Last year was a good year for giving in China with donations totaling 70 billion RMB ($10.7 billion US), double that of 2009. Over 80 percent of those billions came from within China. This dramatic rise in giving comes largely from the increasing number of Chinese wealthy who embraced philanthropy this past year—donations that the public and media praised and criticized for being outspoken, unprecedented, and/or unexpected. In April, Hurun published their annual Philanthropy List, which, along with other recent reports on wealthy donors, highlights some of the interesting trends in how the rich are giving and changes in the sector as a result.
Quantity and Quality
In 2010, the Hurun Philanthropy List had minimum donations at US $1.6 million, which rose to US $2 million this year. On average, the lists’ philanthropists gave 1.5 percent of their personal wealth. As Rupert Hoogewerf, creator of the report, said, “there is still plenty of skepticism as to the motivations behind these donations, but–by and large–the philanthropists are beginning to make their mark.”
Many philanthropists tend to stay on the safe side with their giving, a wise choice considering the scrutiny of the wealthy and the major slip-ups that have occurred in the recent past with high profile actors Zhang Ziyi and Jackie Chan. In an effort to have more control over their donations (and also due to the large sums they give) forty-five of the 100 philanthropists have their own private foundations through which (hopefully) informed staff can research reliable projects. Chinese wealthy also continue to give large sums to the Red Cross Association of China, the country’s most high profile charity that also specializes in disaster relief. While it might be safe, this strategy does mean grassroots NGOs rarely benefit from the newly opened wallets of the rich.
The majority of donations for Hurun’s philanthropists were to disaster relief, which is unsurprising considering 2010 saw the Yushu Earthquake, mudslides in Zhouqu County, and drought in the Southwest. Education was a close second followed by poverty alleviation projects and cultural heritage. Environment and healthcare were at the bottom of the list.
The Biggest Spender
Not surprisingly glass king Cao Dewang was the number one philanthropist this year, giving US$700 million to disaster relief and reconstruction, a library in Fuzhou, and schools and a temple in Fuqing City. So far Cao has given away a staggering 40 percent of his fortune and started the first community foundation funded with stocks.
Cao and his family were in the news this past year for their strict requirements (perhaps the most detailed public donation to date) on how their charitable donations were to be administered. Cao’s donation is the first case where a GONGO, the China Foundation for Poverty Alleviation (CFPA), signed a donation contract with an individual. In the event that the terms were not met, CFPA would incur harsh penalties (read more here). But six months later, CFPA had completed the work to Cao’s specifications and the media’s praise. For the wealthy, Cao set an example of how the rich can supervise their charitable donations responsibly. According to a report from the China Charity and Donation Information Center, 90 percent of the public is unsatisfied with the lack of transparency in how charities use donations. People want to see not only the amount of donations but also how many people benefit from them. So for GONGOs, CFPA proves that they can implement efficient and transparent projects.
Approaches to Giving
This year’s list does not include one of China’s most outspoken philanthropists Yu Pengnian. At 90 years old, the hotel tycoon has given away all his income to set up the Yu Pengnian Charity Foundation and disqualified himself from the list.
Chen Guangbiao continues to be on the list and is, by far, the most visible philanthropist in China. As mentioned before on the blog, Chen’s philanthropy hijinks and seemingly egocentric giving have drawn much criticism in the past year. Recently new controversy has come up as a report from China Business Journal says it has reason to believe that some of Chen’s donations were falsified or inaccurate. Chen stands by them, however, and several authorities in the social sector jumped to his defense. “As long as Chen has not used his charity work to gain economic or political leverage at the expense of poor people, we should be kind to him – even if he likes to show off or brag,” said Yu Jianrong, a professor at the Chinese Academy of Social Sciences quoted in Beijing Today.
Perhaps the biggest issues boil down to Chen’s methods, and he might very well be paving the way (in some regards) for future philanthropists. As Paul French put it, “This is not traditional Chinese philanthropy. This is new, loud, outspoken nouveau riche Chinese charity.”
As we are still on the cusp of this wealthy giving trend, it will be interesting to see how it shifts and changes over the coming years, especially in the areas that philanthropists choose to give to, the public face of that giving, and what bearing their giving will have on the less affluent. The chief editor of China Charity Times, Liu Jing, believes Hurun’s list will influence the donations of other wealthy people more than the everyday Zhou Schmo. For middle class citizens, their willingness to donate must be cultivated in other ways. The rise in interest does show that the social sector is getting much needed publicity and public dialog on the subject is gaining speed.
–Georgia & Zoey