Last week an article in the People’s Daily titled “Rich Philanthropists ‘acting in poor taste’” discussed the emergence of several high profile, high wealth Chinese who have stirred up some controversy on the philanthropy scene of late.
Until recently, charitable giving has been a very private matter in China, not one up for public discussion. But since the Sichuan earthquake, things have been changing. Consumers have shown that they expect companies who have earned money from the people to pay up when natural disasters strike. And when they have failed to be generous, consumers have protested loud enough for these companies to open wide their wallets. On the flip side, too much publicity, particularly from individual philanthropists, can also draw the ire of the public who question their motives.
The Outspoken Philanthropist
The People’s Daily article was prompted, no doubt, by Chen Guangbiao’s recent headlines. Chen, who owns a recycling company in Jiangsu Province, first handed out money to people in Taiwan during Chinese New Year. He followed it up with an announcement that he and his family were changing their given names to new ones invoking environmental friendliness, and after the Japan earthquake, Chen rushed to affected areas to offer his services. Clearly staged photos of Chen rescuing a woman from a damaged building have (unsurprisingly) called into question Chen’s motives.
Xu Yongguang of the Narada Foundation “labeled Chen’s actions ‘violent charity’ – sacrificing the dignity of recipients to meet his own needs.” Others say he is setting a good example and still others say his direct giving brand of philanthropy does not really address problems of poverty.
Chen defended himself saying, "I'm being high-profile not to promote myself. I've been high-profile since I was little. If I did not talk about the good deeds I've done, I would feel pent up."
The Detailed Philanthropist
Cao Dewang, the “glass king”, and his son Cao Hui have taken a much more structured approach to giving away their money. Instead of handing it out, last year they donated 200 million RMB to people affected by droughts in Southwest China through the China Foundation for Poverty Alleviation.
The father-son duo stipulated under a signed agreement that all the money was to be given out within six months with 2,000RMB given to each needy family. The foundation’s management fee was set at a low three percent (as opposed to the usual 10 percent). A monitoring committee also reviewed the donation process. If they found that more than one percent of the recipients failed to meet the qualifications of the Caos’ agreement, then the foundation would be penalized by having to payback a percentage of the misappropriated funds.
Cao said, "The agreement does not show I don't trust the foundation because the agreement functions as a constraint for the foundation and also local governments. No money will be taken away; all money will go to the needy."
Despite all the caveats, the terms were met and all the money delivered on time.
Both the Caos and Chen’s methods raise important questions for wealthy giving and giving in general, especially in a country where every philanthropic accomplishment is breaking new ground.
Publicity follows Chen wherever he goes, which does provide an opportunity for people to see the needs of those in impoverished and quake-damaged areas. That could have a positive effect on both everyday citizens and other wealthy Chinese to see the potential good they can do with their money. On the other hand, tossing out hongbaos (red envelopes filled with money) without any discretion is the antithesis of a “hand up” and does not equip impoverished people to use that money to pull themselves out of poverty.
On the other hand, what Cao and his son have done does seem to be very effective though somewhat overbearing. They targeted a specific area where there was significant need and found an organization working on the ground that had the expertise (which they did not have) to donate the money.
The three percent management fee is unfortunate, however. While the Caos needed the organization to appropriately distribute the funds, by lowballing the market rate, it brings into question how much they truly value the work the foundation does. To distribute the funds to tens of thousands of households took a lot of dedicated manpower, and if a magnate like Cao Dewang won’t pay for the work, then other would-be philanthropists of all income levels may also balk at it.
Overall, it is great that philanthropy is getting a louder voice in the public sphere; however, I hope that the debate leads people to become more informed about giving and ultimately moved to action rather than simply waiting for the next celebrity philanthropy event.