One of the best things about being philanthropy advisors in China is that we have front row seats to the sometimes dramatic (but more often subtle) shifts in the giving and charitable landscape in China. We are often asked what changes we’ve seen and where we believe things are going. What are the most interesting pockets of growth in philanthropy to watch? What does philanthropy “with Chinese characteristics” look like? Will China’s growing new wealth, which has weathered the global economic crisis relatively unscathed, herald new levels of giving in China and abroad?
It is a good time to comment on this topic given the recent launch of China’s first philanthropy research institute and the buzz as to whether billionaires in China should be required to donate a minimum yearly amount of their income (in the vein of similar calls in the US by world renown philanthropists Warren Buffet and Bill Gates). It will be interesting to see how the work of the institute, a cooperative effort between academia and nonprofit players, will impact the sector as a whole.
When we started SVG in 2006, it felt like we were a bit before our time. In 2006, studies showed that 80% of funding to the charitable sector in China was still from overseas. Nonprofits had one of the lowest category ratings for public trust in China. Public perception of charitable giving was still relatively hostile or simply indifferent. One has to remember that the idea of giving outside of one’s immediate clan (family and close networks) has not been as commonly accepted in China as in the West. Also, the number one complaint of smaller grassroots nonprofits has been the complex legal issues surrounding their inability to register locally.
Fast forward now to 2010. Here are some reflections and thoughts (without writing a tome on the subject) on where we’ve been the last few years and where we’re going:
- Several major natural disasters such as the Sichuan earthquake in 2008 and China’s global “coming-out” parties such as the Olympics and the World Expo have catalyzed awareness and attention on the sector as never before. A telling sign is that there are charity events regularly on prime-time television now, which did not exist just a few years ago.
- While corporate giving in China remains the overwhelming majority of all giving, individual and family philanthropy is increasing steadily each year, with a huge spike occurring in 2008 with the Sichuan earthquake. Groups such as Jet Li’s One Foundation are bringing philanthropy more within reach of the masses. There is also a tangible growing interest in volunteerism among China’s young people.
- The fastest growing segment of the nonprofit sector is actually private foundations founded by China’s wealthy business tycoons. (Read about them in our previous posts here and here.) These groups are very different than their Western counterparts, and it remains to be seen what they will do. Amongst this group exists a strong distrust of traditional charity channels. Consequently, many are attempting to reinvent the wheel themselves by implementing projects directly with their staff. A smart new approach or a recipe for disaster? Definitely an interesting group to watch.
- Rumors of a long-awaited overhaul of the existing draft charity law have also been reported in the media. For most groups operating in the sector, though, seeing will be believing.
- A few ominous undercurrents have appeared such as the tough new regulations governing foreign funding (read previous blog post here). The regulations effectively seek to track the sources of all foreign donations entering China, undoubtedly with an eye to catching politically sensitive groups seeking to gain influence within its borders. Unfortunately, these laws also make life very difficult for thousands of smaller grassroots groups.
We have come very far from China’s command economy days when there was essentially no corporate or private philanthropy. Yet sometimes, it still feels like the early days in the sector. Will there be tax-deductions for charitable gifts in China one day, and will restrictions on NGO registration finally be lifted? Will China’s wealthy heed the growing calls for more philanthropy, and will the rest of the country follow their lead? It is good to reflect upon where we’ve come from and where we could be going.