Tonight in Beijing, Bill Gates and Warren Buffett are officially bringing their giving pledge plea to China and are asking the country’s billionaires to consider giving half of their wealth to charity with a much-anticipated dinner. Since they announced their visit, there has been endless speculation on how China’s wealthy will respond. Recent media reports of only two confirmed attendees are now debunked, but many in the public and media have either harangued Buffett and Gates as being out of touch with Asian philanthropy sensibilities or condemned the wealthy in China as stingy and corrupt. But what is the real picture?
Charitable giving, the wealthy, and the government’s role make for a complicated situation here in China. Here we want to address some of those issues.
The Cultural Divide
Reports speculate that many wealthy are worried they will be asked to commit to the pledge during the dinner, and rather than lose face, have declined the invitation. Wang Dongya of China Youth Daily summed up the standpoint of the event’s Chinese critics in this way,
“The silence over the event is embarrassing. But it might partly be the fault of the world's richest billionaire, Bill Gates; he does not understand how things work in China. You cannot invite China's wealthiest to a high profile function under no obligation to donate. The guests will not know what to do. Attending and making a donation will make them look like greedy cowards who've been taught a lesson. Refusing is even worse. Every guest will be enormously wealthy, so matter how much anyone donates, it will not feel like enough, and the amount they give will be compared and judged by their peers. The truth is, many of them would be willing to give, but sometimes, saving face is more important."
To be sure, the cultural dynamic of face-saving and being discrete about one’s wealth is strongly at play. But if there is another “Chinese way” of encouraging philanthropy, no one in China is speaking up yet on a viable concrete alternative. The reason is that we are all still very much “in the thick” of learning what that process is now.
To be fair, Gates and Buffett are here on a kind of fact-finding trip, seeking to bring China’s wealthy into a global dialogue about philanthropy and learn more about the Chinese philanthropic landscape. It’s not apparent that they are here to impose a Western model of philanthropy, as some would accuse. Gates and Buffett have nothing to gain financially from the deal; they are simply starting a conversation and asking some apparently uncomfortable questions.
With Chen’s announcement came a call of his own for the wealthy to heed his example. In the week or so since then, he reports that 100 high wealth individuals have committed to do the same, although he will probably not be naming names any time soon. China may take a lot of cues from the West, but the growth of philanthropy amongst Chinese wealthy may require wealthy peers who have an insider’s view.
Lose-Lose for the Wealthy
We have often noted on our blog the deep mistrust that the general Chinese public has for their wealthy countrymen. The oft-voiced opinion is that the rich acquired their wealth through dishonest and corrupt methods and that their charitable efforts are merely trying to hide that fact. Not helping the matter are the frequent corruption charges that have implicated some of these business leaders.
On the other hand, a loud outcry erupts every time the wealthy are perceived to withhold from giving, as we saw following the 2008 Sichuan earthquake when business leaders were publicly excoriated for allegedly not doing enough. The initial meagre RSVPs to the Gates-Buffett dinner also drew censure from those who say this is just another example of stinginess in a country with a huge wealth disparity.
We believe both these views are overly cynical and need to be balanced with the bigger picture of the great strides that private philanthropy is currently making in China. In our opinion, the tremendous growth in the number of Chinese private foundations is one of the most interesting trends to watch in the next five to ten years. It’s important to remember that these newly minted philanthropists are still early in the process of understanding the implications around their giving. Where will they take their inspiration? What models will they look to both within China and globally to help guide their decision-making? For sure, there will be growing pains in this process, and the Giving Pledge is simply drawing attention to some of these issues now.
One important note to make is that the legal infrastructure around philanthropy is still under development. Currently most of China’s donors do not receive tax benefits from giving to charities, and the role of philanthropy in estate planning is also not well understood. The wealthy in China who do undertake to give generously often face tremendous uphill battles related to legal hurdles and a still relatively weak nonprofit sector. No doubt many of China’s wealthy agree with Bill Gates echoing Andrew Carnegie’s original sentiment that “it is easier to make money than to give it away.”
Lastly, there is something to be said for those who give anonymously, as many wealthy in China assuredly do. As noted Chinese sociologist Wang Kaiyu has recommended, we should not judge the wealthy by whether or not they take the pledge.
It Takes All Types
A larger question that the Gates-Buffett dinner raises is about the overall growth of philanthropy and charity work in China. Afterall, giving to the poor is not only the purview of China’s billionaires. SVG’s experience shows that everyday Chinese citizens with disposable income across China are exploring new ways to give back to their communities. Not everyone can give away all of their wealth, but even small, simple steps towards becoming more philanthropic do make a difference.
Tonight’s dinner will not provide all the answers that the sector needs about what China’s most wealthy should do with their giving; however, it is certainly a good place to continue the discussion.
-- Team SVG