Study on Tripartite Partnership Local Research and Engagement

Civic Exchange October 2005

Study on Tripartite Partnership Local Research and Engagement

Table of Contents

Page

Executive Summary i-ix 1 Introduction 1 1.1 Background to the TPP Study 1 1.2 Context of Global Interests in Partnering & Partnership 3 1.3 Study Methodology

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2 Definition of TPPs 6 2.1 Devising an Appropriate Definition 6 2.2 ‘Third Sector’ or ‘Civil Society’? 7 2.3 Funding Alone is Not Partnership

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3 Overview of the Third Sector 9 3.1 Introduction 9 3.2 General description of Hong Kong’s Third Sector 9 3.3 Legislative Framework of the Third Sector 11 3.4 Financial Reporting Requirements 12 3.5 Charitable Status and Tax Exemption

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4 Government Policy and Practice on TPPs 15 4.1 Government Policy 15 4.2 Government Funding Schemes 17 4.3 Creating a Platform for Partnerships 18 4.4 Improving Third Sector Accountability 19 4.5 Government Advisory Boards and Statutory Bodies 19 4.6 Recognition of Partnership Efforts 20 4.7 Public Private Partnerships (PPPs) 21 4.8 Status of Government TPP Practices

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5 Private Sector Practice and Partnership Trends 26 5.1 Introduction 26 5.2 Private Sectors’ Contribution to the Third Sector 26 5.3 The Emergence of CSR 28 5.4 CSR Trends and Partnership in Hong Kong 29 5.5 CSR and SMEs 31

6 Reasons for Partnership 33

7 Components of Effective Partnership 35

7.1 Introduction 35 7.2 Principles of Partnership 36 7.3 Structural Requirements of Partnerships 38

8 Discussion of Partnership Issues 41 8.1 Introduction 41 8.2 Common Partnership Constraints 41 8.3 Sectoral Partnership Constraints 49

9 Conclusions and Policy Recommendations 54 9.1 Introduction 54 9.2 Developing Trust with Society 54 9.3 The Regulatory Environment 57 9.4 Government Funding Schemes 58 9.5 Increasing Capacity 58 9.6 The Context of Global Interests in Partnering and Partnership 61 Appendices A1-A94 A Study Methodology B History of the Third Sector in Hong Kong C Legal Framework of the Third Sector D Summary of Government Initiatives to Improve Governance in the Third Sector E Results of the Government Questionnaire F Key Findings of the Corporate Philanthropy Report G Focus Group Notes H Interviews – Summary of Issues I Partnership Examples List of Figures Figure 1 Methodology 5 Figure 2 Levels of Partnership 7 Figure 3 Macro Description of the Third Sector in Hong Kong 10 Figure 4 Relevant laws and Regulatory Bodies in the Third Sector 12 Figure 5 Nature of Government Partnership Activities 23 Figure 6 Government Partnership Activities by Type 24 Figure 7 Relative Government Department Involvement in all Types of Partnership 25 Figure 8 Components of Effective Partnership 35

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Executive Summary Background In recent years the Third Sector has emerged globally as a significant influencing factor in government policy-making, business decision-making and social progress. It is further recognised that constructive engagement between the Government, Private Sector and Third Sector is the key to a vibrant, progressive society. The HKSAR Government’s Central Policy Unit (CPU) has endeavoured to enhance the Government’s knowledge and understanding of the Third Sector to better harness potential synergies, identify issues facing the sector in order to strengthen and maximize its contribution to society and ultimately to facilitate policy-making relevant to this area. This has involved detailed research of the Third Sector in Hong Kong through identifying its composition, operational characteristics, requirements and constraints, as well as relationships with the Private Sector and influence over government policy The findings of this research highlighted the significant potential for the Third Sector in Hong Kong to work with the Government and the Private Sector through Tripartite Partnerships (TPPs), not only to achieve common goals, but also to strengthen the Third Sector’s long-term operational viability and effectiveness. In September 2004, the CPU commissioned two studies specifically to examine TPPs. The first study, the ‘Benchmarking Study from an International Perspective’, examined international practice in TPPs. The second study (this study) examines local policy and practice in TPPs, with the overall objective of determining government policy recommendations. This second study has involved a combination of research, surveys and face-to-face engagement including a series of cross-sector and sector-specific focus groups. Definition of TPPs The definition for TPPs used in the Study is:

A collaborative effort among representatives from the Public Sector (Government), Private Sector (Business) and the Third Sector to achieved shared and compatible objectives that contribute to the common good of Hong Kong.

The definition necessarily provides sufficient breadth to take into account the reality that TPPs take many forms. Some partnerships involve information and experience sharing only; others are more task-oriented, while others aim to create long-term and significant impact on society, usually involving interaction at a strategic level. Hence three different levels of partnerships were identified: namely consultative; collaborative; and strategic. Notably, financial contributions in isolation were not considered to constitute partnership.

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The Landscape of Partnership in Hong Kong: Overview of Partners, Policy, and Practice The Third Sector The breadth and depth of the Third Sector’s contribution to Hong Kong is substantial, covering fourteen key functional areas and services. At the end of 2002, the number of Third Sector Organisations was conservatively estimated at around 17,000, ranging from small voluntary groups to large organisations employing hundreds of people. The development of this sector and its capacity to engage in effective partnerships is influenced by the economic, political and social conditions, government legislation and policies, as well as major local and international events. Hong Kong’s governing laws and regulatory bodies necessarily provide the framework within which Third Sector organisations operate. The Basic Law provides for the protection of civil rights, ensuring the right of Hong Kong residents to join and work with Third Sector Organisations and engage in civil society activities. The legal and regulatory environment governing the Third Sector is however highly fragmented, with a variety of statutes and bodies governing their establishment and operation. The most popular forms of Third Sector Organisations are registered societies or companies limited by guarantee, which may or may not be registered as charities (i.e. attaining tax exempt status from the Inland Revenue Department). These different legal forms strongly influence the nature of governance within Third Sector Organisations through differing operational requirements. For example companies limited by guarantee are required to prepare, audit, submit and make available for inspection annual accounts and to hold Annual General Meetings (AGMs), societies however are not. The outcome is the existence of many Third Sector Organisations operating without the necessary regulatory safeguards to ensure good corporate governance. Government Policy and Practice on TPPs Whilst there is currently no comprehensive policy on fostering TPPs in Hong Kong, the recognition of the potential value and importance of cross-sectoral partnerships has in recent years gained momentum. Since 2001, the Chief Executive’s policy addresses and policy agendas have advocated the importance of achieving a vibrant and progressive society through harnessing the potential synergies of the community, Private Sector and Government. In 2001 and 2005, these policy statements were crystallised in the announcement of the Government’s intention to establish significant funding schemes specifically aimed at fostering TPPs in relation to social welfare. At the departmental level the Government’s intentions are evident in a number of areas where cross-sectoral partnerships are encouraged, notably in social welfare, environmental protection, sustainable development, labour, and numerous policy areas under the Home Affairs Bureau. However, with the exception of the Social Welfare Department (SWD), departmental initiatives

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on TPPs were found to be less well-articulated in terms of fostering partnerships even though some, e.g. the Leisure and Cultural Services Department, have longstanding TPP involvement. The focus of Government practice in fostering TPPs has historically been the promotion and facilitation of partnerships through:

i. The establishment and administration of numerous funding as well as partnership recognition schemes. Generally directed at non-profit organisations, the extent to which such funding schemes provide opportunities for partnership depends on the department’s overall policy goals and on how the schemes are structured. The effectiveness of some funding schemes has been bought into question as a result of the strict conditional requirements imposed upon recipients.

ii. Providing a platform for the establishment and development of TPPs. In some areas, the

Government provides leadership to promote TPPs by facilitating Private Sector access to the Third Sector, so that the Private Sector may gain a better understanding of what smaller non-governmental organizations (NGOs) do, and so that they may explore mutual needs and opportunities for collaboration.

iii. Improving Third Sector accountability, for example through the controversial Lump

Sum Grant, as well as proposing measures to improve corporate governance through the development of guidelines as well as best practices.

The Government also administers numerous advisory, consultative and statutory bodies, which have cross-sector representation and hence provide a potential vehicle for strategic TPPs. These bodies form a key part of the Government’s consultation forums to involve the community (including the Private and Third Sectors) in the policy process and development. The effectiveness of these bodies is however undermined by flaws in the consultation process. In terms of actually engaging in TPPs, of the 53 Departments surveyed, almost all had experienced Bipartite Partnerships (BPPs) and/or TPPs mainly through participation in events, training courses, seminars, conferences and workshops. Private Sector Practice And Partnership Trends The Private Sector’s relationships with and behaviour towards the Third Sector are governed by a range of issues that inevitably influence the extent and nature of partnering between the sectors. In addition to financial contributions, which can stimulate and/or develop into partnerships, the emergence of Corporate Social Responsibility (CSR) in the last 5 to 10 years has contributed to the development of both BPPs and to a lesser extent TPPs in Hong Kong. One element of CSR which appears to be a strong component of existing CSR practices throughout the world and in Hong Kong is “Community Investment,” which can include

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partnerships involving employee volunteering of skills and time, in-kind donations of both goods and services and financial contributions including cash donations, matched giving programmes and payroll giving by employees. Similar to other countries (such as Australia and Singapore), CSR initiatives in Hong Kong have been largely imported through locally based multinational corporations which are increasingly analysing and developing more sophisticated Community Investment programmes often involving partnerships. In developing these programmes, such companies are benchmarking staff expectations, evaluating their core service provision and its relevance to community needs, as well as responding to requests by relevant (typically) Third Sector Organisations. The engagement of SMEs in CSR has however proved to be more problematic as a result of the traditional resource constraints and relevant know-how facing the sector. The Government recognises the issues facing SMEs and has specifically geared certain funding schemes towards engaging SMEs. The Drivers And Components Of Effective Partnerships The reasons for engaging in TPPs are multiple and diverse, but there is usually some need for collaboration. Ultimately it is the opportunities and benefits that can be derived from partnership that drive the process. Such drivers include:

i. Achieving specific goals or outcomes; ii. Harnessing synergies and strengths;

iii. Responding to government initiatives; iv. Sharing responsibilities for the common good; v. Resolving conflict;

vi. Transferring skills; and vii. Driving business through CSR.

No matter the driver, TPPs were found to vary greatly in nature. The key components for success can be divided into i) partnership principles and ii) structural requirements. These components are closely related and overlap in many ways. The principles which are mutually reinforcing include building trust, identifying shared goals, being open to change, exercising proper governance, and practicing good communication. In embracing these principles, effective partnerships need to address the requisite structural requirements. These include planning a project properly from its inception, ensuring that there is institutional commitment, ensuring good partnership management, providing monitoring and feedback mechanisms, and recognizing that there are specific competencies and skills that will help build partnerships and communicate the purpose of the partnership to other stakeholders.

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Summary of Conclusions The rise in the idea of partnering between the Government, the Private Sector and the Third Sector stems from a perceived worldwide crisis in social, environmental and political systems. Partnerships are at their strongest and most successful when there is equality of status among the partners, as well as mutual understanding of and respect for each other’s perspectives, positions and interests, and where there is a foundation of trust. Levels of Partnership The recognition that there are three levels of partnership will help to clarify what TPPs can achieve in society. Consultative partnerships (Level 1) involve initiating relationships and information exchange. Collaborative partnerships (Level 2) focus on the joint implementation of specific projects. Strategic partnerships (Level 3) represent the highest form of partnership as it engages the three sectors in long-term collaboration at a strategic level. TPPs are likely to be most effective for the Government at the policy or project inception stage, as they can be structured in ways to provide policy-makers with an ideas-gathering process which can inform the next stage of decision-making. Missing information as well as misunderstandings and objections among stakeholders can be identified early and taken into consideration before decisions are made. The Government can engage in effective strategic partnerships to build social capital, solving societal problems and realising the goal of a progressive society. While the Government’s extensive advisory and consultative structure provides a robust framework for the initiation of strategic partnerships, there are however numerous constraints and barriers which must first be overcome. Restructuring the Government’s consultative and advisory bodies will be essential to fully realizing the potential for TPPs in this area. However, TPPs should not be seen to be the panacea to 'social disharmony' as the causes for perceived disharmony may be related to executive decision-making and/or good governance practices. Community Building TPPs can be a powerful way to build trust because they bring stakeholders together in a collaborative manner to decide upon and implement agreed objectives and goals. From the Government’s perspective, TPPs can be seen as an on-going way to build community.

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Governance An important aspect of building trust has to do with having reliable information about one’s partners. For the Third Sector and Private Sector partners, this means having good corporate governance systems in place. For the Government, this means releasing data and information, as well as having a transparent political decision-making system where due process is followed and where policies are explained and justified. TPPs are not a substitute for the political-legal process. Diverse Structures There is no “one size fits all” ideal structure for TPPs or BPPs. Each occasion requires individual consideration for how to properly structure the TPP in terms of the objectives and goals it is to serve. As for any collaborative endeavour, time needs to be spent at the front-end of the process to design the right structure to fit the purpose. It is also essential to find the right partners for a specific TPP. Time Front-end dialogue among stakeholders to explore and identify their respective interests, goals and objectives will take considerable time. Negotiating a partnership and working out how to structure the collaboration also takes a substantial amount of time. It needs to be recognized and accepted that there is no substitute for carrying out due diligence on potential partnerships, and having the required dialogue and negotiation to find the right arrangements. Partnering Skills However, the process can be sped up by ensuring that partnering skills exist to help it along. Skills that can help the dialogue process among the stakeholders include designing, facilitating and recording meetings, managing conflict and transforming conflicts into opportunities for the parties to understand each other’s positions and interests better. Using these skills, the TPP can be appropriately structured and the goals clearly articulated. Where such skills are not available among the stakeholders, they can be brought in to assist the process. Professional facilitators and mediators can be brought into the process early on to reduce friction and misunderstandings. When a partnership fails it may be due to congenital problems, such as the partners’ respective positions, interests and responsibilities being insufficiently understood by each other from the start.

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Policy Recommendations The policy recommendations are based around FIVE interrelated categories; Developing Trust; the Regulatory Environment, Government Funding, Increasing Capacity and the Context of Local and Global Interests. Developing Trust with Society

i. Clarify policy intention and exercise appropriate ‘issue management’ to eliminate widespread suspicion within the Third Sector that the Government’s attempt to promote TPPs is driven by a desire to further reduce public expenditure in the provision of social services. To stem the tide of frustration and distrust, the Government needs to review all statements made and documents published at all levels of Government relating to partnerships, particularly those relating to the social welfare sector, to assess whether they can be reframed more appropriately.

ii. Provide active and systematic access to information by ensuring that policy-related

documents, supporting research, and advice from consultative bodies are easily available through the Government’s website. The Government may wish to establish a standard policy for the timely release of commissioned studies, research and consultancies using public funds.

iii. Use the consultative system more optimally to help build trust and create a sense of

collaboration between civil society and the Government, and thus be an important part of identifying and generating ideas for partnership including the development of strategic partnerships.

iv. Establish policy to open meetings to consultative bodies as far as possible.

v. Cast a wider net to identify appointees to consultative bodies and participate in

stakeholders’ engagement processes.

The Regulatory Environment

vi. Review and improve the legal and regulatory framework for Third Sector Organizations under the Societies Ordinance and Companies Ordinance.

vii. Consider a long-term mechanism that can help non-profits to develop and good projects

to be recognized; and consider commissioning a study on how to improve the legal and regulatory framework for the Third Sector as a whole.

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Government Funds

viii. Consider commissioning a study to review the effectiveness of government funds to address difficulties encountered by applicants and recipients in accessing the funds.

Increasing Capacity

ix. Developing Skills: • Promote internal training courses targeted at different levels of the Government on

meetings management, dialogue, communication, mediation and facilitation skills. Provide internal training in ‘issues management’ to facilitate officers’ capacity in strategizing, thinking through, presenting and managing relevant issues.

• Encourage the Private and Third Sectors to learn the same skills, to build all round

capacity for BPPs and TPPs. • Encourage Private Sector donors to continue to create NGOs that enable Third Sector

Organisations to obtain basic governance and enterprise skills (including keeping proper accounts and decision-making records, fundraising, initiating partnerships, project and issues management, media management, writing business plans).

x. Cross-fertilisation of skills and ideas: Create opportunities for civil servants to spend

time working in the Private and Third Sectors on short-term secondments.

xi. Government volunteerism: Put together department volunteer teams to perform community work. The Government may wish to consider the extensiveness of its volunteering time so that officers not only see this aspect as a part of their civic duties but also as leadership training with the appropriate recognition being given within the Government.

xii. Guidelines to partnering: Encourage the Private Sector and/or Third Sector to produce a

user-friendly guide on how to structure BPPs/TPPs which may be useful to all sectors. In addition, guidelines including templates on Memoranda of Association, Terms of Reference and legal documentation should also be considered.

xiii. Clearing House/Information Bank: Encourage the use of information technology and

the Internet to provide information about the Third Sector, BPPs, TPPs and any other relevant information that effectively provides a clearinghouse for interested parties to search for useful data and/or assistance.

xiv. Government Contacts for Partnership Issues: Make publicly available the relevant contact details of responsible officers relevant to partnership issues.

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The Context of Local and Global Interests in Partnering and Partnership xv. Improve understanding of global (as well as local issues) such as environmental, social

and political crises, since these issues can be drivers that provide opportunities for BPPs and TPPs. The following suggestions may be considered:

• Using the WTO Ministerial Meeting to explore TPP opportunities globally - 2005

may offer an exceptional opportunity for heightened discussion and debate on ‘globalization’ issues with the WTO Ministerial Meeting being hosted in Hong Kong.

• Adopting a partnership approach in providing assistance outside Hong Kong in the

aftermath of the Asian earthquake and tsunami.

• Adopting a partnership approach for addressing pervasive problems such as air quality and controversial issues such as West Kowloon Cultural District.

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Chapter 1 Introduction

1.1 Background to the TPP Study Over the past two decades, the Third Sector has emerged globally as a significant influencing factor in government policy-making, business decision-making and social progress.1 Constructive engagement between the Government, Private Sector2 and Third Sector is recognised as the key to a vibrant, progressive society through building consensus and thereby creating opportunities for development. The HKSAR Government’s Central Policy Unit (CPU) has endeavoured to enhance the Government’s knowledge and understanding of the Third Sector to better harness potential synergies, identify issues facing the sector in order to strengthen and maximize its contribution to society and ultimately to facilitate policy-making relevant to these areas. This has involved detailed research of the Third Sector in Hong Kong through identifying its composition including size and nature, operational characteristics, requirements and constraints, as well as relationships with the Private Sector and influence over government policy.3 Relevant studies include:

• The Role of Companies in the Development of a Vibrant Third Sector in Hong Kong (CPU, 2001) – The study, published in 2002, examined corporate philanthropy towards the Third Sector, including both financial giving and non-financial volunteer programmes, and identified mechanisms and organisational changes necessary to enhance corporate involvement and support of the Third Sector. The study is referred to hereafter as the Corporate Philanthropy Study.

• Study on the Third Sector Landscape in Hong Kong (CPU, 2004) – This Study,

published in 2004, examined in detail all aspects of the Third Sector in Hong Kong, defining its composition, characteristics and issues facing it in terms of capability and the environment in which it operates. The study is referred to hereafter as the Landscape Study.

1 The ‘Third Sector’ includes all non-profit, voluntary, non-governmental organizations (NGOs). The terms ‘Third Sector’, ‘Third Sector Organizations’ and ‘NGOs’ are used interchangeably in this Report. 2 The ‘Private Sector’ referred to in this Report is the private commercial sector made up essentially of “for-profit” companies. This includes multinational corporations (MNCs) and small and medium-sized companies (SMEs) operating in and from Hong Kong. 3 Other research has also been undertaken by different government departments including the SWD's Survey on Attitudes towards Corporate Volunteering and Survey on General Attitudes towards Volunteering (November 2001), as well as A Study on Social Capital with regard to Giving, Volunteering and Participating (24 January 2001) by the Hong Kong Federation of Youth Groups.

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Following these studies it was recognised that there is significant potential for the Third Sector in Hong Kong to work with the Government and the Private Sector through Tri-partite Partnerships (TPPs), not only to achieve common goals, but also to strengthen the Third Sector’s long-term operational viability and effectiveness. In September 2004, the CPU commissioned two studies specifically to examine TPPs: A Study on Tri-partite Partnership - Benchmarking Study from an International Perspective: This study reviewed and assessed international practice and policy on TPPs and provided policy recommendations to foster TPPs in Hong Kong. The study is hereafter referred to as the International Benchmarking Study. The Study in Tri-partite Partnership - Local Research and Engagement: This is the subject of this Report, referred to hereafter as the TPP Study. This examines in detail the potential for TPPs in Hong Kong, identifying the relevant local issues and constraints as well as the enabling environment necessary to foster such partnerships. Specific objectives of the TPP Study are to:

i. identify the nature and characteristics of existing TPPs in Hong Kong;

ii. identify government policies and practice to date in fostering TPP; and

iii. identify the scope for, and nature of, community engagement in developing policy recommendations in relation to TPPs.

These objectives have been addressed through a combination of research, surveys, face-to-face engagements and focus groups participation. The TPP Study findings presented in this Report are representative of the opinions and views of the wide range of stakeholders who participated in the Study. Although as many views and opinions were solicited as possible within the constraints of the Study, the findings represent an overview only of the issues identified and do not necessarily represent a consensus view of those who participated in the Study. Nevertheless, the feedback and insights derived from the stakeholders from the three sectors are sufficient for drawing specific short and longer-term policy recommendations (Chapter 9). This Report is structured to provide an overview of the three sectors’ approach to partnerships. While the emphasis is on TPPs, many of the findings are relevant to Bi-partite Partnerships (BPPs) as well. In terms of developing partnerships for problem-solving and social progress, BPPs are also a powerful tool for change. The Appendices (A-I) provide background and additional information as well as details of questionnaires and survey results carried out specifically for this Study. In particular, Appendix I provides the many examples of TPPs mentioned in this Report.

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1.2 Context of Local and Global Interests in Partnering and Partnership

While it is not the purpose of this Study to delve in detail into the reasons for local and international interests in the Third Sector, it is important to put the reasons in context for the sake of completeness. Corporate interests want to see more privatization of public assets and services, and markets free from governmental interference that will improve economic efficiency and therefore generate wealth. 4 Politicians are criticised for offering a one-size fits all solution to poverty and inequality, a solution that is preferred and promoted by Business that is based on laissez-faire economics, the culture of consumerism, and the power of finance and free trade. Citizen movements perceive there to be a social and environmental crisis, and that corporate activities are insufficient to alleviate poverty, create social justice and improve environmental conditions. They see corporate interests replacing the public interest where those interests are biased towards the short-term generation of profits. While corporate interests measure ‘progress’ by means of their own wealth, GDP and stock prices, citizen movements use other indicators altogether. Scholars have pointed out that the public has become disillusioned with politics and politicians and are increasingly embracing non-traditional forms of political expression instead, such as protests, e-activism, consumer activism, eco-shopping and shareholder activism. These new forms of ‘resistance’ have had an impact on Business, which has resulted in greater demands for good Corporate Governance, particularly post-Enron,5 as well as Corporate Social Responsibility (CSR). Multinational Corporations (MNCs) are investing time and effort to become more socially and environmentally responsible in the way they run their businesses. Business has also become more aware and interested in NGOs, which often lead the charge against companies that they see as irresponsible. 6 This is the backdrop to the rise in the idea of partnering between the Government, the Private Sector and the Third Sector. It is based on a belief that the world’s social and environmental crisis can be resolved only by the people taking an active interest in local

4 Critics say that corporate interests seek global policies that provide greater safeguards for private property and investors but their primary goal of wealth generation has created imperfect markets and unjust societies, as wealth does not always trickle down. Indeed, critics say that the disparity of wealth has widened, not narrowed. Furthermore, economic development has led to environmental degradation all around the world. Critics also say that in today’s world, corporations are taking over the reins of real power as businessmen become more powerful than politicians, and commercial interests are paramount so that the voice of Business is downing out the voices of other interests. 5 John Cavanagh and Jerry Mander (editors), 2nd edition, Alternatives to Economic Globalization: A Better World is Possible, Berrett-Koehler Publishers Inc, 2004. 6 Noreena Hertz, The Silent Takeover: Global Capitalism and the Death of Democracy, William Heinemann, London (2001).

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decision-making based on principles of openness, partnership and community. Hong Kong’s NGOs are driven by some of the issues that drive their counterparts elsewhere. There is a growing sense that more can be done together to redefine the relationship of the three sectors although much effort will be needed to sweep away the mutual distrust. Thus, for the foreseeable future, collaboration will likely take place alongside campaigns and protests by NGOs. 1.3 Study Methodology The Study followed the CPU’s requirements of research and engagement. The agreed work methodology comprised of four main tasks (see Figure 1 overleaf and details in Appendix A): Task 1 – Defining TPPs Task 2 – Research and Analysis Task 3 – Focus Groups Task 4 – Report and Analysis

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Figure 1: Methodology

TASK IV Reporting

and Analysis

Third SectorGovernment

Business

Third Sector

Government Business

TASK I Defining TPPs

TASK II • Literature Review • Government

Questionnaire • Interviews

TASK III Focus Groups

Sector- Specific

Cross- Sector

Third Sector Environment

Government Practices/Policies

Business Practice

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Chapter 2 Definition of TPPs

2.1 Devising an appropriate definition The definition for TPPs used in this Study is:

A collaborative effort among representatives from the Public Sector (Government), Private Sector (Business) and the Third Sector to achieved shared and compatible objectives that contribute to the common good of Hong Kong.

This definition was fashioned through a process that involved a web-based literature review of partnership definitions used internationally and in Hong Kong. While there are many definitions of TPPs, they share a number of common characteristics. These are:

i. Collaborative effort; ii. Tri-sector involvement;

iii. Sharing of resources, responsibilities and decision-making; iv. Mutual interests; v. Addressing challenges;

vi. Overall objective to deliver more than the sum of all the individual parts; and vii. Common or compatible objectives. In considering an appropriate definition for this Study, the definition needed to be wide enough to take into account that TPPs take many forms. Some partnerships involve information and experience-sharing only, others are more task-oriented, while others aim to create long-term and significant impact on society, usually involving interaction at a strategic level. TPP activities therefore include:

i. Seminars, conferences, workshop; ii. Campaigns;

iii. Events; iv. Specific issue projects and on-going long-term projects; v. Advisory and consultative processes; and

vi. Policy formulation processes (e.g. formal stakeholder engagement).

In addressing the different types of TPPs in Hong Kong, three different levels of partnerships were identified. These range from initial relationships, to joint implementations of one-off projects to long-term partnerships with policy and strategic impact (Figure 2).

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Figure 2: Levels of Partnership 1st Level - Consultative Partnership - aimed at initiating relationships with other organisations for information exchange including sharing of experiences, ideas, and opinions.

Ad hoc subject seminars, workshops, conferences, programme, series of seminars/conferences.

2nd Level - Collaborative Partnership - aimed at sharing objectives and implementation at a project level including activities that avoid duplication and aim to co-coordinate separate sector initiatives for greater efficiency and effectiveness.

Specific one-off events, campaigns, networks (regular meetings for information exchange), issue-specific projects (e.g. air quality research), on-going/long-term projects.

3rd Level - Strategic Partnership - the highest form and level of partnership where partners consider each other as indispensable in pursuing common goals and visions. Aimed at three sectors working together on a more strategic basis and resulting in a long-term and significant impact.

Consultative processes, non-statutory advisory bodies, statutory advisory bodies.

2.2 ‘Third Sector’ or ‘Civil Society’? On completion of the interviews and focus groups, the TPP definition formulated was reviewed to re-evaluate its suitability for application for Hong Kong. Consideration was given to the fact that an important component of TPPs was identified to be the involvement of the community at large in addition to organisations and institutions typically represented as the Third Sector. During the course of this Study, it was explored whether this broader base of potential and actual partners could be more accurately addressed by the term ‘Civil Society’ which can be defined as:

Voluntary associations, organisations, movements and networks that live and work in the social space outside the state and the Private Sector.7

If the term ‘Civil Society’ was used instead of the ‘Third Sector’ it would result in a broader definition of TPPs, and would be more in-line with the definition identified in the International Benchmarking Study. However, to date, TPP experience in Hong Kong largely involves partnerships with organisations that are formally established rather than informally and loosely defined through social movements and networks. It is therefore suggested that the term ‘Third Sector’ should remain in the TPP definition for 7 International Institute for Sustainable Development, 2004. www.iisd.org/didigest/glossary.htm#C

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the purpose of this Study. The use of the term ‘Third Sector’ is also in line with existing government terminology when referring to the non-government and non-business organisations. 2.3 Funding alone is not Partnership In terms of the depth of relationship and interaction necessary for there to be a partnership, purely financial contributions from one sector to another (the Government or Private Sector providing funding to the Third Sector) are not considered to represent partnership, although it is recognised that the financial donor/recipient relationship can evolve into a partnership over time. A number of essential components that characterise effective partnering are identified and discussed further in Chapter 7.

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Chapter 3 Overview of the Third Sector

3.1 Introduction

Previous studies showed that the Third Sector is a key driver in partnerships in Hong Kong. As such, understanding its composition, nature, extent, and socio-economic contributions is important to assess the environment in which TPPs operate. This section provides an overview of the Third Sector relevant to the development of TPPs in Hong Kong. 3.2 General Description of Hong Kong’s Third Sector The Landscape Study was the first systematic attempt to construct a comprehensive picture of the Third Sector in Hong Kong.8 The study adopted the internationally recognised Johns Hopkins University (JHU) definition9 and International Classification of Non-Profit Organisations (ICNPO) system for Third Sector Organisations, adapted to suit the local context.10 Third Sector Organisations were thus divided into 14 categories:

1. Education and Research 2. Professional, Industry, Business

and Trade Unions 3. District and Community 4. Civic and Advocacy 5. Law and Legal Services 6. Politics 7. Welfare

8. Health 9. Environment 10. Sports 11. Arts and Culture 12. Religion 13. Philanthropic Intermediaries 14. International and cross-boundary

activities

8 As part of the Landscape study, a total of 16,700 organisations were identified. 9 JHU defines 5 basic features that make up the non-profit sector: (1) organised, i.e. institutionalised to some extent; (2) private, i.e. institutionally separate from government; (3) self-governing, i.e. equipped to control their own activities, (4) non-profit-distributing, i.e. not returning profits generally to their owners or directors; (5) voluntary, i.e. involving some meaningful degree of voluntary participation. Note - the use of the JHU classification system led to some difficulties, as it did not take account of Hong Kong’s specific social environment, and the fact that many organisations span several categories in the JHU definition. This is particularly true for the special group of 14 so-called “big organisations” such as Caritas and Po Leung Kuk. Separate statistics were collected for the “big organisations” and Owners Incorporated organisations so they would not skew the responses overall or from their particular sector. 10 This lists 12 major activity groups which are further sub-divided into 24 subgroups. Salamon, LM and Anheier, HK. The International Classification of Non-Profit Organizations: ICNPO – Revision 1, 1996. Working Paper of the Johns Hopkins Institute for Policy Studies, 1996. www.jhu.edu/~ccss/pubs/pdf/icnpo.pdf.

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The breadth and depth of the Third Sector’s contribution to Hong Kong was found to be substantial. Third Sector Organisations serve important social functions with activities ranging from service provision, to advocacy, education and civic participation. At the end of 2002, the number of Third Sector Organisations was conservatively estimated at around 17,000 (including over 4,000 charities) ranging from small voluntary groups to large organisations employing hundreds of people.11 A summary of the Third Sector in macro terms is provided in Figure 3.

Figure 3: Macro Description of the Third Sector in Hong Kong (2002)

Employment

• The Third Sector was estimated to employ between

149,230 and 371,800 full time paid staff. This represented between 4.6% and 11.4% of the total workforce of 3,267,000 in 2002.

• Some 59% of the organisations surveyed had 1-10

staff while half of the big organisations had over 1,000 staff.

Expenditure

• Total annual expenditure was estimated to have

been HK$18.59 billion to HK$27.36 billion. This was equivalent to between 1.5% and 2.1% of Hong Kong’s GDP in 2002.

Membership

• Total membership of Third Sector Organisations

was estimated at between 3.7 million and 8.3 million.

Volunteers

• An estimated 57% of Third Sector Organizations

used volunteers with a mean of 106 volunteers per organization (553,890 total). This was equivalent to 8.2% of the population or 15.7% of the workforce in 2002.

• The contribution made by volunteer labour could be

expressed in terms of labour cost at HK$53 million and HK$83 million.

Funding Sources

• Main sources of operation income consisted of

government subventions, grants, reimbursements (28% of respondents), membership dues (18%) and private donations/sponsorships (15%).

11 For example, in the welfare sub-sector it is estimated that voluntary organisations provide over 90% of total welfare services, serving a population of around 2 million people. See Chan KT, Chan CS, Hung SY, Mak WYS. Welfare. Chapter 7 p. 199-222, in Study on the Third Sector Landscape in Hong Kong. CPU, HKSAR Government, 2004. See www.info.gov.hk/cpu/english/new.htm.

11

The development of the Third Sector is a dynamic process that is influenced by economic, political and social conditions, government legislation and policies, as well as other major events, both local and global. In particular for Hong Kong, the unique characteristics of the former colonial Government, which included a centralised and executive-led political administrative system and positive non-interventionist approach has shaped the role of the local Third Sector.12 (Appendix B). 3.3 Legislative Framework of the Third Sector Constitutional rights The Basic Law contains numerous provisions to protect the right of residents to engage in Third Sector Organisations and civil society activities. 13 These provisions are fundamentally important to preserve an atmosphere of openness and freedom which are essential to a thriving Third Sector and civil society as a whole. Governing Laws and Regulatory Bodies Overall, the legal and regulatory environment for Third Sector Organizations in Hong Kong is highly fragmented, with a variety of statutes and bodies governing and their establishment and operation (Figure 4). A summary of the requirements of these different legal forms are included as Appendix C. While there are different legal forms that a Third Sector Organization can take, the most popular ones are registered societies and companies limited by guarantee. Trade unions are separately registered. In general, the larger non-labour Third Sector Organisations tend to be companies limited by guarantee while the smaller organisations tend to be registered societies under the Societies Ordinance.

12 Lam WF and Perry JL. The role of the non-profit sector in Hong Kong’s development. Voluntas: International Journal of Voluntary and Nonprofit Organizations, Vol. 11, No. 4, 2000. See www.info.gov.hk/cpu/english/papers/3rd_ch01.pdf 13 Articles 27, 32, 34, 36, 39, 136, 137, 138, 141, 142, 143, 146, 148, 149, Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China, www.info.gov.hk/basic_law/fulltext/index.htm.

12

Figure 4: Relevant Laws And Regulatory Bodies For Third Sector Registered Legal Form

Governing Ordinance Administrator Administrating Government Dept.

Registered No. as at 30 Jun 04

Society Societies Ordinance (Cap.151)

Societies Officer Police Department 17,00014

Company, Limited by Guarantee

Companies Ordinance (Cap.32)

Registrar of Companies

Companies Registry

7,00015

Trade Union Trade Unions Ordinance (Cap.332)

Registrar of Trade Unions

Labour Department

698

Co-operative Society

Co-operative Societies Ordinance (Cap.33)

Registrar of Co-operative Societies

Agriculture, Fisheries and Conservation Department

228

Registered Incorporated Trust

Registered Trustees Incorporated Ordinance (Cap.306)

Registrar of Companies

Companies Registry

100

Statutory Body Various Ordinances Various Various n/a

3.4 Financial Reporting Requirements The reporting requirements of the various legal forms vary in terms of requirements to prepare, audit, submit and make available for inspection annual accounts and to hold Annual General Meetings (AGMs). The most stringent requirements are under the Companies Ordinance which requires all companies to submit annual audited accounts and hold AGMs. Trade Unions and Co-operative Societies16 must have their accounts audited by their respective registrars and must hold AGMs. Trade Unions must make their accounts available for members’ scrutiny and the Registrar of Trade Union publishes annual statistics on trade unions. Societies and trusts have the least reporting requirements as they do not have to prepare or submit accounts.

14 Estimate made by the Police Department. It should be noted that this figure is inconsistent with the Landscape Study which identifies 17,000 organisations in the Third Sector overall. Part of this discrepancy may be due to the fact that many societies do not formally deregister once they cease operations 15 Although there are 7,000 companies limited by guarantees, the Companies Registry does not keep details as to those that are non-profits and Third Sector in nature. 16 According to the Cooperative Societies Ordinance, a Cooperative Society must have as its object “the promotion of the economic interests of its members in accordance with co-operative principles, or be established with the object of facilitating the operations of such a society” The activities of such societies in Hong Kong are governed by the Ordinance, under which a public officer is appointed to register and regulate cooperatives operating within the Region.

13

The Registrar of Trade Unions appears to be the only regulatory body that offers educational courses on trade union management, book-keeping, auditing and legislation for trade unionists to encourage sound internal administration. 3.5 Charitable Status and Tax Exemption There are no specific laws in Hong Kong governing the registration of charities. However, the Inland Revenue Department has the power to “recognise” an organization as a charity for taxation purposes. Under the Inland Revenue Ordinance (Cap.112), any organisation can apply for income tax exemption if the organisation’s profits are applied solely for charitable purposes and not expended substantially outside Hong Kong.17 In the absence of other regulatory safeguards to ensure good corporate governance of non-statutory Third Sector Organizations, the achievement of tax-exempt status effectively represents the best available stamp of integrity and government “approval.”

17 Registered tax exempt charities which are also exempt from stamp duty, estate duty and business registration fees. Examples of purposes which the court has held to be charitable include:-

• Relief of poor people; • Relief of victims of a particular disaster; • Relief of sickness; • Relief of physically and mentally disabled; • Establishment or maintenance of non-profit-making schools; • Provision of scholarships; Diffusion of knowledge of particular academic subjects; • Establishment or maintenance of a church; • Establishment of religious institutions of a public character; • Prevention of cruelty to animals; • Protection and safeguarding of the environment or countryside.

While the definition of charitable purpose has largely evolved through common law rulings, a legislated definition of charitable purpose is included in section 2 of the Registered Trustees Incorporated Ordinance, Cap.306, which is defined as -

(a) the relief of poverty; (b) the advancement of art, education, learning, literature, science or research; (c) the making of provision for-

(i) the cure, alleviation or prevention of; or (ii) the care of persons suffering from or subjected to,

any disease, infirmity or disability affecting human beings (including the care of women before, during and after child birth);

(d) the advancement of religion; (e) any ecclesiastical purpose; (f) the promotion of the moral, social and physical well-being of the community; and (g) any other purpose beneficial to the community not specified in paragraphs (a) to (f).

14

As at 30 June 2004, some 4,000 non-profits and trusts had been granted tax-exempt status under Section 88 of the Inland Revenue Ordinance.18 A list of these bodies with charitable status is recorded on the Inland Revenue Department’s website.19

18 Individual and business donors who are chargeable for Hong Kong salaries tax, personal assessment or profits tax can claim a deduction for the aggregate of approved charitable donations (where the donation is made to a registered charity under Section 88 of the Inland Revenue Ordinance) for up to 25% of the assessable income or profits, as the case may be, in the basis period of a year of assessment. 19 www.ird.gov.hk/eng/tax/ach_index.htm

15

Chapter 4 Government Policy and Practice on TPPs

4.1 Government Policy Whilst there is currently no comprehensive established policy on fostering TPPs in Hong Kong, the recognition of their potential value in achieving a progressive society has in recent years gained momentum. In his 2000 policy address, the Chief Executive recognised the importance of having a “vibrant” Third Sector, stating that:

“…our citizens will play an increasingly active role in serving the community and in voluntary services.”20

In his 2001 policy address, the Chief Executive specifically addressed the issue of cross-sectoral partnerships, stating that the Government would:

“…encourage the community to come together, and pool the wisdom and strength of individuals, non-profit-making organisations and businesses. Only by doing this can we develop the most effective approach to solving social problems.”21

He announced the setting up of a HK$300 million Community Inclusion and Investment Fund (CIIF) aimed at developing social capital by building community capacities and establishing support networks through cross-sectoral partnerships. 22

On environmental protection, in his 2003 policy agenda, the Chief Executive further drew attention to the importance of partnerships, stating that:

“The community, the Business Sector and Government are stakeholders as much as they are partners in the protection and improvement of our environment. It is incumbent upon all parties to take up this responsibility to collaborate fully, working together with commitment to Hong Kong.”23

In the same policy address, the Secretary for Health, Welfare and Food was entrusted to engage relevant parties in developing social welfare strategies not only to enhance social

20 Chief Executive 2000 Annual Policy Address, paragraph 98. 21 Chief Executive 2001 Annual Policy Address, paragraph 124. 22 The CIIF was subsequently established in 2002. 23 Chief Executive 2003 Policy Agenda, Environmentally Responsible Development, page 33.

16

capital but also to examine ways to develop TPPs and consolidate and promote the successful experiences of CIIF.24 In September 2004, the Health, Welfare and Food Bureau published a draft discussion paper on its strategy framework for social welfare. The paper set out the Bureau’s intention to foster TPPs in order to “mobilise the resources of the three sectors to share responsibilities in taking on [the Bureau’s] social investment approach” to social welfare.25 The paper also set out the Bureau’s rationale behind advocating TPPs as the realisation that no one party alone can effectively resolve Hong Kong’s social problems, so that the ownership of the problems and solutions must be shared. As such the Bureau sees partnering as an important approach to building social capital. In line with this policy and the CE’s January 2005 policy address,26 the Health, Welfare and Food Bureau will further introduce a HK$200 million matching fund in 2005 specifically aimed at engaging the Private and Third Sectors in the joint implementation of social welfare related projects, with a long-term view of building capacity for business participation in the community. The 2005 Policy Agenda further establishes Government policy on partnerships in creating a vibrant economy through:

“…providing a platform for the sports sector to engage business partners in organizing international sports events;”27 and “…re-engineering the methodology for planning and implementing infrastructure projects with a view to deriving better efficiency and cost-effectiveness by various means, including the wider adoption of a partnering approach, alternative dispute resolution mechanisms, alternative design and procurement mechanisms, as well as systematic risk management techniques.”28

24 Chief Executive 2004 Annual Policy Address, paragraph 55: “The Secretary for Health, Welfare and Food will engage relevant parties in developing our strategies to enhance 'social capital'. The social welfare sector has been encouraging volunteerism, and has proposed many new ideas to involve the business community to participate in community affairs. In addition, we established the Community Investment and Inclusion Fund in 2002. These have sown the seeds for a tri-partite partnership between Government, the business community and the Third Sector (not-for-profit sectors). I have asked the Secretary for Health, Welfare and Food to examine, in consultation with the Social Welfare Advisory Committee and the Community Investment and Inclusion Fund Committee, ways to develop this tri-partite partnership, and to consolidate and promote the successful experience of the Community Investment and Inclusion Fund. We seek to inculcate this concept in the community to help it take root.” 25 Health, Welfare and Food Bureau, Strategic Framework for Social Welfare, Draft Discussion Paper (2004) www.hwfb.gov.hk/en/press_and_publications/press/2004/press040920.htm. 26 CE’s January 2005 policy address (paragraph 45) announced the Government’s intention to “Launch the $200 million Partnership Fund for the Disadvantaged - to promote the development of tripartite partnership among the Government, the business community and the welfare sector to help the disadvantaged.” www.policyaddress.gov.hk/2005/eng/pdf/agenda.pdf 27 The 2005 Annual Policy Agenda, Vibrant Economy, page 18. 28 The 2005 Annual Policy Agenda, Vibrant Economy, page 20.

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The Government’s stated intention to bring the three sectors together to harness potential synergies can be seen at the departmental level in a number of areas, where cross-sectoral partnerships are actively encouraged, such as in social welfare, environmental protection, sustainable development, labour, and numerous policy areas under the Home Affairs Bureau. However, with the exception of the SWD, other departments’ initiatives on TPPs were less well-articulated in terms of fostering partnerships even though some have longstanding TPP involvement, such as in cultural presentations under the purview of the Leisure and Cultural Services Department. 4.2 Government Funding Schemes Government funding schemes are implemented by numerous bureaux and departments as a tool for implementing policy. Although these schemes provide the opportunity for partnership, the extent and nature of partnerships depends on the department’s overall policy goals. Therefore, the way in which a scheme is structured influences whether it will promote partnerships as defined in this Report. The Government’s funding schemes are in general directed at non-profits, such as community organizations, schools, universities, and research institutions. As such, they have generally resulted in BPPs. The Government’s role in the disbursement of the funds typically goes beyond purely financial administration to include monitoring and evaluation as there are specific objectives the Government wants to achieve. Some funds and special schemes now actively encourage TPPs. This change reflects a change of mindset within the Government that public funds can be used to support projects where there is Private Sector involvement. Examples include:

i. Sustainable Development Fund: The Sustainable Development Unit’s fund encourages partnership through its project vetting and eligibility criteria. This fund specifically calls for project proposals where the applicants are partnering with other organizations. Government departments may also apply if they are partnering with a Third Sector Organization.29

ii. CIIF: The CIIF was designed to promote social investments and TPPs.30 It does

not exclude Private Sector companies from applying.31 To date, approximately 60

29 www.susdev.gov.hk/html/en/sdf/index.htm 30 The fund specifically aims to: (i) develop networks across sectors as well as individuals, organisations and social strata; (ii) establish mutual care and trust among individual organisations, social strata or sectors; (iii) increase the contribution of individuals or organisations to the benefit of others; and (iv) provide opportunities for community involvement. 31 Even though Private Sector companies can now apply, few have applied although many have been involved with Third Sector applicants. A number of SMEs have also been involved under the CIIF.

18

projects have been selected with another 14 having been approved in principle, amounting to over HK$60 million, and involving 805 organizations (including 149 Private Sector companies, 65 residents groups, 92 other types of NGOs, 477 schools and 22 government departments).32 Of the 60 CIIF approved projects, approximately 70% of them had Private Sector participation, usually in the form of in-kind services, such as the provision of discounted services, skill transfers, mentoring and volunteering.

iii. Professional Services Development Assistance Scheme: The Commerce and

Technology Bureau’s scheme implements a dollar-for-dollar matching principle. This requires the applicant to contribute or procure sponsorship from third parties of an amount equivalent to at least 50% of the funds to be provided by the Government. It also requires that where the applicant is a subvented organisation, the applicant must secure cash contributions from non-subvented organisations or Private Sector companies to an amount of at least 10% of the project cost.

iv. Innovation and Technology Fund: The Trade and Industry Department’s fund

requires that all projects should normally receive sponsorship from more than one private firm not related to the applicant organization in terms of ownership or management. Such sponsorship can either be in cash or in kind, but should normally cover not less than 10% of the total project cost.

v. Enhancing Employment of People with Disabilities through Small Enterprises

Projects: This SWD’s grant scheme makes available funds for NGOs to create and run small enterprises or businesses employing people with disabilities.

4.3 Creating a Platform for Partnerships Through the TPP Study, it became clear that one of the key roles the Government is currently taking in fostering TPPs is to act as a facilitator and to provide a platform for such partnerships. In some areas, the Government also provides leadership to promote TPPs by facilitating Private Sector access to the Third Sector, in order for the Private Sector to gain a better understanding of what the smaller NGOs do, and ultimately to explore mutual needs and opportunities for collaboration. As an example, the SWD is playing an active match-making role through a number of initiatives including its long standing promotion of volunteering activities (including corporate volunteering) under the Central Office for Volunteer Service and the more recently established Marketing Consultancy Office, Rehabilitation (Appendix G).

32 Information verbally given by the HWFB, December 2004.

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4.4 Improving Third Sector Accountability The Government has attempted to improve the financial efficiency and accountability of subvented organizations. The controversial Lump Sum Grant, introduced in 2000 for subvented social welfare organizations, links allocation of funds to the output of services provided. There is also a cap on the subvented amount.33 Experts in the field have noted that over-emphasis on financial accountability have diverted attention away from NGOs achieving better overall corporate governance and organization effectiveness. 34 The SWD has since proposed and implemented measures to improve NGOs’ corporate governance through development guidelines on internal financial controls as well as best practices for fundraising (Appendix D). 4.5 Government Advisory and Statutory Bodies The Government administers almost 500 advisory, consultative and statutory bodies with over 5,000 appointees. Many of these bodies have cross-sector representation and therefore provide a potential vehicle for strategic TPPs. These bodies form a key part of the Government’s consultation forums to involve the community (including the Private and Third Sectors) in the policy development process. The membership of some bodies are statutorily appointed (such as the Antiquities Advisory Board) while others are not (such as the Commission on Youth). The Home Affairs Bureau is in charge of determining operation policy of these bodies, such as maintaining lists of members and updating the Central Personality Index, which is the database for all current and past members’ details and from which future potential members are selected. The Home Affairs Bureau is currently reviewing the Government’s advisory and consultative bodies. In his 2004 annual policy address, the Chief Executive further outlined objectives for rationalizing of the system in order to:

i. Streamline and avoid duplication in organization and membership; ii. Enhance representation;

iii. Strengthen its role in decision-making; iv. Increase its role in reconciling different community interests; v. Use it as an important channel for public participation in public affairs;

vi. Enhance its role in grooming community leaders;

33 The Lump Sum Grant took effect from 1 January 2001. As of November 2004, 161 NGOs have joined the scheme, representing 99% of the total recurrent subvention. See www.info.gov.hk/sed/html_eng/site_map/index.html. 34 Yuen, T. Y. K. (2003). Hong Kong Country Paper from Asia Pacific Philanthropy Consortium’s conference on “Governance, Organisational Effectiveness, and the Non-Profit Sector,” 5-7 September 2003, Makati City Philippines. www.asianphilanthropy.org.

20

vii. Connect the Government and community; viii. Help explain government policies and encourage public discussions;

ix. Improve performance evaluations; and x. Make its role similar to that of public policy think tanks.

Chapter 8 provides a further discussion of the Government’s advisory and consultative system. 4.6 Recognition of Partnership Efforts In addition to the above initiatives, the Government is also involved with partnership recognition initiatives. For example, through the Social Welfare Programme, the Government is currently subventing the Caring Company Scheme. Initiated and led by the Hong Kong Council of Social Services, the scheme is designed to:

i. Raise public awareness of good corporate citizenship and its contribution to a caring community;

ii. Motivate strategic partnership initiatives between Business and the social service sector; and

iii. Recognise companies which demonstrate good corporate citizenship. The scheme aims to achieve the above objectives by awarding the ‘Caring Company’ logo to Private Sector companies that can demonstrate good corporate citizenship in two of the following six priority areas:

i. Volunteering; ii. Employing the vulnerable;

iii. Being family friendly; iv. Partnering; v. Mentoring; and

vi. Giving.

The scheme actively promotes partnerships, most of which are BPPs, between the Private and Third Sectors. In the first year, 250 companies were awarded the logo, in the second year 495 and in the third year 600. About two-thirds are SMEs and the remaining third are MNCs. Other recognition schemes to encourage partnering include the Labour Department’s Enlightened Employer Awards and the SWD’s Central Office for Volunteer Service.

21

4.7 Public Private Partnerships (PPPs) The increasing trend of Private Sector Involvement in public sector initiatives, which includes Public Private Partnerships (PPPs), aims to find ways in which the two sectors interact to supply public sector services. The assumption behind this policy is that the Private Sector, operating on more commercial principles, should be able to provide public services and deliver public sector projects more effectively than the public sector on its own (largely though innovation and competition) and as a result use public money more efficiently. Over the past few years, successive Financial Secretaries have reiterated the Government’s commitment to involve the Private Sector in the provision of public services.35 While PPPs may not be seen as true partnerships in the context in which this Report discusses TPPs, since they are often contractual arrangement between the Government and the Private Sector, they do represent a new form of relationship between Government and Business. A brief discussion of PPPs is included here for the sake of completeness. Since 1997, there have been several high profile and controversial PPPs, including collaboration with Private Sector developers to build public housing,36 and co-investing in Hong Kong Disneyland (scheduled to open in 2005) and the Cyberport. 37 Most recently, there has been the controversy over whether the Government should give property development rights to the Private Sector in return for them to also provide cultural venues and facilities in West Kowloon. 38 The recent conservation policy

35 See Efficiency Unit’s summary of the Government’s goal and policy in relation to Private Sector Involvement www.info.gov.hk/eu/english/psi/psi_psi/psi_govt_goal.html (accessed 11 December 2004). The Efficiency Unit spearheads government efficiency reform and released an introductory guide to PPPs, “Serving the Community by using the Private Sector: An introductory Guide to PPPs” (August 2003) www.info.gov.hk/eu/english/research/files/ppp_guide.pdf accessed 11 December 2004. 36 The Government contracted with private developers to build low-cost housing for sale through the Private Sector Purchase Scheme. The most recent controversy was over Hunghom Peninsula. See and Ambrose Leung and Peggy Sito, People Power Saves Hong Kong Flats, SCMP, 11 December 2004 and Michael Ng and Teddy Ng, Demolition of Hung Hom flats scrapped, The Standard, 11 December 2004 www.thestandard.com.hk/stdn/std/Front_Page/FL11Aa01.html. 37 While the public welcomed the creation of a Disney theme park in Hong Kong, there were questions over the financial arrangements between the Government and the Walt Disney Co. In the case of the Cyberport, the criticism was that the development was seen as a property development whereas the Government promoted it as an Information Technology project. See Doubts still overshadow HK’s Cyberport, China Business Weekly, 28 April 2004, www.chinadaily.com.cn/english/doc/2004-04/28/content_327078.htm and John Tsang, Legislature Fully Briefed on Cyberport www.news.gov.hk/en/category/ontherecord/050125/html/050125en11003.htm, 26 January 2005. A LegCo paper on Cyberport was published in December 2004, see www.legco.gov.hk/yr04-05/english/panels/itb/papers/itb0110cb1-588-1e.pdf. 38 The West Kowloon Cultural Development remains an on-going issue for the Government. See Carrie Chan, Rally to oppose bud process, The Standard, 4 December 2004,

22

announced by the Environment Transport and Works Bureau included PPPs as one of the two options which will be piloted to manage the development of ecologically sensitive land.39 This policy has not been free of criticism.40 It is not for this Report to comment on these projects except to use them to illustrate the Government’s willingness and indeed enthusiasm for developing PPPs. The only point to make in this Report is to note that the intense controversies that have surrounded them appear to have arisen because of public concern over the Government’s land policy, how the Government made those specific decisions and the transparency of the various aspects of those decisions and not over whether the Government should explore PPPs. Nevertheless, with reference to the discussion in Chapter 1, these controversies show how sensitive the public is to what it perceives to be Government-Business ‘collusion’ to commercialize and privatize public policy-making.

Other areas where the Government partners with the Private Sector to provide public services including the provision of public transport, electricity, toll roads, waste collection and the construction and management of infrastructure such as landfills which are designed, built and operated by the Private Sector although ultimate ownership is retained by the Government. 4.8 Status of Government TPP Practices Government Involvement in Partnerships The TPP Study Questionnaire for government departments (Appendix E) was designed to survey the number and types of partnerships they have with the Private and Third Sectors. The survey found that almost all government departments have experienced BPPs and/or TPPs. Of the total 50 responses received, 40 departments indicated that they had partnerships with the Third Sector, 38 with the Private Sector, and 36 had TPPs (Figure 5).

www.thestandard.com.hk/news_detail_frame.cfm?articedid=52699&intcatid=42. See also Tim Burbury, Johnson, Stokes & Master, West Kowloon Cultural District Project: A Status Report www.jsm.com.hk/live/Portal?xml=legal_update/article&content_id=1881. 39 ETWB submission to LegCo: CB(1) 214/04-05(01). The ETWB states that regarding PPPs it: “… aim[s] to encourage support and participation of key stakeholders including landowners, developers and NGOs … [and is] consistent with the “partnership” principle of sustainable development.” 40 See Legislative Panel Council On Environmental Affairs, New Conservation Policy 2004, Response From Kadoorie Farm and Botanic Garden, 19 November 2004 www.legco.gov.hk/yr04-05/english/panels/ea/papers/ea1122cb1-307-3-e.pdf ; and Press Release – Greens Seek Comprehensive Approach to Conservation, Asia’s World City Deserves a World Class Conservation Policy, Business Environment Council, Conservancy Association, Friends of the Earth Green, Green Power, The Hong Kong Bird Watching Society, Kadoorie Farm and Botanic Garden, Green Lantau Association. www.conservancy.org.hk/preleases/20041203E.pdf

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Figure 5 Nature of Government Partnership Activities (BPPs/TPPs)

01020304050

Third Private Third andPrivate(TPP)

Sectors Engaged With Government in Partnership

No. of Departments Involved in

Partnerships

YesNoNot Applicable

Figure 6 below summarises government involvement in different types of partnership activities. It specifically shows the percentages of departments involved in partnership activities. For instance, some 90% of government departments are involved in seminars, conferences and workshops with the Third Sector, yet less than 70% are involved in these activities with the Private Sector and just over 60% are involved in these activities with both the Third and Private Sectors. Overall, it appears that more government departments are involved in activities with the Third Sector than with the Private Sector for all types of activities. The majority of departments are involved in the following activities:

• Conferences, workshops and seminars; • Events; • Specific issue projects; • Consultation processes; and • Training courses.

The activities which have the least departments involved include:

• Policy formulation; • Advisory and consultative engagements; and • Formal committees

24

Figure 6 Government Partnership Activities by Type

0102030405060708090

100

A B C D E F G H I

Partnership Activities

% of depts.

involved

ThirdPrivateTPP

Key: A Conferences, Workshops, Seminars F Specific Issue Projects B Consultation Processes G Advisory Boards C Campaigns H Formal Committees D Events I Policy Formulation E Training Courses

Extent of Government Departments’ Involvement in Partnerships According to the quantitative responses returned from the Questionnaire, 41 the Government has participated in 31,330 partnerships since 1 July 2002. Of these partnerships, 12,177 (39%) were events, 10,550 (34%) were training courses and 2,599 (8%) were seminars, conferences and workshops. Of the responses to the questionnaire received, the Education and Manpower Bureau (EMB) is the only government body that participated in all activities (ranging from seminars to policy development) with the Private and Third Sectors separately, and in TPPs. It had 508 partnerships, 300 of them with the Third Sector (the most common being seminars, conferences and workshops, and training courses, with 60 each, as well as 40 events).

41 Of the 50 responses received, all provided quantitative data with the exception of the SWD, Health Department and Department of Justice as they advised that the information was neither consolidated nor readily available. The SWD and Health Department apparently have such a very large number of partnerships that it was difficult for them to consolidate the information.

25

Other quantitative results of the more active departments can be summarised as:

i. The Leisure and Cultural Services Department (LCSD) had the most number of partnerships with 15,807 (about 50% of all partnerships reported for the Questionnaire), including training courses (8,077) and events (7,437) with the Third Sector.

ii. The Home Affairs Department (HAD) participated in 6,090 partnerships. Most of their partnerships were events (2,676) and consultative processes (1,497) with the Third Sector, as well as 1,065 TPP events. Training courses (259), campaigns (343), and seminars (143) with the Third Sector were also common.

iii. The Fire Services Department (FSD) had the largest amount of TPPs as 2,369 of its 2,689 partnerships were TPPs. The most common TPPs include training courses (1,438), seminars, conferences and workshops (383), and events (360).

iv. The Environmental Protection Department (EPD) participated in 1,709 partnerships, 1,418 of which were TPP campaigns.

v. The Labour Department (LD) was involved in 868 partnerships overall including 220 seminars, workshops and conferences with the Third Sector, and 218 training courses and 151 events with the Private Sector. LD has also been involved in 79 consultative processes with TPPs.

vi. The Television and Entertainment Licensing Authority (TELA) participated in 741 partnership activities, most of which are seminars, workshops and conferences (568) and training courses with the Third Sector.

Figure 7 Relative Government Department Involvement

in all types of Partnerships

LCSD

HAD

FSD

EPD

LD

TELA

EMB

All others

26

Chapter 5 Private Sector Practice and Partnership Trends

5.1 Introduction

The Private Sector’s relationships with and behaviour towards the Third Sector are governed by a range of issues that influence the extent and nature of partnering between the sectors. The section provides an overview of the relevant issues. 5.2 Private Sector’s Contribution to the Third Sector

Nature of Contributions The Corporate Philanthropy Study investigated corporate attitudes to community involvement and corporate giving. While the Corporate Philanthropy Study focussed on corporate giving and volunteerism rather than TPPs per se, it can be assumed that there is some correlation between the willingness of companies to donate financially and the willingness of companies to partner with Third Sector Organisations. Indeed, many TPPs involve donations, volunteering and partnerships between the Private Sector and Third Sector. There is also likely to be a correlation between the types of organisations or causes that companies donate money to, and those they would wish to partner with. The findings of the Corporate Philanthropy Study included (for fuller summary see Appendix F):

i. Large companies donate more along with companies which have large numbers of staff employed locally;

ii. Well-established companies with stable profit and companies strongly subject to

government regulation are more generous on a per capita basis;

iii. MNCs based in Hong Kong are generous but not always to Hong Kong projects, as they consider Hong Kong to be a relatively wealthy society and they often believe their funds can have more impact in less developed economies;

iv. Locally-owned medium and large companies are likely to be more responsive to

government appeals for enhanced philanthropic support;

27

v. Companies are generally most willing to give to education, environmental protection, poverty relief, medical provision, disability assistance, and children and/or elderly assistance projects;

vi. Companies are least willing to give to causes linked with heritage preservation,42

religion-related issues, and animal welfare projects. The Extent of Financial Contributions Overall, the Corporate Philanthropy Study estimated that the Private Sector contributed up to 10% of total giving in Hong Kong, representing 0.2% of GDP. However, the study also highlighted that there is an absence of solid data to support these figures as “guesstimating true levels of current giving is a task fraught with uncertainty.”43 Analysis of Third Sector expenditure levels as recorded in the Landscape Study against corporate charitable donations (reported by the Inland Revenue Department) and GDP statistics showed that corporate charitable donations contributed less than 3% of total Third Sector expenditure needs in 2002. However, the Corporate Philanthropy Study stated that corporate Inland Revenue Department-approved charitable donations do not represent total corporate giving in Hong Kong due to many factors such as the low tax regime (thus lower incentive to declare donations) and the predominance of family owned companies who often use personal and family foundations as giving vehicles.44 The study concluded that the strongest correlating factor to increased giving to charity is the growth of GDP which has generally been strong with growth rates from 6% to 27% between the years 1980 and 1998 (which is also the period of greatest development of the Third Sector), although rates have been negative since 1998. It is not surprising that in the past few years, during a period of declining GDP, that contribution in the form of employee

42 There are signs that the interest in heritage preservation may be increasing. When redevelopment plans for the Central Police station included demolishing large parts of it, several prominent Hong Kong families expressed interest in contributing funds to developing the site in a way that would preserve more of the complex. For example, the Hotung family submitted a proposal for the site which included an arts academy. 43 The Role of Companies in the Development of a Vibrant Third Sector in Hong Kong. Hong Kong: The Central Policy Unit, HKSAR Government 2001. See www.info.gov.hk/cpu/english/new.htm. 44 It is the view of Civic Exchange that family foundations giving should not be counted as corporate giving because it is legitimate for wealthy individuals and families to set up a separate philanthropic vehicle for the giving of their private wealth. This is in fact quite common in other parts of the world. That Corporate Philanthropy Study also noted that there was a belief, especially among Chinese business executives of family controlled companies that the role of companies is to make profit, not to engage in philanthropy, thus contribution to charities from these individuals is more likely to be outside the corporate entity. It is Civic Exchange’s view that even in such cases, there is no reason to include private giving from business people to ‘guesstimate’ total corporate giving. Thus, the Corporate Philanthropy Study’s guesstimates that real cash donations are likely to be at least double that recorded by the IRD and total cash donations could represent 1% of assessable company profits may be unreliable if private donations had been included.

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volunteering has gained more focus as this is a way to contribute to the Third Sector without requiring cash commitment. The Corporate Philanthropy Study suggested that because more Hong Kong people, and the companies they lead, have come to regard Hong Kong as a long-term home since the 1997 transition to Chinese sovereignty, corporate giving levels to the Third Sector will rise over time. For now at least, information updated since that study indicates that the amount of corporate giving has remained steady at 0.05% to 0.06% of GDP for the years 1997 to 2002. It was also suggested in the Corporate Philanthropy Study that the amount of corporate giving could be increased if charities in Hong Kong were more transparent, providing clear and detailed information about who they help and how effectively they use the resources they receive. 5.3 The Emergence of CSR The emergence of CSR in the last 5 to 10 years has contributed to the development of both BPPs and to a lesser extent TPPs in Hong Kong. A common definition of CSR used in Hong Kong is:

The continuing commitment by Business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.45

One element which appears to be a strong component of CSR practices throughout the world and Hong Kong is “Community Investment,” which can include partnerships involving employee volunteering of skills and time, in-kind donations of goods and services and financial contributions including cash donations, matched giving programmes and payroll giving by employees.46 Community Investment is one of the most visible ways which a company can demonstrate its commitment to being a good corporate citizen. However, many companies both in Hong Kong and other parts of the world equate Community Investment alone with CSR when it is just one aspect of CSR.

45 This is a commonly quoted definition used by Community Business (a charity that helps companies improve their impact on people and communities) originated by the World Business Council of Sustainable Development. United Nations, Corporate Social Responsibility and Sustainability Competitiveness. 46 Community Business (2003). “Corporate Community Investment – Getting Started.” See www.communitybusiness.org.hk/5_0resources.html.

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Other elements of CSR include employment practices, human rights and supply chain management.47 5.4 CSR Trends and Partnership in Hong Kong Similar to other jurisdictions, such as Australia and Singapore, CSR initiatives in Hong Kong have been largely imported through locally-based MNCs following global trends. While Hong Kong is far from experiencing a widespread change of corporate attitude in relation to their social responsibilities, some of the larger Hong Kong-related corporations such as Hong Kong and Shanghai Banking Corporation (HSBC), China Light and Power Limited (CLP), Mass Transit Railway Corporation (MTRC), the Swire Group and Jardine Matheson Group are analysing and developing more sophisticated Community Investment programmes often involving partnerships with other organisations. Their efforts have been much more complex than cash donations. In developing their Community Investment programmes, these companies are benchmarking staff expectations, evaluating their core service provision and its relevance to community needs, as well as responding to requests by relevant (typically) Third Sector Organisations. A survey of best practice among Hong Kong companies further revealed that companies were ahead of regulatory requirements in relation to Community Investment. 48 However, with the above mentioned example aside, the survey notes that while Hong Kong companies can be generous when making financial donations there is limited analysis to align contributions with core business objectives thus failing to recognise the full potential of benefits of their engagement with the local community.49 As Hong Kong companies increasingly follow international trends in understanding the “business case” for CSR activities and aligning these with their corporate objectives, Community Investment schemes, including BPPs and TPPs, can be expected to become more sophisticated. A frontrunner is HSBC’s joint development with the Business

47 Welford RJ, Corporate Social Responsibility in Europe and Asia: Critical Elements and Best Practice. Corporate Environmental Governance Program, Hong Kong: University of Hong Kong 2003, web.hku.hk/~cegp/image/publications/report5.pdf listed 20 core indicators including internal employment practices (such as equal opportunities, staff welfare, working hours, staff training and development, freedom of association and human rights), external aspects (such as supply chain management (including child labour and other labour standards), stakeholder engagement, ethics and fair trade, accountability (such as reporting on CSR activities) and raising awareness of citizenship. 48 Welford RJ and Mahtani S, Corporate Social Responsibility in Hong Kong – A Survey of Best Practice, Community Business 2004. See www.communitybusiness.org.hk/5_0_resources.html. 49 Welford and Mahtani (2004) noted that CSR practices of Hong Kong companies largely involve voluntary contributions from self-identified best practice organisations as opposed to an overview of general business practices. See www.communitybusiness.org.hk/5_0_resources.html

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Environment Council of a web-based learning centre to help SMEs to develop their businesses in a more environmentally sustainable manner. Examples of Community Investment programmes in Hong Kong include (see also Appendix G):

i. Employee volunteering: 50 The “HSBC Wayfoong Volunteers,” established in 1993, has volunteers work in small teams, concentrating on practical work and direct service. Activities include: working with young people; helping single-parent families; serving elderly people; providing patient support; and working with handicapped people. Priority is given to charities and organisations that receive funding from the Hongkong Bank Foundation's District Community Programme.

ii. Mentoring: “Livewire” is a social investment programme aims to decrease youth

unemployment. Founded by Shell Group in the United Kingdom, it now exists in 15 countries including Hong Kong. In Hong Kong, ‘Livewire’ caters to those between the ages of 18-30 to help them develop their own business by providing training, mentorship and rewards for successful businesses. Shell works closely with the Hong Kong Federation of Youth Groups and the Trade and Industry Department as well as other businesses in running the programme.

iii. Education Development: CLP’s science-related curriculum development for

secondary schools which focuses on sustainability issues such as renewable energy and involves partnering with the Education and Manpower Bureau.

iv. Professional services: Allen and Overy’s professional assistance scheme for

domestic helper associations which incorporates legal advice giving, marketing advice on fundraising and communication, IT set-up and business management skills.

v. Community well-being: Zurich Insurance’s “Play Park” initiative involves

teaming up with NGOs to develop projects focusing on playing with children and their parents.

vi. Issue development: Jardine Matheson Group’s “Mindset” initiative launched in

2002 channels the group’s philanthropic programmes (including cash and in-kind giving, volunteering and partnering) towards the development of mental health support and awareness-raising.

50 The Government has also promoted CSR through engaging the Private Sector in community concerns by means of the SWD’s Corporate Volunteering Scheme and programs such as the Caring Company Scheme.

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vii. Employee training: JW Marriott Hotel’s partnership with Hong Chi Association to train and place mentally disabled people in jobs within the hospitality industry.

viii. Representation on boards and committees: Many corporate representatives sit

on NGO boards and committees, advisory boards and committees, members of business, professional and trade associations (which are a part of the Third Sector).

5.5 CSR and SMEs There are currently over 300,000 SMEs in Hong Kong.51 The engagement of SMEs in CSR has proved to be more problematic as a result of the traditional resource and relevant know-how constraints facing the sector. Research into SMEs’ perception of CSR in Hong Kong provides further insight into corporate attitudes towards Community Involvement.52 CSR research confirmed the following:

i. SMEs are more vulnerable to downturns in the economy and are currently more preoccupied with growing competition from China and worry of additional financial burden.

ii. There is low awareness and understanding of CSR amongst SMEs.

iii. Examples of CSR were minimal; in many cases SMEs equated CSR with

compliance with the law.

iv. SMEs’ perception of CSR was that it increased operation and staff costs. Perceptions and attitudes were varied between the sectors (manufacturing, trading, retail/wholesale and business services) with the business services sector being the most favourable and the manufacturing sector the most negative towards CSR.

Given the above findings, it can be assumed that Community Involvement would be a low priority for most SMEs. The promotion of CSR should therefore focus on opportunities rather than responsibilities. Further it should be recognised that SMEs vary according to sector and type (e.g.: 2-3 person ‘mom and pop’ shops to more

51 The Trade Development Council defines SMEs as: less than 100 employees for manufacturing industries and less than 50 employees for non-manufacturing industries. 52 AC Nielson, Project CSR presentation. Prepared for HSBC, December 2003. The research undertaken for HSBC interviewed four groups of SME companies with 21-50 employees in trading, manufacturing, retail/wholesale, and business services.

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substantial medium sized enterprises that are more sophisticated in nature) and different approaches to CSR are adopted accordingly. The Government recognises the issues facing SMEs and has specifically geared certain funding schemes to address this. Through the CIIF, specific community projects have been successful in engaging SMEs as demonstrated by the Caring Estates Island South project, which is currently supported by 31 “caring organizations (NGOs)”; 55 “caring shops (SMEs)”; and 229 core volunteers. The Hong Kong Council of Social Services Company Caring Scheme has also targeted SMEs to engage with Third Sector Organisations in a number of priority CSR areas.

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Chapter 6 Reasons for Partnership

The TPP Study showed that the reasons for engaging in TPPs are multiple and diverse but there is usually some need for collaboration. They may be of a general nature applicable to all sectors, or sector or organizational specific. Ultimately, it is the opportunities and benefits that can be derived from partnership that drive the process. This Section provides a summary of why partnership happens and necessarily touches on some of the issues discussed elsewhere in this Report.

i. Achieving specific goals or outcomes: The primary reason for most partnerships is to achieve one or more specific outcomes, which may be goal or process oriented 53 which cannot be done without the other sectors as partners.

ii. Harnessing synergies and strengths: Through harnessing the complementary

strengths of other sectors and maximizing or optimizing resources, the overall objective is to deliver more than the sum total of the individual parts. Maximizing or optimizing resources through a partnership can sometimes provide the only means to achieve a certain outcome that is better and more innovative.

iii. Responding to government initiatives: The Private and Third Sectors do

respond to government initiatives and are more responsive to partnerships given an enabling environment, including availability of funding, compelling ideas, and specific events.

iv. Sharing responsibilities for the common good: Accepting that the Government

cannot take responsibility for social progress in every field, the three sectors can share responsibilities through partnership.

v. Resolving conflict: Through their consensus and team-based nature, TPPs are

often a way to get all three sectors together to discuss, resolve and collaborate on a common concern.

vi. Transferring skills: TPPs provide unique opportunities to transfer skills,

knowledge, experiences, and best practices across sectors, benefiting all three sectors as TPPs can help those involved gain perspectives, insights and useful lessons.

53 An example of a goal oriented outcome is to organize a specific event, and a process oriented outcome is to improve employees’ skills.

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vii. Driving business through CSR: For the Private Sector, fulfilling CSR objectives can be a driver for Business to get involved with the Third Sector and civil society through TPPs. Business drivers for CSR include: • Building a reputation with the Government and Third Sector; • Developing employees’ skills (leadership, communication, self-esteem, social,

networking skills etc) and broadening their perspectives; • Building institutional pride that employees are working for a socially

responsible company; • Using opportunities to enhance internal, intra-company interaction; • Building relationships with clients and stakeholders; • Raising awareness and educating about important issues.

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Chapter 7 Components of Effective Partnership

7.1 Introduction As TPPs vary greatly in nature, there is no single prescription for forming such partnerships. Responses from participants to the TPPs Study identified key components for successful partnerships. These components can be grouped into two branches: the Principles of Partnerships and Structural Requirements of Partnerships. These components are closely related and in many ways overlap since the actualization of principles requires structure in execution. This section examines these two branches of components while highlighting their specific importance.

Components of Partnership

Principles

Project Planning

Institutional Commitment

Partnership management

Monitoring and Feedback

Complementary Competencies & Skills

Building Mutual Trust

Identifying Interests, Priorities and Shared Goals

Being Open to Change

Exercising Good Governance

Practicing Good Communication

Structural Requirements

Figure 8 Components of Effective Partnership

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7.2 Principles of Partnership The Principles of Partnership are related and mutually reinforcing. They include building mutual trust, identifying shared goals, being open to change, exercising proper governance, and practicing good communication. Building Mutual Trust Trust is the basis of all successful relationships and was the most commonly referred-to principle in the focus groups and interviews. In TPPs, the partners from the three sectors often have very different and conflicting perspectives in how they see many issues as introduced in Chapter 1, which affects their approach to partnership. For example the Government, which is the policy-maker and regulator, is often regarded with suspicion by the Private and Third Sectors. They may see the Government’s interest in TPPs as a way to avoid or delegate responsibilities, such as to get the Private Sector to fund more social welfare services, or to co-opt NGOs in order to make them less critical of government policies.54 The Third Sector is often distrustful of the Private Sector, whose ultimate priority is seen to be the maximization of profits for its shareholders, and BPPs and TPPs are ways for companies to commercialize their social projects. The Private Sector sees the Third Sector as unworldly and ignorant of economics and commercial practices, including the compromises that often have to be made in business. Both the Government and Private Sector are frequently uncomfortable with the advocacy role of many Third Sector NGOs, which may oppose government policies or certain business interests. Chapter 8 provides a more in depth discussion of the differences in approach to a partnership by the three sectors. Building trust is an active process. To create and sustain an alliance requires reconciling their respective differences and expectations so that mutual trust and respect can develop despite differences. Even where a TPP is formed, the lack of trust is likely to lead to problem in the relationship, including failure in achieving the project’s goals. Trust and respect must arise from a mutual understanding of what each partner can bring to the project and a recognition that each party’s expectations will be met, otherwise there would be no point in collaboration.

54 The SWD argued emphatically and convincingly that it is in fact not possible for the Government to shirk its responsibility to be the provider of welfare in society. The sums needed are so huge that there is no possibility for the Private Sector to provide funding to substitute for the Government. TPPs’ role is to help explore innovation so that service delivery and/or sustained behavioural change may be achieved more effectively. Other measures were aimed at exploring the structural relationship between the Government and subvented organizations to improve efficiency of service delivery.

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Identifying Interests, Priorities and Shared Goals Each party to a TPP needs to recognize the respective interests and priorities of each partner and that these priorities may be very different from each other. The time frames of each partner may also be quite different. The Government and Third Sector often think in longer-term than the Private Sector. Nevertheless, the reason that there is a basis to create and sustain a TPP is that there are shared goals to pursue together over a specific period of time or for a specific outcome. It is likely to take time for the three sectors to recognize and understand the respective interests and priorities of each other, be clear about what their shared goals are, and what each party can and will bring to the partnership. Chapter 8 of this Report provides a longer discussion of these issues. Being Open to Change During the course of a partnership, circumstances may change that require the partners to consider whether and how they may adapt to new challenges. It may require fundamental reconsideration of the relationship and restructuring of the partnership. Examples include where one partner needs to pull out, where funding becomes drastically reduced at a certain point in time, or where there is competition to the project. The partners need to have an open attitude otherwise it may be extremely difficult to adapt to change. It may well be that the TPP needs to be dissolved, or dissolved and substantially reconstituted. In the case of the Hang Seng Table Tennis Academy, the Hang Seng Bank supported the development and promotion of table tennis through a development programme in 1991 together with the Leisure and Cultural Services Department, the Hong Kong Table Tennis Association and the former Sports Development Board. It was the first time that a specific programme had been developed for a single sport in Hong Kong. After a decade, the partners found that to expand the programme it was necessary to set-up a more structured and comprehensive approach and transform it altogether. Exercising Good Governance Transparency and accountability form the roots of good governance for all three sectors. In the case of the Government, the issue of good governance has to do with the political process as a whole, including the transparency of the policy-making process, the accountability of officials, and how the public participates in political decision-making. A transparent project is one which the decision-making process, reasons for the decisions, resources brought to the project and used for the project, project performance, and financial records and results are clearly stated and where all relevant documentation are accessible to the partners. Some TPPs will also need to allow the public to have access to relevant information due to the Government’s involvement. Furthermore, all the partners need to be held accountable for their decisions, conduct and the results of the TPP. As such, BPP and TPP projects require a high standard of

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project reporting, proper accounting of finances, and honest assessment of outcomes. A more in depth discussion is provided in Chapter 8. It would be helpful to integrate periodic evaluation requirements into a BPP and TPP at the outset when the project is first designed, In particular, such arrangements will be helpful to the Third Sector where NGOs are less used to producing evaluation and financial reports. Practicing Good Communication The ability to communicate openly and effectively on an on-going basis lies at the heart of all relationships. While it is widely recognized that open and effective communication among the partners in a TPP is vital for clearing up miscommunication, misunderstandings and wrong assumptions about each other, the ability to communicate well often proves to be quite difficult in practice. Furthermore, beyond communication among the partners, there is a need for communication about the project to others, including the stakeholders for each of the partners, as well as the media. Chapter 8 provides some ideas of how each of the sectors can be empowered to communicate better by recognizing that there are tools individuals and organizations can learn and use. 7.3. Structural Requirements of Partnerships In embracing the principles of partnership stated above, partnerships need to meet certain structural requirements to operate in an optimal manner. These include planning a project properly from the start, ensuring there is institutional commitment to the project, ensuring good partnership management, providing monitoring and feedback mechanisms, and recognizing that there are specific competencies and skills that will help build partnership and communicate the purpose of the partnership to other stakeholders. Project Planning It is vital for a BPP or TPP to be properly planned from the start, where all the partners work together to determine the project objectives, project design, timelines, desired outcomes, and how it should be implemented. Negotiation among the partners is an essential part of the process. A suggestion to help the negotiation and initial planning process is for the partners to outline their respective goals, areas of cooperation and to exchange their knowledge and experience in a Memorandum of Understanding so that they can refer to it as the negotiation and planning proceeds to ensure that each partner remains on track to achieve their goals in a manner that is appropriate to them. Another similar suggestion is for Terms of Reference to be stated so that they can be referred to during the negotiation and planning process.

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For certain types of partnerships (e.g. complex partnerships) the final arrangements could be stated formally in a legally binding document, even if the project commitments are stated to be achieved on a best endeavour basis. The drafting of the final agreement will take time, whereas the signing of a Memorandum of Understanding or to state Terms of Reference should take much less time but can provide the compass necessary for all the partners as they attempt to reach agreement on critical issues for the partnership. The project negotiation and planning stage is vital to create a sense of joint ownership and equality in the partnership. On-going planning and adjustments to plans are also necessary since circumstances may change and partners need to review them and where necessary negotiate how to meet new challenges. Institutional Commitment Commitment is essential for success of a partnership especially to ensure that there is support both from the top-level management of the partners as well as from the working level. Without top-level support it will be hard for working-level personnel to devote the time and resources needed for the project. Up and down the organization, there needs to be clarity on the value of the partnership to the organization as a whole so that personnel do not simply regard the responsibilities involved in making the project work as additional work for them. Without institutional commitments from each partner, the partnership may lose momentum with personnel and other changes. In the case of the Hong Kong Arts Festival, a number of the key corporate donors have long-term commitments to promote the arts in the city and have played an active part in identifying artists and programmes, as well as commissioning new works. Partnership Management Managing the partnership is also crucial to success. Signs of poor partnership management include being insensitive to understanding each others’ “languages”, corporate cultures, and operating styles. It is no surprise that the Government, Private and Third Sectors each have their own languages, cultures and styles. The Government as policy-maker and regulator in society is always focused on implementation, and can therefore appear to be prescriptive about a partnership. It has a longstanding tradition in assessing problems and taking decisions. The Government is a large bureaucracy and many of its ways of doing things often appear cumbersome and inflexible to the Private and Third Sectors. Government officials are also trained to exercise caution, which may come across to the other sectors as inflexibility. The Private Sector is used to working with commercial relationships where performance is judged in efficiency and financial terms. Business personnel may find both government bureaucracy and Third Sector cultures overly time-consuming. In cases where the Private Sector provides financial support to a partnership, it may continue to assess its success using a profitability

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yardstick that has little resonance with the Government and Third Sectors. Being sensitive to each others’ languages, culture and styles, and being non-judgmental about each other, are important in long-term partnership management. Furthermore, there may also be the added challenge of trying to deal with a domineering party. It can often be helpful to use neutral facilitators to assist the partners in improving mutual understanding although the interest in building understanding and trust over the long-term must be sustained by the partners themselves. Monitoring and Feedback To keep a project on track and to ensure there is proper accountability, some from of project monitoring and review system must be in place. Government-funded partnership projects usually incorporate monitoring and feedback into the funding requirements and often establish clear targets. For example, the SWD’s Intensive Employment Assistance Projects targets are set and linked to a bonus scheme where the targets are met or exceeded. Monitoring and feedback mechanisms typically involve periodic face-to-face presentations, submission of written progress reports, and review by the funding administrator. Each partnering organization may also have their own internal project review although the extent and nature of such practices vary greatly. In planning a partnership project, it would be good practice to build internal reviews by the partners into the process, as well as having mutual reviews. Having a proper review mechanism can help to enhance continuity as it will provide opportunities for the partners to exchange views about their relationship. Competencies and Skills While each partner in a TPP has specific skills and resources to contribute, a relationship works best when these are complementary to each other and when they are well-exploited through the partnership. Identifying the right partners from the start is therefore critical, as is a mutual appreciation of the specific competencies and resources that each can contribute. For example, the Sustainable & Renewable Energy Curriculum Pilot Project involves the Education and Manpower Bureau as it is responsible for school curriculum development, China Light and Power, an electric utility with expertise in energy and an interest in renewable energy, and the Hong Kong Association for Science and Mathematics Education, a network of teachers who can test the curriculum in class and provide valuable feedback to the other partners.55 In several TPPs, the Public Relations and Marketing teams of the Private Sector partners helped to promote the projects to the media, which the Government and Third Sector found useful since all the partners wanted their efforts noticed by the public. The Private Sector is also seen by the other sectors as having important competencies in various aspects of project management.

55 www.hkasme.org/us.htm and interview with CLP Power.

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Chapter 8 Discussion of Partnership Issues

8.1 Introduction Interaction between the three sectors is highly interdependent, yet is complex and full of potential pitfalls because of their differing perspectives, interests, values and cultures. While many TPPs in Hong Kong have arisen out of a desire to harness synergies and strengths and achieve outcomes that would otherwise have not been possible, in recent times Hong Kong has increasingly seen TPPs arise as a response to political confrontation rather than collaboration. While it is beyond the ambit of this Study to say much more than what has already been said in Chapter 1, or to explore Hong Kong politics specifically on the causes of confrontation,56 it is appropriate to note that TPPs born out of disagreement take more time to move from the confrontation mode to a solution-building mode. This chapter provides a more in depth discussion of various partnership issues and the relevant constraints raised in this Report, in particular in Chapters 1, 3, 4 and 7, in order to provide the foundation for the recommendations in Chapter 9. 8.2 Common Partnership Constraints Different Interests and Objectives Where the components of partnerships raised in Chapter 7 are missing in a partnership, there are likely to be larger problems in it. Partnership problems often stem from differences in the overall primary interests and objectives among the BPP or TPP partners. The three sectors have different inherent perspectives, interests, values, cultures, objectives and priorities:

i. The Government’s primary purpose is to govern through setting policies for the public interest, legislating where necessary, collecting taxes, creating regulatory environments, and keeping law and order. The Government is also the guardian of public assets, provider of public services, as well as acts in the public interest. Moreover, Government has highlighted social disharmony as an issue in response to continuing controversies over governance.57

56 For a general reference, see Lau Siu-Kai, The First Tung Chee-hwa Administration: The First Five Years of the Hong Kong Special Administrative Region, The Chinese University Press, 2002. 57 www.policyaddress.gov.hk/2005/eng/pdf/speech.pdf, see paragraphs 23-25.

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ii. The Private Sector’s primary purpose is to create shareholder value in the commercial environment. The Private Sector runs on principles of optimizing efficiency and maximizing profits within the legal boundaries set by the Government. The Private Sector believes in reducing government bureaucracy and to have more assets and services in private hands in the belief that this will generate greater efficiency and create more wealth for all.

iii. The Third Sector’s primary purpose lies within the realm of civil society to

promote social progress. As such, Third Sector actors do not always accept the status quo as seen from the perspectives of either the Government or Private Sector. Third Sector and civil society activists see the Government as having already transferred more power than it should have to serving corporate interests and that there is an urgent need to strike a better balance through improved governance. For there to be a lively Third Sector in any society, prerequisites include the enjoyment of basic freedoms and the ability to actively participate in public affairs.

The three sectors interact through the inter-flow and interaction of people, volition and resources:58

i. People: Government representatives serve on a variety of statutory bodies, public body boards and other committees where they have an ex officio role. Government officials do not serve on boards of purely commercial private corporations. Private Sector people serve on government bodies in an individual capacity but in some cases in a representative capacity usually representing a profession. They also serve on boards and act as volunteers for Third Sector Organizations. Third Sector representatives serve on government bodies but few appear to serve on the boards of Private Sector boards although public bodies and many large companies have extensive contacts a variety of Third Sector Organizations.

ii. Volition: The Government’s ability to set and implement policy as well as pass

laws has an impact throughout society, and therefore affects the Private and Third Sectors. The Private Sector has frequent contacts with the Government at all kinds of levels and those contacts present opportunities to lobby and influence government decision-making. While only a small percentage of Third Sector Organizations describe themselves as advocacy groups, many of them do exert considerable pressure on the Government and Private Sector in the course of doing their work including using the media as a vehicle to get their views across to the general public.

58 Study on the Third Sector Landscape in Hong Kong. Hong Kong: The Central Policy Unit, HKSAR Government, 2004. See www.info.gov.hk/cpu/english/new.htm.

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iii. Resources: Government funding directly determines the finances of some 40% of

Third Sector Organizations in Hong Kong, particularly those in the social welfare work. Government funding comes from taxation and other forms of public revenue generation and thus ultimately from the public. The Private Sector also provides resources for the Government through the levy of taxes, and for the Third Sector through direct funding and volunteering. The Third Sector provides a wide range of services and activities for the betterment of society as a whole.

In terms of building community and advancing social progress, each sector has much to contribute in a collaborative partnership where knowledge, expertise and resources are pooled. The greatest challenge for and strength of TPPs is harnessing the abilities of each sector to enable dialogue across the sectors, generate ideas, insights and perspectives to develop collaborative projects for the betterment of society.

Finding the Right Partner There is general agreement that finding the right partners is vital to the success of a partnership. While it may be easy to list what ideal characteristics partners should have, it is another matter altogether to find the right ones for a specific project. The Private and Third Sectors participants wanted the Government to publish the names and positions of personnel within departments that they could approach to discuss prospective BPPs and TPPs. 59 This can probably be done with modest re-organization within each department. There was also an interest in some sort of partnership information ‘clearing house’ to be developed to enable all sectors to identify suitable partners and know about the kind of projects that are being done. As such, many participants expressed the wish to see a TPP database to be created. The Private Sector wanted an easy way to obtain the information on the reliability and credibility of potential Third Sector partners. Likewise, the Third Sector wanted to have information in a user-friendly form about companies’ objectives, project interests and funding priorities so that they would know whom to approach with their ideas. While the Internet provides many opportunities for information dissemination, the difficulty of creating the right database for the purpose, managing and maintaining it, updating it regularly, and providing bilingual information should not be underestimated as the endeavour demands a strong vision on how it should be done, technical and design expertise, as well as substantial time, resources and manpower. It will also be difficult to have information on the reliability and credibility of organizations from any such database since someone needs to pass judgment on the organizations when they would not necessarily have the full information to make fair

59 The Government’s website provides names and contacts of responsible officers in many departments, and the Government up until 2002 used to publish an extremely useful directory. However, the information available from the website does not indicate whom to contact for partnership issues within the departments.

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and balanced comments. While it is understandable that all sectors want an easy way to identify suitable partners, it needs to be remembered that the requirement for potential partners to carry out due diligence on each other is an essential part of the process. It would be a mistake to think that an Internet information database most likely created by a non-profit organization could replace a rigorous due diligence process. Existing Consultative Processes The Government’s extensive advisory and consultative structure and system noted in Chapter 4 potentially provides multiple platforms for all sectors to come together to plan, develop policies, and through them identify BPPs and TPPs. However, the existing system needs to function more optimally for the full potential benefits to be reaped. This section provides a summary of the key points arising from this Study’s participants’ observations of areas that need to be addressed by the Government. A key problem at the root of many of the participants’ comments is the lack of trust in how the Government makes decisions. This may indicate that there is a significant gulf between the policy preferences of ministers and officials and the participants from the Private and Third Sectors.

i. Policy Consultation

• Lack of transparent mechanism in policy formulation: There appeared to be no mechanism (or lack of transparency as to what the mechanism is) whereby the public can find out about the assumptions and rationales behind policies. In a number of recent controversial cases, critics said there been no prior release of policy papers with sufficient detail to show that issues had been well-thought through by the Government. Furthermore, the public had no real opportunity to debate the policies after finding out about the Government’s underlying assumptions and rationale. There were also complaints that the Legislative Council had been by-passed in some cases.60

• Perception of government bowing to vested interests: Perhaps the most serious criticism of the Government from the Private and Third Sectors participants to this Study is that the Government succumbed to lobbying from powerful business interests. This created a perception that the Government catered to ‘Big Business’ over the interests of society.

• Public views not taken into account: While Private and Third Sector participants acknowledged that the Government has a vast number of

60 Controversial cases included the Cyberport, reclamation projects, the ‘Super Prison’, West Kowloon Cultural Development, and Hunghom Peninsula. The Study Team noted that all of these were projects that related to land policy. Indeed, the other three categories of concerns in this sub-section of the report are related and the participants’ observations often overlapped.

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consultative channels and considerable time appears to have been spent to collect public views, they were unsure how views that did not accord with the Government’s were treated. The common criticism was that opposing views were either ignored or dealt with in a cursory manner.

• Consultation fatigue: As touched on in the previous point, while the Government continued to organize consultation sessions, there was cynicism that more consultation would only consume the Private and Third Sectors’ time and might not consider their opinions. They felt that if the Government was going to continue to pursue policies that did not appear to be based on the wider views of society, consultation fatigue would set in.

ii. Structural issues of the consultative system: The Home Affairs Bureau’s

public consultation on how the consultative system is functioning provided useful insights for this Study. Together with the findings for this Study, the problems identified included:61

• Relevance: There is a need to review the relevance, number and terms

of reference of advisory and consultative bodies to ensure that they continue to serve an appropriate purpose.

• Performance monitoring: Thought needs to go into how government advisory and consultative bodies’ performance can be appropriately monitored, as well as that of the appointees to these bodies.

• Openness, transparency and accountability: Moreover, as these bodies are designed to assist the Government in policy making (even though supposedly in an advisory capacity), there is an interest for these bodies to be open and transparent in how they operate, what advice the appointees give the Government, and how these bodies may be more accountable for how they operate.

• Appointments: It is unclear how the Government makes appointments to these bodies that are designed to influence policy. The Home Affairs Bureau’s Central Personality Index and how it is used to identify appointees to the Government’s advisory system is seen to be shrouded in secrecy. There has been a longstanding concern that the Government more often than not appoints people who are in agreement with it rather that individuals who have different views, are

61 See also www.legco.gov.hk/yr03-04/english/panels/ha/papers/ha0213cb2-1263-03e.pdf

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competent, and willing to spend the time to serve.62 There is also a concern in recent years that the Government prefers to appoint those who are ‘politically correct’ rather than valuing political impartiality. By appointing ‘yes’ people in the majority, critics say that the Government loses the opportunity to use its advisory system to debate issues with people who have strong, considered views. Furthermore, certain sectors of society are ‘under-represented’ within the advisory system, such as ethnic minorities and women while certain types of individuals are ‘over-represented’, such as those with business and professional backgrounds.63 Moreover, those in social welfare, public health and education feel left out.

• Remuneration: There appears to be no consistency in how appointees are remunerated and it may be time for this to be reviewed across the board along with the other issues raised here.

Legislative and Regulatory Environment Chapter 3 has already provided an overview of the legislative and regulatory environment for BPPs and TPPs. This section provides a summary of the issues relating to Third Sector organisations (including but not limited to registered charities)64 that need to be reviewed and resolved by the Government to establish a more conducive environment for partnerships to develop: • Inadequacy of existing laws – There are questions over whether the Societies

Ordinance and Companies Ordinance remain suitable for the regulation of non-profits and charities that form the backbone of the Third Sector.

• Inconsistent regulation of Third Sector organisations – There are currently several ordinances governing the establishment and operation of Third Sector Organizations and numerous government departments that regulate them with virtually no

62 The Government has imposed a limit to not appoint the same people to more than 6 committees and for appointees to in general not serve more than 6 years. 63 The Government's current attempt to "appoint 600 persons from the middle class as well as the business, professional and academic fields [to give feedback] on political affairs and public issues in Hong Kong" is an indication of the breakdown of the appointment system. It shows the Government is at a loss as to what sort of people and who specifically to appoint into the advisory system in general. See www.legco.gov.hk/yr04-05/english/panels/ha/papers/ha1210cb2-342-3e.pdf for the most current details to date about its make-up. This exercise is however in line with goals set in the 2004 Policy Agenda: "We will strive to involved more middle class people in political affairs" (para 72) and "We will appoint more middle class managers and professionals into the Government's advisory boards and committees" (para 73). 64 While not all Third Sector Organizations are charities, the Private Sector often prefers partners that have charitable status

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coordination between them. Furthermore, there is often no particular expertise about non-profits and charities within the regulating departments.

• Varying financial disclosure requirements – The current laws regulating Third Sector organisations have different requirements for financial disclosure. Once charitable status (i.e. tax exemption) has been granted, there is limited monitoring of a charity’s financial accountability.

• Better use of donor tax deductions – Along with considering the above issues, there

is merit in also assessing whether donor tax deductions can be improved to encourage philanthropy.

Corporate Governance Corporate governance is often referred to as the ‘ethics’ of an organization. While there are different yet similar definitions of corporate governance used by local and international bodies, such as the OECD,65 and the SWD,66 there are three commonly accepted fundamental principles – openness, integrity, and accountability - that provide the foundation of all aspects of an organization’s structure, processes, management and controls, and reporting and disclosure practices. The Hong Kong Society of Accountants launched a corporate governance guide for public bodies in response to the evolving public expectations on public bodies although the Government has yet to endorse the guidelines.67

i. Low Awareness and Patchy Efforts:

Although the Third Sector does not appear to be too concerned with the limited disclosure requirements prescribed by the existing laws and regulations, Private Sector donors, funding intermediaries, and scholars doing work on corporate governance have highlighted concerns about the Third Sector Organizations’ overall governance including financial and operational transparency.68 Among government departments, the SWD has done the most to initiate education campaigns to improve the governance of subvented NGOs (Chapter 4

65 OECD Principles of Corporate Governance notes that corporate governance involves: “a set of relationships between an organization management, its board, its shareholders and other stakeholders” and “provides the structure through which the objectives or the organization are set, and the means of attaining those objectives and monitoring performance are determined”. 66 The SWD describe corporate governance as: “the set of principles and practices adopted by a Board – whether in the private or social welfare sector – that assure its key stakeholders that the organization is being managed effectively and with appropriate probity”. 67 Hong Kong Society of Accounts 2004, Corporate Governance for Public Bodies. 68 While the Private Sector in general is perceived to have better corporate governance than Third Sector Organizations, corporate wrongdoings, such as Enron’s, have rocked public trust in how companies operate.

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and Appendix D). The leadership that the SWD displays is not surprising as it provides a very large portion of funding to many social welfare organizations.69 Another perspective can be seen from the Ombudsman’s report in 2003 on the Government’s monitoring of charities’ fundraising. The report noted that the existing controls are confined to very limited types of fundraising activities (mainly Flag Days and lotteries) and do not cover all charitable organizations. As such, the monitoring mechanisms are partial, patchy, fragmented and therefore ineffective against irresponsible or unscrupulous fundraisers.70

It is perhaps understandable why the Government has not done more to require better monitoring of NGOs. Firstly, the notion of corporate governance is relatively new to Hong Kong. Secondly, there is an assumption that since most Third Sector Organizations do not operate for profit, governance issues are considered less relevant for them. 71 Thirdly, the Government may not have wanted to be perceived as desiring to ‘control’ NGOs through comprehensively reforming the monitoring system. With the amendment of the Societies Ordinance in 1997, there is continuing suspicion among NGOs that the Government wants to control them for political reasons.

ii. Third Sector Efforts:

With the abovementioned reasons as the backdrop, it is unsurprising that Third Sector Organizations on the whole have not developed strong self-regulatory mechanism.72 However, there have been useful steps taken that are likely to gradually filter through the Third Sector. These efforts include initiatives spearheaded by the Asia Pacific Philanthropy Consortium to improve governance and organizational effectiveness of the Third Sector. In 2003, its bi-annual conference focused on the theme of “Governance, Organizational Effectiveness, and the Non-profit Sector”. After the conference, it commissioned the Centre for Civil Society and Governance at the University of Hong Kong to undertake a research project looking into non-profits and their reporting and accountability processes. It is also noteworthy that the University of Hong Kong set-up the Centre in 2002 as a response to the growing interest in civil society development. The Centre, in partnership with the Hong Kong Council of Social

69 Appendix G provides the results to the Questionnaire sent to government departments for this Study, where governance and transparency rated relatively low on the list of barriers to partnering. 70 Ombudsman, 2003, www.ombudsman.gov.hk/english/06_direct_investigation/tindex07.html 71 Study on the Third Sector Landscape in Hong Kong. The Central Policy Unit, HKSAR Government, 2004. See www.info.gov.hk/cpu/english/new.htm. 72 See www.asianphilanthropy.org. “Memorandum and Articles of Association are prepared for fulfilling the relevant registration requirements, and very often they are ignored once the organization has been established”.

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Services, has established a Task Force on NGO Statistics and Social Auditing and a report is expected in 2005.73

The Media The media is often seen to be no help in the promotion of good social causes because successes are not seen as ‘news’ and thus remain unreported. There is also a fear of criticism by the media, particularly from the Private Sector, where even doing good may lead to questions about their intentions and other activities. Yet, the local media may be an untapped platform to assist BPP and TPP development. Operation Santa Claus is an example of how the media can help to promote social causes. This is an annual fundraising event organized by the South China Morning Post together with RTHK, the public broadcaster and a government department. The event includes the profiling of a number of local charities and how public donations will help their work. All three sectors can benefit by understanding how the media operates so that they can be better focused on how to position a project by giving it an interesting angle or story, as well as develop good relations with the media. Maintaining good media relations is not about having the ability to pay for advertising and public relations, a belief that exists among some Third Sector Organizations. Developing strong media skills requires setting it as a priority and investing time in the process. 8.3 Sectoral Partnership Constraints The following constraints were identified in relation to each of the three sectors entering into TPPs: The Government

i. Varying departmental approach: Some departments are actively exploring partnering opportunities, whereas others do not appear to be.

ii. Dealing with bureaucracy: The Government is a very large bureaucracy, and it

is itself constrained by operating within an institution that has extensive sets of practices to follow that often lead to slow response and inflexibility.

iii. Internal coordination and communication difficulties: Coordination within

departments and across departments can be difficult.

73 The Task Force on NGO Statistics and Auditing has two Working Groups working separately on statistics and auditing of NGOs.

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iv. Frequent personnel changes: The large number of changes within the civil service resulting from departmental transfers and retirements can create continuity problems.

v. Reduced human and financial resources: With budget cuts in recent years and a

freeze on hiring, there are fewer people and resources to draw upon to explore new initiatives.

vi. Lack of empowerment at working level: In a large bureaucracy where decision-

making power is concentrated at the top, working level officers often feel restricted in what they can do, yet they are the ones operating at the frontline of society and are therefore in regular contact with potential partners. Lower level officers have no ability to approve even the smallest financial commitments. Similarly, since officers do not feel empowered to take decisions when they are exploring, negotiating or participating in a partnership project, many feel unable to speak for the Government and thus they often prefer to speak ‘off the record’.

vii. Lack of ownership: With the issues mentioned above, it is not surprising that it

is often difficult to successfully identify and engage the right level of personnel with the appropriate authority to discuss partnership, and for working level staff to be proponents of projects, as the bureaucratic constraints make it harder for officers to take ownership of issues and causes without specific directions from their superiors.

viii. Over cautiousness: The fear of failure is high within bureaucracies and

departments. They are often unwilling to partner unless there is a prior examples of success, which deters new partnerships.

ix. Lack of effective review and feedback mechanisms: Projects involving partners

do not always have effective review mechanisms built-in to ensure honest and constructive feedback that include negative experiences, as these would give the impression of ‘failure’.

x. Worry over perception of ‘impartiality’: With widespread accusations that the

Government favours certain companies and organizations in the Private and Third Sectors, as well as the longstanding practice of not wanting to appear partial towards specific individuals and organizations, this can hinder partnerships developing for fear of allegations of ‘favouritism’.

xi. Control of agenda: As the Government generally has an agenda, there is a

tendency to influence the setting of the agenda when exploring and negotiating partnerships, which may make trust building more difficult.

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xii. Need for new skills: Officers are trained in ‘command and control’ skills appropriate for a large top-down bureaucracy and not in mediation and facilitation skills to ensure effective dialogue and dealing with conflicts.

The Private Sector

i. Lack of acceptance of responsibility: While the Private Sector is willing to play some part in social issues, it does not feel that it is responsible for social development, which it sees as the responsibility of the Government.

ii. Lacking of understanding of Third Sector: The Private Sector does not know

how to partner with the Third Sector and lacks understanding of and experience in Third Sector interests and needs. Traditional relationships built on cash donation appear no longer to be sufficient but the Private Sector is unsure about what the new dynamics in society are.

iii. Funding: Many companies consider providing donations to be a form of

partnership.

iv. Fear of further regulation: The Private Sector worries that the new dynamics in society will lead to further government regulation, which could result in greater inefficiency and higher operating business costs.74

v. Motivation: Private Sector motivation in partnering is often the result of one

committed individual within senior management who wants to pursue a social goal rather than the company having committed overarching corporate policies to do so.

vi. Management support: Partnering with the Third Sector and the Government is a

function of having top management approval and support.

vii. Term of commitment: Private Sector partners usually have shorter term interests in a project than either the Government or Third Sector which can inhibit the development of long-term partnerships.

74 For example, the Private Sector has been concerned about such social developments as emphasis on anti-discrimination, polluter pays, environmental clean-ups, labour, and political reform related issues.

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The Third Sector

i. Funding: The Third Sector considers the lack or insufficiency of funding to be its key constraint, and this is especially true for the vast numbers of small NGOs.75 Funding difficulties vary depending on whether the organizations are subvented or privately funded. Subvented organizations have been facing budget cuts,76 and the new competitive bidding system has hindered the sharing of ideas and experience. 77 Matching funds can be problematic as the Government requirements are built into the funding process and some NGOs feel they cannot meet them and so cannot even make first base on the project.78 Different donors have their specific demands for documentation to show how the money has been spent. NGOs feel they must spend a lot of time to meet many separate requirements.

ii. Donors’ outdated volunteer expectation: There is an outdated expectation that

non profit work should be done at no charge. Thus, donors will pay for out of pocket costs but not staff costs. This practice devalues Third Sector knowledge and experience.79

iii. Reliance on volunteers: While volunteers are extremely important to Third

Sector Organizations, it is often hard to rely on volunteers to do work that ought to be done by full-time staff. Managing volunteers is a hard task and many NGOs do not know how or have sufficient time to do it well.

iv. Leadership and management: The funding shortfall often makes it hard for

NGOs to recruit people with professional backgrounds. NGOs therefore rely

75 See Study on the Third Sector Landscape in Hong Kong. The Central Policy Unit HKSAR Government, 2004. See www.info.gov.hk/cpu/english/new.htm. As the study was conducted in 2002 during a time following several years of economic downturn and deflation, many NGOs were concerned about funding, with Civic Associations, Advocacy and Politics sub-sectors, and some in the Law/Legal Services, and Environment sub-sectors suffering the most. By virtue of their advocacy work, many of these NGOs avoid, or are excluded, from regular funding support from the Government or companies. 76 Many NGOs, especially those in the education, health and welfare sectors, are heavily reliant on government funding. They feel that they are becoming increasingly indistinguishable from the Government and its goals. Some scholars feel that while the welfare sector used to be highly innovative, independent in service development, and independent in its financial management, the fact that they rely on the Government for as much as 90% of their funding has made them an extension of the bureaucracy See www.asianphilanthropy.org. 77 See Chan KT, Chan CS, Hung SY, Mak WYS. Welfare. Chapter 7 p. 199-222, in Study on the Third Sector Landscape in Hong Kong. CPU HKSAR Government, 2004. See www.info.gov.hk/cpu/english/new.htm. 78 Some matching funds require that a percentage of the matched fund is evident in the project account before the Government will disburse funds, so that when an NGO is short of capital, it is unable to contribute the funds to start the project rolling. 79 Some government funds do not allow allocation for staff time, or cap staff costs at 25% of budgets.

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heavily on commitment to the cause over managerial and professional competence. This has a direct impact on NGOs’ ability to develop the right governance structure, show strong leadership, manage finances, negotiate partnerships and conduct management reviews. NGOs’ staff usually work long hours and extremely hard. Their workload can lead to ‘burn out’.

v. Inability to communicate effectively: In particular, the Third and Private Sectors

speak a very different language, where the former focuses on values and desired outcomes and the latter on process and efficiency.80

vi. Insufficient recognition of partners: Third Sector Organizations do not always

use their media and information channels to acknowledge partners and donors sufficiently.

80 For example, an NGO may speak in terms of the desired outcome, such as the need to conserve a valuable ecological site; and a company may speak in terms of process, such as what to do to minimize environmental damage.

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Chapter 9 Conclusions and Policy Recommendations

9.1 Introduction The Policy Recommendations for the HKSAR Government advise on developing partnerships with the Private and Third Sectors. They arise from reflections of this Study’s findings and observations. The recommendations are grouped into FIVE interrelated categories: developing trust, improving the regulatory environment, reviewing Government funds, increasing capacity and understanding the context of global interests. These categories reflect the components of effective partnership discussed in Chapter 7, as well as ideas on how to free the constraints to partnership discussed in Chapter 8. 9.2 Developing Trust with Society i. Clarify policy intentions This Study shows that there is a widespread suspicion particularly within the Third Sector that the Government’s attempt to promote TPPs is to further reduce public expenditure in social services provision. 81 This perception was reinforced by the Government’s restructuring of its funding commitments to subvented organizations. The new competition-based scheme to contract services out to the lowest bidder to provide social services has in some ways weakened the social welfare providers’ trust in the Government and has the potential to weaken their longstanding relationship. There is in fact considerable frustration within the social welfare sector over these recent changes.

While these perceptions may be incorrect, the fact that they exist and are pervasive among the Third Sector highlights the need for the Government to clarify its purpose much more clearly. This will require the Government to consider how it relates to and is involved with society as a whole, and the specific objectives the Government wants to achieve. The widespread suspicion of the Government’s intention also indicates that the Government as a whole may not have managed the issues optimally and extensively enough. To stem the tide of frustration and distrust, the Government may wish review all the statements it has made at all levels of the Government and documents it has 81 The SWD argued emphatically and convincingly that it is in fact not possible for the Government to shirk its responsibility to be the provider of welfare in society. The sums needed are so huge that there is no possibility for the Private Sector to provide funding to substitute for the Government. TPPs’ role is to help explore innovation so that service delivery and/or sustained behavioural change may be achieved more effectively. Other measures were aimed at exploring the structural relationship between the Government and subvented organizations to improve efficiency of service delivery.

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published relating to partnerships, including those relating to the social welfare sector in particular, to assess whether they can be reframed more appropriately. ii. Provide active and systematic access to information The Government can improve operational transparency and good governance practices both within the administration as well as with the public by ensuring that policy-related documents, supporting research, and advice from consultative bodies are easily available through the Government’s website. In terms of developing trust, the Government may wish to establish a standard policy for the timely release of commissioned studies, research and consultancies using public funds. The purpose of setting such a practice is to enable the Government to capture reactions and ideas from a wide number of sources before it makes up its mind on a policy, what needs to be done to manage the ‘issues’ involved and how to implement the policy. It is clear from recent trends in society that stakeholders are spending considerable time reading government information and willing to give substantial feedback to the Government. This phenomenon is an indicator of an active civil sector and is a significant public resource that the Government can tap.

iii. Use consultative system more optimally to achieve different levels of

partnership

The recognition of three levels of partnership assist in defining what TPPs can achieve in society. As indicated in Chapter 2, Level 1 consultative partnerships involve initiating relationships and information exchange. Level 2 collaborative partnerships focus on the joint implementation of specific projects, and Level 3 strategic partnerships represent the highest form of partnership which engage the three sectors in long term collaboration at a strategic level. The Government’s extensive advisory and consultative network has the potential to function much more optimally to help build trust and create a sense of collaboration between civil society and the Government, and thus be an important part of identifying and generating ideas for partnership. TPPs can provide a useful framework through which the Government explores policies, strategies and projects. In today’s world, where civil society is well-educated, inquisitive and politically more active than in previous generations, the consultative systems needs to be ‘de-politicized’ because its purpose should be to capture the diversity of views and opinions and generate new perspectives and policies rather than to buttress legitimacy of a bygone colonial administration.82 As a Special Administrative Region of the People’s Republic of

82 Hong Kong’s consultative system was developed during colonial times as a substitute for democracy and the system was used to generate the semblance of public support for the colonial administration and its policies. Today, government consultation and its advisory system are continuously criticized for being

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China, Hong Kong is now going through a journey to redefine its political system towards the ‘ultimate goal’ of ‘universal suffrage’,83 and as such, the raison d’etre of the consultative system needs to be re-articulated to match new developments. In terms of building social capital, solving societal problems and realising the goal of a progressive society, the Government can further take this opportunity to engage in effective strategic partnerships through the consultative system. No successful strategic partnerships were identified during the course of this study, however a number of partnerships (e.g. the Harbour-front Enhancement Committee, the Council for Sustainable Development), were identified as having the potential to evolve into effective strategic partnerships, if their structure and development were to adopt the principles of effective partnership (Chapter 7). iv. Establish a Policy to open meetings to consultative bodies as far as possible There is room for the Government to also consider how the operation of the consultative system can be made more transparent. Various attempts had been made in the mid-1990s to enable advisory bodies to conduct open meetings. Today, some of the bodies make provision for their meetings to be open to the public but there is as yet no standardized policy for open meetings. 84 Thinking through how to create greater openness and transparency through open meetings will likely assist the Government to work through trust building issues which accord with today’s social needs and expectations.85 v. Cast a wider net to identify appointees and stakeholders In revamping and ‘de-politicizing’ the Government’s advisory and consultative system, one important aspect is to ensure that appointments to the various bodies are aimed at capturing the diversity of views and opinions, as well as providing the Government with well-considered perspectives, ideas and arguments from all sides of the social, economic and political spectrum. If the consultative system is no longer being used to buttress the Government’s political legitimacy but to built trust and a sense of collaboration between the Government and civil society, then the Government needs to

‘politicized’ because it is perceived that the HKSAR Government is using these bodies to buttress its legitimacy. Whether issues of political legitimacy can be solved using colonial methods is doubtful. 83 Basic Law, Articles 45 and 68. 84 The recent amendments to the Town Planning Ordinance allows for some of the Town Planning Board’s meetings to be opened. The rationale of enabling a more open and transparent mechanism in town planning can be applied across the board for government advisory and consultative bodies. The new measure for open meetings in town planning is expected to be implemented within 2005. 85 In the past, the Government hesitated to make open meetings the norm because it was afraid that it would make meetings more unwieldy and inefficient, and that certain members might be tempted to ‘grandstand’ with a public audience. Thus, open meetings are the exception rather than the rule today. See www.legco.gov.hk/yr96-97/english/panels/ha/rasb/minutes/ra300996

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cast its net differently and focus on diversity, representation, 86 experience and competence when identifying appointees to its consultative system.

While the advisory and consultative network is potentially a breeding ground for ideas and projects for BPPs and TPPs, partnerships not only have the potential for generating new perspectives and policies for the Government but the project stakeholders provide pools of potential appointees to the advisory and consultative network. Thus, partnerships enable the Government to expand its connections into civil society. 9.3 The Regulatory Environment vi. Review and improve the legal and regulatory framework for Third Sector The HKSAR Government needs to review the current legal and regulatory framework for non-profit Third Sector Organizations. The respective registration and incorporation options most commonly used by NGOs available via the Societies Ordinance and Companies Ordinance respectively appear inadequate to address the proper functioning of non-profit enterprises. Any such review would necessarily address constraints of the sectors in meeting any new requirements.. vii. Consider a long-term mechanism that can help Third Sector organisations to

develop and to recognise good partnership projects

With Third Sector Organizations registered under two different ordinances and overseen by either the Police (societies) or Companies Registry (companies), and the Inland Revenue Department deciding on the grant of charitable status, there is no public body that can focus on the needs of the Third Sector. The CPU may wish to consider commissioning a study to look specifically at issues raised above, as well as whether a special charities/Third Sector body should be set-up to help it develop. Such a body may be more effective in offering courses to NGOs to help them gain the many skill sets that are required to manage an organization.87 Having such a body should also make it easier for good BPPs, TPPs and other social initiatives to be given recognition through annual awards.

86 “Representation” in this context means if an appointment is to represent a certain sector or organization, the person appointed must be named in his or her capacity as a representative, not as an individual. 87 The Private Sector (Creative Initiatives) has already shown an interest to help the Third Sector improve on their management capabilities.

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9.4 Government Funding Schemes viii. Consider commissioning a study to review the effectiveness of government

funds

The HKSAR Government’s funding schemes provide an opportunity for and in some cases actively encourage BPPs and/or TPPs. In order to maximise effectiveness of the schemes and especially to overcome the difficulties experienced by Third Sector applicants in accessing the funds, the Government may wish to consider commissioning a comprehensive review of all such schemes. Such a review should address the different types of funding schemes (e.g. matching funds), the structure of the funds, and specifically the conditional requirements often placed on the remittance of monies. It should also address the practical constraints encountered by the Third sector in fulfilling theses requirements. 9.5 Increasing Capacity Increasing capacity means the process and steps that enable individuals, groups and/or organizations to obtain new perspectives and skills to do what they do at a higher qualitative level. Capacity building is the development of an organization’s core skills, capabilities and capacities – such as leadership,88 management, finance, fundraising, programming, project evaluation, negotiation, running meetings, mediation and conflict resolution skills – in order to increase the organization’s effectiveness and sustainability. ix. Developing Skills

• Meetings Management: In general, all three sectors can benefit greatly by developing a number of basic skills that can help their individuals and organizations to operate more effectively, one of the most important of which is learning how to design, manage and facilitate meetings. Any gathering of two or more people is a meeting. Effective meetings are those where dialogue takes place that enhances understanding, cross-fertilizes ideas, and outcomes achieved. Meetings are necessary to explore issues and get things done. Thus, trust building is a consequence of meetings. Successful meetings make the participants understand and respect each other even if they do not agree on issues. However, many meetings drag on, becoming arenas for conflict that do not lead to greater understanding; no constructive outcome is achieved, and distrust is further entrenched.

88 This Study found that there was some interest in using short-term secondments to enhance cross-fertilization among the three sectors but the degree of difficult appears to be quite high. There exists a precedent in the Civil Service Bureau, which conducts a program in which senior administrators from the Private and Third Sectors are seconded to various government departments for two years and then return to their 0 or academic posts.

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Specific skills can be learned to help internal and external meetings run smoothly so that the objectives for calling those gatherings can be achieved. Such skills are now considered basic leadership skills and are being used by those who design and manage meetings. 89 Furthermore, by encouraging such skills discussed above to be learned by the Private and Third Sectors, there will be a greater all-round awareness of how to participate at meetings. The roles of the convenor/chair, presenters and other participants will be clear, as well as at which of the exploratory, negotiation, debating and consensus-building stages the meeting is going through.90 This is an area where the Government and Private Sector can collaborate to fund training for all three sectors.

• Presentation and Media Management, Dialogue and Facilitation Skills: Many

government departments, as well as the Civil Service Training Development Institute (CSTDI), already offer officers the opportunity to attend presentation and media training courses using external trainers. The courses so far appear to be introductory and general in nature. After having attended these courses, the Government may wish to consider what will be the next tier of skills to attain. It may wish to encourage the running of internal training courses on dialogue, communication, mediation and facilitation skills as well as presentation and media management targeted at different levels of the bureaucracy. This may involve designing departmental as well as CSTDI courses to provide opportunities for officers to improve their capacity skills, which will also be good self-development and leadership training.

• Issue Management: Issue management is a separate though related skill to

presentation and media management that additionally addresses the strategy, analysis and overall management of issues. The current training courses (as discussed above) may not include issue management training. The Government may wish to ask the departments to include issue management skills in their training courses.

• Internal communication: The Efficiency Unit might also be an appropriate

department to use the help of neutral facilitators to begin inter-departmental exploration on how to set up a series of internal dialogues to improve interdepartmental communication. This will also address consistency issues between departments.

89 See An Introduction to Sustainability Tools: Using effective public dialogue to improve government-civil sector relations Christine Loh, March 2002; Promoting Sustainability Tools: Connecting Thinking and Dialogue Skills, Christine Loh, January 2003; and Mark Gerzon, Leaders Beyond Borders – How to Live and Lead in Times of Conflict, Chapter 3, Dialogue, 2003. 90 Several federal governments, such as Germany’s, provide training in meeting management and other such tools.

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• Governance and Enterprise skills: The Government may also wish to consider

encouraging Private Sector donors to continue to create NGOs that provide the skills that enable Third Sector organisations to obtain basic governance and enterprise skills (including keeping proper accounts and decision-making records, fundraising, initiating partnerships, project and issues management, media management, writing business plans)

x. Cross-fertilisation of skills and ideas The Government may further create opportunities for civil servants to spend time working in the Private and Third Sectors on short-term secondments. The opportunities will give officials a deeper understanding of how the other sectors work. Private Sector individuals can also be brought into the Government on a short-term basis for greater fertilization. xi. Government volunteerism The Private Sector is beginning to use employee volunteerism as a way to be a good employer, good corporate citizen, build corporate brands and enable employees to exercise leadership skills outside their place of work. Government officials already give a lot of their time outside working hours to community activities either playing a supporting function, or a BPP/ TPP coordination role. Various departments also put together their own volunteer teams to perform community work. The Government may wish to consider the extensiveness of its volunteering time so that officers not only see this aspect as a part of their civic duties but also as leadership training with the appropriate recognition being given within the Government. xii. Guidelines to partnering A user-friendly guide on how to structure BPPs/TPPs may be useful to all sectors. The guide can in fact be produced by any one of the three sectors. As the Private and Third Sectors will have greater flexibility to produce such a guide, the Government may encourage its production by giving personnel time to contribute to it.91 Guidelines can also be similarly produced to provide templates for Memoranda of Associations, Terms of Reference, and legal documentation (see Chapter 7).

91 Experience may be drawn from the Efficiency Unit’s development of guidelines for PPPs (Section 4.4). Those guidelines included examples of areas where PPPs may be appropriate, forms which PPPs may take, processes to develop PPPs, benefits of being involved and the roles which the different parties may take.

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xiii. Clearing House/Information Bank

All three sectors recognize it is desirable that best practice sharing to be made available in easily accessible and digestible forms. Information technology and the Internet provide useful information about BPPs, TPPs and the Third Sector, as well as serve as a databank and clearing house for interested parties to search for what they need. A number of overseas countries with more developed public and private funding for civil society have developed useful portals to provide extensive information relating to relevant laws and regulations, grant makers, foundations, fundraising etc. 92 The Government has a role to play to encourage the development of a similar portal for Hong Kong, including giving a grant to help start the process. However, the recurrent operating resources needed to keep the portal updated, information verified and properly managed will be substantial, as will be the need for experienced people to create and operate it. Any such portal will not be a substitute for the due diligence that the parties to BPPs and TPPs need to carry out prior to entering into a partnership. xiv. Government Contacts for Partnership Issues Difficulties encountered in contacting the relevant officers in Government in relation to partnership issues should be addressed by making available the names and contacts of responsible officers dealing with partnership activities. This could simply involve enhancing the Government website to include such contacts. 9.6 The Context of Global Interests in Partnering and Partnership xv. Understanding global issues such as environmental and social crises

The sense of disillusionment within civil society not only in Hong Kong but also in many parts of the world with governments, politics, politicians, corporations and business is very real. The Government and its constituent parts need to understand the relevant issues better.93. In the context of partnerships, these issues can be drivers and provide opportunities for BPPs and TPPs

92 Guidestar is a US information portal which has advice for donors, charities and matchmakers www.guidestar.org. Guidestar UK received seed funding from foundations and a 3-year development grant from the British Treasury to develop a similar portal that is expected to launch in 2005 www.guidestar.org.uk 93 That many multinational corporations now have special internal programmes for their executives to better understand various issues leading to the deep sense of alienation and disillusionment in global society is evidence that the Private Sector is no longer ignoring it.

62

The global perspective also affects Hong Kong because the HKSAR Government participates in global forums, 94 many Hong Kong companies are global in their operation, and Hong Kong’s Third Sector has links with their global counterparts. The Private Sector, particularly MNCs, has already started to pay attention to the various global issues noted in Chapter 1 of this Report. Many Third Sector Organizations are immersed in them and have been for some time. The Government may wish to do likewise. The HKSAR Government needs to consider how it can help officers understand the various ‘global’ issues that the Private and Third Sectors are engaged with. The Government has used creative methods to engage a large number of officers and these can be replicated and further developed into continuous learning programmes for the Government at many levels within the civil service. 95 The year 2005 may offer an exceptional opportunity for heightened discussion and debate on ‘globalization’ issues, with the WTO Ministerial Meeting being hosted in Hong Kong. It is recommended that the HKSAR Government gives urgent attention to what opportunities can be generated to use TPPs as a forum for discussion, as time is of the essence.96 The earthquake and subsequent tsunami that swept across Southeast Asia and South Asia in December 2004, being the worst natural disaster in living memory, calls for reconstruction work in many countries for a long time to come. Like in other parts of the world, the Hong Kong public responded to the disaster with donations and offer of other resources. The longer-term needs of the region provide many opportunities for TPPs organized within Hong Kong to provide assistance outside the Territory.97 Locally, there are many issues on the political agenda that provide the opportunity for and would benefit greatly from TPPs. Immediate examples include Hong Kong’s pervasive air pollution problem and the current government proposals for developing West Kowloon as a cultural Hub. 94 Hong Kong will play host to in 2005 to the WTO Ministerial Conference, at which there are likely to be local and global NGOs activities. 95 Examples include the Efficiency Unit’s Management Forum in 2002; and the Sustainable Development Unit’s Sustainable Development Workshops in 2003-2004. 96 Various departments are already engaged in thinking about their roles for the 2005 WTO Ministerial Meeting. For example, those in trade will be preparing for Hong Kong to host the occasion, the Police will prepare for security arrangements as well as public demonstrations etc. The recommendation in this section proposes that 2005 also provides a timely opportunity for the underlying issues of globalization to be discussed widely in Hong Kong in a manner that engages all three sectors. 97 In light of the impact of the Asian tsunami, five non-government organizations including Oxfam Hong Kong, SynergyNet, Hong Kong People's Council for Sustainable Development, Hong Kong Policy Research Institute and Civic Exchange held a forum for opinion leaders to reflect on the impact and lessons of this catastrophe as well as Hong Kong’s response and role in this globalizing world where even disasters seem to have taken on a global scale.

Appendices

Contents

Page A Study Methodology A1 B History of the Third Sector in Hong Kong A22 C Legal Framework of the Third Sector in Hong Kong A25 D Summary of Government Initiatives to Improve Governance in the Third

Sector A28

E Results of the Government Questionnaire A29 F Key Findings of the Corporate Philanthropy Study A50 G Focus Group Notes A53 H Interviews – Summary of Issues A80 I Examples of TPPs in Hong Kong A90

Appendix A Study Methodology

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Study Methodology This appendix contains six sections detailing the methodology of the study. These six sections are outlined below. A1: Task 1 – Defining TPPs A2: Task II – Research and Analysis

A2.1: Objectives and Scope of Research and Analysis

A2.2: Sub-task A: Literature Review

A2.3: Sub-task B: Questionnaire for Government Departments

A2.4: Sub-task C: Interviews

A2.5: Examples of TPPs

A3: Task III – Focus Groups A4: Questionnaire for Government Departments A5: Interview Questionnaire A6: List of Organisations Which Participated in the Study A1: Task I – Defining TPPs At the outset of the study it was determined that an initial working definition of TPPs was required to define what forms of engagement constitute partnerships for inclusion in the study. This working definition was to be refined appropriately in line with the study findings. A2: Task II – Research and Analysis A2.1 Objectives and Scope of Research and Analysis Task II Research and Analysis had five objectives:

i. Identify the extent and nature of tri-partite partnerships (TPPs) in Hong Kong;

ii. Facilitate further understanding of the background, nature and characteristics of the Third Sector in the context of partnerships, and in particular Private Sector and Government interaction with the Third Sector in Hong Kong;

iii. Consolidate existing information in terms of a macro description of the Third Sector in Hong Kong, to provide an account of the current legal and regulatory structure of the Third Sector in terms of flexibility for different types of groups, governance structure, transparency and financial accountability;

Appendix A Study Methodology

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iv. Gain an understanding of the financial contribution of different organisations to the Third Sector; and

v. Assist in both identifying organisations and government departments to participate in the focus groups discussions, as well as designing the focus group programme and agenda for in-depth examination of the issues under Task III of the study.

These objectives were addressed according to three sub-tasks:

i. Sub-task A: Literature Review; ii. Sub-task B: Survey of Government departments; and

iii. Sub-task C: Interviews. A2.2 Sub-task A: Literature Review The Contractor undertook a combination of web-based research, review and analysis of local and international studies, papers, and conference proceedings. Examples of these are listed below:

• CPU’s Study on the Role of Companies in the Development of a Vibrant Third Sector in Hong Kong1 (referred to as the Corporate Philanthropy Report)

• CPU’s Study on the Third Sector Landscape in Hong Kong 2 (referred to as the Landscape Report)

• CPU’s Study (Draft Final Report) on Benchmarking TPPs from an International Perspective3, (referred to as the International Benchmarking Report)

• Proceedings from the CPU’s conference Tri-partite Partnership Among Government, Business and the Third Sector, July 2004

• Proceedings from the Annual Asia Pacific Philanthropy Consortium’s Conference on Governance, Organisational Effectiveness, and the Non-Profit Sector, September 2003

• Proceedings from the Health Welfare and Food Bureau’s Conference on Social Investment and Tri-partite partnerships, April 2004

• Proceedings from the Health Welfare and Food Bureau’s Annual Community Investment and Inclusion Fund (CIIF) 2nd Annual Forum; Enhancing Social Capital – Building Momentum, October 2004

• Proceedings from the Health Welfare and Food Bureau’s Workshop on its Strategic Framework for Social Welfare – including Draft Discussion Paper, September 2004

• CIIF, Enhancing Social Capital, 2004-2004 Performance and Reflections

• Business Partners for Development – Putting Partnership to Work – Tri-sector Partnership Results and Recommendations, 1998-2001

1 The Role of Companies in the Development of a Vibrant Third Sector in Hong Kong published in 2002. 2 Study on the Third Sector Landscape in Hong Kong, published in 2004 3 A study on Tri-partite Partnership: Benchmarking Study from an International Perspective, Draft Final Report (unpublished).

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• Review of the existing laws and regulatory regimes relating to Third Sector Organisations in Hong Kong including:

- Companies Ordinance (Cap.32)

- Co-operative Societies Ordinance (Cap.33)

- Societies Ordinance (Cap.151)

- Trade Unions Ordinance (Cap.332)

- Inland Revenue Ordinance (Cap.112) Section 88 – tax exemption for charities

• Various guidance notes from the Social Welfare Department in relation to internal financial controls for charitable institutions, corporate governance etc.

• Review of relevant literature on Corporate Governance including the newly released “Corporate Governance for Public Bodies – A Basic Framework” (2004), Hong Kong Institute of Certified Public Accountants.

In conjunction with issues raised in the interviews, the findings of the literature review further assisted in the design of the focus groups. A2.3 Sub-task B: Questionnaire for Government Departments Rationale for the Questionnaire Since there are a finite number of government departments, and government involvement is by definition a requisite component of a TPP, the Government Questionnaire was intended to identify the overall landscape of TPPs in Hong Kong, i.e. showing the frequency, types and nature of partnering activities. Unlike the Private and Third Sectors, the Government has not been extensively researched nor engaged in relation to its interaction with the Third Sector and/or Private Sector. Consequently the Questionnaire was also designed to research Government’s role in, and perception of, partnering with the other two sectors (bi-partite and tri-partite), including explanations as to the factors which may act as barriers to partnering. Design of the Questionnaire The scope of the questionnaire was limited to government departments and bureaus. Government-related organisations were not included given the recognised time constraints4 and the main focus being to solicit Government views5. To collect information on previous and existing TPPs, the Questionnaire was designed to gather data from the time period 1st July 2002 to date. For planned and potential TPPs, the

4 CPU further recommended that the questionnaire be restricted to government departments only, to in part reduce complexity. 5 Note: it is not clear whether all of the Government related organisations were surveyed in the Third Sector Landscape or Corporate Philanthropy studies, due to unavailability of relevant information. It is therefore possible that these organisations may have been excluded from both studies.

Appendix A Study Methodology

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Questionnaire covers the next four years up to and including 2008. The former time period selected, beginning 1st July 2002, marks the commencement of the Principal Officer Accountability System (POAS). It is held that this change in government structure fundamentally altered Government’s relationship with civil society and therefore likely altered Government’s approach to partnering. The latter time period was selected on the basis that i) this was considered to be a reasonable planning period for government departments, and ii) it coincides with the next Legco elections in 2008. Another consideration incorporated into the design of the Questionnaire was the likelihood that much of Government’s involvement in partnerships is likely to be through funding rather than at a participatory level involving the key characteristics of TPPs, e.g. shared responsibility, decision-making, etc. Therefore, in order to gain a more precise view of the nature of partnerships and to increase awareness and consideration of the different levels of involvement, the questionnaire requires that for each form of partnership, respondents indicate whether a partnership activity involves:

i. funding only;

ii. participation only; or

iii. both participation and funding. In addition to providing an overview of previous, existing and potential partnerships (both tri-partite and bi-partite) within the time-frames specified, the questionnaire further assisted in the identification of:

i. additional candidates for Tier I interviews;

ii. potential case studies of TPPs; and

iii. Government representatives for participation in the focus groups. Questionnaires were sent to the 53 government departments plus the Education and Manpower Bureau (EMB) and the Sustainable Development Unit. A2.4 Sub-task C: Interviews Interviews were conducted with representatives of organisations from all three sectors. Interviewees were selected on the basis of their knowledge and/or experience of TPPs, either through direct experience or other avenues such as conducting relevant research. The overall purpose of the interviews was to build on the information contained in the CPU’s Third Sector Landscape Report and Corporate Philanthropy Report, and to identify each sector’s experiences and issues in partnering, with a view to selecting representative case studies as well as candidates for participation in the focus groups. The interviews also aimed at obtaining an overview of Governments practice and policy in fostering TPPs as well as identifying potential case studies.

Appendix A Study Methodology

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In relation to the Business Sector, the Contractor further conducted a number of interviews both with larger, and small to medium-sized enterprises (SMEs) which have been involved in partnering to determine what key factors enable or inhibit such involvement. Finally, in order to gain an understanding of the regulatory environment governing Third Sector organisations, the Contractor conducted interviews with the Inland Revenue Department, Police Department (Societies Officer), Companies Registry, Labour Department (Registrar of Trade Unions) and the Agriculture, Fisheries and Conservation Department (Registrar of Cooperative Societies). Through these interviews the Contractor gained insight into the different roles and responsibilities of each regulatory body and the resultant monitoring coverage, plus education and support for the different types of Third Sector organisations. Utilising available research, interviews and focus groups discussions, the Contractor also sought to gain an understanding of the concerns relating to governance, financial accountability and transparency from the perspective of the business and funding community, and also from the Government’s regulatory perspective. The interviews provide qualitative information only. To this end, questionnaires (Appendix A4) were drafted to guide the interviewers in questioning and discussion. Both the issues raised during the interviews and the information gained from the Government Questionnaire were considered in the design of the focus groups. A list of organisations interviewed is included in Appendix A6.1. A2.5 Examples of TPPs Through the literature review, the questionnaire for government departments and interviews, examples were identified to illustrate different types of TPPs and to highlight conditions and practices that both enable and inhibit successful TPPs. Assessing both successful and unsuccessful examples of TPPs has enabled analysis of the benefits and challenges of such partnerships, including conditions for success, barriers, and lessons learned. This information also helped to identify practices that facilitate effective partnerships and collaboration. The TPP examples identified are referenced as appropriate in the text and summarised in Appendix I. A3: Task III – Focus Groups On completing Task II, the Contractor conducted six focus groups to provide a forum for harnessing and analysing information gained through the literature review, the Government Questionnaire and the interviews. The objective of the focus groups was to identify key factors in the development and execution of TPPs, including those factors that either inhibit or encourage such partnerships, from the perspective of all three sectors and to identify potential solutions to problems. The findings of the literature review, interviews and Government Questionnaire assisted in identifying the different types of stakeholders to participate in the focus groups and key issues on which to begin discussion. This enabled the Contractor to ensure that a fully representative

Appendix A Study Methodology

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picture of stakeholders’ views was attained from the discussions. All focus groups were designed to facilitate in-depth engagement to maximise exchange and minimise potential conflicts. The six focus groups were made up of three tri-sector groups plus one for each individual sector (i.e. Government, Private Sector, and Third Sector). The sector-specific focus groups were conducted in advance of the tri-sector groups so that issues raised could be discussed openly before being tabled in the cross-sectoral groups. This approach was effective in maximising information flows and provided an important insight into each sector’s perspectives, which is an important consideration when developing policy options. Bringing the different sectors together in the tri-sector groups allowed the sectors to better understand each other’s perspective and needs, and work on solutions together.

Sector-specific Focus Groups – Each sector-specific focus group followed the same general agenda and format involving an introduction to the study, its purpose, overall methodology and progress to date. Participants were then invited to comment on the proposed definition of TPPs, after which they were asked to discuss examples of cross sector partnerships from their own experiences and to explore the reasons, benefits of and problems encountered in such partnerships. Tri-sector Focus Groups – The tri-sector focus groups followed the same general agenda and format, which commenced with a recap of the study (primarily for those participants who had not attended any sector-specific groups) followed by an invitation to comment on the issues raised in the 3 sector-specific groups under the following headings: Characteristics of Successful Partnerships, Barriers and Problems in Partnerships, Opportunities for and Benefits of TPPs and finally solutions to overcoming barriers.

A list of focus group participants is included in Appendix A6.2. Notes of the focus groups are presented in Appendix G.

Appendix A Study Methodology

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A4: Questionnaire for Government Departments

Name of Department: Date:

Department Contact Details: Name of person completing this questionnaire: Post and Title: Telephone: Fax number:

Email (if available):

Please respond to ALL questions and return the questionnaire to the Central Policy Unit on or before 29th OCTOBER 2004

Official Use only

Date Mailed ………d/………m/……… yr

Date Returned ………d/………m/……… yr

Checked by: Date: ………d/………m/……… yr

Appendix A Study Methodology

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Part A Tri-partite Partnership Definition

For the purposes of this Study a Tri-partite Partnership (TPP) is defined as:

A collaborative effort among representatives from the Public Sector (Government), Private Sector (Business) and the Third Sector6, to achieve shared and compatible objectives that contribute the common good of Hong Kong.

Partnerships may take a variety of forms including:

Type of Partnership

Examples include (but are not limited to):

1

Consultative partnership - aimed at initiating relationships with other organizations for information exchange including sharing of experiences, ideas, and opinions.

⇒ Ad hoc subject seminars, workshops

and conferences ⇒ Programme/series of

seminars/conferences e.g. the Community Investment and Inclusion Fund Annual Forum

2

Collaborative partnership - aimed at sharing objectives and implementation at a project level including activities that avoid duplication and aim to co-coordinate separate sector initiatives for greater efficiency and effectiveness.

⇒ Specific one-off events e.g. Harbour

Fest ⇒ Campaigns e.g. SARS Clean Hong

Kong ⇒ Networks (regular meetings for

information exchange) e.g. Interfaith Network

⇒ Issue-specific projects e.g. regional air quality research

⇒ On-going/long term projects e.g. the Hong Kong Arts Festival

3

Strategic partnership - the highest form and level of partnership where partners consider each other indispensable in pursuing common goals and visions. Aimed at sectors working together on a more strategic basis and resulting in a long term and significant impact.

⇒ Consultative processes e.g. Sustainable

Development Strategy for Hong Kong ⇒ Non-statutory Advisory boards e.g.

University Grants Committee ⇒ Statutory Advisory boards e.g. Arts

Development Council

Please note that the above definitions and examples provided are not considered to be exhaustive or final but are provided as a ‘working definition’ for reference only in this questionnaire. The results of this questionnaire will be used to refine the TPP definition further.

6 The Third Sector includes all non-profit, voluntary, non-governmental institutions, which are distinctly different from those in the Government and market sectors in their aims, structures and operations.

Appendix A Study Methodology

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PART B Since 1st July 20027, has your Department engaged in any of the 3 types of partnership activities listed in Part A of this questionnaire :

Please indicate ‘ ‘ as appropriate

Q1 with the Private Sector, i.e. local businesses

Yes / No

Q2 with the Third Sector1

Yes / No

Q3 with both the Private Sector and the Third Sector together

Yes / No

If you answered YES to any Part B questions above, please continue to Part C (below). If you answered NO to all Part B questions, please go to straight to Part F (on page 6).

Part C

Please fill in the number of partnership activities your Department has participated in and/or funded since

July 1st 2002

Partnership Activity i

with Third Sector Only

(NGO)

ii with

Private Sector Only (Business)

iii with both

Private and Third Sector (TPP)

a Participation only

b Funding only

Q4 Seminars Workshops Conferences

c Participation and funding

a Participation only

b Funding only

Q5 Consultation Processes c Participation and funding

a Participation only

b Funding only

Q6 Campaigns

c Participation and funding

a Participation only

b Funding only

Q7 Events

c Participation and funding

a Participation only

b Funding only

Q8 Training Courses c Participation and funding

7 1st July 2002 marks the commencement of the Principal Official Accountability Scheme (POAS).

Appendix A Study Methodology

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Part C Continued

Please fill in the number of partnership activities your Department has participated in and/or funded since

July 1st 2002

Partnership Activity i

with Third Sector Only

(NGO)

Ii with

Private Sector Only (Business)

iii with both

Private and Third Sector (TPP)

a Participation only

b Funding only

Q9 Specific issue projects c Participation and funding

a Participation only

b Funding role only

Q10 Advisory Boards c Participation and funding

a Participation only

b Funding role only

Q11 Formal Committees c Participation and funding

a Participation only

b Funding role only

Q12 Policy Formulation c Participation and funding

a Participation only

b Funding only

Q13 Please describe any OTHER partnership activity(s) not specified above, that your Department has participated in and/or funded

c Participation and Funding

Appendix A Study Methodology

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Part D

Please provide a brief description of what you feel are the three MOST successful activities in which your department has engaged with the Private and/or Third Sector, and the key reasons why you think they were successful. Example 1 a (i) Description of Partnership Activity

b (i) Key Reasons for Success Example 2 a (ii) Description of Partnership Activity b (ii) Key Reasons for Success

Q14

Example 3 a (iii) Description of Partnership Activity b (iii) Key Reasons for Success

Appendix A Study Methodology

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Part E

Please give a brief description of what you feel are the three LEAST successful activities in which your department has participated in with the Private and/or Third Sectors and the key reasons why you think they were not successful. Example 1 a (i) Description of Partnership Activity b (i) Key Reasons for lack of success Example 2 a (ii) Description of Partnership Activity b (ii) Key Reasons for lack of success

Q15

Example 3 a (iii) Description of Partnership Activity b (iii) Key Reasons for lack of success

Appendix A Study Methodology

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Part F

During previous studies on the Third Sector, a number of potential barriers were identified which may prevent partnership activities between the three sectors.

Does your Department see, and/ or has it encountered any of the following as barriers to partnership activities?

i partnership with Third Sector only

ii partnership with Private Sector

only

iii partnership with both Private and

Third Sector

Potential Barrier

Please indicate ‘ ’ as appropriate

a Lack of trust between parties

Yes / No

Yes / No

Yes / No

b Lack of departmental financial resources

Yes / No

Yes / No

Yes / No

c Lack of partner financial Resources

Yes / No

Yes / No

Yes / No

d Lack of departmental human resources

Yes / No

Yes / No

Yes / No

e Lack of partner human resources

Yes / No

Yes / No

Yes / No

f

Partner governance issues

Yes / No

Yes / No

Yes / No

g Partner transparency issues

Yes / No

Yes / No

Yes / No

h Government policies Yes / No

Yes / No

Yes / No

I Government practices Yes / No

Yes / No

Yes / No

j Difference in interests and priorities between partners

Yes / No

Yes / No

Yes / No

Q16

k Differences in culture and/ or values between partners

Yes / No

Yes / No

Yes / No

Q17 Please describe any OTHER factor(s) that your Department has encountered and/ or feels, may act as a barrier(s) to forming partnerships with the Third Sector and/ or Private Sector.

Appendix A Study Methodology

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Part G

Does your Department have any plans to participate in any type of partnership activity(s) in the next 4 years - see footnote 8 below?

Q18

Please indicate ‘ ’ as appropriate Yes /No. If yes, please go to Q19

Please select the year(s) in which the partnership activity(s) is/are planned, and provide an indication of the partnership type, according to the corresponding letter from footnote 3

Year

Partnership Type i

with the Third Sector only

ii with the

Private Sector only

iii with both the Private and Third Sector

a Participation only H 0 0 b Funding only 0 0 A

For example

a. 2005 c Participation and funding

B 0 C

a Participation only

b Funding only

a. 2005

c Participation and funding

a Participation only

b Funding only

b. 2006

c Participation and funding

a Participation only

b Funding only

c. 2007

c Participation and funding

a Participation only

b Funding only

Q19

d. 2008

c Participation and funding

Brief Description of ‘Other’ activities (see note 3 (J)) e. J1………………………… J2………………………… J3…………………………

8 A - conferences, workshops, seminars B - consultation processes C - campaigns D - events E - training courses F - specific issues projects G - advisory boards H - formal committees I - policy formulation J - OTHER activities not specified in A to I – please provide a brief description of any ‘other’ partnerships in the

space provided. Please number other activity(s) as indicated in part e.

Appendix A Study Methodology

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Please provide below the name and contact details of people in your Department who Civic Exchange (the Contractor for this CPU Government Study) may approach for further information, if necessary.

Name

Post and Title

Telephone / email

Thank you for completing the questionnaire.

For any questions relating to this questionnaire, please contact:

Veronica Galbraith Tel: 9634-9902 email: vgalbraith@civic-exchange.org

Sophie le Clue Tel: 9304 4697 email: sleclue@civic-exchange.org

Appendix A Study Methodology

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A5: Interview Questionnaire

SECTOR:

Name of Organisation: Date:

Contact Details

Name of person interviewed Post and Title: Telephone: Fax number:

Email:

A: Details of TPPs

Details of Partners Government Department

Private sector organization(s)

Q1

Non business/government entity(s)

Appendix A Study Methodology

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Q2

Type and description of partnership: Duration:

Q3

Reasons for engaging in a partnership Specific objective(s) of the partnership and how they were determined

Q4

Describe the implementation and monitoring process of the TPP?

Q5 What do you consider to be the key success factors of the partnership? What were the key enablers that brought the partnership together in the first place and what aspects are critical to moving it forward to achieve its objectives?

Q6

Was the partnership successful – what was the outcome (were the objective(s) of the Partnership achieved? If not, why not?)

Q7

Problems / difficulties encountered either in establishing the partnership or during the course of the partnership

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Q8 Lessons Learnt and the Way Forward (if relevant)

Q9

Do you have the capacity make the necessary changes (mentioned in lessons learnt) to improve the next TPP? If not, why not?

Q10

What advice would you give to the Government in their efforts to create an environment that encourages TPPs?

Appendix A Study Methodology

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A6: List of Organisations Which Participated in the Study A6.1 Organisations Interviewed

1. Agriculture, Fisheries and Conservation Department 2. Allen & Overy 3. Arts Development Council 4. Bishop, Diocese of Western Kowloon 5. Business Environment Council 6. Cheung Kong Holding Ltd. 7. China Light and Power Research Institute 8. Community Business 9. Companies Registry 10. Conservancy Association 11. Creative Initiatives Foundation 12. Crossroads International 13. Designing Hong Kong Harbour District 14. DHL 15. Education City 16. Environment Protection Department ( Community Relations Unit, Facilities Planning Group,

Compliance Office) 17. Environment, Transport and Works Bureau 18. Friends of the Earth 19. Golin Harris 20. Green Power 21. Greenland Café 22. Groot Fine Art 23. Hang Seng Bank 24. Health Welfare and Food Bureau 25. Helping Hand 26. Hong Kong University 27. Hong Chi Association 28. Hong Kong Amateur Athletic Association 29. Hong Kong Arts Festival 30. Hong Kong Council of Social Services 31. Hong Kong Productivity Council 32. Hong Kong and Shanghai Banking Corporation Limited 33. Hospital Authority 34. Inland Revenue Department, Commissioner's Unit, Charitable Donations and Retirement

Schemes Section 35. Innovation and Technology Fund 36. Junior Achievement 37. JW Marriott Hotel 38. Labour Department - Registrar of Trade Unions 39. Leisure and Cultural Services Department

Appendix A Study Methodology

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40. Liberal Party 41. Living Island Movement 42. Manpower 43. Microsoft 44. Morgan Stanley 45. Neighbourhood Advice Action Council 46. One Port Pty Ltd. (member of HK PRD Foundation) 47. Oxfam 48. Planning Department 49. Police Department, Public Relations Branch - Societies Officer 50. PricewaterhouseCoopers 51. SERCO 52. Shell Hong Kong 53. Social Welfare Department (Rehabilitation and Medical Social Services), (Social Service), (Youth

and Correction), (Central Office for Volunteer Services) (Marketing Consultancy Office) (Rehabilitation)

54. Sports Institute Ltd. 55. St James' Settlement 56. State Street Bank 57. Sun Hung Kai Properties 58. Sustainable Development Unit 59. World Wildlife Fund, Hong Kong

A6.2 Focus Group Participants

1. Aberdeen Kai Fong 2. Agriculture Fisheries and Conservation Department 3. Allen and Overy 4. Architectural Services Department 5. Artist Commune 6. Asia Foundation 7. Bank Consortium Trust 8. Better Hong Kong Foundation 9. Boyden 10. Business Environment Council 11. Civil Engineering and Development Department 12. China Light and Power Research Institute 13. Community Business 14. Companies Registry 15. Correctional Service Department 16. Creative Initiatives Foundation 17. Education and Manpower Bureau 18. Electrical and Mechanical Services Department 19. Environmental Protection Department 20. Fire Services Department

Appendix A Study Methodology

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21. Food Environment and Hygiene Department 22. Freshfields Bruckhaus Deringer 23. Designing Hong Kong Harbour District 24. Health Welfare and Food Bureau 25. Helping Hand 26. Highways Department 27. Hong Kong Council for Social Service 28. Hong Kong Federation Women’s Commission 29. Hong Kong General Chamber of Commerce 30. Hong Kong Amateur Athletics Association 31. Hong Kong Arts Development Council 32. Hong Kong Productivity Council 33. Hong Kong Observatory 34. Hong Kong University 35. Hospital Authority 36. Housing Authority 37. Hong Kong and Shanghai Banking Corporation Limited 38. Information Services Department 39. Inland Revenue Department 40. Insight Dynamics 41. Junior Achievement 42. Labour Department 43. Living Islands Movement 44. Manpower Services 45. Marine Department 46. Microsoft 47. Morgan Stanley 48. Mass Transit Railway Corporation 49. Neighbourhood Advice Action Council 50. Oxfam 51. PCCW 52. Planning Department 53. Police Department 54. PricewaterhouseCoopers 55. Social Welfare Department 56. Sports Institute Ltd. 57. State Street Bank 58. Sustainable Development Unit 59. Swire Coca Cola (Hong Kong) Limited 60. Television, Entertainment and Licensing Authority 61. Transport Department 62. World Wildlife Fund, Hong Kong 63. Zurich Insurance Group

Appendix B History of the Third Sector in Hong Kong

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History of the Third Sector in Hong Kong Hong Kong has a long history of civil society activity,9 which grew in strength during the two world wars because of tremendous service needs.10 The huge influx of refugees from mainland China in the late 1940s led to the growth in welfare services, community organisations and establishment of international relief organisations. The 1950s and 1960s saw the development of a diverse civil society. With population growth stabilizing and industrialisation taking off in the 1960s and 1970s, the demand and resources for better public services grew. The Colonial Government took on more responsibilities, particularly in the areas of education, health and social welfare, and increasingly used (and funded) civil society organisations in service delivery.11 The 1967 riots also hastened the pace of social welfare development, particularly in youth-related services as well as sports, arts and culture. The need for more skilled workers in the 1970s also led to greater government investment in education – subsidising Third Sector Organisations to manage schools. A major welfare policy paper in 1973 which recognised the status of voluntary agencies as equal partners in social welfare planning precipitated the growth of the welfare sector. Hong Kong’s political development gained momentum in the early 1980s, with Sino-British negotiations over Hong Kong’s future, and political reforms such as the setting up of local District Boards. The 1989 Tiananmen Square incident was a turning point in political participation, and resulted in the growth of pro-democracy political parties, trade unions, and human rights groups. Despite low membership, the different political parties now lead the debate on Hong Kong’s public affairs. The 1980s saw the height of economic prosperity and was a golden period for many Third Sector Organisations. Since the 1980s Hong Kong people have becoming increasingly concerned with universal social issues such as environmental protection, human rights, racial equality, women’s rights, consumer protection, poverty and civil society development. Since the handover in 1997 Hong Kong has faced profound challenges including the Asian Financial Crisis, bird flu and the 2003 SARS outbreak. Third Sector Organisations have had to respond to a rapidly changing and challenging environment. Not least, the severe economic downturn and budget deficit has led to cuts in both government and private sector funding for non-profit organisations. Even today, many NGOs face a major challenge of finding the funds to continue to provide high quality services and recruit high calibre staff. Major milestones in the development of Hong Kong’s Third Sector are shown in Table B1.

9 At the beginning of the colony the main non-government organisations working in Hong Kong were foreign missionaries and traditional Chinese organisations such as Po Leung Kuku. However, groups such as the Hong Kong General Chamber of Commerce date back to 1861. 10 Yuen, T. Y. K. (2003) Hong Kong. Country Paper from Asia Pacific Philanthropy Consortium’s conference on ‘Governance, Organisational Effectiveness, and the Non-Profit Sector’, 5-7 September 2003, Makita City, Philippines. www.asianphilanthropy.org 11 Ibid.

Appendix B History of the Third Sector in Hong Kong

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Table B1: Milestones in Hong Kong’s Third Sector development

Date Milestone Late 1800s Foreign missionaries (e.g. Catholic Church) and traditional Chinese organisations

(e.g.Tung Wah Hospital, Po Leung Kuk etc) providing health, welfare and education services. Hong Kong General Chamber of Commerce established. First formal sports organisations.

1941 Village representative system introduced by the Japanese. Development of rural committees.

Post WWII Influx of refugees from mainland China. Major services (health, welfare) left to voluntary organisations. International development assistance organisations (e.g. Red Cross, UNHCR) established.

1947 Hong Kong Council of Social Services set up to coordinate relief work. Hong Kong Council of Women formed.

1949 Establishment of PRC. Huge influx of Chinese immigrants. Formation of FTU (pro-China) and TUC (pro-Taiwan) unions. Kaifong associations emerged (and declined after 1967).

1950s Industrialisation of Hong Kong. Growth in trade associations; clansmen associations. 1950 Amateur Sports Federation and Olympic Committee (ASF and OC) formed. 1960s Many local and foreign business chambers formed. Growth in resident associations.

Growth in self-help organisations e.g., Hong Kong Blind Union. 1960 Hong Kong Federation of Industries formed. 1967 Hong Kong Riots. 1968 Hong Kong Community Chest set up to coordinate fund-raising among voluntary

organisations 1970s Major arts activities initiated including Hong Kong Arts Festival. New approach to

sports and recreation – Government provided land at nominal rent to sports clubs. Number of major sports facilities built. Opening up of China in late 1970s led to growth in service sector and start of economic boom.

1970 Multi-storey Buildings (Owners’ Incorporated) Ordinance created incorporated owners.1973 Social Welfare Policy 5-year plan, recognised voluntary agencies as equal partners in

social welfare planning: growth of welfare voluntary agencies. Urban Council financially autonomous: art activities started to flourish. Council for Recreation and Sports established – new era for sports. Mutual Aid Committees launched.

1978 Free and universal primary and junior secondary education introduced. High profile media case of Lai Shuk Mee – focussed public on child welfare.

1980s Height of Hong Kong’s economic prosperity. Golden period for voluntary organisations, especially health, welfare, education, arts. Many art and cultural facilities built. Growth in service sector. Government recognised professional associations. Growth in radical grassroots women’s groups and human rights groups. Growth in international organisations in response to Vietnamese refugee crisis.

1982 District Board elections held on universal franchise. Sino-British negotiation on Hong Kong future began. Hong Kong Council for Performing Arts (HKCPA) formed. Chernobyl nuclear accident. One million signatures collected in Hong Kong against building of nuclear power plant across the border.

1984 Hong Kong Bill of Rights passed. Sino-British negotiations on Hong Kong began. 1984-85 Period of democratic reform. Trade Unions given representation in LegCo.

1985 Regional Council established. 1988 Hong Kong Human Rights Commission established. 1989 Tiananmen Square incident. 1990s New political parties formed. Growth in pressure groups on political, press freedom,

women’s rights, homosexual rights, ethnic, racial equality, equal opportunity, refugee and minority rights.

1990 Final version of Basic Law promulgated. Hospital Authority established. Sports Development Council established.

Appendix B History of the Third Sector in Hong Kong

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1991 Community Investment and Inclusion Fund established. 1994 HK$50 million Environment & Conservation Fund established. Hong Kong Sports

Institute amalgamated for elite sports training. 1995 Hong Kong Arts Development Council replaced HKCPA to improve community

participation. 1997 Handover and Asian economic crisis. Beginning of economic downturn. Education

Commission started review. HK$5 billion Quality Education Fund established. 1999 Comprehensive review of social welfare subvention system. Introduction of Lump Sum

Grant system. 2000 Culture and Heritage Commission set up. 2001 HK$5 billion Continuing Education Fund established for lifelong learning. 2002 Sutherland report on reform of higher education sector. 2003 Culture and Heritage Commission report on art and cultural development.

Appendix C Legal Framework of Third Sector Organisations

Appendices Page 25 of 94

Legal Framework of Third Sector Organizations C1: Legal Forms of Third Sector Organisations The legal forms that Third Sector Organizations can take and the laws which regulated them include: i. Company Limited by Guarantee* - Companies Ordinance, Cap 32 ii. Co-operative Society* - Co-operative Societies Ordinance, Cap. 33 iii. Society** - Societies Ordinance, Cap.151 iv. Trade Union** - Trade Unions Ordinance, Cap.332 v. Registered Incorporated Trust* - Registered Trustee Incorporated Ordinance, Cap.306 vi. Statutorily enacted organisations and bodies*, various Caps * Incorporated bodies ** Unincorporated bodies C2: Brief Description of each ordinance and its requirements: (i) Companies Ordinance, Cap 32. Third Sector Organizations may choose to become incorporated under the Companies Ordinance where they can be “Limited by Guarantee” (which limits the liability of the directors and which is resultantly the more commonly used option for Third Sector Organizations). There are currently some 7,000 Limited by Guarantee Companies in Hong Kong although there are no details recorded as to how many of these companies are non-profit making or part of the Third Sector. While the process of setting up a company (limited by guarantee) is more complex and expensive, as a company must have a registered office, hold AGMs and prepare annual accounts which need to be independently audited and submitted to the Companies Registry, the limitation of directors’ liability means this is the favoured legal setup for many of the larger or more established Third Sector Organisations. It is also considered to be a favourable legal framework for those organizations which intend to obtain tax exemption from the Internal Revenue Department. Where it is proved to the satisfaction of the Companies Registrar that a company that promotes commerce, art, science, religion, charity or any other useful object, and where all profits and income, if any, are prohibited from being distributed to its members, the Companies Registrar can license the company to drop the word “Limited” from its name (thus reducing perceptions that the organization is business-like in nature). There are currently less than 600 organisations that have this Section 21 license in Hong Kong.

Appendix C Legal Framework of Third Sector Organisations

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(ii) Co-operative Societies Ordinance, Cap. 33. The Co-operative Societies Ordinance is administered by the Registrar of Co-operative Societies (held by the Director of Agriculture, Fisheries and Conservation). Historically, this Ordinance was passed to register agricultural and marine based co-operatives which were formed after World War II. In the 1950s it other co-operatives such as building cooperatives were formed by civil servants. In recent years a few workers’ co-operatives have been formed. Co-operative Societies must have their accounts audited by the Registrar and must hold AGMs. Co-operatives must seek approval from the Registrar before making investments; utilising reserve land, writing off bad debts, making charitable donations etc. As at 30 June 2004 there were 228 co-operative societies registered. (iii) Societies Ordinance, Cap 151. Societies, which are defined widely under section 2 of the Societies Ordinance to include “any club, company, partnership or associations of persons, whatever the nature or objects” must register in Hong Kong. The Societies Ordinance is administered by the Societies Officer who has been historically and is still currently the Commissioner of Police. The historical origins of the ordinance and its regulation by the Commissioner of Police came from its aim to control organized triad activities in the 1980s. Societies which are exempted from registration include those established solely for religious, charitable, social or recreational purposes or as a rural committee. The process of registering a society with the Societies Officer is straightforward and inexpensive, reporting requirements are minimal and it is generally the favoured option for smaller voluntary organisations. Societies are not required by law to have their annual accounts audited although they are required to advise of any changes in particulars of the society and to report their AGMs. In practice there is no active enforcement of the Societies Ordinance and breaches are normally identified through informants. There are currently some 17,000 societies registered in Hong Kong. (iv) Trade Unions Ordinance, Cap 332. The law requires trade unions to register in Hong Kong. The Trade Unions Ordinance is administered by the Registrar of Trade Unions who is currently the Permanent Secretary for Economic Development and Labour. A registered trade union is required to submit details of union members and officers and audited accounts to the Registrar. The Registrar must monitor that trade unions to ensure that they do not spend their funding outside prescribed areas. The Registrar also organizes educational courses on trade union management, book-keeping, auditing and legislation for

Appendix C Legal Framework of Third Sector Organisations

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trade unionists to foster sound internal administration. It publishes annual statistics on trade unions which are available on the Labour Departments website. As at 30 June 2004 there were 698 registered trade unions in Hong Kong. (v) Registered Trustees Incorporated Ordinance, Cap.306. While private trusts can be set up through a trust deed by an accountant or lawyer and do not require public registration, trusts which are charitable in purpose and which collect money from the public are required to be registered and incorporated under the above ordinance, which is administered by the Registrar of Companies. The incorporated trusts are not required to submit accounts although they must supply details of registered offices and trustee details. Section 2 of this ordinance includes what appears to be the only legislative based definition of charitable purpose, which is defined as:

(a) The relief of poverty; (b) The advancement of art, education, learning, literature, science or research; (c) The making of provision for-

(i) the cure, alleviation or prevention of; or (ii) the care of persons suffering from or subjected to, any disease, infirmity or disability affecting human beings (including the care of women before, during and after child birth);

(d) The advancement of religion; (e) Any ecclesiastical purpose; (f) The promotion of the moral, social and physical well-being of the community; and (g) Any other purpose beneficial to the community not specified in paragraphs (a) to (f).

There are currently some 100 registered trusts in Hong Kong. Other ordinances related to trusts include:

• Trustees Ordinance, Cap. 29 • Recognition of Trusts Ordinance, Cap.76

(iv) Statutory organizations and bodies established under Hong Kong legislature, various Caps. There are various other Third Sector Organizations established under law for organizations such as universities and other educational institutions (such as the University of Hong Kong and St. Joseph’s College), philanthropic intermediaries (such as the community chest), religious organizations (such as the Methodist Church), and community service organizations (such as the St. Johns Ambulance, Caritas) etc. The reporting requirements governing these organizations are varied and are detailed within the separate ordinances.

Appendix D Summary of Government Initiatives to Improve Governance in the Third Sector

Appendices Page 28 of 94

Summary of Government Initiatives to Improve Governance in the Third Sector

• In June 2001 the SWD prepared and distributed a “Guidance Note on Internal Financial Controls for Charitable Fundraising Activities” which was distributed to all registered charities.12

• In June 2002 the SWD published a reference guide, “Leading your NGO – Corporate Governance – A reference guide for NGO Boards,” which was distributed to more than 200 government-funded social welfare organisations.13

• In November 2002, the Education (Amendment) Bill 2002 was submitted to the Legislative Council to introduce a school-based management governance framework to all aided schools in Hong Kong.14

• In response to the Ombudsman’s report of 2003 15 the SWD released a “Reference Guide on Best Practices for Charitable Fundraising Activities” (Fundraising Guide)16 in October 2004.

• It was originally intended that charities which voluntarily undertook to adopt this Fundraising Guide would be included in a Public Register maintained by the SWD. However the SWD has shelved the idea of the Public Register system17 for the time being on the basis that it would:

(a) Not help the public to identify “dubious” charities;

(b) Would require considerable resources to develop the system (especially in relation to the vetting and review procedures); and

(c) There was a concern that the system may inadvertently stifle the fund-raising activities of small scale charities.18 The SWD has committed to review the Public Register System in late 2005.

12 The guide includes advice in safe custody of cash, proper documentation of income and expenditure generated from charitable fundraising activities, etc. 13 Social Welfare Department (2002) 14 At present the majority of primary and secondary schools are aided schools operated by non profit school sponsoring bodies (SSB). Yuen (2003). 15 In Feb 2003 the Ombudsman published results of an investigation on the mechanism for monitoring charitable fund-raising activities which is available at: www.ombudsman.gov.hk/english/06_direct_investigation/tindex07.html (accessed 12 December 2004). 16 Guide to Fundraising Activities can be accessed at: www.ird.gov.hk/eng/tax/ach_index.htm (accessed 8 December 2004). The guide includes information on donors’ rights, fund-raising practices and financial accountability. 17 Details of the proposed Public Register System can be accesses at: www.info.gov.hk/archive/consult/2003/charity-e.pdf (accessed 8 December 2004). 18 LC Paper No. CB(2) 3257/03-04

Appendix E Results of the Government Questionnaire

Appendices Page 29 of 94

Results of the Government Questionnaire E.1 Introduction to the Results Sections E.2 to E.8 provide a summary of the Government Questionnaire Results while Section E.9 provides the original data set responses from the Government Questionnaire. E.2 Response Rates Questionnaires were sent to the 53 Government departments plus the Education and Manpower Bureau (EMB) and the Sustainable Development Unit (SDU). 50 responses were received representing a 94% response rate.19 Of the 50 responses received, 7 departments said that they had not engaged in any partnering activity during the past 2 years.20 Of the 43 respondents who had been involved in some sort of partnering activity during the past 2 years, all provided quantitative data with the exception of the Social Welfare Department, the Health Department and the Department of Justice as they advised that the information was neither consolidated nor readily available. The Land Registry responded that they would not complete the questionnaire although no reasons were provided. E.3 Departmental Partnering Rate This summarises the responses to Part B Q1 to Q3. As summarised in Figure E1 (below) almost all government departments are involved in bi- or tri-partite partnerships. Of the total 50 responses received, 40 departments indicated that they had experience of partnership with the Third Sector, 38 with the Private Sector and 36 with TPPs.

19 The 3 departments who did not respond included the Government Flying Service, Government Property Agency, and Telecommunications Authority. 20The 7 departments who responded that they had not taken part in any partnership activities in the past 2 years included: the Government Laboratory, Government Logistics Department, Joint Secretariat for the Advisory Bodies on Civil Service and Judicial Salaries and Conditions of Service, Official Receiver’s Office, Registration and Electoral Office and the Treasury.

Appendix E Results of the Government Questionnaire

Appendices Page 30 of 94

Figure E1 Nature of Government Partnership Activities (BPPs/TPPs)

01020304050

Third Private Third andPrivate (TPP)

Sectors Engaged With Government in Partnership

No. of Departments Involved in

Partnerships

YesNoNot Applicable

E.4 Types of Partnership This section summarises the responses to Part C Q4 to Q12 Figure E2 below summarises the Government’s involvement in different types of partnership activities. It specifically shows the percentages of Government departments which are involved in a certain type of partnership activity. For instance, some 85% of Government departments are involved in seminars, workshops and conferences with the Third Sector, less than 70% are involved in these activities with the Private Sector, and just over 60% of departments are involved in these activities with both the Third and Private sectors. Overall it appears that more Government departments are involved in activities with the Third Sector than with the Private Sector for all types of activities. Figure E2 highlights that the majority of departments are involved in the following activities:

• Seminars, workshops and conferences, • Events, • Consultation processes and • Training courses.

Figure E2 also highlights that the activities which have the least departments involved include:

• Policy formulation, • Advisory boards and • Formal committees.

Appendix E Results of the Government Questionnaire

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Figure E2 Government Partnership Activities by Type

0102030405060708090

100

A B C D E F G H IPartnership Activities

% of depts.

involved

ThirdPrivateTPP

Activities key:

A Seminars workshops and conferences B Consultation processes C Campaigns D Events

E Training courses F Specific issue projects G Advisory boards H Formal Committees I Policy Formulation

E.5 Extent of Partnerships This section summarises the responses to Part C Q4 to Q12 According to the quantitative responses returned,21 Government has participated in 31,330 partnerships since 1 July 2002. Of these partnerships 12,177 (39% of total) were events, 10,550 (34%) were training courses and 2,599 (8%) were seminars, workshops and conferences. As shown in Figure E3 (below), of those departments and bureaus that provided quantitative data, the Leisure and Cultural Services Department (LCSD) was engaged in the most partnerships with 15,807 reported (which is about 50% of all partnerships reported). Interestingly, the Education and Manpower Bureau (EMB) is the only government body that participated in all activities (ranging from seminars to policy development) with the Third and Private sectors separately, and in TPPs.

21 Of the 43 active responses received all provided quantitative data with the exception of Social Welfare Department, the Health Department and the Department of Justice as they advised that the information was neither consolidated nor readily available.

Appendix E Results of the Government Questionnaire

Appendices Page 32 of 94

Other quantitative results of the more active departments and bureaus are summarised below:

• The bulk of the LCSD’s 15,807 partnerships included training courses (8,077) and events (7,437) with the Third Sector.

• The Home Affairs Department (HAD) participated in 6,090 partnerships. Most of their partnerships were events (2,676) and consultative processes (1,497) with the Third Sector, as well as 1,065 TPP events. Training courses (259), campaigns (343), and seminars (143) with the Third Sector were also common.

• The Fire Services Department (FSD) had the largest number of TPPs as 2,369 of its 2,689 partnerships were TPPs. The most common TPPs included training courses (1,438), seminars, workshops and conferences (383), and events (360).

• The Environmental Protection Department (EPD) participated in 1,709 partnerships, 1,418 of which were TPP campaigns.

• The Labour Department (LD) was involved in 868 partnerships overall including 220 seminars, workshops and conferences with the Third Sector, 218 training courses and 151 events with the Private Sector. The LD has also been involved in 79 consultative processes with TPPs.

• The Television and Entertainment Licensing Authority (TELA) participated in 741 partnership activities, most of which were seminars, workshops and conferences (568) and training courses (104) with the Third Sector.

• The EMB had 508 partnerships, 300 of them with the Third Sector (the most common being seminars/workshops/conferences and training courses with 60 each followed by 40 events).

Figure E3 Relative Government Department Involvement

In all Types of Partnership

LCSD

HAD

FSD

EPD

LD

TELA

EMB

All others

Appendix E Results of the Government Questionnaire

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E.6 Characteristics of Most and Least Successful Partnerships This summarises the responses of Part D Q14 and Part E Q15 The most common factors for success cited were:

i. Mutual/common objectives/goals e.g. helping the community ii. Participation – active, multi-stakeholder

iii. Clear programme/ co-ordination/organization iv. Complementary strengths and expertise v. Mutual understanding (e.g. of needs)and willingness between partners

vi. Complementary resources vii. Goals and objectives - clear

viii. Knowledge sharing/exchange of ideas ix. Publicity x. Good Communication

The most common factors for lack of success cited were:

i. Difference in interest and priorities between parties ii. Inadequate resources, e.g. additional workload

iii. Inadequate communication iv. Public complaints v. Poor project design

vi. Unclear objectives vii. Inadequate publicity

viii. Impact of events out of partners’ control (e.g., SARS) ix. Information - too much hampers dissemination x. Public reaction - lack of management plan/underestimated

E.7 Barriers to Partnering This summarises the responses to Part F Q.16 Table 1 shows the most common barriers (actual or potential) to entering partnerships with the different sectors. The main barriers to entering partnerships (for all three types of partnerships), which are featured in the top half of the table included:

• Difference in interests and priorities between partners • Difference in culture or values between partners

Appendix E Results of the Government Questionnaire

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• Government practices • Departmental financial resources • Departmental human resources • Government policies

The least common barriers to entering partnerships (for all three different types of partnerships), which are indicated by the barriers featuring in the lower half of the table included:

• Partner’s human resources • Partner’s financial resources • Partner’s transparency issues • Partner’s Governance issues • Trust

Other results showing the relative importance of different barriers in different types of relationships between government departments and other parties include:

• Departmental financial and human resources are much more of a barrier in partnerships with Third Sector than with private sector or TPPs

• Difference in cultural values, government practices and trust are more of a barrier in TPPs and private sector partnerships compared to Third Sector partnerships

• Partner governance issues are more of a barrier in TPPs compared to partnerships with third and private sectors

Appendix E Results of the Government Questionnaire

Appendices Page 35 of 94

Table: 1 Summary of most common barriers 22 Partnership with

Third Sector Partnership with

Private Sector Partnership with Third AND

Private Sector Difference in interests and priorities b/w partners

Difference in interests and priorities b/w partners

Department financial resources Difference in culture or value between partners

Difference in interests and priorities b/w partners and equally Difference in culture or values between partners

Department human resources

Government practices Government practices

Difference in culture or value between partners

Government policies Departmental human resources

Government practices Department financial resourcesGovernment policies Department human resources

Government Policies and equally Departmental financial resources

Partner human resources

Partner transparency issues

Partner financial resources

Trust

Partner transparency issues Partner financial resources

Partner governance issues and equally Partner transparency and equally Trust

Partner governance issues Partner governance issues

Trust Partner human resources

Partner financial resources and equally Partner human resources

E.8 Planned Future Partnerships This section summarises the responses to Part G Q.18 and Q.19 The survey results showed that departments plan to engage in the same sort of partnering activities leading up to 2008.

22 For instance, in the first column, 25 government departments said that “different interests and priorities between partners” was an actual or potential barrier to entering partnerships while only 6 departments said that “lack of trust” was an actual or potential barrier.

Appendix E Results of the Government Questionnaire

Appendices Page 36 of 94

E.9 Original Data Set

Part B Since 1st July 200223, has your Department engaged in any of the 3 types of partnership activities listed in Part A of this questionnaire :

Please indicate ‘ ‘ as appropriate

Q1 with the Private Sector, i.e. local businesses

Yes No No answer 38 9 3

Q2 with the Third Sector1

Yes No No answer

40 7 3 Q3 with both the Private Sector and the Third Sector together

Yes No No answer

36 11 3

Part C

Please fill in the number of partnership activities your Department has

participated in and/or funded since July 1st 2002

Partnership Activity

i with

Third Sector Only (NGO)

ii with

Private Sector Only (Business)

iii with both

Private and Third Sector (TPP)

Q4 Seminars Workshops Conferences

a Participation only

Total Cases 47 Group Count % 0 22 46.8091 5 10.6382 2 4.255 3 1 2.128 4 1 2.128 5 1 2.128 7 1 2.128 9 1 2.128 10 1 2.128 11 1 2.128 13 3 6.383 31 1 2.128 50 1 2.128 55 1 2.128 56 1 2.128 61 1 2.128 74 1 2.128 164 1 2.128 568 1 2.128

Total Cases 48 Group Count % 0 28 58.3331 3 6.250 2 1 2.083 3 3 6.250 4 2 4.167 5 2 4.167 6 1 2.083 8 1 2.083 10 2 4.167 17 1 2.083 20 1 2.083 21 1 2.083 32 1 2.083 82 1 2.083

Total Cases 47 Group Count % 0 28 59.5741 6 12.7662 3 6.383 3 1 2.128 4 1 2.128 5 1 2.128 6 1 2.128 10 3 6.383 73 1 2.128 89 1 2.128 383 1 2.128

23 1st July 2002 marks the commencement of the Principal Official Accountability Scheme (POAS).

Appendix E Results of the Government Questionnaire

Appendices Page 37 of 94

b Funding only Total Cases 48 Group Count % 0 47 97.91717 1 2.083

Total Cases 48 Group Count % 0 47 97.9175 1 2.083

Total Cases 48 Group Count % 0 47 97.91710 1 2.083

c Participation and funding

Total Cases 47 Group Count % 0 29 61.7021 4 8.511 2 4 8.511 3 1 2.128 5 1 2.128 10 2 4.255 19 1 2.128 48 1 2.128 56 1 2.128 65 1 2.128 97 1 2.128 120 1 2.128

Total Cases 48 Group Count % 0 35 72.9171 2 4.167 2 4 8.333 3 1 2.083 4 1 2.083 5 1 2.083 8 1 2.083 10 1 2.083 17 1 2.083 30 1 2.083

Total Cases 48 Group Count % 0 37 77.0831 3 6.250 2 3 6.250 3 2 4.167 5 2 4.167 11 1 2.083

a Participation only

Total Cases 46 Group Count % 0 30 65.2171 3 6.522 2 1 2.174 3 2 4.348 4 2 4.348 5 2 4.348 15 1 2.174 30 1 2.174 55 1 2.174 89 1 2.174 101 1 2.174 1494 1 2.174

Total Cases 48 Group Count % 0 35 72.9171 2 4.167 2 1 2.083 5 5 10.41710 1 2.083 15 2 4.167 19 1 2.083 70 1 2.083

Total Cases 48 Group Count % 0 35 72.9171 4 8.333 2 2 4.167 4 1 2.083 5 1 2.083 10 1 2.083 13 1 2.083 14 1 2.083 68 1 2.083 79 1 2.083

b Funding only Total Cases 48 0

Total Cases 48 0

Total Cases 48 0

Q5 Consultation Processes

c Participation and funding

Total Cases 48 Group Count % 0 42 87.5001 1 2.083 3 2 4.167 5 1 2.083 9 1 2.083 10 1 2.083

Total Cases 48 Group Count % 0 42 87.5002 3 6.250 3 1 2.083 4 1 2.083 5 1 2.083

Total Cases 48 Group Count % 0 43 89.5831 1 2.083 2 1 2.083 3 1 2.083 11 1 2.083 17 1 2.083

Q6 Campaigns

a Participation only

Total Cases 47 Group Count % 0 36 76.5961 6 12.7662 1 2.128 3 1 2.128 20 1 2.128 24 1 2.128 129 1 2.128

Total Cases 48 Group Count % 0 47 97.91710 1 2.083

Total Cases 48 Group Count % 0 40 83.3331 3 6.250 2 1 2.083 3 1 2.083 9 1 2.083 10 1 2.083 24 1 2.083

Appendix E Results of the Government Questionnaire

Appendices Page 38 of 94

b Funding only Total Cases 47 Group Count % 0 46 97.8721 1 2.128

Total Cases 48 0

Total Cases 48 Group Count % 0 47 97.9171 1 2.083

c Participation and funding

Total Cases 48 Group Count % 0 39 81.2501 2 4.167 2 1 2.083 3 1 2.083 7 1 2.083 9 1 2.083 10 1 2.083 42 1 2.083 214 1 2.083

Total Cases 48 Group Count % 0 40 83.3331 2 4.167 2 3 6.250 5 1 2.083 105 1 2.083 208 1 2.083

Total Cases 48 Group Count % 0 37 77.0831 2 4.167 2 2 4.167 3 1 2.083 5 3 6.250 6 1 2.083 7 1 2.083 1417 1 2.083

a Participation only

Total Cases 47 Group Count % 0 30 63.8301 3 6.383 2 1 2.128 3 1 2.128 4 1 2.128 5 2 4.255 6 1 2.128 8 1 2.128 9 1 2.128 10 1 2.128 11 1 2.128 13 1 2.128 30 1 2.128 162 1 2.128 198 1 2.128

Total Cases 48 Group Count % 0 34 70.8331 4 8.333 2 4 8.333 10 1 2.083 12 1 2.083 14 1 2.083 25 1 2.083 86 1 2.083 151 1 2.083

Total Cases 48 Group Count % 0 37 77.0831 2 4.167 2 2 4.167 3 2 4.167 8 2 4.167 10 1 2.083 15 1 2.083 208 1 2.083

b Funding only Total Cases 48 Group Count % 0 46 95.8332218 1 2.083 7038 1 2.083

Total Cases 48 0

Total Cases 48 Group Count % 0 45 93.7501 1 2.083 5 1 2.083 1000 1 2.083

Q7 Events

c Participation and funding

Total Cases 48 Group Count % 0 33 68.7501 6 12.5002 1 2.083 3 2 4.167 5 1 2.083 10 1 2.083 30 1 2.083 35 1 2.083 237 1 2.083 260 1 2.083

Total Cases 48 Group Count % 0 42 87.5002 1 2.083 4 4 8.333 5 1 2.083

Total Cases 48 Group Count % 0 35 72.9171 3 6.250 2 2 4.167 3 1 2.083 5 1 2.083 6 2 4.167 15 2 4.167 50 1 2.083 152 1 2.083

Appendix E Results of the Government Questionnaire

Appendices Page 39 of 94

a Participation only

Total Cases 48 Group Count % 0 31 64.5831 3 6.250 2 2 4.167 4 3 6.250 5 3 6.250 8 1 2.083 10 1 2.083 15 1 2.083 46 1 2.083 50 1 2.083 104 1 2.083

Total Cases 48 Group Count % 0 38 79.1671 2 4.167 2 2 4.167 4 1 2.083 5 1 2.083 10 1 2.083 17 1 2.083 64 1 2.083 218 1 2.083

Total Cases 48 Group Count % 0 41 85.4171 1 2.083 5 2 4.167 10 1 2.083 14 1 2.083 39 1 2.083 60 1 2.083

b Funding only Total Cases 48 Group Count % 0 47 97.917211 1 2.083

Total Cases 48 Group Count % 0 47 97.9172 1 2.083

Total Cases 48 Group Count % 0 47 97.9175 1 2.083

Q8 Training Courses

c Participation and funding

Total Cases 48 Group Count % 0 39 81.2501 2 4.167 2 2 4.167 3 1 2.083 10 1 2.083 25 1 2.083 35 1 2.083 8072 1 2.083

Total Cases 48 Group Count % 0 40 83.3331 1 2.083 2 2 4.167 3 2 4.167 4 1 2.083 5 1 2.083 10 1 2.083

Total Cases 47 Group Count % 0 41 87.2341 3 6.383 4 1 2.128 5 1 2.128 1424 1 2.128

a Participation only

Total Cases 48 Group Count % 0 34 70.8331 7 14.5832 1 2.083 3 1 2.083 5 1 2.083 9 1 2.083 10 1 2.083 22 1 2.083 50 1 2.083

Total Cases 48 Group Count % 0 39 81.2501 5 10.4173 1 2.083 5 1 2.083 15 1 2.083 28 1 2.083

Total Cases 48 Group Count % 0 40 83.3331 6 12.5005 1 2.083 6 1 2.083

Q9 Specific issue projects

b Funding only Total Cases 48 Group Count % 0 42 87.5001 2 4.167 3 1 2.083 7 1 2.083 10 1 2.083 61 1 2.083

Total Cases 48 Group Count % 0 47 97.9171 1 2.083

Total Cases 48 Group Count % 0 47 97.9172 1 2.083

Appendix E Results of the Government Questionnaire

Appendices Page 40 of 94

c Participation and funding

Total Cases 48 Group Count % 0 35 72.9171 5 10.4174 1 2.083 5 3 6.250 7 1 2.083 14 1 2.083 36 1 2.083 48 1 2.083

Total Cases 48 Group Count % 0 40 83.3331 2 4.167 2 1 2.083 3 2 4.167 4 1 2.083 9 1 2.083 10 1 2.083

Total Cases 48 Group Count % 0 40 83.3331 5 10.4173 2 4.167 15 1 2.083

a Participation only

Total Cases 48 Group Count % 0 39 81.2501 1 2.083 2 1 2.083 4 2 4.167 6 1 2.083 10 1 2.083 13 1 2.083 15 1 2.083 25 1 2.083

Total Cases 48 Group Count % 0 43 89.5831 2 4.167 2 1 2.083 5 1 2.083 9 1 2.083

Total Cases 48 Group Count % 0 38 79.1671 3 6.250 2 1 2.083 5 4 8.333 11 1 2.083 31 1 2.083

b Funding role only

Total Cases 48 0

Total Cases 48 0

Total Cases 48 Group Count % 0 47 97.9174 1 2.083

Q10 Advisory Boards

c Participation and funding

Total Cases 48 Group Count % 0 44 91.6674 1 2.083 5 2 4.167 7 1 2.083

Total Cases 48 Group Count % 0 47 97.9173 1 2.083

Total Cases 48 Group Count % 0 46 95.8331 1 2.083 3 1 2.083

a Participation only

Total Cases 48 Group Count % 0 37 77.0831 2 4.167 2 1 2.083 3 1 2.083 5 1 2.083 7 1 2.083 9 1 2.083 14 1 2.083 15 2 4.167 118 1 2.083

Total Cases 48 Group Count % 0 44 91.6673 1 2.083 4 1 2.083 5 1 2.083 14 1 2.083

Total Cases 48 Group Count % 0 36 75.0001 3 6.250 2 3 6.250 4 1 2.083 5 1 2.083 13 1 2.083 15 1 2.083 16 1 2.083 69 1 2.083

Q11 Formal Committees

b Funding role only

Total Cases 48 Group Count % 0 47 97.9171 1 2.083

Total Cases 48 0

Total Cases 48 0

Appendix E Results of the Government Questionnaire

Appendices Page 41 of 94

c Participation and funding

Total Cases 48 Group Count % 0 41 85.4171 2 4.167 5 2 4.167 8 1 2.083 10 1 2.083 100 1 2.083

Total Cases 48 Group Count % 0 44 91.6671 2 4.167 3 1 2.083 36 1 2.083

Total Cases 48 Group Count % 0 42 87.5001 3 6.250 3 1 2.083 12 1 2.083 23 1 2.083

a Participation only

Total Cases 48 Group Count % 0 43 89.5831 2 4.167 15 1 2.083 34 1 2.083 53 1 2.083

Total Cases 48 Group Count % 0 45 93.7501 1 2.083 5 1 2.083 10 1 2.083

Total Cases 48 Group Count % 0 44 91.6671 1 2.083 2 1 2.083 10 1 2.083 80 1 2.083

b Funding role only

Total Cases 48 0

Total Cases 48 0

Total Cases 48 0

Q12 Policy Formulation

c Participation and funding

Total Cases 48 Group Count % 0 47 97.9175 1 2.083

Total Cases 48 Group Count % 0 47 97.9175 1 2.083

Total Cases 48 Group Count % 0 46 95.8331 1 2.083 5 1 2.083

Part D

TOTAL: 42 positive responses for each of examples A, B and C.

Factor for Success # of instances sited

Mutual/common objectives/goals e.g. helping the community 27 Participation -- active, multi-stakeholder 25 Clear programme/co-ordination/organization 23 Complementary strengths and expertise 18 Mutual understanding between (e.g. needs) and willingness of partners 17 Complementary resources 15 Goals and objectives - clear 15 Knowledge sharing/exchange of ideas 15 Publicity 14 Good Communication 12 Participation of public (in implementation of goals) 11 Broad Perspectives represented 10 Collaborative/co-operative 8 Commitment 7 Financial Resources -Adequate 7 Top level support 7 Departmental Support 6 Allocation of resources / responsibilities 5 Relationships - personal/working (good, close) 5

Appendix E Results of the Government Questionnaire

Appendices Page 42 of 94

Factor for Success # of instances sited

Preparation/planning 5 Flexibility/willingness to compromise 4 Trust 3 Benefits all parties 3 Administrative / logistical support 2 Financial Resources – Minimal 2 Freedom of expression 2 Monitoring and reviewing (quality of service, of programme) 2 Shared leadership 2 Wide impact/project needed 2 Broad topics 1 Past successes 1 Transparency 1 Common values and Culture 1 Openness to discuss problems 1

Part E

TOTAL: 24 examples given in all.

Factor for lack of success # of instances sited

Difference in interest and priorities between parties 7 Resources inadequate e.g. additional workload 7 Communication inadequate 4 Public complaints 4 Poor project design 4 Objectives unclear 3 Impacted by events out of partners control (e.g.: SARS) 2 Information - too much hampers dissemination 2 Publicity - inadequate 2 Public reaction - lack of management plan/underestimated 1 Narrow focus 1 Follow-up on conclusions with participants inadequate 1 Few sectors/participants involved/lack of participation 1 Low interest 1 Stakeholders unwilling to compromise 1 Lack of common objectives 1

Appendix E Results of the Government Questionnaire

Appendices Page 43 of 94

Part F

During previous studies on the Third Sector, a number of potential barriers were identified which may prevent partnership activities between the three sectors.

Does your Department see, and/ or has it encountered any of the following as barriers to partnership activities?

i partnership

with Third

Sector only

ii partnership

with Private

Sector only

Iii partnership with both Private

and Third Sector

Potential Barrier

Please indicate ‘ ’ as appropriate (** # of depts)

a Lack of trust between parties

Yes No No answer 6 35 7

Yes No No answer 11 28 9

Yes No No answer 11 26 11

b Lack of departmental financial resources

Yes No No answer 22 20 6

Yes No No answer 18 22 8

Yes No No answer 15 22 11

c Lack of partner financial

Resources Yes No

No answer 14 26 8

Yes No No answer 10 28 10

Yes No No answer 10 25 13

d Lack of departmental human resources Yes No

No answer 21 21 6

Yes No No answer 16 24 8

Yes No No answer 16 20 12

e Lack of partner human

resources Yes No

No answer 14 25 9

Yes No No answer 7 30 11

Yes No No answer 10 25 13

f

Partner governance issues

Yes No No answer 10 30 8

Yes No No answer 9 29 10

Yes No No answer 11 25 12

Q16

g Partner transparency issues Yes No No answer 11 29 8

Yes No No answer 13 25 10

Yes No No answer 11 25 12

Appendix E Results of the Government Questionnaire

Appendices Page 44 of 94

h Government policies Yes No No answer 15 27 6

Yes No No answer 20 20 8

Yes No No answer 15 22 11

I Government practices Yes No

No answer 18 24 6

Yes No No answer 21 19 8

Yes No No answer 17 20 11

j Difference in interests and priorities

between partners Yes No

No answer 25 14 9

Yes No No answer 23 15 10

Yes No No answer 21 16 11

k Differences in culture and/ or values between partners

Yes No No answer 21 19 8

Yes No No answer 22 16 10

Yes No No answer 21 14 12

Appendix E Results of the Government Questionnaire

Appendices Page 45 of 94

Part G

Does your Department have any plans to participate in any type of partnership activity(s) in the next 4 years?

A - conferences, workshops, seminars;

B - consultation processes;

C - campaigns;

D - events;

E - training courses;

F - specific issues projects;

G - advisory boards;

H - formal committees;

I - policy formulation; and

J - OTHER activities not specified in A to I.

Q 18

Please indicate ‘ ’ as appropriate

Yes /No If yes, please go to Q19

Please select the year(s) in which the partnership activity(s) is/ are planned, and provide an indication of the partnership type, according to the corresponding letter from the footnote below.

Q 19

See results to Q.19 overleaf

Appendix E Results of the Government Questionnaire

Appendices Page 46 of 94

Year

Partnership Type

i with the

Third Sector only

ii with the

Private Sector only

iii with both the

Private and Third Sector

a Participation only

Total Cases 46 Group # % 0 20 43.47"A,B" 3 6.522"A,B,C" 1 2.174"A,B,C,D,E,F,G,H" 1 2.174"A,B,C,D,F" 1 2.174"A,B,D,G,H,I" 1 2.174"A,B,D,J2" 1 2.174"A,D,F,H,J" 1 2.174"A,D,F,J2" 1 2.174"A,D,G" 1 2.174"A,D,H" 1 2.174"A,E,F" 2 4.348"A,E,J" 1 2.174"B,C,D,H" 1 2.174"B,E,H,J1" 1 2.174"B,F" 1 2.174"B,G,H,J1" 1 2.174"E,C" 1 2.174A 3 6.522E 2 4.348H 1 2.174

Total Cases

46

Group # % 0 28 60.87 "A,B,C,D" 1 2.174 "A,B,D" 1 2.174 "A,B,G,J2" 1 2.174 "A,D" 1 2.174 "A,E" 1 2.174 "B,E,H,J1" 1 2.174 "B,F" 1 2.174 "B,F,J1" 1 2.174 "B,H" 1 2.174 "B,J1,F" 1 2.174 "C,E" 1 2.174 "D,H" 1 2.174 A 2 4.348 B 1 2.174 E 1 2.174 F 2 4.348

Total Cases 46 Group # % 0 26 55.32 "A,B" 1 2.128 "A,B,D,E,H" 1 2.128 "A,B,E,F,H" 1 2.128 "A,B,G,H" 2 4.255 "A,D,E,G,F" 1 2.128 "A,D,E,H," 1 2.128 "A,G" 1 2.128 "B,D" 1 2.128 "C,D" 1 2.128 "C,F" 1 2.128 "C,G" 1 2.128 A 1 2.128 B 3 6.383 E 1 2.128 F 1 2.128 G 1 2.128 H 1 2.128

b Funding only Total Cases

46

Group # % 0 40 86.95"A,C,D,E" 1 2.174"A,D,E" 1 2.174F 1 2.174J1 2 4.348J3 1 2.174

Total Cases 46 Group Count % 0 45 97.83 F 1 2.174

Total Cases

46

Group # % 0 44 95.65"A,D" 1 2.174A 1 2.174

a. 2005

c Participation and funding

Total Cases 46 Group # % 0 21 45.651 1 2.174"A,B,C" 1 2.174"A,C,D,E,F" 1 2.174"A,C,D,G,H," 1 2.174"A,D,E" 1 2.174"A,F" 1 2.174"A,G" 1 2.174"B,F" 1 2.174"C,E" 1 2.174"F,J1" 1 2.174A 2 4.348B 3 6.522C 1 2.174D 2 4.348d 1 2.174E 1 2.174F 3 6.522G 1 2.174H 1 2.174

Total Cases

46

Group # % 0 30 65.22 "A,C,F" 1 2.174 "A,D,E" 1 2.174 "A,D,E,J4" 1 2.174 "A,H" 1 2.174 "C,E" 1 2.174 "F,J1" 1 2.174 A 1 2.174 B 1 2.174 C 2 4.348 D 2 4.348 E 2 4.348 F 1 2.174 J 1 2.174

Total Cases 46 Group # % 0 32 69.56"A,B,C,E,G" 1 2.174"A,C" 1 2.174"A,D,F" 1 2.174"A,D,F,G,J1" 1 2.174"B,D,G,H,I" 1 2.174"B,F" 1 2.174"D,E" 1 2.174"D,F" 1 2.174B 2 4.348C 1 2.174E 1 2.174G 1 2.174J3 1 2.174

Appendix E Results of the Government Questionnaire

Appendices Page 47 of 94

a Participation only

Total Cases 46 Group # % 0 26 56.521 1 2.174"A,B" 1 2.174"A,B,C,D,E,F,G,H" 1 2.174"A,B,C,D,F" 1 2.174"A,B,D,G,H,I" 1 2.174"A,B,D,J2" 1 2.174"A,D,F,H,J" 1 2.174"A,D,F,J2" 1 2.174"A,D,G" 1 2.174"A,D,H" 1 2.174"A,E" 1 2.174"B,F" 1 2.174"C,D,H" 1 2.174"E,C" 1 2.174A 3 6.522E 2 4.348H 1 2.174

Total Cases

46

Group # % 0 28 60.87 "A,B,C,D" 1 2.174 "A,B,D" 1 2.174 "A,B,G,J2" 1 2.174 "A,D" 1 2.174 "A,E" 1 2.174 "A,E,H,J" 1 2.174 "B,F,J1" 1 2.174 "B,H" 1 2.174 "C,E" 1 2.174 "D,H" 1 2.174 A 1 2.174 B 1 2.174 C 1 2.174 E 1 2.174 F 2 4.348 J1 2 4.348

Total Cases

46

Group # % 0 30 65.22"A,B,G,H" 2 4.348"A,D,E,G" 1 2.174"A,D,E,H" 1 2.174"A,E,G" 1 2.174"A,G" 1 2.174"B,D" 1 2.174"C,D " 1 2.174"C,G" 1 2.174A 1 2.174B 2 4.348C 1 2.174E 1 2.174G 1 2.174H 1 2.174

b Funding only Total Cases 46 Group # % 0 42 91.304"A,C,D,E" 1 2.174 "A,D,E" 1 2.174 J1 2 4.348

Total Cases 46 Group Count % 0 44 95.652 E 1 2.174 F 1 2.174

Total Cases 46 Group Count % 0 44 95.652 "A,B,C" 1 2.174 "A,D" 1 2.174

b. 2006

c Participation and funding

Total Cases 46 Group # % 0 26 56.52"A,C,D" 1 2.174"A,C,D,E,F" 1 2.174"A,D,E" 1 2.174"A,G" 1 2.174"B,E" 1 2.174"B,F" 1 2.174"F,J1" 1 2.174A 3 6.522B 1 2.174C 1 2.174D 3 6.522E 1 2.174F 2 4.348G 1 2.174H 1 2.17

Total Cases 46 Group Count % 0 32 69.56 "A,C,F" 1 2.174 "A,D,E" 2 4.348 "A,H" 1 2.174 "C,E" 1 2.174 B 2 4.348 C 2 4.348 D 1 2.174 E 1 2.174 F 1 2.174 J 1 2.174 J2 1 2.174

Total Cases 46 Group # % 0 34 73.91"A,B,E,G" 1 2.174"A,C" 1 2.174"A,D" 3 6.522"A,D,J1" 1 2.174"B,F" 1 2.174"D,F" 1 2.174"H,I" 1 2.174B 1 2.174E 1 2.174J3 1 2.174

c. 2007

a Participation only

Total Cases 46 Group # % 0 26 56.521 1 2.174"A,B" 1 2.174"A,B,C,D,E,F,G,H" 1 2.174"A,B,D,G,H,I" 1 2.174"A,B,D,J2" 1 2.174"A,D,F,H,J" 1 2.174"A,D,F,J2" 1 2.174"A,D,G" 1 2.174"A,D,H" 1 2.174"A,E" 1 2.174"B,F" 1 2.174"C,D,H" 1 2.174"E,C" 1 2.174A 3 6.522C 1 2.174E 2 4.348H 1 2.174

Total Cases

46

Group # % 0 31 67.39 "A,B,D" 1 2.174 "A,B,J2" 1 2.174 "A,D" 1 2.174 "A,E" 1 2.174 "A,E,H,J" 1 2.174 "B,F,J1" 1 2.174 "B,H" 1 2.174 "D,H" 1 2.174 A 1 2.174 B 1 2.174 C 1 2.174 E 1 2.174 F 2 4.348 J1 1 2.174

Total Cases

46

Group # % 0 31 67.39"A,B,G,H" 2 4.348"A,D,E,G" 1 2.174"A,D,E,H" 1 2.174"A,E" 1 2.174"A,G" 1 2.174"B,D" 1 2.174"C,D" 1 2.174"C,G" 1 2.174A 1 2.174B 2 4.348C 1 2.174E 1 2.174G 1 2.174

Appendix E Results of the Government Questionnaire

Appendices Page 48 of 94

b Funding only Total Cases

46

Group # % 0 42 91.30"A,C,D,E" 1 2.174"A,D,E" 1 2.174J1 2 4.348

Total Cases 46 Group Count % 0 44 95.652 E 1 2.174 F 1 2.174

Total Cases 46 Group Count % 0 45 97.826 "A,D" 1 2.174

c Participation and funding

Total Cases 46 Group # % 0 29 63.04"A,C,D,E,F" 2 4.348"A,D,E" 1 2.174"A,G" 1 2.174"B,F" 1 2.174"F,J1" 1 2.174A 1 2.174B 1 2.174C 1 2.174D 2 4.348E 2 4.348F 2 4.348G 1 2.174H 1 2.17

Total Cases 46 Group Count % 0 35 76.087 "A,C,F" 1 2.174 "A,D,E" 2 4.348 "A,H" 1 2.174 B 1 2.174 C 2 4.348 D 1 2.174 E 1 2.174 J 1 2.174 J2 1 2.174

Total Cases

46

Group # % 0 34 73.91"A,B,E,G" 1 2.174"A,C" 1 2.174"A,D" 2 4.348"A,D,J1" 1 2.174"D,F" 1 2.174"H,I" 1 2.174A 1 2.174B 1 2.174D 1 2.174E 1 2.174J3 1 2.174

a Participation only

Total Cases 46 Group # % 0 27 58.7 1 1 2.174"A,B" 1 2.174"A,B,C,D,E,F,G,H," 1 2.174"A,B,D,J2" 1 2.174"A,C,D,H" 1 2.174"A,D,F,H,J" 1 2.174"A,D,F,J2" 1 2.174"A,D,G" 1 2.174"A,E" 1 2.174"B,D,G,H,I" 1 2.174"B,F" 1 2.174"C,D,H" 1 2.174"E,C" 1 2.174A 3 6.522E 2 4.348H 1 2.174

Total Cases

46

Group # % 0 31 67.39 "A,B,D" 1 2.174 "A,D" 1 2.174 "A,E" 1 2.174 "A,E,H,J" 1 2.174 "A,J2" 1 2.174 "B,F,J1" 1 2.174 "B,H" 1 2.174 "D,H" 1 2.174 A 1 2.174 B 1 2.174 C 1 2.174 E 1 2.174 F 2 4.348 J1 1 2.174

Total Cases

46

Group # % 0 30 65.22"A,B,G,H" 3 6.522"A,D,E,G" 1 2.174"A,D,E,H" 1 2.174"A,E" 1 2.174"A,G" 1 2.174"B,D" 1 2.174"C,D" 1 2.174"C,G" 1 2.174A 1 2.174B 2 4.348C 1 2.174E 1 2.174G 1 2.174

b Funding only Total Cases 46 Group Count % 0 41 89.13 "A,C,D,E" 1 2.174 "A,D,E" 1 2.174 D 1 2.174 J1 2 4.348

Total Cases 46 Group Count % 0 44 95.652 E 1 2.174 F 1 2.174

Total Cases 46 Group Count % 0 45 97.83 "A,D" 1 2.174

d. 2008

c Participation and funding

Total Cases 46 Group # % 0 28 60.871 1 2.174"A,C,D,E,F" 1 2.174"A,D,E" 1 2.174"A,G" 1 2.174"B,F" 1 2.174"F,J1" 1 2.174A 2 4.348B 1 2.174D 3 6.522E 2 4.348F 2 4.348G 1 2.174H 1 2.174

Total Cases 45 Group Count % 0 35 77.78 "A,C,F" 1 2.222 "A,D,E" 1 2.222 "A,H" 1 2.222 B 1 2.222 C 2 4.444 D 1 2.222 E 1 2.222 J 1 2.222 J2 1 2.222

Total Cases 45 Group Count % 0 37 82.22 "A,B,E,G" 1 2.222 "A,C" 1 2.222 "A,D" 2 4.444 B 1 2.222 E 1 2.222 F 1 2.222 J3 1 2.222

Appendix F - Key Findings of the Corporate Philanthropy Study

Appendices Page 49 of 94

Key Findings of the Corporate Philanthropy Study Summary of Key Findings The Corporate Philanthropy Study drew on the responses of 66 companies to a questionnaire on corporate giving. While this is a limited cohort which showed some bias towards international companies,24 it is the largest statistical analysis of attitudes to corporate philanthropy in Hong Kong. Key findings from the Philanthropy Study include the following: Patterns of corporate giving

• Local Hong Kong companies, many of them family-owned, are not commonly used as a significant channel for philanthropic giving.

• There are no strong tax incentives either to channel giving through a company, or to create corporate foundations as vehicles for giving activity.

• Business leaders tend to give discreetly (according to Chinese tradition), sometimes through individual or family foundations or through personal and financial support to community charitable organisations like the Community Chest. There is also a high level of “guanxi” giving in support of charitable initiatives taken by business friends or colleagues.

Multinational companies • Multinational companies’ (MNCs) giving policy is normally dictated from the global

headquarters, and is often driven by a corporate foundation. Giving activity is strongly driven by a desire to motivate and retain staff.

• MNCs tend to be generous contributors in general, but will give little in Hong Kong (which most regard as a comparatively wealthy community) unless they have very substantial numbers of employees in the SAR.

• MNCs can provide examples for best practices and a structured, professional approach to giving activity.

Levels of Corporate Giving

• Approved charitable donations by companies (reported by Hong Kong’s Inland Revenue Department) were HK$850 million in 1999, about 0.36% of total assessable profits of HK$234bn.25

24 Only 61% respondents regarded themselves as Hong Kong companies and a large proportion of the small company respondents were actually foreign-controlled therefore the survey provides a less reliable reflection of the hundreds of thousands of tiny local SMEs. Note that in this survey large companies were defined as those with over 200 staff. Golin/Harris Forrest (2001). 25 In 2002, approved donations by companies were HK$640 million.

Appendix F - Key Findings of the Corporate Philanthropy Study

Appendices Page 50 of 94

• This HK$850 million significantly understates actual levels of corporate giving. Guesstimates based on various methods of calculation suggest that company giving currently amounts to at least HK$1.4 billion, and that the upper bound of giving is about HK$2.6 billion.26

Reasons for community involvement

• 80% respondents regarded the need to build a good reputation as the principal motivator for community involvement, with 58% of respondents seeing it as a complement to marketing activity, and 56% as a means of motivating staff and building team spirit (particularly so for overseas companies).

• Big companies and companies with large numbers of staff employed locally give more. • Long-standing companies with stable profit performance and companies strongly

subject to Government regulation are more generous on a per capita basis. • Locally-owned medium and large companies are likely to be more responsive to

government appeals for enhanced philanthropic support.

Reasons for committing more resources • Rising profits (48% respondents) followed by rising welfare/community needs (12%

respondents) are the most important factors that encourage companies to commit more resources to philanthropic activity.27

• In simple terms, the better the economy, the greater the contribution by corporations. • Corporate giving by locally-owned Hong Kong companies and SMEs are more affected

by economic trends than international companies.

Beneficiaries of corporate giving Companies are generally most willing to give to causes linked with Education (58% respondents), the environment (39%), poverty/the disabled/the aged (35%), children (30%), and with health/ medicine (27%).28 Companies are generally least willing to give to causes linked with heritage (1%), religion (3%), and animals (3%). Attitudes to volunteerism While almost half of the respondents stated that they actively encourage staff to be involved in the community, at least 30% had no formal schemes to encourage voluntary activity, while just 30% give staff time off to be involved in voluntary activity. However 45% did provide matching funds to staff taking initiatives to raise money for charity.

26 This excludes the value of giving in kind, the monetised value of company-endorsed volunteer activity, and personal giving by heads of family-owned companies. 27 Least important factors encouraging giving were government matching funds, increase in mainland operations and tax breaks. 28 The questionnaire may have significantly under-represented the priority of SMEs, many of whom support the Community Chest, clan associations and organisations like the Po Leung Kuk.

Appendix F - Key Findings of the Corporate Philanthropy Study

Appendices Page 51 of 94

Attitudes to corporate giving There is still a belief, especially among Chinese business executives of family-controlled companies that the role of companies is to make profit, not to engage in philanthropy. This traditional view is being eroded, and there is good evidence that focussed corporate citizenship can boost the performance of the donor company. Public expectations of the modern company are also changing. It was suggested by the Philanthropy Study that due to a natural reticence among many Chinese business leaders, initiatives likely to draw a spotlight onto an individual or his/her company might be counterproductive. Instead it was considered that initiatives which encouraged a group of business leaders or their companies to join forces might be more successful. The Philanthropy Study suggested that because more Hong Kong people, and the companies they lead, have come to regard Hong Kong as a long-term home since the 1997 transition to Chinese sovereignty, corporate giving levels to the Third Sector will rise over time. NGO Transparency It was also suggested in the Philanthropy Study that the amount of corporate giving could be increased if charities in Hong Kong were more transparent, providing clear and detailed information about who they help, and how effectively they use the resources they receive.

Appendix F - Key Findings of the Corporate Philanthropy Study

Appendices Page 52 of 94

The following summaries F1 and F2 are calculations based on information updated since the publication of the Corporate Philanthropy Study F1 Corporate donations as a % of Third Sector expenditure29 All in HK$ billions Year 2002 IRD approved charitable donations (under profits tax) 0.64Third Sector expenditure (mean average) 22.97GDP (current) 1,247.00 Corporate donations as % of GDP 0.05%Third Sector expenditure as % of GDP 1.84% Approved charitable donations as a % of Third Sector expenditure 2.79%

F2 Approved charitable donations and GDP figures for fiscal years 1997-200230

All in HK$ billions 1997 1998 1999 2000 2001 2002 Approved charitable donations (under profits tax)

0.803

0.631

0.700

0.830

0.820

0.640

GDP (current) 1,344 1280 1246 1288 1270 1247 Donations as % of GDP 0.060 0.049 0.056 0.064 0.065 0.051

29 Approved charitable donations (under profits tax) provided by IRD, personal communication. Third Sector Expenditure CPU (2004). GDP figures (at constant prices) from HKSAR Governments Census and Statistics Department www.info.gov.hk/censtatd/eng/hkstat/fas/nat_account/gdp/gdp1_index.html accessed 17 November 2004). 30 Ibid.

Appendix G – Focus Group Notes

Appendices Page 53 of 94

Focus Group Notes The following provides a summary in note form of the issues raised and discussed in the six facilitated Focus Groups undertaken as part of the study. These comprised 3 sector-specific focus groups and 3 tri-sector focus groups. The views and opinions expressed in the notes do not necessarily represent a consensus view; rather the notes provide an overview of the issues raised. Although similar agendas were followed in the 3 sector-specific and the 3 tri-sector Focus Groups (Appendix A3), the notes necessarily reflect the dynamic flow of discussion and highlight the participants’ different concerns.

FOCUS GROUP 1 - THIRD SECTOR, –22ND NOVEMBER 2004

Third Sector Participant Organisations (alphabetical order)

1 Artist Commune 2 Asia Foundation (2 participants) 3 Community Business 4 Crossroads 5 Designing Hong Kong Harbour District 6

Global Reporting Initiative 7 Hong Kong Amateur Athletics Association 8 Hong Kong Arts Development Council 9 Hong Kong Federation Women’s Commission 10 Hong Kong General Chamber of Commerce 11 Hong Kong University 12 Junior Achievement 13 Living Islands Movement 14 Neighbourhood Advice Action Council 15 Sports Institute Limited (2 participants)

Appendix G – Focus Group Notes

Appendices Page 54 of 94

Summary Of Key Issues – Third Sector General

• Fiscal Issues –if Government intention is to forge partnerships as a measure to ease the fiscal burden – this would not be acceptable to the Third Sector (funding is a concern for NGOs). It was suggested that Government should make clear that the primary reason for partnerships is not to reduce the fiscal burden.

• Funding – remains a major concern for NGOs • Public and private sector funding – funding roles are different and should not be confused • Fourth Partner – the consumer and the individual need to be considered as the fourth and fifth partners • Diversity – is a core value and should be accommodated • Participative democracy – is considered to be lacking in Hong Kong • A policy on TPPs requires understanding of the roles of different sectors of the community • Pure financial donations/funding – alone are not considered as partnerships • Evolution of partnerships – cannot be disassociated from the evolution of governance • Cost Benefit Analysis – there is a need to convert (the worth of) social value to the bottom line

Benefits and opportunities of partnership. TPPs can be undertaken to:

• Lead to a better quality outcomes and better quality decisions • Provide solutions to problems • Provide an vehicle for partners who wish to ‘contribute’ to society in some form • Provide for change of management • Provide advantages to Government, since it gains free advice from experts

Issues Relating to the Role of NGOs:

• The role of NGOs requires clarification • How does the advocacy role of many Third Sector Organizations affect partnering? When the reasons for

the relationship are unclear, NGO advocacy can be an issue from both a Government and Business perspective. When the NGO is a contracted non-profit service provider, then the advocacy role is less appropriate.

• NGOs should not be viewed as just on the receiving end. They also need to contribute to a partnership. NGOs should make a specific effort to be actively involved in/contribute to, the partnership to avoid being viewed as solely the receiver.

Appendix G – Focus Group Notes

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Characteristics and Components of Effective Partnerships

• Partners must have clear roles and defined responsibilities • Partners must have shared objectives and targets • Negotiation and hard work is required – all 3 parties have vested interests, success lies in negotiating

these (the harmonious relationship was identified as an elusive concept – there is a need to come to some agreement)

• Ownership of the partnership activity (by partners) • Leadership • Flexibility – adapting to change • Mutual Trust • Respect • Accountability – e.g. from an NGO perspective, report on the return on investment to partners from a

business perspective • A review process – self reporting on performance • Transparency

Third Sector Views on Government

• Inflexibility of front line staff in administering policies and also red tape hinders partnerships • Mindset change is needed and Government needs to be reflective (there is a lack of reflectivity within

Government e.g. on its own processes) • The Government’s role is to provide endorsement and build confidence of partners through its

involvement • Inconsistency within Government is problematic in developing and maintaining partnserships • The Government does not understand the concept of cost-benefit analysis • The Government appears to adopt a consultation approach without truly wanting policy i.e. there is data

collection and analysis, but is it being used? What happens to the information/findings? •

Third Sector Views on Business • The business case for partnerships can be to manage risk (brand and reputation) • The business case can also be that partnering is the right thing to do in terms of responsibility • Business engages in partnerships for their staff, for profit and for reputation

Media

• Is a catalyst for action

Recommendations

• Mindset change of frontline government employees • Recognition of the complexities and benefits of partnership; there is nothing necessarily superior about tri-

as opposed to bi-lateral partnerships in reference to achieving overarching goals of building the community

• Raise awareness and educate in how to partner, provide skills training • Public disclosure (disclose finances e.g. NGOs, and improve government disclosure of information) • Consultative process needs to be seen in terms of the evolution of governance. • Tax incentives could be considered (e.g. for the arts) • Publish the TPP Study (this study) Report

Appendix G – Focus Group Notes

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FOCUS GROUP 2 - BUSINESS SECTOR, 30TH NOVEMBER 2004

Business Sector Participant Organisations (in alphabetical order) 1 Allen and `Overy 2 Bank Consortium Trust 3 China Light and Power Research Institute (2 participants) 4 Freshfields Bruckhaus Deringer 5 Hong Kong Council of Social Services 6 Hong Kong and Shanghai Banking Corporation 7 Insight Dynamics 8 Manpower 9 Morgan Stanley 10 PCCW 11 PricewaterhouseCoopers Hong Kong 12 Zurich Insurance Group

Appendix G – Focus Group Notes

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Summary of Key Issues – Business Sector

Comments on the TPP definition

• The form of ‘Strategic’ partnerships as identified in the definition may not exist in Hong Kong. There is no on-going discussion on policy formation.

• Should the definition be split into types? Focus definition more on principles e.g. clear and shared goals, division of work, clear responsibilities, consistent evaluation of each party’s role

Benefits and Opportunities of partnership. TPPs can be undertaken:

• As part of CSR and corporate culture • In response to internal staff interest – to meet staff requirements who wish to ‘contribute’ • To build pride in the company and to build team spirit. • As part of brand and reputation building • To provide the opportunity for enhanced interaction among different levels within the company • To build relationships with clients. Through networking, TPPs provide the opportunity to team up with

clients • To transfer resources and expertise to transform the Third Sector Org – “Transfer and Transform” • As a collaborative exercise, since collaborative projects within one sector can also be more rewarding for

employees than one organisation doing it alone • As there is no other way to achieve an objective • To help retain staff. Employees want to work for a caring company • To raise employee awareness and educate Business and the community • To enhance employee development – e.g. communication skills, job skills, social skills, relationship

building, self esteem (seeing their actions making a difference)

Bi-partite Partnerships (BPPs) versus TPP

• Often partnerships start small (BPPs) and grow as the partnership evolves which may or may not include developing into a TPP

• BPPs can be effective forms of partnership – often Business and NGO – without Government • The perception is that a TPP is much bigger and more involved as a project; and is therefore often more

difficult to manage To what extent does philanthropy create partnerships?

• Philanthropic donations are part of a partnership in terms of support to a project, but not in isolation • The process of making a donation can form a partnership in itself • Partnerships may begin with cash donations and develop as business realises it can contribute more e.g.

its business expertise

Appendix G – Focus Group Notes

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Role/Characteristics of Business. Business can:

• Provide skills and expertise to NGOs • Build capacity through training e.g. proposal writing, communication skills, approaching people for money

etc. • Create platforms that enable experience and best practice sharing; teaching others how to partner –

companies often don’t know where to start (e.g. Community Business’ Business Leadership Team aims to do this)

• Provide some funding. It is not businesses’ role to fund projects forever, but they can work with the Third Sector and Government to make projects more sustainable

Note • Business’ partners undertake co-ordination and administrative tasks as these are time-intensive aspects of

a partnership/ project • SMEs are concerned with building business and have little understanding or time for CSR

Role of Government and its relationships with Business

• There is an emerging understanding that the Government cannot do everything • The Government can provide facilitation role • The Government can provide recognition/publicity/promotion of partnership efforts • Some partnerships evolve through business/community initiatives, only involving government at a later

stage • The Government can provide leadership to initiate a partnership, but departmental communication

problems make implementation difficult

Barriers to partnership and reasons for failure Management/structure/dynamics of the partnership

• The partnership initiator can lose interest and stop upholding commitments, partnerships can die spontaneously (change in personnel and manpower shortages can contribute to this)

• Poor relationship management – more than one individual should drive a partnership • Often two parties get on well and the 3rd one is left out – team dynamics therefore need to be well

managed • Uneven commitment by parties may be problematic • Significant time is required in (a) organising the activity and (b) convincing others to be involved • Facilitating partnerships involves valuing diversity; tapping the participants’ knowledge, and working in a

collaborative manner (skills which are limited in Government and big business) • Meetings tend to be chairman driven and are not necessarily effective

NGO Related • Sometimes there is suspicion (by NGOs) as to why Business is involved in partnerships • Some NGOs see themselves as recipients rather than partners • NGOs have inadequate resources and skills to fully deliver on the project objectives of a partnership • Often Third Sector Organisations don’t want cash but they want access to networks and to enhance/build

image and reputation

Appendix G – Focus Group Notes

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Government Related

• Need to engage at the right level in the Government and through the appropriate committee • Ownership of projects is problematic within the Government (a responsibility issue) • Lack of empowerment in the lower levels – staff are bound by rules and regulations and staff are generally

not hopeful that things will get approval at the top level so they don’t try. • Lack of authority renders personnel unable to make decisions for fear of doing something wrong • The Government is only receptive to working with businesses who have already successfully run programs• If the idea is not already on their agenda Government is unlikely to be interested • Working with the Government means dealing with rigidity and red tape • Individuals within the Government do not have the appropriate authority or budget to facilitate the

partnerships. Decisions needs to be taken to higher levels where there is often a lack of understanding of the partnership

• The Government acts as an advisor/observer not a full partner, more government involvement is preferred Critical Success Factors Project management and design

• Designing the project together, define upfront each party’s contribution • A performance monitoring/evaluation and management role should be built into the project design • Clear division of responsibility • Formalising agreements are important – can be used to remind each other of commitments made • Projects need a “champion” to ‘own’ the project and to develop them in the longer term • Structures should be set up internally e.g. project dedicated committees that can review and change plans • For longer term programs it is useful to get business staff on the boards of the Third Sector organisations

to increase understanding of the Third Sector needs • Providing compensation leave for employees giving their time

Characteristics • Shared objectives • Flexibility to alter and transform the objectives as needed. • Diversity of the partners and understanding of/between partners • Maintaining contact with all parties and building collaborative networks; sharing of experience and

expertise builds commitment and trust • Trust builds over time (sincere commitment to the project and persistence) and is best developed through

professionalism • Trust needs to be built at different levels e.g. at the top level and at the working level • Partnerships often take much longer to develop than expected • Credibility can be checked in a due diligence type manner • Transfer, Transform, Team, Time (to build relationships), Trust, Thrust (purpose/mission)

Appendix G – Focus Group Notes

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Media / Promotion

• Chinese media do not report on philanthropic activities. The Oriental Daily has its own foundation and only reports on its own events and regarding the Apple Daily, it is difficult to get interest or space

• Good news is not reported in Hong Kong; only bad news • Sometimes the publicity budget has to be higher than the project budget just to get some coverage in the

newspapers; this is fed by the perception that big business can afford to pay for media advertising • Operation Santa Claus is a good template because the media is using its skills and networks to harness

support and to profile the work of various charities. SCMP/RTHK act as a catalyst between Business and the community

• Third Sector has its own media channels (annual reports/ newsletters/ website) but often they put sponsors and partners contributions at the back of the documents – they should be featured upfront

Questions

• Are there opportunities to partner with the Third Sector to achieve business objectives? • Usually Business has more power than the Third Sector (in terms of resources, management capability

etc.) – how can this be managed? • Where do opinion leaders, social leaders (the glitterati) fit in?

Recommendations

• Publicize organisations which are looking for assistance to make it easier for Business to know who to contact and get involved with; builds a better menu for businesses to choose what to get involved with

• Third Sector Organizations need more training to develop expertise on initiating partnerships and asking for funding. Government to help increase the capacity of Third Sector through the development of training courses such as the NGO administration and management courses

• Ways should be found to encourage SMEs to be involved as they are often closest to the community • Capacity building – holding meetings, management skills etc.

Appendix G – Focus Group Notes

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FOCUS GROUP 3 - GOVERNMENT SECTOR, 30TH NOVEMBER 2004

Department (in alphabetical order)

1 Agriculture Fisheries and Conservation Department (AFCD) 2 Architectural Services Department (ArchSD) 3 Companies Registry (CR) 4 Correctional Service Department (CSD) 5 Education and Manpower Bureau (EMB) 6 Electrical and Mechanical Services Department (EMSD) 7 Environmental Protection Department (EPD) (2 0articipants) 8 Food Environment and Hygiene Department (FEHD) 9 Fire Services Department (FSD) 10 Health Welfare and Food Bureau (HWFB) 11 Highways Department (HyD) 12 Hong Kong Observatory (HKO) 13 Information Services Department (ISD) 14 Inland Revenue Department (IRD) 15 Labour Department (LD) 16 Marine Department (MD) 17 Planning Department (Plan D) 18 Social Welfare Department (SWD, MCOR) 19 Social Welfare Department (SWD) 20 Sustainable Development Unit (SDU) 21 Television and Entertainment Licensing Authority (TELA)

Appendix G – Focus Group Notes

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Summary Of Key Issues Benefits and Opportunities of partnership

• To allow different perspectives to be aired/increases understanding of different sectors’ issues/builds collaboration

• To maximise resources • In building strategic direction it is beneficial to involve all parties • Can be used to transform business behaviour towards best practices (as opposed to the traditional

regulatory role which aims to catch, punish and stop unlawful behaviour) • NGO/ Business involvement usually leads to more creativity in partnerships

Bi-partite Partnerships (BPPs) versus TPP

• Instead of a TPP, projects can often end up with two BPPs rather than one TPP. • For TPPs – it is more challenging to engage all three sectors’ parties– as compared to BPPs.

Role/Characteristics of NGOs

• NGOs/civil society sometimes easier to work with than Business but it depends on the area of collaboration

• Some NGOs are more political than others • NGOs must recognize needs when offering services (i.e. be pragmatic; service oriented and reasonably

priced) • NGOs (particularly the grass roots) need assistance in reporting back to Government and in applying

certain skills e.g. project management, reporting, and budget management. Governance is often poor in section 21 organisations (those with charitable status) – basic skills are often missing e.g. accounting

Role/Characteristics of Business

• Business is pragmatic and willing to work with NGOs providing they provide a good service • Business cannot replace Government funding responsibilities as the amounts are too large • Businesses have a lot to contribute other than just money – they can provide opportunities for social

transformation; information provision; expertise • Business may work in partnerships to protect image/brand/reputation

Appendix G – Focus Group Notes

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Role/Characteristics of Government

• Leadership role – leave creativity to others • Facilitating the partnering process and acting as a broker between NGO and Business • Provision of advice • Matchmaking and mentoring • Providing a platform for partnerships • Capacity building • Arbitrator, protector of public interests, regulator and monitor • Front line staff trained to ensure policy implementation • Different departments have different characteristics – some open, some bureaucratic • Brings media which is good for business

Reasons for Failure of/Barriers to Partnership

• The Government is seen as a regulator, such that there is often inherent potential for conflict and lack of

trust • Some potential partners are cynical (through experience of working in partnerships with Government that

are not genuine) – suspecting that the Government has an ulterior motive for partnering e.g. keeping partners quiet

• Suspicion that the Government is ‘palming off’ some responsibilities e.g. financial though partnering – leads to mistrust

• Frequent changes in personnel can be problematic, but institutional memory is considered to be good and can counteract the potential negatives

• Continuity can be a problem due to government staff rotating through departments • Problems in partnerships are not all down to trust • Often it is harder for government departments to communicate with each other than to communicate with

other sectors – there appears to be a lack of co-ordination between departments • Need to move away from confrontation based approaches and towards collaborative approaches

Critical Success Factors

• • Partnerships should be based on organisational strength • Strong personal relationships with Third Sector Organizations can facilitate partnerships (which can take

years to develop) • Recognising that there are inherent conflict of interests and that there is a need to build trust • Understanding the needs of the NGO • Openness and transparency • Recognise that one size does not fit all, different partnership frameworks should be recognised • Departmental commitment – not just using a ‘stick’ approach • Respect of partners and understanding each partners’ constraints • Recognising that partnerships are a working relationship and require time and effort • Partners matching themselves rather than the Government doing it (although this depends on the

department) Media

• Good relations with media is important • Media does not necessarily portray partnerships in the right light

Appendix G – Focus Group Notes

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Recommendations

• Capacity building for NGOs – basic skills training e.g. in holding meetings, budgeting, governance, accounting, reporting, project management

• Capacity building for the Government – mediation skills, media management, meeting management • Institutionalize some of the relationships/collaborative channels • Need to change the macro climate – to ensure accurate portrayal of partnerships • Provision of guidelines for partnering for NGOs and Business – providing information on initiating

partnerships, NGOs to partners with, priority (community) areas

Appendix G – Focus Group Notes

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FOCUS GROUP 4 - TRI SECTOR , 4TH DECEMBER

Participants Organisations ( in alphabetical order) 1 Asia Foundation 2 Boyden 3 Civil Engineering and Development Department 4 Community Business 5 Correctional Services Department 6 Creative Initiatives Foundation 7 Environmental Protection Department 8 Hong Kong Council of Social Services 9 Insight Dynamics 10 Hong Kong Council of Social Services 11 Hong Kong Police Department 12 Hong Kong Productivity Council 13 Hospital Authority (2 participants) 14 Internal Revenue Department 15 Junior Achievement 16 Labour Department 17 Living Island Movement 18 Microsoft 19 Transport Department

Appendix G – Focus Group Notes

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Summary of Key Issues – Tri sector 4th December 2004 General Issues

• Business looks to TPPs from a perspective of what they can get out of the partnership, as opposed to what they can contribute to it.

• The TPP model is too simplified. With many complex problems and many stakeholders, it is not appropriate to rely on TPPs to solve all problems. Some examples do work, but their suitability should be assessed on a case by case basis

• Self awareness by Government would appear to be low, given the discourse from the Government sector focus group

The TPP Process

• Legal requirements are unclear. An understanding of corporate law is necessary in partnerships. Business applies considerable effort in ensuring that the annual report meets the relevant reporting requirements. Business sees the issues of transparency as a potential liability

• Disclosure may be an issue when competitors are invited into a partnership Comments on Opportunities/Benefits of TPPs

• Government does not currently involve all relevant parties in strategic decision making processes as

demonstrated for example by the Super Prison. TPPs provide the opportunity to build strategic direction and build consensus

• TPPs can provide a platform for mutual understanding and communication, and can assist in conflict resolution

• The Government can contribute to CSR through TPPs e.g by providing recognition to corporations and promoting CSR and in doing so promote community work.

• TPPs provide the opportunity to build on shared visions and goals • One of the objectives of partnership is to increase cross-sectoral trust by more transparent sharing of

information and reducing the level of mutual suspicion • TPPs provide the opportunity to recognize differing sectoral strengths • TPPs provide the opportunity to strike a balance • TPPs provide the opportunity to involve and educate the media • Government can transform business behaviour through TPPs • TPPs can harness synergies of the 3 sectors and stop the reliance on just the Government to solve all

societal problems • Leadership - It should not always be the role of the Government to lead; whichever sector has the strength

should lead. TPPs provide this opportunity Additional Benefits Identified

• Results are a benefit and there should be a tangible outcome Additional Opportunities

• Without participation from all sectors, certain areas cannot sustain themselves e.g. health care • There are many consultative mechanisms in Hong Kong, but they are not working effectively (e.g

transparent sharing of information)

Appendix G – Focus Group Notes

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Existing Governmental Processes

• There is currently a lack of process. The Government does not necessarily recognize a problem. Recognizing a problem is half-way to its solution.

• The Government often listens to individuals as opposed to groups – this is unreliable as it subjects the Government to individuals’ vested interests, TPPs go beyond individuals

• The Government does not involve parties early enough in the consultative processes e.g. in identifying issues and problems; rather it identifies solutions for consultation. TPPs provide the opportunity for dialogue early in the consultation process

• TPPs provide the opportunity to engage the public early and bring them up to speed on issues • The Government’s process of identifying solutions is currently inadequate

Comments on success factors

• Transparency is fundamental to successful TPPs • Mutual trust is important • Partnering with the right partner

Process/Structure of TPPs • Effective TPPs should have a formal mechanism, this will assist in handling diverse views • A results-oriented approach is important as TPPs are ultimately a means to an end and success will be

judged by achieving the objectives. • The Government should have a champion for the partnership as well as providing leadership. There is

little point in having direction without effective leadership. Additional success factors

• Willingness of parties to communicate Comments on Barriers to Partnership

• Fear of attack by media prevents parties getting involved, particularly in the Business Sector • Insufficient recognition of parties’ contributions, e.g. their strengths • Different sectors have different agendas and each sector is suspicious of the other. Business needs to

come to terms with the fact that the NGOs wear two hats. Business is also often seen as a cash cow by both NGOs and the Government. The Government’s motives for partnering are also under suspicion i.e. proposing TPPs as a way of withdrawing responsibility.

• NGOs have inadequate resources • Government’s unwillingness to partner unless a proponent has undertaken similar activities in the past

negates the opportunity to partner with parties that have the appropriate ability and experience

Additional Barriers to Partnerships • Lack of knowledge about how to approach issues and to organize partnerships • There maybe a lack of attention to issues by the Business Sector due to inadequate knowledge

Appendix G – Focus Group Notes

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Recommendations

• Improve existing consultative process – Involve tri-sector dialogue before formal policies on consultation • Establish a clearinghouse for information/issues, for brokering ideas and matchmaking partners from the

three sectors • Increase representation of NGOs on advisory boards/committees • Create a TPP council which works with Government to identify parties/organisations to be used as a

platform for specific issues • Establish government policy on NGOs and departmental guidelines on how to work with NGOs • Develop ad hoc think tanks/workshops – use existing intellectual capital to work on specific issues, submit

a report to Government and disassemble • Improve interdepartmental communication to address consistency issues between departments • Create an NGO of the year award • Increase involvement/support from the media • Develop a mechanism for facilitating feedback and use feedback to educate partners • NGOs need additional resources with no strings attached • Lack of experience in addressing an issue should not be a barrier as demonstrated by the Livings Island

Movement

Appendix G – Focus Group Notes

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FOCUS GROUPS 5 AND 6 - TRI SECTOR , 6TH DECEMBER Group A Participant Organisations (in alphabetical order) 1 Artist’s Commune 2 Bank Consortium Trust 3 Crossroads 4 Education and Manpower Bureau 5 Highways Department 6 Labour Department 7 Mass Transit Railway Corporation 8 Morgan Stanley 9 Oxfam 10 PCCW 11 Social Welfare Department 12 Sports Institute Limited 13 State Street Bank 14 Sustainable Development Unit

Group B

Participant Organisation (in alphabetical order) 1 Agricultural, Fisheries and Conservation Department 2 Allen Overy 3 Better Hong Kong Foundation 4 Business Environment Council 5 China Light and Power Research Institute 6 Environmental Protection Department 7 Harbour-front Enhancement Committee 8 Health, Welfare and Food Bureau 9 Helping Hand 10 Hong Kong Shanghai Banking Corporation 11 Hong Kong Southern District Women’s Association 12 Manpower 13 Planning Department 14 Social Welfare Department (MCOR) 15 Swire Coca Cola (Hong Kong) Limited

Appendix G – Focus Group Notes

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Summary of Key Issues – FOCUS GROUP 5 - Tri sector, 6th December 2004, Group A Comments on opportunities and benefits identified by the sector specific focus groups Overall – it was agreed that in general the opportunities and benefits presented were applicable from all different sectors’ perspectives, however specific comments included

• NGOs have unique expertise which can be utilized in partnerships. They are particularly good at working externally, an area where the Government is quite weak. Compared with the Government, NGOs have stronger networks and relationships with grassroots organisations, which allows for effective outreach in the community.

• Understanding how the other sectors think is one of the benefits of TPPs • The benefits identified seem to be process-oriented not goal-oriented • One of the reasons for partnering is that the Government cannot do everything, or as suggested does

not want to do everything. Additional opportunities and benefits

• A key benefit of TPPs is achieving a goal • TPPs achieve social transformation and the well-being of the recipients

Comments on Success Factors Characteristics of TPPs

• The Government doesn’t understand business behaviour and vice versa. Civil society groups and the Government have more in common in terms of working together.

• Clear communication regarding expectations of the different partners. For example there maybe an expectation that the partnership can go on infinitely, which is unrealistic

• Equality in the partnership • Flexibility is a key success factor and an issue for all three sectors

The process/ Structure of TPPs • For TPPs to be successful it is necessary to monitor and review progress. There should be flexibility

to adjust and refine the goals and the process for achieving them. • Leadership should disappear as the partnership progresses, equality is important. Leadership should

also change at different stages in the project. • All parties need to work together

Facilitation • With the right facilitator a group can become a unit. Provided that the facilitator is not associated with

any of the partners’ interests, it does not matter who the facilitators are. However, the independence of the facilitator maybe in question given that one of the partners would be responsible for employing the facilitator.

Other • An indication of success is also the likelihood of ‘offspring’ i.e. something else happens • A successful TPP should be measured by its achievements

Appendix G – Focus Group Notes

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Comments on Government • In response to previous groups findings, it is not really a case of the Government not being able to do

everything, more of a case of not wanting to do everything. However, if the goal is creating social harmony, then the Government can’t do everything – everyone needs to work together.

• It is ultimately the Government’s responsibility to take the lead. Comments on Barriers to Partnership

• Suspicion – there is a sense that the Government’s interest in partnering with the Business Sector is to establish procedures for Business Sector to provide financial resources for the benefit of the Government.

• Lack of transparency. The issue of transparency is very sensitive and a key concern for Government • NGOs seldom have time to understand the issues of the Business Sector and vice versa

Reasons for Partnership Failure

• Characteristics of Partners – the Government and Business do not speak in a language that is understood by the Third Sector

• Lack of ownership and empowerment are issues relevant to the Government in particular The Structure /Process

• For a successful TPP it is important to contact the right people with the right expertise at the right level of the organisation. With the Government, senior levels may not be involved, whereas Business and NGOs will usually involve senior people. This creates frustration.

• Lack of understanding and knowledge of the legal framework • Care should be taken not to formalize TPPs too much since this could be a barrier

The Partnership Process

Matchmaking/Identification of partners and Access to Information

• In terms of matchmaking, NGOs are well placed, having access to the right level of people. • Care should be taken not to stereotype partners as part of matchmaking. Matchmaking should

depend on the goal of the project. • There is no particular group that should be responsible for matchmaking. Large corporations are

usually approached by project proponents and therefore do not need matchmaking in the same way as an SME does, for example.

• Matchmaking is a phase in the TPP • Locating individuals for partnership with the appropriate skills and expertise can be problematic,

since although the skills required are clear, locating the individuals who possess them is challenging • The internet is a channel for making information available and researching potential partners before

committing. Word of mouth is another channel which maybe preferred since there is no verification of information on the internet and the appropriate people can be easily found through this route. The internet is only the first step in information gathering.

• The limitation of the internet should be recognized when accessing information about potential partners.

• Global hand provides NGO listings on the internet and is available to provide such services to government.

• Due diligence (regarding potential partners) is an issue when seeking potential partners • It is easier for large corporates to assess potential partners since they have access to resources. For

SMEs this would be problematic. The best way to check on SMEs would then be to contact them directly

• HKCSS provides significant information on the Business Sector through the Caring Company programme

Appendix G – Focus Group Notes

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• From the business perspective it is more appropriate for NGOs to approach the Government regarding partnership initiatives. Business is often not the expert in the subject area and relies on the NGO to make an assessment and also to provide endorsement if the business is providing financial contributions

• In terms of due diligence to determine the suitability of partners, small NGOs in particular are at a disadvantage as they don’t have the resources.

Existing Government Consultative Processes

• The Government process has been successful for 30 years, although it is recognized that it could improve. The machinery is in place. There is early dialogue in the consultation process, although this does not mean that Government has to abide by stakeholder requirements since stakeholders often have conflicting views

• Given consultation processes – how does Government act in response to stakeholder opinions? • The Government mediates as part of the consultation process.

Legal Framework • The formalities of partnership in terms of legalities can take considerable time, whereas the initial

agreement to partner can be quite quick. From the business perspective this is a result of the fact that when a business is providing financial contribution the company has an obligation to the shareholders. The legalities are therefore not trivial. From a Third Sector perspective however, the legalities should not just be in the hands of lawyers and the partners need to be involved in resolving such issues

Other

• Query why the Government holds so many committee meetings behind closed door. • The Government does not require empowerment given its position as an authority; however, it does

need to capacity build. • The Government should publish the findings of this TPP study; otherwise it is not recognizing its

position as a true partner. • Regarding the use of a clearing house. This would imply that NGOs have adequate resources to use

it effectively. • The Government and Business may have substantial resources and the proponent undertakes a risk

assessment (for certain types of project projects) regarding financial risks and and systemic risks to public projects. Need to consider the main stakeholders. It is recommended to formalize this.

Recommendations

• Government to maintain a centralized directory to aid businesses in sourcing potential NGO partners. Also a rule of partnerships which would facilitate an improved understanding of how partnerships work and why.

• Use the internet as an information source for conducting due diligence • Empower front line people • It is clear that the Government mechanisms are not working in terms of its consultative processes.

The Government should involve stakeholders in designing the actual process. • Establish a clearinghouse which can identify facilitators and be a platform where interested parties

can exchange ideas

Appendix G – Focus Group Notes

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Capacity building • Capacity building should include stakeholder identification and facilitation skills

For NGOs • Provide NGOs with the opportunity to work in the Business Sector • Business Sector should consider having some NGO representation on their boards to facilitate

understanding of the Business Sector. However this may not be appropriate since the boards have a fiduciary responsibility and board members must have the appropriate experience. In this respect NGO representation on working committees maybe more appropriate

• NGOs to receive training in leadership, management skills etc. Given the subvention requirements, professional people should be running the NGOs. Capacity building of NGOs should be considered in the context that the NGOs have been set up to deliver services in place of the Government.

For the Business Sectors

• The Business Sector can learn from NGOs, an example in the UK was sited where business leaders visited NGOs and found that they could learn a great deal from NGOs

Summary of prioritized recommendations (i.e. those who received 5 responses or more – see Table G1:

(g) Change the mindset of government employees e.g. by reducing bureaucracy, developing open mindedness, increasing flexibility

(c) Improve the consultative process, e.g. greater transparency and inclusiveness in policy making. Involve tri-sector dialogue before formal policies on consultation

(e) Third Sector capacity-building, e.g. fundraising, initiating partnerships, project management, media management, writing business plans

(h) Encourage SMEs to be involved in partnerships (l) Establish a clearinghouse for information/issues, for brokering ideas and matchmaking

partners from the 3 sectors; (s) Increased involvement/support from the media (d) Create funding for partnerships through specific tax revenues

Note – the recommendations in Table G1 have been consolidated from the previous focus groups

Appendix G – Focus Group Notes

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Summary of Key Issues – FOCUS GROUP 6 - Tri sector, 6th December 2004, Group B

Comments on opportunities and benefits identified in the sector specific focus groups

Overall – it was agreed that in general the opportunities and benefits presented were applicable from all different sectors’ perspectives, however specific comments are included:

• Government in the leadership role • Leadership can be driven by any sector and not just the Government (if it was only the Government

then this would be a barrier). • The Government can more naturally take a leadership role at a macro/policy level but on the

project level this is not always appropriate. • Should also distinguish between initiation and management - once Government engages in a TPP

it should become a partner and not necessarily a leader (examples were quoted in relation to projects where NGOs and Business had taken the lead both at the project level and at the strategic level).

• The Government can provide leadership to encourage TPPs by setting up a platform to allow Business easy access in order for them to gain an understanding of what the smaller NGOs do and what their needs are. The proposed matching grant is a good idea but it is only part of this platform; the Caring Companies is another good initiative.

• Government leadership is ambivalent; on the one hand we do not want Government to take too strong a role yet on the other hand we need people within Government to commit to TPPs and show leadership.

• Government cannot do everything – in fact no sector can do everything; • Raise awareness of social, economic and environment issues; • The Government, like a business, is an organisation which can use TPPs to develop its

brand/image and to develop pride in the organisation, team spirit and employees’ skills. Similarly NGOs can benefit from TPPs in the same way;

Additional opportunities and benefits

• TPPs allow the development of teamwork and raises understanding among all parties; • TPPs are an opportunity to re-order or re-structure the way that all three sectors traditionally relate;• TPPs are an opportunity to build trust • TPPs are an opportunity to create successful outcomes that are agreed upon by all sectors; • TPPs are a tool that can help resolve conflict and save time (many TPPs arise due to conflict in the

community, examples such as the Tung Chung channel and West Kowloon Cultural District were quoted in the context of requiring the different sectors to get together to sort out the issues in a constructive manner);

Note: • The Government needs to motivate the formation of TPPs, and it appears that Government

considers their formation a desirable outcome – Business and NGOs work together/share resources, which alleviates some of the Government’s responsibility.

• NGOs need to communicate their needs better; especially to the Business Sector. Bigger NGOs have business people on their boards but smaller NGOs have less Business representation and find it more difficult to communicate with the Business Sector.

Appendix G – Focus Group Notes

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Barriers to Partnership Comments on barriers to TPPs from sector- specific focus groups

• Lack of government budget (n) – there is a pre-occupation with funding which is misplaced as it is clear that money alone does not achieve goals and can sometimes be a barrier as it makes recipients competitive instead of co-operative.

Additional barriers identified

• Alignment of different sectors’ goals (each sector has different objectives and every now and then there is an alignment of these objectives; often more of a natural fit between NGOs and Business Sector in terms of sharing resources);

• The nature of business often results in more short term interest in projects/issues whereas NGOs and Government are committed to longer term development of projects/issues. This in itself can cause problems although they would be eased if there was an underlying sense of trust. Capacity to run TPPs (a problem for all sectors – see ‘real barriers’ below)

The ‘real barriers’

• Most of the barriers identified (especially trust) are symptomatic reflections of the real problems/barriers which are:

• There is a difference in objectives between the three sectors • There is no mechanism or process to overcome this or find consensus among these differing

objectives. • Without a clear understanding of how the process works, TPPs will always be sensitive to breaking

down and symptomatic problems will arise. Generally there is a lack of capacity to run TPPs which is relevant to all sectors.

TPPs process and competencies/skills include

• Terms of reference – must be clearly defined by all parties, and if defined by one party then should be flexible to changes suggested by the other partners

• Setting of objectives – must be agreed upon by all parties, or at least related to each other • Development of methodologies to achieve objectives • Access to required funding • It would be helpful if each party can state upfront what they expect of each other and what they

expect of the TPP; this assists in clarifying misunderstandings and helps identify common objectives; skills and resources required etc. This could be illustrated in the form of a matrix.

• Early dialogue is a key to success as this helps identify related and similar objectives of the different sectors. Examples included community recycling where Government took the initiator role but did not have a clear set of objectives; these were then created once it understood what NGOs and Businesses objectives were and how they related to each other. Hence the project map was built together and then the project applied for government funding. Smaller experiences like this may form a model for larger projects.

• Getting the right people around the table is important (like-minded people won’t solve the problem). It is important to have a mixture of people who have diverse perspectives on the matter which can lead to mutual learning and understanding.

Ways of identify diverse views and perspectives

• Get NGOs involved • Create a list of NGOs who have different views (but not just the large and vocal ones) • Create forums to bring these views out – this may mean you need to have different stages or

platforms to identify (1) ideas (2) experienced actors who can implement those ideas (3) the

Appendix G – Focus Group Notes

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decision makers who approve the ideas and (4) a forum that links up the expertise, experience and the decision making powers.

• There is an element of meeting fatigue although previously untapped sectors (such as many of those involved in the CIIF fund) are eager to be involved.

• Multi-stakeholder/sector gatherings can be eye-opening for some sectors/groups (they may hear different perspectives of themselves or they may benefit from hearing and understanding the different views and perspectives). It may not solve the problem but it is a good start.

Matching skills with needs

• Matching the needs of the partnership with appropriate skills is important; time needs to be spent working out the skill sets required and finding actors who have those skill sets. If one organisation does not have the right skill sets it can partner with other organisations within the same sector to find them (example used was professional law firm partnering with one of their clients to provide specific skills required by NGOs).

• Could be done through a website although the credibility of data is critical. • Simple list of reliable NGOs (however inherent problems in selection were noted) and their needs.

NGO management

• SWD recently had a workshop in conjunction with the Business School of Hong Kong University and 40 executive directors of NGOs to analyse the status of the commercial management of NGOs in HK.

• The CPU also ran a workshop a few years ago on better business administration. • Much potential for Business Sector to co-operate with NGOs in this area.

Knowledge Transfer / Tapping collective wisdom

• Training courses and seminars to share ideas • Join a partnership and learn from doing • Government Advisory Boards and Committees (two main avenues to find people for committees (1)

recommendations from the relevant bureaus (2) HAB list of 5,000 people) • Widen the network of people who contribute skills and knowledge • Ensure that a process exists to constantly update and improve this list (for instance if a CEO or

someone on the list is invited to attend and cannot, then they should be able to nominate others to be involved; this ensures both the development of people and the widening of skills base) – same is necessary for NGO and business boards.

• Capacity of the advisory committee representative is also important because often departmental or organisational representatives prefer to represent in their personal capacity so they don’t need to go back to the department/organisation to get approval/agreement on issues. However departmental/organisational agreement is sometimes important but there is a lack of a process to achieve this.

Dissemination of the wisdom

• Publicizing of successful stories (through the press, ceremonies, letters of thanks to project partners and community involved)

• Seminars • Reporting • Networking with others in the industry to share experience and best practices • Publicizing of successful partnerships is time consuming and can be difficult to do (difficult to get

the right message to engage the people you want to engage) • TPP website could be used to disseminate successful experiences and to education on best

Appendix G – Focus Group Notes

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practice; people to contact to get involve in TPPs; list of the Government Advisory Committees and updates on what they are doing/ achievements; templates for TPP reporting etc.)

• Annual seminars could be held to focus on success stories; • TPP website to disseminate information can be quite involved and will require constant updating

and networking Other characteristics of success

• Understanding the limitations and realistic contributions of each partner is important as well as clearly articulating the length of the partnership.

• Review process to ensure that the TPP dissolves when it is no longer relevant (being objective driven, TPPs should in fact try and make themselves irrelevant through the achievement of their objectives)

• Formulation of process (including ending), for instance through a Memorandum of Understanding which can be used at both project and strategy levels as they can outline the areas of co-operation and knowledge exchange.

• It is important to get buy-in and involvement from top level management. • Sustained policy commitment.

Review and ranking of recommendations Generally it was felt that the recommendations presented could be grouped under general headings / focus areas. The following areas were suggested:

• Skills development • Process • Capacity building • Mindset changes • Relationship building • Information and communication • Policy development • Recognition

Changes to the list of recommendations:

• Combine b & c • Combine e & f • Combine r & s • In relation to r -create a TPP of the year award (as opposed to an NGO of the year award)

Appendix G – Focus Group Notes

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Summary of prioritized recommendations (i.e. those who received 5 responses or more – see Table G1):

(a) Develop a guide on how to partner (including directory of NGOs, MOU, relevant contacts in relevant government departments etc.)

(c) Improve consultative process, e.g. greater transparency and inclusiveness in policy making. Involve tri-sector dialogue before formal policies on consultation

(f) Government capacity building skills, e.g. mediation, meeting management, media management.

(l) Establish a clearinghouse for information/issues, for brokering ideas and matchmaking partners from the 3 sectors; and

(n) Create a TPP council which works with Government to identify parties/organisations to be used as a platform for specific issues

Appendix G – Focus Group Notes

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Table G1 Solutions To Overcome Barriers And Improve The Environment For TPP

Development (consolidated from Focus Groups 1-4) a

Develop a guide on how to partner (including directory of NGOs, MOU, relevant contacts in relevant government departments etc.)

b

Improve Third Sector governance, e.g. accountability and transparency

c

Improve consultative process, e.g. greater transparency and inclusiveness in policy making. Involve tri-sector dialogue before formal policies on consultation

d

Create funding for partnerships through specific taxation revenues

e

Third Sector capacity building, e.g. fundraising, initiating partnerships, project management, media management, writing business plans

f

Government capacity building skills, e.g. mediation, meeting management, media management.

g

Mindset change of government employees e.g. reducing bureaucracy, developing open mindedness, increasing flexibility.

h

Encourage SMEs to be involved in partnerships

j

Government officials to work with the community more (improve understanding of grass roots).

k

Recognition of partnership efforts (internal and external)

l

Establish a clearinghouse for information/issues, for brokering ideas and matchmaking partners from the 3 sectors

m

Ensure appropriate representation of all parties on advisory boards/committees

n

Create a TPP council which works with Government to identify parties/organisations to be used as a platform for specific issues

o

Establish government policy on NGOs and departmental guidelines on how to work with NGOs

p

Develop ad hoc think tanks/workshops – use existing intellectual capital to work on specific issues, submit report to Government and disassemble.

q

Improve interdepartmental communication to address consistency issues between departments

r

Create an NGO of the year award

s

Increased involvement/support from the media

Appendix H – Interviews-Summary of Issues

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Issues Third Sector

Government Business

Reasons for Partnering

Subvented Third Sector Organizations are too reliant on Government funds. x x x

The Business Sector has traditionally participated through the donation of money but with the changing environment including reduction in social resources there is a need for deepened involvement; more than just donations are required.

x x x

Too much reliance on government funding

Old style welfare system no longer works. There is a need to develop social capital and partnering is a method of addressing this x

Need for capacity building

Corporations should never replace Government but they should increase the capacity of NGOs. This can be addressed through resource support (non-financial), professional services provision, providing a platform that gets everyone to the same table.

x x

Legislation Changes in legislation, such as the enactment of revisions to Town Planning Ordinance will result in corporations such as developers being forced to engage the community more

x x x

Resources Better use of resources

x x

Barriers to Preventing Partnerships and Factors Contributing to Failure

Mutual Interest Difficulty in finding issues of mutual interest over which to partner – i.e. different agendas of partners

x x x

Outcomes Partners need to see the outcome of partnering e.g. with Government x x x Monitoring Government needs to make it clear how success has been evaluated x x Accountability Government needs to be accountable for the results of partnership (e.g. The

Sustainable Development Council) x x

Benchmarks There is a lack of benchmarks and partnering in Hong Kong is immature x

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Issues Third

Sector Government Business

Trust and Transparency

Lack of trust and openness. There is a lack of “mutual trust” between Business and Third Sector and there is a need for greater communication between these sectors. There is lack of transparency in Government. The Third Sector does not trust Business as a reliable source of support and a reliable partner (they still look to the Government)

x x x

Different values Different political values between partners

x

Government

Ingrained higherarchy and bureaucracy in Government, inflexibility x x x

Sector specific issues/ Characteristics of Sectors HK is a compliant driven (master/servant) environment and Government is

inherently inflexible. Government works on apparent problems rather than real problems

x x x

Due to high awareness of anti-corruption, Government tends to stay at arm’s length from Business

x x

Government thinks that it needs to remain independent of both NGOs and Business. For instance if seen to be partnering with a particular business it may suggest favoritism and lack of level playing field

x x

In Government there is pressure to find solutions, not processes. The policy making process is flawed as it does not involve effective consultation

x x x

Government officials change to often (Department priorities change as a result so projects are dropped)

x

Government needs to be in control of the agenda, it favours closed-door meetings and does not like negative feedback –There is no clear process – can be referred to as a black box (task forces don't include those from the outside)

x x

Government needs to see partnerships as a solution to problems – working together and sharing – the Sustainable Development Council and the Harbour Enhancement Committee are steps in that direction

x x x

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Issues Third

Sector Government Business

Business and NGOs

Business and NGOs speak a different language. Business speaks in terms of processes (e.g. the processes that are put in place to minimise corruption or environmental damage) and Third Sector speaks in terms of results (e.g. the total amount of corruption or environmental damage) Need to create new models of NGO and Business dialogue.

x x x

Business

Corporations viewed as willing , but don’t know how to engage with NGOs /partners x x x Partnering with Business is a function of the individuals in senior/top management x x

Barriers to partnerships and factors contributing to failure Sector specific issues/ Characteristics of Sectors (continued) Some corporations are not interested in TPPs because they want to have full

control over the project and don’t want the hassles of partnering. x x x

The Business Sector does not want to do the Government's job x x x Business Sector is uncertain about working with Government x

Business does not want further Government intervention x If the Business Sector becomes involved, will it try to commercialise social service

delivery? x

Companies have inadequate information and experience to establish priority in community care (interest)

x

NGOs NGOs don’t operate like businesses (largely because they are not run by business

people) which can lead to financial mismanagement; inefficiency, poor transparency; lack of accountability etc.

x x x

NGO's generally have poor internal governance structures (especially the smaller ones)

x x x

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Issues Third

Sector Government Business

NGOs don't have the capacity to be involved in stakeholder engagement for multiple companies

x x

The old model of charities (i.e. money from Government/ Business / charity workers not paid market rates/ low cost base) does not encourage entrepreneurs to the Third Sector

x x

NGOs have the brain power and networks which could benefit Business and Government

x x

Barriers to preventing partnerships and factors contributing to failure Sector specific issues/ Characteristics of Sectors (continued)

Capacity – NGOs don’t have the skill sets required to negotiate sophisticated partnership agreements

x x

Time and human, financial resource constraints/competition over resources is problematic

x x

One bad experience with one NGO taints the whole sector x x Benefits of Partnership

Use TPPs to foster a strong Civil Society x x

To achieve a common goal, to reach the wider community (e.g. environmental education)

x x x

Business can benefit in relationships/projects with Third Sector/ community in many ways, including: - Shows its employees and clients that it is committed to building community spirit; - Involves staff to participate in many different ways which contributes to their self development, morale and team working spirit. Also believe that it contributes to staff’s sense of belonging to the company and enhances multi-level communication; - Creates “social workership” and in doing so broadens employees’ perspectives through coming into contact with different sectors of the community; -In the long term, hope that projects like this will help build a better corporate citizen image.

x x

Appendix H – Interviews-Summary of Issues

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Issues Third Sector

Government Business

Specific Forms of partnerships

Funding is a key concern of the Third Sector x x Governments funds

Government funds are often difficult to work with e.g. accessibility to money, conditional requirements. Funds don’t pay for staff time – implying that Government doesn’t value the Third Sector

x x

Matching funds can be problematic. Government bureaucracy is reflected in matching funds

x

Funds are used to build capacity for business partnership in the community x New matching grant is a means of engagement x Government says some funding schemes too broad, need to narrow focus to be

more effective x

Consultation Public consultations are a major avenue for Third Sector Organisations, Business and Government to interact. Some of the problems with the existing consultation system hinder this.

x x x

Too many consultations (everyone is feeling consultation fatigue). Same issues are coming up year after year, for instance Planning Department advised the Government would proceed with certain mechanisms to support heritage conservation in 1999, yet a new consultation process has just begun by the HAB in 2004 to look at these very issues

x x x

Government is bending over backwards to consult every one on everything but, apart from a few notable exceptions, there is no evidence that these views are being considered in policy making – exceptions to this include the Hei Ling Chau prison proposal which was overridden by the Finance Committee (2004), largely as a result of the pressure from the Living Islands Movement;

X X

Lack of transparent mechanism whereby the responses are sorted and analysed to understand the overriding public views;

X X

x

Cultural weakness that inhibits open discussion of different stakeholders views as there is a fear of criticism and confrontation;

x

Appendix H – Interviews-Summary of Issues

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Issues Third Sector

Government Business

Normally no feedback on ideas and points of view submitted through consultations (even though they often represent the view of an entire profession or industry);

x

x Specific Forms of partnerships Consultation (continued)

Current process of consultation is flawed as it is not inclusive and stakeholders are not involved in policy formulation

x x

Government's Role in Partnering

As a donor and financial support (funds/taxation) x x To endorse policy x x To provide credibility to projects x x x Provide a platform for partnering (free enterprise government in Hong Kong means that Government provides the platform for involvement)

x x

To promote ideas for fund projects x x Government should lead by example – (policy on employee volunteering) x x Government should facilitate matching, but not be part of the matching process x x x Government should act as facilitator, but not get too involved x x Government should take a leadership role; Government responsibility (in terms of community care) is to use public revenues appropriately.

x

Government has a role to support Business in social reporting and NGOs to encourage social accountability

x

Appendix H – Interviews-Summary of Issues

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Issues Third

Sector Government Business

Factors which contribute to success and Lessons Learnt

Clear communication from the outset x x Good relationship with the media/work with the media x x x

Personal connections/reputation x

Designation of authorities need to be clear x x x Flexibility x x x Mismatching of partners – requires dispute resolution x Need for ownership and commitment x x TPPs must build in trust and willingness to have mindset change and see things

from the others’ frame of reference (building consensus) x x x

Donors/participants like tangible 'sexy' projects (i.e., not fixing drains in old folks' homes)

x x

There is always a 1st time for involvement between Business and community and it requires much incubation for partners to get to know each other; progress can be slow but pilot projects are the best way to move into other projects.

x x

Good participation from all the partners and well organized players engaged x x x

TPPs are about shared objectives and sharing resources x x x

Government has a monopoly on information, its important that information is shared as openly as possible. Information inequality can lose partners

x x x

Government shouldn’t lead actual partnerships as then they become prescriptive x

Ability to recognise the difference in partners approaches x x x

Appendix H – Interviews-Summary of Issues

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Issues Third

Sector Government Business

Others

Important question – are TPPs the right way? x x x Factors which contribute to success and Lessons Learnt (continued)

Criteria Business Sector adopts when determining what projects/organisations to get involved in include: - Looking for meaningful projects which are misunderstood or neglected by society; - Looking at own service strengths to find a match; - Understanding how knowledge and experience can be effectively transferred; - Understanding the benefits to the business including enhanced reputation and improved staff morale.

x x x

TPPs are complementary to government subvention. It is a concern that sectors of the Government are looking at TPPs to engage the Business Sector to take up more of a financial role. Government needs to change its mindset

x x

Employee volunteering is a major contribution to Third Sector at all different levels of personnel and in many capacities (e.g. teams of volunteers for events, professional volunteering of services, participation in Third Sector organisations etc.)

x x x

Bi partite partnerships can be valuable, shouldn't force TPPs x x

Appendix H – Interviews-Summary of Issues

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Issues Third

Sector Government Business

Recommendations

A steering body in tri-partite social partnership x x Provide tax incentives for corporations to make charitable donations x x x Need better communication strategies in Government x x Need to train Government staff to understand strategies to change mindset x x x Senior Government officials to get outside in the community more (enhance

understanding of grass roots) x x

Establish an NGO accountability system – e.g. Charities Commission in the UK x x NGOs need to be more united x

NGOs must modernise: they must further understand the role and expectations of donors; ensure they are delivering what society really needs; flatten their management structures; understand areas of efficiency gains.

x

Government to appoint person into the Government for businesses that are interested in supporting TPPs

x x

Government to change its method of operation, open communications between departments and with the public

x

Corporate giving incentives could be more policy supportive/directive (e.g. double tax deductions for contributions to welfare orgs).

x

Business needs a guideline in partnering, as it doesn’t know how to partner (organisations should take the initiative to contact the Business Sector and discuss how cooperation may come about – the Business Sector needs to be educated to understand what sort of support is required (as the Business Sector have traditionally only known to contribute money)

x x x

Encourage Business to reach a higher level of engagement x x x

Business and NGO should come together to support Government policy x

Appendix H – Interviews-Summary of Issues

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Issues Third

Sector Government Business

TPPs needs a bottom up approach – involving SMEs, front line staff x Capacity building – tools, templates, guidelines, training to assist NGOs and companies

x

Recognition of effective partnerships x x x Commit money to Think Tanks (promote creative new ideas and encourage public policy research, balance of information is key)

x x

Change the public consultation process to be more inclusive, representative, transparent, independent and involve stakeholders in policy making

x x

Recommendations (continued)

Matchmaking system required – search, identify and match potential partners x Legal and Regulatory Framework

Laws and regulatory framework of Third Sector is fragmented, unequal in its requirements and inadequate in its supervisory role (part of the problem is that one size doesn’t fit all and Third Sector organisations are hugely varied in size, resources and purpose)

x x

Societies Ordinance (which now has 17,000 organisations registered) was historically set up to monitor the actives of triad groups – although this has now changed, the Ordinance has stayed the same. Further, there is no need to submit accounts/no active monitoring.

x x

There is no active monitoring of Third Sector Organizations financial or other activities

x x

There is no definition of "charitable purpose" in the law. The meaning of "charitable purpose" is largely based on court rulings over the years.

x

Appendix I– Examples of TPPs in Hong Kong

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Partners

Third Sector Government Private SectorTPP Examples

Hong Kong Association for Science and Mathematics Education (HKASME), Chinese University, and the Fulbright Scholar Programme

Institute of Curriculum Development and the Education and Manpower Bureau (EMB)

China Light and Power Ltd. (CLP)

Sustainable & Renewable Energy Curriculum Pilot Project. CLP worked with the EMB and a world-renowned curriculum expert to develop a curriculum for HK teachers. Through HKASME’s network of teachers a training of teachers (TOT) programme has been developed. The first TOT has been conducted, and teachers are now testing the materials in the classroom for a one-year trial phase.

Junior Achievement Hong Kong

EMB HSBC

Company Programme for Upper Secondary. Volunteers from the corporate sector draw on their experience to teach at schools. Students start up their own business, run it and close it down.

Community Business

Government-run School and EMB

Credit Suisse First Boston (CSFB)

Race for Mentors. This collaboration mentors students from disadvantaged backgrounds in relation to the business world. CSFB wanted to be involved in a project that would give employees an opportunity to transfer skills and experience to young people.

HK Arts Development Council, HK Institute of Education, and schools

EMB Hong Kong Bank Foundation (HSBC)

Art in Education (AiE). This six-year programme has integrated art into education through the formal curriculum. It conducted trials in 30 schools where an artist participated in the design of the programmes with the teachers. The programme is currently being evaluated.

HK Federation of Youth Groups (HKFYG)

Trade and Industry Department (TID)

Shell Hong Kong

Livewire. This social investment programme aims to decrease youth unemployment. It helps people aged 18-30 develop their own business by providing training, mentoring and rewards for successful businesses. Shell works closely with the HKFYG and the TID as well as other businesses in running the programme.

Appendix I– Examples of TPPs in Hong Kong

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Partners

Third Sector Government Private SectorTPP Examples

Crossroads International and numerous NGOs

Social Welfare Department (SWD) and Government Property Agency

100s of corporate sponsors

Crossroads. This programme’s initial aim was to support people who were economically disadvantaged through the collection of surplus products. Driven by the volume of Hong Kong’s surplus and the breadth and depth of need, the programme has rapidly expanded locally and internationally. Government provides the land, businesses the products, and the NGOs and SWD place request for products for the needy. The 'in-kind' principle has led to the success of the project.

Friends of the Earth (FOE), Conservancy Association (CA), Green Power, and the World Wildlife Foundation (WWF)

Environmental Protection Department

Various

Moon Kick Action. This mooncake-tin recycling campaign aims to change consumer behaviour as well as get producers to accept their responsibility for producing waste. FOE works closely with producers, businesses, schools, NGOs, and government departments to participate in the campaign.

WWF, HK Bird Watching Society, and Conservancy Association

Agricultural Fisheries and Conservation Department

HSBC, Cheung Kong

Mai Po Wetlands. This partnership between Government, the WWF and other green groups and the private sector manages the wetland, conducts public education and monitors bird life.

Green Power - Green schools network, HK Lepidopterists' Society

Environment, Transport, and Works Bureau (ETWB)

Shell Hong Kong

Butterfly Watch. Forty secondary schools are participating in a butterfly-watching team and a series of butterfly-watching trainings and monitoring activities. It is the first citizen-initiated Hong Kong butterfly database to help conserve local butterflies and protect nature hotspots.

Appendix I– Examples of TPPs in Hong Kong

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Partners

Third Sector Government Private SectorTPP Examples

Oxfam and varied NGOs

Multiple depts: Hong Kong Police, Hong Kong Physiotherapy Association, Auxiliary Medial Services, HK Fire Services and others

State Street Bank

Oxfam Trail Walker. The 100-kilometer annual fundraising walk has raised HK$180 million since 1986 for Oxfam's emergency relief and poverty alleviation programmes both locally and internationally. The success of this TPP is based on the active participation, collaboration and coordination of all sectors.

Hong Kong Table Tennis Association and the former Sports Development Board

Leisure and Cultural Services Department (LCSD)

Hang Seng Bank

Hang Seng Table Tennis Academy. The first formally-structured, single-sport academy in HK. It was established on the foundation of the former Hang Seng Table Tennis Development Programme. The HKTTA operates the Academy, LCSD support it, and Hang Seng Bank gives sponsorship and support.

St James' Settlement (SJS)

Environmental Protection Department (EPD) and Electrical and Mechanical Services Department (EMSD)

Sung Hung Kai

Recovery Programme for Waste Computers and Waste Electrical and Electronic Equipment (WEEE). St James' Settlement with EPD and Sun Hung Kai have been fixing or recycling 12,000 used appliances a year to give to the needy. The developer supplies a godown in Kwun Tong to store and dismantle appliances. The EPD facilitated discussions with the EMSD and SJS uses its extensive grassroots network to distribute the 2nd hand appliances.

Harbour-front Enhancement Committee, Conservancy , The Society for the Protection of the Harbour

Planning and Transport Departments

Business Environment Council, Real Estate Developers Association (REDA)

Designing Hng Kong Harbour District (DHKHD). This group conducted a workshop followed by public hearings and pressure on the Government to build a platform for the public to participate in the decision-making of harbour-front planning. The result was the formation of the HEC.

Business Environment Council and Hong Kong Polytechnic University

The Housing Dept, Buildings Department, and the Environmental Protection Department

REDA, Swire Properties, Hong Kong Land

HK BEAM. The Hong Kong Building Environmental Assessment Method is the private sector initiative to assist developers, designers, builders and managers in sustainably designing and managing local buildings. Over 100 certificates have been awarded.

Appendix I– Examples of TPPs in Hong Kong

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Partners

Third Sector Government Private Sector

TPP Examples

Creative Initiative Foundation (CIF), Trade Development Council, and universities

Port Authority, Airport Authority, Transport Dept, and Customs and Excise Dept

DHL, various airlines, airfreight, shipping lines, sea freight and mid harbour

Logistics Development Council. CIF conducted a workshop with representatives from the logistics sector (sea, air, and land transport) to work on common issues, which resulted in the Council’s formation.

Hong Kong Council of Social Services (HKCSS) and the Hong Chi Association

Social Welfare Department JW Marriott

Caring Company Scheme - Youngsters with a mild mental handicap are being trained for open employment in the hospitality industry, This is a bi-partite example under the umbrella of the caring company, which is itself a TPP.

Neighbourhood Advice Action Council

Social Welfare Department (rehabilitation and medical social services)

Sun Hung Kai

Provision of household services. This programme involves a western-style restaurant in a private housing estate. The NGO won the contract for managing the property and employs people with disability.

Island South Women's Association and Residents’ Association

Health, Welfare, and Food Bureau (Community Investment and Inclusion Fund - CIIF)

Numerous SMEs

CIIF - Caring Estates in Island South. Local SMEs (businesses) work together with a local NGO to provide neighbourhood support to those in need in the community.

Multiple

Social Welfare Department (Central Office for Volunteer Service)

Multiple

Promotion of volunteer services. Business volunteers and Third Sector Organisations requiring volunteers are matched. A cross-steering committee on promoting volunteer service has been established specifically to promote volunteering in the various sectors.

Appendix I– Examples of TPPs in Hong Kong

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Partners

Third Sector

Government

Private Sector

TPP Examples

HK Arts Festival and various NGOs

Leisure and Cultural Services Department and other Government departments

Exxon, Morgan Stanley, City Bank, South China Morning Post and others

Hong Kong Arts Festival. This is in its 33rd year and promotes innovative and diverse local and international works. One strength is the commission of new dramatic works which take risks and stretch performers and audiences. It also makes the arts accessible to younger audiences.

Helping Hand Lands Department Multiple

Holiday Centre for the Elderly. The Lands Department provides the land for this retreat for the elderly in Sai Kung, the Jockey Club and various corporates fund it, and Helping Hand provides services for the elderly.