"To Solve Social Issues, Public Interest Foundations Must Be Given a Break" [Public Interest Corporations with Broken Wings]

Interview with Chairman Dongcheon Yuuk
"Maintaining Corporate Control through a Public Interest Foundation
Profit Rights Can Also Be Returned to Society"

"Why don't we have public interest foundations like the Bill and Melinda Gates Foundation?"

Attorney Yoo Wook, chairman of Dongcheon, a public interest foundation under the law firm Bae, Kim & Lee, has been contemplating why the public interest ecosystem in Korea is in such a poor state while providing legal support to various nonprofit public interest organizations. The Bill and Melinda Gates Foundation, which invests about 5 trillion won annually in small modular reactor development, improving sanitation and health environments in developing countries, vaccine development, and more, literally changing the world, was both astonishing and enviable.

"I have worked on North Korean defector-related issues like an NGO activist through public interest activities, and every day I worried about how to secure salaries for the activists. Recently, I had a meeting with activists from organizations working with residents of jjokbangchon (tiny room villages), and these people have been working for decades on less than minimum wage. I could only say, 'I truly respect you.'"

Yoo Wook Dongcheon Chairman

While the situation of public interest corporations operating solely on the sacrifice and dedication of activists is challenging, it is also regrettable that the scope of public interest organizations is limited to charity or welfare activities. Why is there no Korean public interest corporation that can serve as a think tank like the Brookings Institution or the Heritage Foundation in the United States?

"What if talented people with creative ideas engaged in public interest work? For example, in housing projects, if nonprofits took the lead, how different would it be? Looking at the cooperative public-supported private rental housing projects carried out by the social innovation company 'The Ham' in Namyangju’s Byeollae district and Goyang’s Jichuk district, prices are about 60% lower, yet community facilities are well established. How great would it be if such public interest-related companies competed in a structured environment?"

Yoo’s belief grew that if public interest corporations had financial capacity, they could attract talented participants, enabling new innovations that governments or existing social conventions could not imagine.

"The name I gave this project is 'Mulkkwo' (Water Channel)"

The biggest issues were 'money' and 'organization.' Especially, like a 'mulkkwo'?a channel that lets water flow into rice paddies?the key was to find ways to increase funding, i.e., donations, for organizations and institutions engaged in public interest work. Yoo found a path in the example of Sweden’s Wallenberg family. The Wallenberg family has continued hereditary management through foundations that own some of Sweden’s leading companies. What stands out most is that a significant portion of corporate profits is invested in Sweden’s present and future.

"Isn’t the fundamental cause of incidents where top domestic company CEOs face trials actually issues of corporate succession and governance? Yet the Wallenbergs have maintained hereditary management for five generations. Entrepreneurs deserve respect and honorable treatment. But it is also clear that companies are built together by our society and citizens."

Many businesspeople Yoo met hoped that the wealth they accumulated would be used properly and hold value beyond mere inheritance. The obstacle was taxes. The solution he found was to raise the tax-exempt limits on corporate stock donations while imposing a re-donation obligation on public interest corporations. If a certain percentage (for example, 30-50%) of 1% of the donated asset value is re-donated, it could build a public interest ecosystem between corporations and civil society. The core of this plan is the separation of profit rights and control rights.

"I understand concerns about indirect control when donating stocks to public interest foundations. But the Wallenberg family actually exercises direct control through the foundation. However, in exchange for allowing this, the wealth belongs to the foundation, so almost none of it goes to family members. How about reconsidering the concept of indirect control itself? But since concerns about indirect control are significant in our society, perhaps we could try growing public interest foundations within certain limits."

Ultimately, this approach allows the separation of corporate control rights and profit rights, permitting control rights to be preserved in a legitimate way while corporate profits return to society through public interest foundations in the form of public interest projects. Through this honorable method, entrepreneurs can maintain corporate control, earn respect, and contribute their accumulated wealth to society. He hoped this would create "capitalism with a human face."

He focuses on public interest corporations because he believes they can play roles different from the state. While there are areas the state can cover, there are clearly areas that the private sector can accomplish.

"When we talk about welfare states, it is a mistake to think the state does everything. The private sector has been doing what the state could not. This delivery system needs more private sector involvement. Public interest foundations must play roles in areas where the government and companies cannot. If creative solutions emerge for housing or disability issues, and talented people create public interest ventures that compete, bold solutions we have never tried before will come out. That’s how money should be spent."

About the public interest foundation 'Dongcheon'

Dongcheon is a public interest foundation established by the law firm Bae, Kim & Lee. To implement legal support measures for public interest activities, Bae, Kim & Lee created the Public Interest Activities Committee in 2001, and since 2009, Dongcheon Foundation has conducted pro bono activities and public interest projects. It has provided legal support and public interest services for people with disabilities, North Korean defectors, refugees, and others, including legislative support. Notably, it has sought ways to revitalize Korean-style public interest corporations by publishing 'Corporate Public Interest Foundation Legal Research' as part of a public interest legal series, bringing together academia and the legal community.

This content was produced with the assistance of AI translation services.