Questions/Answers

There are over 3,200 homeless people living in Seoul, 290 of whom are living on the streets. Seoul currently has five jjokbangchon (low-income housing projects), which are home to a combined total of approximately 3,300 residents. A jjokbang (literally, “sliced room”) refers to a room with a floor area of between three and five square meters that has no kitchen or shower facilities: most jjokbangchon have very few restrooms. Seoul Metropolitan Government operates diverse policies that aim to help jjokbang residents become functioning members of society. Through these policies, a total of 982 households (1,333 people) have already moved into public rental housing. These destitute citizens lack basic household items (TV, refrigerator, etc.) and furniture and are extremely lacking in terms of hygiene products (e.g. soap) as well. In an attempt to solve this problem, Seoul Metropolitan Government is carrying out a project in cooperation with five-star hotels in the city. To maintain their high level of service, five-star hotels regularly replace a wide range of items (hygiene products, furniture, electronic goods, tableware, etc.) that are still otherwise quite useable. To minimize the period of time during which they need to close in order to replace such items, these hotels waste no time in replacing and discarding or selling these usable items, often for extremely low prices. Seoul Metropolitan Government accepts the items discarded by hotels as donations and distributes them to homeless people, jjokbangchon residents, and people living in public rental housing as a means of bringing some stability to their lives. Any left-over items are distributed to welfare facilities for people with disabilities, women, seniors, and/or multicultural families. Since October 2015, Seoul Metropolitan Government has signed contracts with 14 five-star hotels and used the donations received to provide a full supply of household items to 151 households, including homeless people and former jjokbangchon residents who were accepted into public rental housing. The items are also regularly delivered to 234 welfare facilities for the homeless, women, multicultural families, people with disabilities, and seniors.

The goal of this project is to establish a community based on coexistence and cooperation through exchanges of materials and culture between five-star hotels and destitute citizens, thereby supporting the livelihood stabilization of the underprivileged by fostering a culture of sharing and donation, efficient reuse of discarded resources, and promotion of corporate social responsibility. Initially, the beneficiaries of the project were identified as homeless people, jjokbangchon residents, and former jjokbangchon residents who had moved into public rental housing. Since then, however, the beneficiary pool has been expanded to include social welfare facilities in Seoul and will be further expanded in 2018 to include destitute residents living throughout Seoul.

The project helps improve the poor and unhygienic conditions of homeless people and jjokbangchon residents and allows public rental housing residents to reduce their expenditure on household items, thus enabling them to enjoy peace of mind and a small degree of financial stability while settling down in a new home. Although the assistance provided through this project may seem trivial, the improvement in the recipients’ living environments has proven to be a highly effective means of preventing them from becoming homeless or jjokbangchon residents again. The donations are also of great help in improving the quality of services provided for the recipients (i.e., clients) of social welfare centers for senior citizens, women, and individuals with disabilities. Moreover, the simple act of allocating the household items to be donated serves to remind the staff of the five-star hotels that they actually live alongside destitute citizens in the same city. The activities of this project also help eradicate poverty and contribute to the creation of a sustainable city and urban community.

Since October 2015, Seoul Metropolitan Government has received material donations from five-star hotels with which it has contracts of over 150 types of items in five major categories, including: 1.8 tons of soap bars, 10,000 liters of shampoo/conditioner/shower gel, 27 tons of linens, 1,172 beds, 614 televisions, 413 refrigerators, 2,202 chairs, 331 desks, 462 tables (assorted sizes), 2,110 items of clothing, and 33,351 dishes. Based on secondhand prices, the total value of the donated items is estimated to be over KRW 1 billion. Of the donated items, 65.1 percent was distributed to destitute citizens. Those that did not end up being used were sold at the recycled goods market, generating a profit of KRW 84 million. Some of this profit was used to pay the project’s operational expenses, and the rest was poured into a fund that will be used for a welfare project for the homeless. A common practice in the Korean welfare system, as well as for Seoul Metropolitan Government, is the provision of cash in the form of welfare checks to support living expenses. When recipients are able to secure another source of cash, however, their welfare checks are reduced. Since in-kind donations are not considered income, the project is helping improve the quality of life of the recipients because they can receive material goods without any reduction of their public welfare benefits.

As stated in the answer to the previous question, the initial targets of the project were the homeless, jjokbangchon residents, and former jjokbangchon residents who had recently moved into public rental housing. And the rest of donations were sent were a shelter for female victims of prostitution/family violence and a welfare facility that supports multicultural families. After that, there were still some items left over. So, the project now also sends items to welfare facilities for people with disabilities and is planning to supply some senior citizen welfare centers in the near future.

Going forward, the project will be expanded in scope to provide assistance to those who may not be classified as “destitute” but are nevertheless low-income, including residents of public rental apartments and families that are forced to live apart due to poverty. To achieve this goal, the project is making consistent efforts to sign contracts with more hotels.

There are many examples worldwide of institutions like the Salvation Army ARC (Adult Rehabilitation Center) and Goodwill, to which ordinary citizens donate unused items and the donated items are re-sold, the profits from which are used for social welfare projects. However, we have yet to hear of a case where donated items are delivered directly to the destitute citizens or social welfare facilities to improve their living environments or assist with operations, respectively. Seoul Metropolitan Government signs contracts with five-star hotels but does not receive donations from them directly. Instead, a trustworthy NGO is designated as the operational institution, making it responsible for distributing the donated items, selling any left-over items, and issuing donation receipts. From 2015 to 2017, the designated operator was the Korea Religious Council on Social Welfare . Starting in 2018, however, Seoul Metropolitan Government will be partnering with the Salvation Army Korea Foundation (consignment contract has already been signed), which has more expertise with resource recycling/reuse projects. Although the project is conducted by Seoul Metropolitan Government, the city is involved only with general coordination. All other tasks (receipt and distribution of donated items, application management, shipment, etc.) are conducted, based on negotiations, by private corporations and organizations.

In early 2015, when the idea for this project was still in the germination phase, the primary aim was to secure donations of hygiene products (soap, shampoo, etc.) from five-star hotels to help improve the personal hygiene of the homeless people under the care of Seoul Metropolitan Government. While conducting market research, however, it became apparent that five-star hotels replace their supplies/items more frequently than expected, which led to an expansion of the scale of the original project.

Seoul Metropolitan Government provides the operating institution(s) with storage space and the personnel necessary to handle and transport the items. The current storage facility is located on the third floor of Seoul Medical Center’s Gangnam branch (building will soon be sold) and has a total floor area of 1,124 square meters. Currently, the city is preparing a permanent storage space to be used after the sale of the Gangnam branch building. There are five employees in charge of transport and delivery, all five of whom are homeless, and a nominal wage is provided for one administrative employee. The remaining operational expenses are procured by selling large items that cannot be moved easily (large pieces of furniture, beds, etc.). When one of the hotels under contract carries out a full-scale renovation, a large number of items is donated over a very short period of time and must be delivered or stored immediately. In a case such as this, the sheer quantity of items requires the hiring of a professional transport company, which obviously incurs a cost. To address this issue, the Korea Racing Authority (affiliated with the Let’s Run Foundation) was asked to consider a partnership. As a result, the Let’s Run Foundation will be participating in the project by covering a portion of the transport costs starting in 2018.

否

But many of the hotels that Seoul Metropolitan Government has signed contracts with are famous hotel chains that operate hotels in most major cities (Westin, Marriott, Hilton, Ambassador, Hyatt, Sheraton, etc.). We assume that every city has a poor population that needs assistance. Because the basic structure of this project is so simple, we believe that as long as there is a local government willing to conduct it, projects of the same format can be implemented in any country. It is so simple that the institution that implements the project does not even have to be a government; any institution with connections and organizational power (even an NGO) can undertake the project quite easily.

As of September 30, 2017, there are 381 registered hotels in Seoul, with a combined total of 49,902 guest rooms. Of these, 70 are four-star or higher, with a combined total of 22,757 guest rooms. Currently, 14 hotels have signed contracts with Seoul Metropolitan Government, accounting for only 20 percent of all four-star (or higher) hotels in the city. Five-star hotels typically carry out full-scale renovations every seven years and replace their furniture/room items (bed, linens, etc.) every three years. To minimize the loss of sales caused by temporary closures for renovations, five-star hotels also minimize the time they spend replacing room items and furniture. Items that are easily disposed of are sold for extremely low prices (dumping), while things like furniture, which are not easily sold, are discarded. Korea’s Corporate Tax Act offers tax deductions based on the book value of monetary/material donations (recognized as operating cost). Considering the procedures involved in issuing donation receipts as well as the sales amount and cost of processing the discarded items, this project is not a financial burden for the hotels—it actually helps them improve their public image. Therefore, the operation of the project is expected to remain stable, and the number of participating hotels is very likely to increase.

Seoul Metropolitan Government has purchased an old, 600-square-meter storage space inside the sewerage treatment center in Yongdap-dong, Seongdong-gu, for KRW 450 million and is currently conducting renovation work to turn it into a warehouse. The Salvation Army Korea Foundation, the operating institution, is creating a website dedicated to the implementation of this project. Through the website, information on donated items will be updated regularly. Applications for and the distribution of items for those in need will also be conducted regularly. (The current system requires an in-person visit in advance to confirm the availability of requested items.) The completion of these two sub-projects will result in an integrated platform for donations and sharing and ensure the stability of the project going forward.

否

The basis of this project is the voluntary donations made by five-star hotels. The project does not handle newly purchased items specifically because they are needed by the destitute or request donations of hotel items that are being reused. The project also does not require hotels to donate items every time they carry out renovations or replace hotel items, and the hotels do not have to donate all the items they replace. What the hotels are expected to do, however, is agree to donate all items that they are unable to sell off readily. Also, the project does not make unreasonable demands of the operating organization. Seoul Metropolitan Government promotes the project and its purpose to hotels in Seoul and requests their voluntary participation. It also provides the hotels with lists of the individuals who require donations. In general, the primary role of Seoul Metropolitan Government is to arbitrate and expedite the activities of the project. In the early stages of the project, the overall business model was determined after three or four meetings with hotel equipment management employees who were sympathetic to our cause. A workshop or meeting is held once or twice every year by representatives of Seoul Metropolitan Government, the operation organization, and participating hotels. To solidify the bonds of solidarity and friendship, outstanding hotels (or hotel employees) are selected at the end of every year to receive a commendation from the mayor of Seoul in recognition of their contributions to a worthy cause.

Over the two years that this project has been conducted, we have learned that attention to detail is just as important as the business model itself. We are learning and evolving through a trial-and-error process. One important lesson we have learned is that managing and distributing the donations properly is just as important as receiving them. As stated previously, we hope to create a long-term platform of donation/sharing for Seoul’s most destitute residents. In the future, Seoul Metropolitan Government hopes to share its experiences with this project with the world’s major cities, all of which attract large numbers of tourists. We also hope to send donated items that cannot be used in Korea, due to Korean’s culturally driven tendency to avoid secondhand items, to developing countries and refugees. Regarding this matter, we would like to ask for the advice and assistance of organizations affiliated with the UN.