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PHILANTHROPY

CHANGES FOR THE ASIAN GIANT

A new wave of philanthropy invades China as the State's social welfare system declines. But the Asian giant still lags behind most of the world's industrialized nations.

 

 

Taking New Roots: Philanthropy
in China Finds a Patron

By Laura Juncadella


 

China may be home to one-fifth of the world’s billionaires, but last year, the country’s 100 wealthiest donated less than Mark Zuckerberg did alone. A recent announcement by the entrepreneur Jack Ma to set up a charitable endowment may be marking a shift in the country’s philanthropic culture.

According to Reuters, China’s top 100 philanthropists donated a mere $890 million, down 44% from the previous year. The number of charitable organizations was 2,961, less than 3 percent of the US total, keeping in mind that the population is 1.351 billion to the US’s 313.9 million.

Philanthropy in China

In 2010, Microsoft co-founder Bill Gates and businessman Warren Buffet traveled to China with the hope of finding signatories for the Giving Pledge. The initiative, launched by the pair, asks billionaires the world over to agree to donate half of their fortunes before their deaths. While Buffet and Gates have seen success in most places they travel, they received an icy reception in China— no single person agreed to the commitment.

Despite widening income inequality and extreme poverty in rural areas, few major philanthropic causes have managed to take root in the country. Curiously, Chinese culture has historically encouraged charity, but the tradition was superseded in recent decades thanks to the extensive state welfare system imposed by the Community Party.

Cultural norms dictated donors quietly fund local initiatives, without drawing praise or attention. Families preferred to carry out charitable work directly, rather than give the money to an organization or to someone else, so that they could assure that the work was being carried out. In fact, the World Giving Index reported that in 2013, 373 million Chinese stated they helped a stranger directly at least once a month.

Philanthropy in China
Jack Ma.

In recent decades, a slow dismantling of China’s welfare system and safety nets has generated a whole new set of social challenges, including a widening gap in income inequality. The result, it seems, is that resistance to not-for-profit work is waning. The number of registered nonprofit organizations rose by 6% in 2012, and has continued to rise in the years since. Currently, over 4,000 international NGOs maintain a presence in the country.

Individuals are also realizing that philanthropy can substantially benefit their careers, finances and families. Being perceived as an entrepreneur who cares can help soften resentment in a society that does not admire people who get rich fast. Parents, with high hopes for their children, recognize that companies and universities abroad will look more favorably upon applicants who have acquired skills from nontraditional work or challenging environments.

Charitable giving and philanthropic works explode in times of catastrophe. Following the Sichuan earthquake in 2008, total charitable donations increased by 380% from the previous year. Currently, the Chinese government is in the process of reviewing laws that will make charitable giving more beneficial to donors, and additionally, easier for charitable organizations to get off the ground (including designating them as tax-exempt).

The most noticeable shift comes from Jack Ma’s recent announcement to fund charitable causes. Ma founded the Alibaba Group 15 years ago, and today, it is China’s largest online retailer. This spring, he and his business partner set-up philanthropic trusts financed by share options that represent about 2% of the company’s current equity – by far the largest endowment of its kind in China.

Philanthropy in China
(L) Mark Zuckerberg; (C) Bill Gates; (R) Warren Buffet.

Most of the trust will go to find environmental improvement efforts. In an interview with the Wall Street Journal, Ma cited his concern over a rising spate of throat and liver cancers in his friends, family and colleagues. It seemed to him that it was vital to improve the country’s environment in order to ensure the population’s health.

A quick sweep of Chinese social media shows pictures of benefit dinners and celebrities promoting charitable causes. Pictures of extravagance are being replaced with visits to rural schools and earthquake-stricken zones. While philanthropic giving may still not be the norm in China, the tide may be turning, and Ma’s recent announcement will likely inject new energy into Chinese philanthropy.


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