The Nkf Scandal

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  • Topic: National Kidney Foundation Singapore scandal, Ethics, The Straits Times
  • Pages : 6 (1440 words )
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  • Published : October 30, 2010
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Nanyang Technological University[Type the company address]
Yi Theng Lim
Organization Behavior & Design Case Ethical Analysis
NKF Singapore: Anatomy of a Crisis

In July 2005, Singapore was shaken by a scandal involving the National Kidney Foundation (NKF), the nation’s largest charity. The scandal had surfaced many ethically controversial practices by NKF. In this paper, I will be focusing on the dilemmas surrounding NKF’S operations structure and evaluate them from various theoretical perspectives to present a more holistic view of the issue.

Unlike most charities in Singapore, NKF operated as a professionally run, non-profit organization (NPO), where professional fund-raisers were hired and aggressive campaigning was done to acquire the charity dollar. This is quite a contrast to what most of its donors and society expect of a voluntary welfare organization (VWO), where there still exists an expectation that NPOs should be run solely based on the good will of volunteers. Here, NKF’s operation model comes in conflict with societal norms, although it cannot be denied that this model has been a tremendous success in raising funds for its cause.

The lack of transparency of NKF added further fuel to the fire. Although it is desirable to society for NKF to practice total transparency, the impact of such a practice on the donations and privacy rights of NKF’s employees may not be desirable as we will see further in the discussion.

As Singapore’s largest charity, it is firstly accountable to its shareholders, the donors, who are concerned with how their donations are being spent. Secondly, the beneficiaries of NKF, who wish to know that the best is being done to provide them with uninterrupted, affordable treatment for their disease. This scandal however would have undermined their trust in NKF.

NKF is also linked to other charities. By raising such a large number of funds, it would crowd out smaller charities that are also in need of funds for operations, such as the KDF. In addition, the scandal would have damaged the charity sector’s reputation, causing society to be skeptical of donating in the future. As part of NKF, NKF employees’ reputation would also be damaged.

The government, another stakeholder of NKF, has also taken its fair share of battering from society as it is responsible to ensure that there is good governance and proper usage of donor funds.

Ethical or Unethical?
As mentioned prior to this, NKF’s main contention points are its operations structure and its degree of transparency. Here, I will be discussing these issues from the perspectives of utilitarianism, deontology, rights and the conventional approach.

Objectively, there is nothing fundamentally wrong with NKF operating like a corporation as it will focus on providing services to their targeted beneficiaries by hiring trained full-time staff and utilizing modern equipment to serve their cause. Its larger reserves also allow NKF to reach out to a larger amount of people requiring its services. Allowing the CEOs to have a pay scheme pegged to the fund raising performance would also motivate them to raise more funds, which in turn benefits society more, assuming that the funds are utilized responsibly. However, there is a conflict of interest, where an individual working in a VWO is essentially supposed to be a “volunteer” who does all these things as it is part of his duty to serve society, and not because he gets paid for doing them. In short, there is a dilemma between utilitarianism and deontology.

Furthermore, although it is globally accepted that society benefits most when professional managers are hired at market rates to provide public goods, Singapore’s society still finds it hard to accept this, as the social sector here is still young. Some individuals resent that their donations are being used to fund corporate salaries. Thus this raised a furor among...
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