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  • Gordon Dumoulin

DIFFERENT CHINA (ep 10) | Philanthropy with Chinese Characteristics; a game changer for charity

“A man of humanity is one who, in seeking to establish himself, finds a foothold for others, and who, in desiring to attain himself, helps others to attain.” Confusius (551-479 BC)

Philanthropy in China today is in a state of expansion, experimentation and evolution. Its origins and the charitable motivations of the country’s new philanthropists are deeply rooted in traditional Chinese values. Yet at the same time there are new exciting philanthropic initiatives in China, built on high-tech innovations to create new evolutions in philanthropy for mankind.

Between 2010 and 2016, donations from the top 100 philanthropists in mainland China more than tripled to USD. 4.6 billion, while the number of registered foundations in China surged to 5,545, a 430 percent increase over a decade.

The National People’s Congress (NPC) in China enacted the Charity Law in 2016, which played a key role in boosting charities.

Philanthropy has a very long history in China, several dynasties were driven and thriving on charity but it has been a relatively new phenomenon for the current younger generation as since the establishment of the People’s Republic of China in 1949, wealth was nationalized and philanthropy maligned.

In recent decades, philanthropy in China is surging and slowly developing into a valuable asset of China’s future. Charity in China has its own long history and also has its own motivations and considerations today and certainly its own direction and methods for the future. Chinese characteristic philanthropy is not just a blind copy of Western style philanthropy.  

History Philanthropy in China

Philanthropy and charity is inherent to most civilizations and dynasties throughout China’s ancient history.

The relatively modest level of giving in modern-day China is something of an anomaly in China’s long history. The notion of charity is deeply embedded in the ethical premises of Confucianism, Buddhism and Daoism, creating a strong sense of moral obligation of giving to help others in China prior to the secularization that accompanied the revolution of 1949. Over many centuries charitable giving in China established firm roots and characteristics which even can be seen up till today in the sense of collectiveness among people in China and Chinese people abroad.

Under the various pre-1911 dynasties and in Republican China (1911-1949), local communities and trading organisations gave through temples or associations to build schools, orphanages and hospitals; to provide assistance during famine or natural disasters; and, given the cultural importance of ancestor veneration and the afterlife, to help families who could not afford the cost of burial.

In most dynasties, trade, beliefs and governance were closely linked and keeping communities well, healthy and respected through charity by local county magistrates implied ethical, moral, financial and continuity motivations. From the Song dynasty (960-1279) local county magistrates and powerful merchants provided charity to the destitute and impoverished, including the operation of poorhouses and subsidization of burial costs.

During the Ming Dynasty (1368-1644), private foundations supported by elites controlling the salt trade monopoly (called “benevolent societies”) emerged and were significant sources of philanthropy to keep communities respected and developed.

"Did you know that the salt trade monopoly in China is the eldest continuous state monopoly in the world, more than 2000 years, only being eased and dismantled step by step since recent years. The monopoly has existed since before the Han Dynasty, predating the construction of the Great Wall.  In 119 BCE, Emperor Wu of Han cast about for ways to finance his expansionist policies, and at the urging of his legalist advisors, decreed salt to be a state monopoly, operational until today. "

An important shift in philanthropy occurred in the 19th century with the arrival of foreign philanthropies in China, initially linked to the work of missionaries. Much of the work of these foreign philanthropic organizations was linked to introducing foreign health care and religions.

In 1949 with the establishment of the People’s Republic of China in 1949, all wealth was nationalized and philanthropy maligned. Any recognition of the need for private charity for schooling or sustenance was a sign of state failure.

However the deeply rooted sense of collectiveness has survived since 1949 through charity support within families. Where lineages were strong, charitable estates long provided the schooling and health care of poorer members of extended families, which could comprise an entire community. Nevertheless private philanthropic initiatives and nongovernmental associations (NGOs) were shut down and foreign philanthropies were told to leave China. Philanthropy in China stagnated for the next 30 years.

Philanthropy in China since the 1980’s

With the country’s economic reforms in the 1980’s, China’s philanthropic landscape began to revive, admittedly slowly and cautiously at first. The historical philanthropic legacies described above formed the foundation for the revival. Building on these traditions, three key factors have contributed to the surging development of today’s modern philanthropic sector.

First, as described above, is the remarkable expansion of private wealth that escalated once China entered the World Trade Organization in 2001. This has led not only to a sharp rise in the number of the wealthy, but also to the rapid expansion of the middle class, members of which are exhibiting important interest in charitable causes. While private wealth alone is not a sufficient prerequisite for a robust philanthropic sector, it is an important ingredient, and it provides the foundation for a potentially explosive growth in philanthropy in China.

A second critical factor in the development of the modern philanthropic sector is the Chinese government’s shift in attitude towards philanthropy and provision of social services. Some new social needs by people created through the reforms could not be fulfilled by the government or market alone and alternative vehicles for the provision of services would be necessary to supplement the work of government agencies. In addition, the government wished to turn public service units – such as hospitals, scientific research organizations and museums – into not-for-profit organizations, and wanted to open new channels of funding for them, including public donations, to avoid their collapse and the attendant unemployment that would result.

The third factor in the sector’s expansion is the rapid rise of non-governmental organizations (NGOs). At the start of 2016, there were 662,000 social organizations formally registered with the Ministry of Civil Affairs, with perhaps another three million unregistered organizations. Most of these are local organizations working on issues of health, education or poverty alleviation. Of those registered, around half are called “social groups,” which correspond most closely to the Western definition of an NGO; almost one half comprises private non-enterprise units (including the public service units); and approximately 5,000 are foundations. This growth has provided both entities that can receive philanthropic giving and also those that can provide support. In 2015, non-governmental organizations received RMB 61.03 billion (USD 9.1 billion) in donations.

While reported philanthropic contributions are still comparatively low, amounting to only 0.16% of China’s 2014 GDP, philanthropy is developing rapidly and China now has a full range of philanthropic mechanisms.

The 2016 Charity Law

The National People’s Congress (NPC) in China enacted the Charity Law in September 2016, which is a milestone in providing more legitimacy to the philanthropic sector and encourages its growth, consistent with government priorities.

Although the perception of charity is still with a lot of suspicion by many people due to lack of transparency, it is expected that the new law will be supplemented by implementing clear and transparent guidelines and supporting legislation. With the new law, a much clearer picture is emerging of how the CCP is hoping to encourage the application of at least some of China’s new wealth to address social challenges.

Philanthropy China today and tomorrow

Philanthropy in China today is in a state of expansion, experimentation and evolution. Its origins and the charitable motivations of the country’s new philanthropists are deeply rooted in traditional Chinese values.

The volunteering spirit, strongly present in Chinese society is also important spiritual power of the  philanthropic culture, and has absorbed the essence of Chinese traditional philanthropic culture. What’s more, combined with its own advantages the volunteering spirit is giving a new dimension to the philanthropic culture of the present time.

Yet at the same time there are new exciting philanthropic initiatives in China, built on high-tech innovations to create new evolutions in philanthropy for mankind.

Philanthropic giving in China is growing rapidly, gaining visibility,and displaying exciting ingenuity and innovation.

Hurun China Philanthropy list 2018

Hurun Research, the company best known for its Hurun China Rich List that ranks China’s wealthiest people, has released its annual Hurun Philanthropy List for 2018. The List contains the top 100 individuals to have made public donations to foundations, NGOs, and educational institutions in Mainland China. This year 76 year-old He Xiangjian, founder of the Midea Group, was named the most generous philanthropist in China, with 7.5 billion RMB worth of donations. The second and third places were taken by two real estate moguls, 60 year-old Xu Jiaxin, with 3.42 billion RMB worth of donations, and 68 year-old Lu Zhi Qiang with 1 billion.

The report calculates cash and cash-related donations, as well as promises made with legal force, between April 1 2018 and March 31, 2018. Similarly to 2017, the donations of the individuals listed account on average for 0.5% of their personal assets. 13 women made the list, somewhat lower than the female proportion (25.8%) in the Hurun Rich List. The total donations of the 100 philanthropists increased by 33% compared to last year, reaching 21.8 billion RMB. To be able to make it onto the list one had to donate at least 16 million yuan, 6.7% higher than the figure for 2017. “The increase in the amount of donations is quite obvious. On average they are 10 times as large as the donations that were made 15 years ago, when we compiled the first Philanthropy List”, said Rupert Hoogewerf, the Luxembourg-born chief researcher and CEO of Hurun Report.

Tech-Enabled Philanthropy in China; the Great Game-changer

New technologies in China have helped bring innovative approaches to philanthropy and encouraged broader participation since recent years. Tech giants, in particular, have already learned to take advantage of their branded merchandise to involve the general public in philanthropic activities. For example, in response to the 2008 Wenchuan earthquake in Sichuan, Tencent, the company behind China’s biggest social network Wechat/Weixin as well as the largest gaming company in the world, established an online donation platform. More than half a million people contributed, raising a total of US$ 2.9m. Tencent added donation options to WeChat, the instant messaging and social media app with one billion monthly active users, and allowed users to give any amount with a swipe of a finger, making philanthropic engagement easier than ever.

New technologies have created more diversified ways of giving. The rising popularity of fitness apps in China has inspired tech companies to incentivize giving among the younger, more health-conscious, generation. Through the Xingshan (“doing good”) app developed by the Beijing based company iMore, users record the number of steps they take each day, which is then “donated” to charities through corporate sponsors. By the end of 2015, users of Xingshan had walked a total of 2.8 million kilometers, raising more than US$ 4.6m for 52 different public welfare organizations and projects.

Facing the troubled reputations of some charitable organizations, new types of charity platforms have stepped in to address both transparency and accountability issues. Real-time updates on donation collections, along with different verification systems, guarantee the funding reaches the right people at the right time. For example, JIAN Charity – launched by Alibaba’s Cainiao Logistics in 2016 – is an online donation platform where people can place orders and then track the real-time location online of the items they donated.

A New Era for Philanthropy with differentiated characteristics

The deeply rooted sense of collectiveness with expansion of China’s private wealth and high-tech innovations, philanthropy in the country is on an undeniably upward trajectory. New technologies are unlocking more inventive forms of giving, which become more synergized with mega business ecosystems. Public awareness about philanthropy is rising, while non-profit organizations are regaining their credibility and trustworthiness.

The rise and impact of philanthropy by Chinese people and NGO’s in China and abroad will be more and more seen all over the world in coming decades. Keep in mind that ‘Chinese style’ philanthropy is not a blind copy of the ‘western style’ philanthropy concept. It clearly has its own characteristics, motivations and ancient roots. Chinese philanthropic motivations include ethic foundations, personal and corporate responsibilities in ‘giving back’, harmonious and respected societies or collective standard and opportunity.

Although it is much more complicated; one might generally differentiate the philanthropy motivations in ‘collective, harmonious objectives’ for Chinese philanthropists while ‘Western’ philanthropists might be more characterized for their objectives towards the ‘individual and diversity

Philanthropy with Chinese characteristics; it might be a game changer for philanthropy in the future global society……..

Sources article : Social Investor, a Chandler Foundation Publication; UNDP; Harvard Kennedy School ASH Center; NYtimes; Barron’s Penta; The Diplomat; The Guardian; The Telegraph; Wikipedia; Center or International Business ethics, Liu Baocheng / Zhang Mengsha; Hurun Research

#china #philanthropy #charity #chinesesociety

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