China’s booming economy has fueled the philanthropy of its richest citizens, with the country’s top 100 donors more than tripling their giving from 2010 to 2016 to $4.6 billion annually, according to a new report from Harvard University’s Ash Center for Democratic Governance and Innovation.
Their giving is often motivated by personal values, creating individual happiness, and aiding others, according to the study. But some also want to help China, an economic and political heavyweight, strengthen its influence in other areas, such as culture and philanthropy.
“China is strong in hard power but behind by many decades in soft power,” said Wang Bing, founder of DTC Investment Management and of the Ai You Foundation, in the report. In addition to providing medical aid to orphaned and poor children, the foundation gives start-up funding, professional development, and other assistance to promising social enterprises and nonprofit groups.
Eventually, Mr. Wang hopes the foundation can become the “Facebook of philanthropy” by creating a platform that will connect foundations, individuals, and nonprofits large and small to facilitate more organized and informed giving.
The study was based on data from the 100 donors, as well as in-depth interviews with more than 30 Chinese philanthropists, 15 experts on the country’s nonprofits, and staff at several of China’s foundations.
Education Focus
As in other parts of the world, education is a top priority for China’s biggest benefactors, with nearly half of their giving going toward that cause. Projects cited in the report include an effort to reduce the dropout rate among girls of the minority Yi ethnic group and help rural children whose parents are away at jobs in urban areas.
Poverty alleviation and social welfare was the second most-popular cause in terms of donor dollars, followed by the arts. Despite the country’s problems with severe air pollution, work to help the environment drew less than 1 percent of giving.
Philanthropy in China has grown significantly more institutionalized since 2004, when legislation first enabled donors to create foundations. Still, registering a foundation remains relatively difficult in Mainland China. Donors also said they worried about the time involved and their potential loss of privacy.
As of the beginning of last year, there were approximately 5,000 registered foundations in the country.
Legislation adopted last September, known as the Charity Law, marks an effort by the government to encourage giving and regulate nonprofits. In general, the report says, the law holds promise as a way to gather and spread information about the field and increase trust in nonprofit institutions. Many people, however, see it as just a first step, requiring more specific guidelines about implementation.
“We needed a torrent, and they gave us a drizzle,” said one philanthropist quoted in the report.
At the same time, the law seeks to encourage giving primarily to the government’s preferred causes and government-linked nonprofits.
While the report doesn’t cite specific concerns among Chinese philanthropists about this tighter government hand, such worries have been raised about a separate law governing foreign groups that went into effect in January. That law requires foreign organizations operating in China to find government sponsors and register with the police, among other restrictions.
“U.S. foundations are worried about getting government approval under the new law to fund programs on issues that may not be supported by the government,” said Natalie Ross, senior director for global philanthropy and partnerships at the Council on Foundations.
No Mistakes
Philanthropists interviewed in the report called for additional steps to strengthen China’s charitable sector: make it easier for nonprofits to obtain tax-exempt status, clarify policies concerning foundation investments, and recruit more talented people to work in the field, to name a few.
A further challenge to philanthropy, they said, was the relatively widespread resentment in China toward people who’d accumulated mass wealth. A big gift, meanwhile, is often met with the expectation that the next donation must be even larger.
“In philanthropy,” said one wealthy interviewee, “not even one mistake is allowed.”