Philanthropic giving in Asia expected to grow rapidly

Though still low compared to the West, philanthropic giving has been rising across Asia, and the changing environment in the region means it is likely to grow rapidly in the coming years. These are among the findings included in “Something’s Gotta Give: The State of Philanthropy in Asia”, a report from the Economist Intelligence Unit that was commissioned by HSBC Private Bank. The report is based on in-depth interviews with academics, consultants and prominent Asian philanthropists.
Charity appears to be increasing along with wealth in Asia. In Singapore, individual contributions have increased every year since 2006. China, meanwhile, has seen an explosive growth in private foundations due to the recent liberalisation of the sector and low public trust in existing charities. This rise in philanthropic giving is almost certainly linked to increasing wealth in the region, which is now home to more than 3.3 million high net-worth individuals.
“Venerable traditions of charity have existed for a long time in Asia,” says Sudhir Vadaketh, editor of the report. “But the concept of philanthropy – an organised approach to making large financial donations to achieve specific benefits for society – is only now really taking off.”
Other findings of the report include:
-Humble upbringing and a desire to enact positive change in society are two of the main drivers of philanthropy in Asia today. Many philanthropists in Asia today grew up at a time when the region was still largely poor. For example, Chen Guangbiao, chief executive of the recycling company Jiangsu Huangpu Renewable Resources, and one of China’s richest men, remembers his mother sharing food with neighbours and beggars – this left a lasting impression, and is an important motivation for his philanthropy.
-Philanthropic giving in Asia is probably under-reported. Charity in Asian cultures has traditionally been carried out informally and often donors remain anonymous and are reluctant to call attention to their actions. Public displays of wealth, often implicit in philanthropy, are also frowned upon in many parts of Asia.
Wealthy people in some parts of Asia are also wary of revealing the full extent of their wealth, lest they are slapped with taxes, a corruption investigation or even the risk of imprisonment. Thus some may prefer to give quietly. As a result, data on charitable donations in Asia likely under-report the actual levels of giving.
-Tax incentives, friendlier regulatory climates and the emergence of role models are all helping to boost philanthropy. Several factors are making Asia more conducive to philanthropy. First, some countries are offering generous tax incentives. In Singapore, for instance, taxpayers can deduct 250 per cent of their charitable giving from their taxable income. Friendlier regulatory climates in places like China are also leading to a rise in the number of charities. Finally, the emergence of several role models, including Putera Sampoerna in Indonesia and John Gokongwei in the Philippines, is spurring on other would-be philanthropists.
-Strategic philanthropy is now making its mark. A number of leading Asian philanthropists are pursuing “strategic philanthropy”, which emphasises innovation, scale and measurable results in its execution, and aims to make a long-term impact on social issues. Nellie Fong’s work is representative of this trend: her organisation, Lifeline Express, which began as a train-based mobile eye clinic delivering cataract surgeries in rural China, now also trains doctors to perform the surgeries themselves, broadening patients’ access to care throughout the country.
To realise the full potential of Asian philanthropy, new philanthropists must coordinate their efforts with other stakeholders. Given the increasing amount of information available on the subject, Asian philanthropists today have an opportunity to learn from mistakes of the past, bypassing the developmental stage of “chequebook charity” and taking up strategic philanthropy right away. However, they must also resist the entrepreneur’s impulse to go it alone in their philanthropy. By coordinating their efforts with other stakeholders, they can magnify the impact of their time and money.
Despite challenges ahead, Asian philanthropists have an enormous opportunity to make an impact. Many parts of Asia have experienced or are experiencing cultural, political and social shifts, whereby individual rights are becoming more pronounced. This shift is being catalysed by, among other things, rising incomes, levels of education and technology. In line with that, individual responsibilities are also becoming greater, partly because some governments have been unable to keep pace with rising citizen expectations. The non-profit sector, including philanthropic activities, could fill this void.

“Something’s Gotta Give: The State of Philanthropy in Asia” is available free of charge at www.businessresearch.eiu.com/somethings-gotta-give.html