Wallet of the Poor

From a simple start-up in 1993, Dompet Dhuafa is now has 22 branches and four overseas, and keeps looking for new ways to be of service.

Ismail Agus Said. Photo by Ahmad Zamroni

The name of charity group Dompet Dhuafa Republika is based on a combination of Indonesian and Arabic: “dompet dhuafa” means literally “wallet of the poor.” While the group freely opens its wallets to help the poor, its strategy is broader than just financial assistance. “What we want to do is empower the poor. The concept is giving fishing rods instead of fish,” says Ismail Agus Said, president director, alluding to the axiom that if you give a man a fish, he eats for a day, but if you teach him to fish, he eats for life.

Dompet Dhuafa is one of the 17 national philanthropic organizations that collect zakat, the Muslim practice of charitable giving. It is the largest such charity in the country, receiving last year Rp 129 billion, about 11% of the national total (of Rp1.5 trillion) (although not all funds are from zakat, some are donations made by individuals or companies). The organization has 22 branches, including four overseas (Australia, Hong Kong, Japan, and Korea). Even the state-affiliated Badan Amil Zakat Nasional (Baznas), received only Rp 33 billion last year.

Although Dompet Dhuafa collects zakat, its programs are secular. They are divided it into three main programs of social development, economic development, and disaster management.  It also has a healthcare service and a institute to teach people entrepreneurial skills. In giving out funds, its staff (60 in all) carefully check the receipt’s status to ensure that are truly deserving. “We are very selective because there are many who pretend to be poor,” says Ismail. In keeping with the principles of zakat, all funds collected are distributed within a year, and operating expenses cannot exceed one eighth of the funds raised.

Through its social development program, the foundation gives full scholarships so students can attend university and high school. Presently Dompet Dhuafa is giving scholarship to 875 students in 11 state-universities. They also provide dormitories for the students. For high school it owns and manages Smart Ekselensia, an all-boys boarding school in Bogor. For three years in a row, all its 30 students qualified for state universities. It also has a teacher training program.

For its economic development program, Dompet Dhuafa teaches the poor in techniques for farming, gardening or breeding. The foundation will help them by providing resources, capital and guidance. For example with its Kampoeng Ternak (livestock village) program, it gives low-income farmers three to six goats, regular veterinarian visits plus cash for animal medicine. The foundation then monitors the farmers, if they fail to keep the livestock healthy, the foundation withdraws them and gives them to others. A similar mechanism also applies to farmers. It will give them seeds, working along with them and help them get products to market. “We monitor them for two years. When they become independent, we move to other needs. That’s how we do our job,” says Ismail proudly.

The final activity that has made Dompet Dhuafa famous is its Disaster Management Center, which is often first on the scene when disaster strikes. In fact they are the first aid agency to bring relief to Sendai and Kesennuma, Japan, the day after the tsunami hit the area on March 11. The foundation opened a branch office in Tokyo earlier this year with the aim to provide assistance to about 5,500 trainees from Indonesia. Erie Sudewo, one of Dompet Dhuafa founders, says the foundation has the ability to get to the affected areas faster than others because of its network and numerous volunteers.

Typical of a Dompet Dhuafa program is one being done with PT Trakindo Utama, the heavy equipment distributor. “We glad to cooperate with Dompet Dhuafa. It is professional, has good values and integrity. It has extensive networks and systems that have been tested, so it’s always ready wherever we need help,” says Josephine Satyono, CSR consultant for Trakindo. To commemorate its 40th anniversary, Trakindo is conducting a program to refurbish 40 elementary schools across Indonesia. Dompet Dhuafa will help Trakindo to upgrade teachers skills and give scholarships to students.

Erie Sudewo. Photo by Ahmad Zamroni

Dompet Dhuafa is a true start-up. It began as an after-hours activity for some staff of Republika, a newspaper owned by Erick Thohir, in 1993. It was founded by Republika’s Chief Editor Parni Hadi with three others, Erie, Haidar Bagir and S. Sinansari Ecip who first collected zakat from newspaper employees. Soon the charity was growing so large that Erie–as president director–decided to make it into an independent institution in 1998. But the name Republika stuck.  It never crossed Erie’s mind in the earlier years that Dompet Dhuafa would be as big as it is today.

Accountancy Ernst and Young awarded him as the social entrepreneur of the year in 2009. Erie retired as president director of Dompet Dhuafa in 2003 but remains part of the board of trustees, and Ismail became president director in 2008. Most activities are paid out the regular budget with the exception of disaster relief and other special programs that cannot be planned in advance. Ismail, 58, says the foundation only seeks donations from those who can afford it, such those who are middle class and above. The group has implemented technology to allow donations to be made online or through ATMs. It never conducts street donations. “If anyone is in the street claiming to be us, they’re not,” says Ismail.

He formed a holding company named PT Daya Dinamika Corpora to generate more funds from social business activities based on sharia. There will be at least seven units in sectors such as trade, travel services, consumer goods, financial, consultancy services, and construction. For example in DD Construction (DD is abbreviation of Daya Dinamika and also representation of Dompet Dhuafa), it will provide technical expertise to build in disaster-affected areas. “We have the capabilities and experiences in this. We are still in the process of obtaining licenses for these companies,” says Ismail.

Actually, the foundation has already been doing business activities but they were limited in scope. It has a small stake in PT Daya Consumer Goods, a bottled water company in Sukabumi, to produce DD Water. Ismail stresses that the foundation and the business entities have a separate management.

After almost two decades of conducting programs in villages across the country, Dompet Dhuafa came up with the idea of a poverty map, which combines geographic data with statistics on income levels to show the location of low-income areas as well as show the areas of high-income. The map is useful to the organization to help identify the best locations for its activities, such as education, healthcare and agricultural. With the map, the organization can also collaborate with other foundations conducting similar programs to ensure there is no redundancy of programs.

A related concept is the “Madina Zone” project. It will be an eight hectare development in Bogor that will try to create a holistic model community combining the various elements championed by Dompet Duafa, such as free hospital, excellent schools, sports facilities, an entrepreneur incubator center, a digital library and affordable but quality housing. When Forbes Indonesia visited the project in May, the development is already 80% complete and the hospital is expected to receive its first patient in early August, at the start of the Islamic fasting month. “If the program is successful, it could be applied as a model in other provinces in cooperation with the local government,” says Ismail.

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Social Banker

Ismail Agus Said had to put aside his dream of retirement to take this assignment—he and his wife had planned to retire together in 2010. But it was not to be. He was asked to lead Dompet Dhuafa Republika as the president director in 2008. As a consequence, he is often away from his family for extended periods, traveling overseas or to villages to monitor the work of the foundation. “They told me Dompet Dhuafa is a big ship and it needs a senior person as its captain,” he recalls. Ismail, who will turn 59 in October, is the oldest staffer at the foundation. The rest of the staff are below 40, except for one director who is 40. It’s a big shift for Ismail, who spent 36 years in the financial industry, two-thirds of it as a banker. He started his career in 1972 at Citibank and ended it as a director of Bank Muamalat Indonesia in 1996, before becoming president director of insurance firm PT Asuransi Nugra Pacific. As a banker he used to think about generating money and calculating interest, today he must generate donations and distribute them to the poor. “I have to be able to live in two different worlds. I have to be able to get close to those who are rich and those who are poor,” he says.

* This story appears in June 2011 issue of Forbes Indonesia magazine.

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