the fact that the performances were meant to reflect creativity9 and sheerhard workthat have been invested in this sincere effort to seek donations. In the long run, it helps to create “ warm fuzzies” 10, an intangible goodwill that improves the public’s image and impression of the organization. The loose connection between wonderful performances and the high level of donations is at best subtle and should be deemed as a reward of effort more than anything else – making it perfectly ethical. Adopted from http://www. geraldtan. com/medaffairs/misc-nkf. tml#A3, 20th Feb 08 Theory of ethics that derives duty or moral obligation from what is desirable as an end to be achieved 8 A Nissan Sylphy 2.
0 was given out as the top prize, followed by cameras, tread mills, etc 9 Highest-rated Singaporean Program in 2003. Adopted from http://www. corporate. mediacorp. sg/press_release/pr_1050315812. htm , 21st Feb 08 10 “ Guide to Special Events Fundraising”, Ken Wyman (Refer to Annex C) 6 7 6 (b) Advertisements (Overstating the number and maintenance costs of patients) Moving on, NKF engaged in deceptive advertising by falsifying their statistics11 (Annex D), hoping to generate more donations. Understandably, the public was appalled by the blatant exaggeration by NKF.
This is a clear violation of the code set by the Association of Fund Raising Professionals12 where they failed to promote high ethical standards in the fundraising profession and to preserve philanthropy and volunteerism. Upon discovery, it has severely eroded the organization’s reputation. On the contrary, the teleological perspective would allow NKF to defend its inflated figures. A charity’s collections are of paramount importance as they do translate into an increase in the patients’ welfare. A mild case of inaccuracy should not be too strictly held against such philanthropic organizations as it severely stifles their operations and creates unnecessary constraints. (c) Soliciting donors during free health screening sessions Last but not least, another controversial marketing tactic that NKF adopted was the high pressured pitching to people who enjoyed free health screening services. They were often approached with an impassioned line that reads, “ This is something we are doing for you; is there something you’d like to do for us? ” 13This act could be deemed as an attempt to take advantage of the concept of reciprocity, knowing full well patients would feel most emotionally indebted at that point Adopted from http://www.
geraldtan. com/medaffairs/misc-nkf. html, 8th March 08 A 40 year old organization based in the US that serves as the standard bearer forprofessionalismin fundraising. More information available in Annex (E) 13 Straits Times Article, Susan Long 11 12 7 in time. Some have found it very pressurizing, thus making the act of donation less “ voluntary” and thus unethical. Again, we are of the opinion that this tactic merely an unconventional approach with fundamentally good intentions. After all, if a private health screening costs a minimum of $60, it does not seem unreasonable to request a token donation of a few dollars per month from visiting health screeners.
The choice still ultimately lies with the potential donor. And therefore, the act remains ethical. Conclusion In conclusion, we are of the opinion that the NKF has been ethical to a larger extent in its fundraising efforts. It is a financial demanding organization and thus one should remain understanding towards its situation and need to actively source for funds. Lessons Learnt and Closing Words This saga has certainly reshaped the non profit landscape for Singapore. Based on the examples above, we are able to learn that: o Non profit organizations have to be cautious and professional in their approach towards fundraising o As the custodians of public money, non profit organizations have an ethical burden to ensure that funds are spent prudently and will be held accountable to the public o The interests of the patient must always come first We hope that, through ourcase study, it has served to educate the reader in better understanding the NKF saga. While we acknowledge Mr.
Durai’s contributions, several of his actions are clearly unacceptable. However, this should not translate to adversely impact NKF as an organization. The public should exhibit compassion and reconsider our reaction towards this unfortunate incident. If we choose to react negatively by withdrawing our donations, only the patients stand to lose. 9 Annex A Annex B 10 Annex C Annex DStatistic (Year 2003) Patients NKF Treated Duration funds could last Claimed 3000 3 Years Actual 1512 40 Years 11 Annex E Association of Fund Raising Professionals Description from http://www. afpnet. org/index.
cfm The Association of Fundraising Professionals (AFP) represents nearly 28, 000 members in more than 190 chapters throughout the world, working to advance philanthropy through advocacy, research, educationand certification programs. The association fosters development and growth of fundraising professionals and promotes high ethical standards in the fundraising profession. Ethical Standards: http://www. afpnet. org/ka/ka-3. cfm? content_item_id= 1068&folder_id= 897 1. Members shall not engage in activities that harm the members’ organizations, clients or profession.
2. Members shall not engage in activities that conflict with their fiduciary, ethical and legal obligations to their organizations, clients or profession. 3. Members shall effectively disclose all potential and actual conflicts of interest; such disclosure does not preclude or imply ethical impropriety. . Members shall not exploit any relationship with a donor, prospect, volunteer, client or employee for the benefit of the members or the members’ organizations. 5.
Members shall comply with all applicable local, state, provincial and federal civil and criminal laws. 6. Members recognize their individual boundaries of competence and are forthcoming and truthful about their professional experience and qualifications and will represent their achievements accurately and without exaggeration. 7. Members shall present and supply products and/or services honestly and without misrepresentation and will clearly identify the details of those products, such as availability of the products and/or services and other 12 factors that may affect the suitability of the products and/or services for donors, clients or nonprofit organizations. 8. Members shall establish the nature and purpose of any contractual relationship at the outset and will be responsive and available to organizations and their employing organizations before, during and after any sale of materials and/or services.
Members will comply with all fair and reasonable obligations created by the contract. 9. Members shall refrain from knowingly infringing the intellectual property rights of other parties at all times. Members shall address and rectify any inadvertent infringement that may occur. 10. Members shall protect the confidentiality of all privileged information relating to the provider/client relationships. 11.
Members shall refrain from any activity designed to disparage competitors untruthfully. Annex FTotal Receipts From 2001 – 2005 (in thousands) Receipts 2001 2002 2003 Donations in Cash Tax 35, 723 45, 589 38, 585 Deductible Non-tax 22, 459 21, 952 28, 780 deductible Sub Total 58, 182 67, 541 67, 365 Investment 4, 047 2, 839 7, 565 Gains Other Income 24, 177 24, 180 25, 344 Total Income 86, 406 94, 560 100, 274 Source: NKF Annual Reports 2004 2005 38, 560 33, 675 72, 235 1, 378 8, 392 108, 740 28, 268 33, 102 61, 370 999 5, 118 97, 985 13 Annex G (Multiple Sources) Sequence of events NKF acts against defamation Acting Health Minister Supports NKF Over Publicity Surrounding Its Reserves Questions in Parliament