HCP: call for sponsors

Two years ago I wrote about my plans to set up a non-profit organisation in Cambodia that provided alternative financing for poor Cambodians so they could attend university. Later that year, the Human Capital Project (HCP) was started with its first five students, all studying at the University of Management and Economics in Battambang (UME-BB).

At the end of 2008 I went back to check up on the students and, after dealing with some of the inevitable problems that come with a new enterprise in a developing country, expanded the project to six students at UME-BB and another four students at the University of Management and Economics in Kampong Cham (UME-KC).

This is how it works… HCP pays for a student to go to university for four years. After they graduate, if the student goes on to get a professional job (ie if they get a benefit from the education) then they will pay 10% of their income for a certain number of years back into the scheme. That money will then be used to finance more poor students into university. One way to explain it is like a “pass-it-forward” approach — where the more benefit you get, then the more you put back into the system. Unlike a loan, the student does not have the risk of failure as they only need to pay money if they get a professional job.

This type of financing is called “personal equity”.

The idea is that the project will eventually be self-financing and will grow naturally. HCP will start to generate revenue in 2011 and will hopefully be self-financing by around 2015. But until then, I need to rely on the generosity of some sponsors (including Peach Home Loans) to keep the project working.

The commitment to sponsor one student is A$300/year for four years. If you would like to be involved, then please contact me on john.humphreys99@gmail.com or 0404 044561.

27 thoughts on “HCP: call for sponsors

  1. You need pictures and profiles of current students on your website so donors can feel some connection with the people they are helping.

  2. p.s. Is if A$300 each year for four years or A$300 in total. And why is it so cheap?

  3. Architectonic — information goes out, mostly work-of-mouth, to new school graduates and recent graduates in the regions (Battambang & Kampong Cham) who couldn’t previously afford university. They send in an application.

    The next step is for all interested people to come in to an information session with their parents (or guardian). Then the university contact (Muon for UME-KC and Sophon for UME-BB), and me (and maybe other university staff) explain the project in detail. We get their feedback and discuss whether they might have a better option (such as applying for a full scholarship, if available). We also ask about their living arrangements & life plans.

    Part of the application is school results and a reference from another adult (preferably a teacher) commenting on the students character. Depending on logistics, we may also do a house visit.

    The final decisions is with me… but by necessity I am forced to rely significantly on the recommendations of the university contacts (Muon & Sophon). One thing I try to do is get a mix of male and female students, and a mix between the two (maybe three this year) universities.

    Terje — It’s A$300 per year. That is the going price for a degree from a private university in Cambodia. It’s not a rich country.

    I’ll try to get some pictures up soon. I’d be delighted to have a proper web manager some day… let me know if you hear of any volunteers. πŸ™‚

  4. Sure… anybody involved is welcome to join me in my annual Cambodia trip, and have a say in all the selections. I’m heading over in about a month to arrange the 2009 intake. Come join me! πŸ™‚

  5. “Terje β€” It’s A$300 per year. That is the going price for a degree from a private university in Cambodia. It’s not a rich country.”

    Are classes in English? A single subject in Australia costs about $925.

    Why couldn’t you act as a middleman to westerners that want something different, making a profit and making this immediately self funding?

    Of course, you could plow the profit right back into the charity work.

  6. Joe — you’re already in as an inaugural sponsor from 2007, and a member of the advisory board for good measure. πŸ™‚

    Mark — there is also quite a difference in quality between a Cambodian degree and an Australian degree. And while students do learn English, most classes are held in Khmer.

  7. How many years of university do they typically do and what is the prospective impact on their subsequent annual income?

    Also assuming each student honors their commitment to pay the 10% what is the number of future full term students they would typically end up funding. In other words how quickly does this compound.

  8. Great to see John. Very good idea and I applaud your initiative. You’ve probably already done this but just in case … how about contacting some media outlets to run a story, especially after the news about how “horribly” we treat overseas students? Perhaps a columnist could run a story for you. Ask Sinclair Davidson, he seems in tight with a few journos.

    All the best for this program.

  9. Tim & jc… I’m not sure what to do about one-year donations. Perhaps the people here could add some thoughts.

    This is the problem: If I add students this year based on the donations I get this year, then what happens next year if I can’t raise the same level of donations? I don’t want to un-sponsor a student, but HCP doesn’t have a huge amount of “back-up” funds.

    I probably worry too much. But I’d be interested in other people’s opinion about this.

    Terje — your comment at #3 answers your first question (4 years). There are no good income statistics in Cambodia. But anecdotally, a rural non-professional can earn around US$20-50 per month… a low-level professional can get around US$80-200 per month… and a professional can get anywhere between US$200-1000 (or more) per month, depending on their job.

    Because there are no accurate statistics on incomes, or good estimates for repayment honesty, it is hard to say how the future cash flow will look. If a student earns an average of $2000 per year, then after 10 years they would pay a total of $2000 (10% for 10 years) to HCP which is enough to pay for two further students.

    JohnH — I don’t think this is a big enough news story. Civil society is full of little schemes like this. I plan on writing something up for publication at some stage soon, after the 2009 intake.

  10. I’d suggest that to tell a student you will support their education decison you ought to have either a commited sponsor or the working funds in the bank. As such I’d bank one off donations until you have enought to sponsor a student with full confidence that the funds will be there until the end of their course. In short I’d be fiscally conservative.

    Alternately you could sponsor students and tell them up front that you only have the funds to sponsor year one and that there is a risk that the funding for year two won’t be available. That way they know the risks up front and can make an informed decision.

  11. What is wrong with said cambodian paying back what they where lent – only?!

    Nothing, except that isn’t the deal on offer. Also it would restrict the upside for other future Cambodians students that might miss out under your scheme. In any case if the upper income for a non-professional is $600 per annum then at 10% it will be 20 years before they pay back the $1200 cost of their education. Obviously if they earn $12000 per annum they are going to pay the thing off in the first year but if they do that well out of the scheme they are not exactly a loser.

    I’m sorry but were i a cambodian, i woudnt go for this, its a rip off!

    Personally I think insurance is a rip off. However I don’t mind if other people want to offer insurance and if some other people choose to sign up for it. I’m pretty big on self determination. For Cambodians as well as other people.

  12. S conveniently fails to mention that people who don’t benefit from the education pay nothing at all, and also fails to mention that the amount paid is tied to the income level of the graduate.

    It’s 300 per year, so as Terje says, to pay the degree off in a year you would need to earn 12000pa. That’s a pretty high income.

    But hey, whatever makes your case, right? Don’t let the truth get in the way or anything.

  13. On the matter of people who would like to help but can’t make a 3 year committment of $300 a year etc, could you not collect such donations and hold them in trust for when the combined total reaches the $900 threshold?

  14. What is left wing about letting people volunatarily give money to something which will reduce the reliance on taxpayer funded aid?

    “Have you ever considered they could be way more intellectual than you”

    That’s why it is satisfying to give money to such a project. These people might be able to build bridges and cure a form of cancer, etc.

  15. I don’t want to be in a situation where I have donations that I haven’t passed on to the students. That would open up the project to accusations of corruption. At this early stage I think it’s better to ensure that no money stays with me.

    Terje — if HCP cancelled a scholarship the student would have no liability. So that is not a risk for them… it’s a risk for HCP.

    Thanks JC.

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