Warren

Strategic philanthropy in Asia

Strategic philanthropy in Asia

Charitable giving is an integral part of the Asian culture and as the region continues to grow economically, the philanthropy sector has also seen a steady growth.
Take India, for example. According to Bain & Company’s annual India Philanthropy Report, the country has seen the rise of more than 100 million new donors since 2009. Indeed, the future of philanthropy looks promising with more than a third of current donors expecting their donations to increase in the next five years.
Changing Giving Trends
Over the years, the trend of giving has evidently changed across the region. Previously, giving in Asia was largely understated and kept low-key. It was seen as a personal affair and not something to declare publicly. Also, giving was confined to specific communities and causes: funding was directed towards communities that the givers came from and causes that had directly impacted them, such as specific illnesses. This is now changing and the idea of giving back to one’s own community is diminishing, with a greater sense of responsibility for global issues.
This was evident in China last year when a number of Chinese high net-worth individuals (HNWIs) gave money to Harvard University: the Chan family, the Hong Kong real estate tycoon, gave $350 million and Pan Shiyi and Zhang Xin, co-founders of a large real estate company in China, donated $15 million. These were some of the most significant outgoing donations from Asia to the West and were covered by Western media at length.
The new generation of the many renowned wealthy Asian families are now also more inclined to see the impact of their philanthropic acts – more commonly known as strategic philanthropy. They do this by bringing in metrics, assessing scalability and sketching out long-term social benefits- Asian foundations are bringing in a more corporate model to their organisations.
This element of measuring the so-called “social returns” not only brings a greater degree of rigor to the act of giving but also brings with it greater transparency and accountability. We can see this in the case of Japan where its largest grantmaking foundation – The Nippon Foundation – has noticeably changed its approach to becoming more impact oriented.
Facing Barriers
While philanthropy in Asia looks promising, it still dwarves in front of giving across the West. The fact that there were 11,000 media reports on philanthropy in the US in 2013, compared with a mere 1,000 in India across the same time period show a greater need for public profiling to make the philanthropy sector stronger across Asia. Greater reporting on the sector will not only show the importance of philanthropic work but will also help grow the sector.
Some philanthropic organisations have also expressed that there is a need for more favourable government legislations.
Reports show that philanthropy in China has deteriorated over the years because of the policy environment and this has constrained the growth of the sector. Requirements such as a compulsory RMB 2 million initial fund ($330,000) to establish a local private foundation, and RMB 20 million for a national private foundation, leave many organisations in a disadvantageous positon as many are unable to meet the requirements.
Grievances from Indian philanthropists have been that the NGO sector has insufficient capacity and there is a lack of professionalism with limited access to funds and training. They also express that the tax laws in the country do not incentivise giving.
Onwards and Upwards
The future of philanthropy in Asia is indeed encouraging and the recent giving trends and sharp increase in the number of philanthropic activities is reassuring.
However, to ensure the sector continues to grow and has greater impact, there is a strong need to raise the profile and importance of the sector. The only effective way to achieve this is for philanthropists themselves to meet with journalists to communicate about their work. Talking about their philanthropic work will help influence others in doing the same work and will raise greater interest in the sector.
We are of course yet to see how philanthropist tackle these challenges and what this will mean for the future of the sector in Asia.
Marya works in Portland’s international team, supporting leading philanthropic and nongovernmental organisations including the Bill & Melinda Gates Foundation and The Elders.

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