Introduction

The nature and visibility of major philanthropy in China is influenced by deep-rooted traditions. These have encouraged an altruistic approach to philanthropy, with many donors choosing to remain anonymous. That said, wealthy Chinese donors are increasingly willing to comment publicly about their giving.

The changing economic, social, political and legislative contexts in China today are also playing a key role in shaping major philanthropy. Beyond the analysis of the data, we have observed a number of trends in philanthropy through our discussions with donors and charities: for example, growth in the establishment of foundations, which has contributed to greater visibility of major philanthropists. We anticipate this growth will continue, and also expect increased support for the growing social enterprise sector.

Private vs public philanthropy

Are philanthropists becoming more open about their giving?

Philanthropists in China generally prefer to make their donations privately. This behaviour is based on their rich cultural heritage and traditions, which encourage a modest and altruistic approach to giving[1].

Yet that culture is slowly changing. Anecdotally and by monitoring the rising number of public announcements, it seems that wealthy Chinese donors are increasingly willing to speak publicly about their giving.

Indeed, the China Philanthropy Times was formed in 2001 specifically to spread information about charitable giving. Its establishment indicates increasing encouragement for philanthropy and the wider attention being given to this topic among the Chinese population as a whole.

Another reason behind the growth of publicity is the growing presence of private foundations in China. After being given the go-ahead in 2004, well-known entrepreneurs and celebrities have established their own foundations, which has led to an increase in media coverage of philanthropy and charitable giving.

The China Charity Awards have been held on an annual basis since 2005 to honour major Chinese philanthropists. Award-winners are chosen through a combination of evaluation by committee and online voting by the general public. This process helps to publicise philanthropy at the highest levels and to improve awareness of key players in the field.

Media attention given to disaster relief in China has also helped to raise public awareness of philanthropy, such as after the Sichuan earthquake in 2008. This tragedy saw Chinese citizens volunteer at an impressive rate, with donations totalling more than $16bn or RMB 100bn.

The future

What does the future hold for philanthropy in China?

The data gathered in this year’s report illustrates a strong culture of giving at the highest levels in China.

Building on this rich heritage, some Chinese philanthropists are now taking a more strategic approach to their giving, with a clear purpose and focus to their work. We anticipate that the growing number of private foundations will lead to greater professionalisation and longevity for the sector, with the hiring of expert staff or the establishment of endowments.

In addition, there have been reports that the Committee for Internal and Judicial Affairs of the National People’s Congress has led the drafting of a National Charities Act, which is expected to be submitted for consideration in 2015. This suggests that the government has begun to acknowledge that it can no longer supply all the answers and that private initiatives (through the social sector) have a role to play in meeting society’s needs.

Social enterprise is another way in which wealthy Chinese may seek to address societal issues. A social enterprise is an organisation that uses business strategies to improve society and the environment, rather than maximising profits for shareholders. A recent study shows that many high-net-worth Chinese individuals and families believe social entrepreneurship will be a major trend in the future.[2]

So far, social enterprises in China have focused largely on areas such as deficiencies in the education system, the alleviation of poverty and the provision of employment opportunities for disabled and socially-disadvantaged people. Our data on million dollar charitable gifts does not measure support for social enterprise, though anecdotal evidence has led us to anticipate that finance for social enterprise will grow in China.

History

What is the history of philanthropy in China?

Informal philanthropy in China has existed for centuries within communities where extended families would care for the poor within their own clans. Organised philanthropy in China can be traced back to 400 BC, when the nobility began to set up funds specifically to support local students in their education.

From that point until the Han dynasty (206 BC-220 AD), a major period of philanthropic activity unfolded, with an emphasis on disaster relief in the aftermath of frequent natural disasters, such as famines and floods.[3]

Religious giving increased with the popularity of Buddhism during the late Western Han dynasty (206 BC-9AD). People donated money and goods to temples, which provided disaster relief and health care. During the Tang and Song dynasties (618-1279 AD), private philanthropy grew independently of Buddhism, and the elite class provided relief for the poor on a large scale.

During the Ming and Qing dynasties (136-1912 AD), Chinese philanthropy experienced a period of dramatic growth. Charitable activities were carried out not just by the elite but also by other classes such as merchants. These activities were no longer limited to disaster relief and health care, but expanded into almost every field of social welfare.

In the first half of the 20th century, the number of relief agencies grew quickly, influenced by foreign ideas of philanthropy. By 1948, over 4,000 relief agencies were in operation across China, nearly half of them privately funded.

However, during the period of the Communist Party’s centrally planned system, private philanthropy virtually disappeared as the government took over and reformed most private charities. After key reforms in 1978, the environment for private philanthropy became more hospitable. In the past two decades, the government has encouraged private philanthropic support for social needs, and expressed support for philanthropy as an important part of the social security system.

Today, government support for non-governmental organisations (NGOs) is primarily devoted to education and public & societal benefit organisations, including poverty relief. In 2004, the government passed regulation allowing individuals and corporations to establish foundations. As a result, the number of private foundations in China has risen rapidly from a few hundred prior to 2005 to over 1,700 by 2013[4].

The Chinese government is directly involved in many charitable ventures at all levels, and often directs philanthropy towards specific areas. More than 200 local governments have established their own charity federations, which raise funds for philanthropic purposes. Sometimes referred to as government-organised NGOs (GONGOs), these organisations are affiliated with the national China Charity Federation. This organisational structure is similar to that of the Red Cross, which has a national headquarters as well as affiliated organisations in various provinces and cities.

Chinese donors are motivated by a variety of factors. Clan philanthropy is still prevalent, particularly in rural areas. If a wealthy person was raised in a small village, their first priority when giving to charity will naturally be their home community. As a result, many donors fund infrastructure or school-related projects in these areas.

[1]  M. Mauss, ‘The Gifts’, 1954 (translated by I. Cunnison), The Free Press.

[2]  ‘UBS-INSEAD Study on Family Philanthropy in Asia’, 2011.

[3]  L. Meng and X. Wang, ‘Introduction to Philanthropic Efforts in China’, 2008, from Peking University Press.

[4] X. Feng, ‘China’s Charitable Foundations: Development and Policy-related Issues’, October 2013, Stanford Centre for International Development