As reported recently, the UBS Optimus Foundation, a philanthropic organisation, opened a regional office in Hong Kong to spearhead and expand its operations in Asia Pacific. This publication interviewed a number of top UBS executives about developments.

Editor’s note: As reported recently, the UBS Optimus Foundation, a philanthropic organisation, opened a regional office in Hong Kong to spearhead and expand its operations in Asia Pacific. The foundation, which supports 127 projects globally including 45 across Asia, will use the new office to engage UBS clients and nurture interest from Asian families seeking philanthropic opportunities which focus on improving the lives and the potential of children, UBS said in a statement this week.

The foundation was created in 1999, and so far has received donations of SFr200 million ($213 million), and supported more than 300 projects in 75 countries and regions, including China, Hong Kong, Indonesia and the Philippines. Because UBS bears all administrative costs of the Foundation, 100 per cent of client donations go directly to the targeted causes.

This publication recently put questions to Phyllis Costanza, chief executive, of the UBS Optimus Foundation and to Wei Wei, Director, APAC, UBS Optimus Foundation; and Christina Tung, Head of Philanthropy & Values-Based Investing, North Asia, UBS Wealth Management.

Firstly, the answers from Phyllis Costanza

Why was HK chosen as the first APAC office for Optimus?

We have done a thorough assessment of several locations and HK came out as the most suitable location to establish the foundations first branch office. It is attractive for our donors in (North) Asia as well as to support the strengthening of our charitable engagement in North Asia, especially we are now supporting 15 projects in China which is the most we have in one country around the world. In a second step, we will specifically look at options to expand our activities to Singapore as well.

The commitment of UBS to the Foundation and its consequent integration in the bank's philanthropy offering is unique in the financial services industry in APAC. The activities of and capabilities within the Foundation are also unmatched in the industry.

Do you position the Optimus as a way for wealthy families to engage the next generation in the wealth transfer process in a ‘softer’ way?

In most cases the main motivation of our clients is to give back to the society because they want to make a positive change for children in need. However, we see there's an increasing trend for our clients/the patriarch to get their next generation involved in philanthropic planning and activities as a way to educate them about the different aspects of lives, and to bring them into the wealth planning process.

Typically, are Asian investors very hands on following their donation to Optimus or do they prefer to step back after the cheque is written?

Our Asian client donors are increasingly sophisticated, and this usually means higher engagement. We have the unique pleasure of being able to provide our clients with what we believe are the most impactful and cost effective approaches to ensuring children can reach their full potential in life. Our clients want to know that their donations are making a meaningful difference in children's lives. This means being able to monitor things like whether health actually improved, whether learning achievement increased and whether incidences of child abuse went down.

Wei Wei, Director, APAC, UBS Optimus Foundation

What reaction have you had from ultra-high net worth and high net worth individuals is Asia in response to the launch in APAC? Has it been long awaited?

We see strong interests from our clients in Asia who are keen to engage in philanthropy through UBS Optimus Foundation, that's why we decided to open an office here in HK as a first step. We have recently initiated our marketing activities to UBS clients and feedback to date is very positive, we already had a very strong pipeline.

Is contributing to Optimus exclusive to UBS private wealth clients?

Yes.

Is there a minimum donation required to be involved?

We provide different ways for our clients to engage with the Foundation. A client can choose to donate to support our overall programmes, adopt a particular program we fund or work with us to develop a tailor-made programme.

What’s the biggest donation you’ve had from one single investor (globally or in Asia)?

Since inception, we have received 18,000 donations totalling CHF200 million.

UBS Optimus Foundation is the beneficiary of many large bequests and in this position we have received several extremely large donations (in excess of SFr1 million).

What’s the typical range of donations (in dollars)?

We receive a wide range of donations from a small amount to multi-million US dollar donations.

Are there any tax benefits for contributors to investing in Optimus?

Tax deductibility for those clients residing in locations where UBS Optimus Foundation has an entity. So we are able to provide tax deductibility to tax residents in Hong Kong now.

Christina Tung, Head of Philanthropy & Values-Based Investing, North Asia, UBS Wealth Management

What’s the process that the wealthy contributors go through in order to get involved & where does their wealth advisor/relationship manager fit into the process?

Usually we start with a discussion with our client and the family members to help them identify their objectives, mission and vision. Because of our scale and commitment, we have over 30 in-house experts in philanthropy & values-based investing who can provide a one-stop shop for professional advice and guide the client through civil society.

We help to clarify their philanthropic objectives, translate their aspirations into a coherent strategy and effective action plan, set-up the legal vehicle, manage their assets and identify the right partners for them.  We are able to establish contacts with reputable partners, making the necessary introductions.  And we also ensure that a cost effective and high impact philanthropic programme is delivered. 

Is the concept of philanthropy and values based investing as developed in Asia as it is in the West – in the US for example? Or is more education among wealthy Asians needed?

In the West, philanthropic giving has a long history and they have mature legal and tax system to regulate and encourage giving. Private family foundation set up is prevalent in the West.  However, Asia has also witnessed unprecedented growth of philanthropy in recent decades alongside the strong economic growth. UBS Philanthropy Services has received increasing demand from their Asian clients in needs of strategic philanthropic advisory.

UBS has also seen the mega trend in Impact investing in the West - which helps address social and/or environmental problems while also turning a profit. It could unlock substantial for-profit investment capital to complement philanthropy in addressing pressing social challenges. Impact investing could expand to a $500 billion industry in the next decade! This is a new trend in Asia and has received a lot of attention and interests from sophisticated philanthropists and socially minded investors.  UBS is one of the first large financial institutions to have launched an impact investing fund in early 2013.

In order to create change in scale, philanthropy needs to draw on a whole toolbox of intervention mechanisms beyond pure grant-making.