China's philanthropy scene is growing — just not internationally

NEW YORK — China’s rapid economic growth over the past several decades has sparked a rise of extremely wealthy individuals and, in turn, more charitable giving. But China’s growing philanthropic scene remains insular, with major donors prioritizing needs within the country’s borders. “Most funding in Asia is local. So, Chinese money tends to stay in China, Indian money in India, and so on,” said Ruth Shapiro, founder and chief executive of the Hong Kong-based Centre for Asian Philanthropy and Society. “When rich Chinese fund or send money to Yale or Harvard or other top international schools, they have been criticized on social media. Citizens ask, ‘Why send funds abroad when there are still great needs in China?’” “Most funding in Asia is local. So, Chinese money tends to stay in China, Indian money in India.” --— Ruth Shapiro, founder and chief executive, Centre for Asian Philanthropy and Society Overall giving in China rose from $6 billion in 2009 to more than $23 billion in 2017, according to The Rockefeller Foundation. The number of Chinese foundations grew from 1,809 to 6,332 during that same time period. Only two of the top 100 Chinese donors in 2018 donated to recipients outside of mainland China, according to the China Philanthropy Project at Harvard Kennedy School’s Ash Center for Democratic Governance and Innovation. The largest outside donation — totaling more than $64 million — came from Jack Ma, former chairman of Alibaba and founder of the Jack Ma Foundation, to support the think thank Our Hong Kong Foundation. The local giving trend is partially linked to Chinese donors’ strong connections with their families’ ancestral hometowns, according to Heather Grady, vice president in the San Francisco office of Rockefeller Philanthropy Advisors. “There are many wealthy Southeast Asians who emigrated, or their parents or grandparents emigrated, from China, and these people are now millionaires or billionaires. They may still today be giving back to their hometown in China, 50 or 70 years later,” Grady said. “People have a very rootedness to place.” There are also legal reasons for the dominance of in-country giving. China’s 2017 foreign NGO law, for instance, has placed regulations on civil society, imposing “such tight restrictions … that it effectively hands administration of NGOs to the Government,” according to the U.N. human rights office. A general lack of trust in outside foundations and a focus on issue-based funding aligned with domestic corporate and government priorities can also help explain this trend, according to Edward Cunningham, director of the Ash Center China Programs at Harvard. “Every year, we are always struck by how little giving is international. So, even though people talk about the rise of Chinese donors, the reality of what we’ve seen, at least in terms of top-quarter giving, is they are very focused on China,” Cunningham said. Almost 90% of China’s large-scale giving — donations totaling more than $150,000 — is dominated by corporations. This is unlike the U.S., for instance, where the majority of charitable giving comes from individual donors. There were 115 donors giving more than 50 million yuan ($7.6 million) in 2018, according to the Ash Center, a rise from the 100 donors it documented in 2017. Ninety of these donors were organizations, and about one-third of the donors came from the real estate sector. The China National Tobacco Corporation is an example of a Chinese company that is a large donor but does not have a broad global reach in its work or philanthropy. “We've definitely seen over the past several years a professionalization, meaning that those corporations are setting up corporate foundations and giving through their foundations,” Cunningham said. “As they become more international themselves, they start to understand what CSR [corporate social responsibility] basically means, at least in theory,” he said. Top Chinese philanthropists gave most to the cause of poverty alleviation in 2018, followed by education, which ranked as the top giving cause in the Ash Center’s 2017 analysis. Support for the environment, meanwhile, dropped from 3.5% of giving in 2017 to 0.54% in 2018. “And when you actually look at the type of giving, it is often linked to government-affiliated foundations and such. So that giving obviously supports their business interests,” Cunningham said. “They'll often use philanthropy as an important tool.” Other emerging trends coincide with what Grady has seen in the San Francisco Bay Area, given the rising number of people who have found sudden wealth but are not sure how to approach philanthropy. Donor-advised funds, impact investing, and internet-enabled philanthropy are three growing areas that potential donors are now working to reconcile, according to Grady. “We've got corporate philanthropy. We've got private philanthropy. We have a huge amount of internet philanthropy,” Grady said. “It's what happens when people suddenly become wealthy and they want to be generous. But some are a bit flummoxed by what exactly to do. You know, the responsibility that comes with the wealth is significant.” There are some signs that philanthropy in China could take on a greater regional and international focus in the next several years, experts say, and more corporate leaders like Ma could emerge on an international development stage. In 2018, China established a separate foreign aid agency: the China International Development Cooperation Agency. And China has been encouraging some of its nonprofits and other organizations to carry out international projects from East Asia to Europe, aligned with the Belt and Road infrastructure initiative, according to Shapiro. “Assuming that China gets over this hump of both economic slowdown and coronavirus, it does want to increase its soft power in the world. CSR is also part of this, and state-owned enterprises have been encouraged to take on some international projects,” Shapiro said. “For many Asian donors, including those in China, solving a societal issue is one factor in their decision to fund but not the only factor.”