China Philanthropy

The Round Up - February 2013

We're overdue for another roundup on current events in China's social sector. We also like to highlight a few recent quality macro reports that may be of interest. 

Current Events in China

More Transparency needed in China's Social Sector (Sina English): Though the China Charity Information Center announced a large increase in the China Charity Transparency Index for 2012, they say organizations need to disclose more information. Based on a 100-point scale, only 20% of organizations scored above 60. The Red Cross of China had a score of 35.2 and only 11 of the 124 charity societies scored above 60.

Concept of corporate social responsibility evolving further (China Daily): A quick look at the evolution of corporate social responsibility and the factors that are pushing for this change.

China’s Charity Sector Poised to Expand In 2013 (The Asia Foundation): This article gives a great summary on the current state of China's social sector and an optimistic view on what is to come in 2013. The Asia Foundation will also be launching the Mainland-Hong Kong Charity Platform where they will be bringing key government and private sector stakeholders together to discuss joint research and project opportunities.

Boosting migrants' education (China Daily): All non-governmental school for migrant children in Beijing's Chaoyang District to shut down in the next two years. In 2006, the education authorities started a big push to improve the management of schools for children of migrant workers by shutting down non-governmental schools not meeting the standards set by the government. This new policy will ensure the enrollment of these children in public schools but parents are wary of the education and social adjustment issues their children might encouter. 

Chinese Graduates Say No Thanks to Factory Jobs (NY Times): As the number of college graduates increases, so does the number of unemployed individuals with a bachelors degree or higher. Graduates come out of these programs unwilling to work in factories though there is a surplus of jobs in this area with much higher pay. Will China's economy be able to keep up with this boom in education?

China Lets Media Report on Air Pollution Crisis (NY Times): With the air pollution ratings consistently at "hazardous" or higher both by foreign and local monitors, citizens are voicing a cry for change on Chinese microblogs and to anyone who will listen.

POLICY BRIEF NO. 12 (December 2012): A New Dawn After the 18th Party Congress? (China Development Brief)

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Macro Reports on the Social Sector:

Navigating the Labyrinth of Corporate Giving in China (Asian Philanthropy Advisory Network)

China Social Enterprise Report 2012 - Foundation for Youth Social Entrepreneurship

The Methodology of the China Foundation Transparency Index - The China Foundation Center

World Giving Index - Charities Aid Foundation

Future Stars of Philanthropy - Charities Aid Foundation

 

SVG and FindoOut Survey: Netizens Want More for Philanthropy in China

In December of 2012, SVG and FindoOut, a local Chinese marketing research company, announced the results of an online survey asking netizens of China about their attitudes and behaviors toward philanthropy. Over 1,000 questionnaires were completed over the span of five days and the results were interesting.

• 83% of interviewees stated they have been involved in charitable work in the past
• 72% have participated via a form of a monetary donation
• 40% in the form of goods and services
• 26% completed volunteer work
• 22% supported causes through social media

One particularly encouraging finding was that over 60% of participants who had never done charitable work before stated they would like to do so in the future. Many said they would be more inclined to help if there was greater transparency in the social sector, increase in promotion of these causes in the media, and there was a legal infrastructure to this sector.

To learn more about our findings, click on the following link to download SVG & FindoOut press release.

We want to especially thank Johnnie Yu, a student in Shanghai, for making a great video on Youku that shows the findings from our survey in Chinese. 

Notes from AmCham Shanghai's Corporate Social Responsibility and Sustainability Conference

    I had the pleasure of attending AmCham Shanghai’s 2012 Corporate Social Responsibility (CSR) and Sustainability Conference on Nov 29, 2012. Sponsored by Biogen Idec, Intel, and Dow, the theme of the event was "Shared Value Creation For Business.” Among the list of speakers were business leaders from Intel, Dow, and KPMG along with academic and research leaders such as Dr. Zhang Qiang of Beijing Normal University and Harvard University and Mr. Chien Weijia from the China Social Innovation Forum. There were representatives from organizations such as the United Way, Shanghai Children’s Medical Center, and Solar Ear as well as foundation leaders such as Dr. Shi Derong, former Director General of Shanghai Civil Affairs Bureau and current Shanghai Chairman of the Special Olympics and vice president of the Shanghai Special Care Foundation. Reflecting on the diversity of stakeholders involved in the event, one can see the shared value that was created.

    One recurring theme during the conference was our thoughts towards CSR evolving and progressing.  Mr. Jun Ge, Managing Director at Intel China, aptly outlined it as a three-tier system:

• CSR 1.0:  traditional CSR comprised of charitable contributions and compliance (e.g. human resources, legal services, environmental, health and safety) 
• CSR 2.0: strategic CSR involving aligning CSR with one’s business interest and core competency
• CSR 3.0: catalytic CSR concerning collaborating with others to transform systems into social innovation.

    Dr. Zhang Qiang's moving speech, "The 3rd Path to a Beautiful China" is also a nice summary highlighting the challenges and opportunities driving social innovation.

    Overall, the event was a well-spent afternoon full of great networking and good food. Thank you AmCham and all the sponsors and speakers for such an enjoyable and educational event!

 - Karen

Review on Charitable Giving in China 2010 - 2011

Each year, the China Charity and Donation Information Center publishes an annual report on Charitable Giving in China. This entry will summarize some developments in these reports from the last two years. You can also find information about the 2009 report here.

Total Donations in 2010-11
In 2010, total charitable giving was 103.2 billion RMB, (USD 15.8 billion) and accounted for 0.26% of GDP, while in 2011 it totaled 84.5 billion RMB (USD 13.25 billion) which accounted for a reduced 0.18%. Figures for both 2010 and 2011 include monetary donations (RMB 87.1 billion and 68.6 billion respectively) and in-kind donations (RMB 16.1 billion and 15.9 billion respectively) -- that is, donations of goods such as clothing and food.

Giving Rises and Falls in 2010-11, Likely Related to Natural Disasters
The below image from the 2011 report shows the rise and fall of charitable giving in China since 2007. Much like in 2008, (with the 2008 Sichuan/Wenchuan earthquake) in 2010 notable natural disasters (the Southern China drought, Gansu mudslide, and Yushu earthquake) likely contributed to the 63.81% increase in total giving from 2009. Meanwhile the absence of any major disasters in 2011 probably contributed to the 18.12% decrease in giving from 2010. The graph below, from the 2011 report, shows changes in total charitable giving since 2007.

The explanation that major natural disasters caused the 2010 spike in giving is further supported by the statistic that natural disaster relief was the recipient of about a quarter of donations for that year while in 2011 only 6.1% of donations went toward disaster relief.

Where Donations Came From: Corporate, Domestic
In 2010-11, we continued to see a decrease in the percentage of overseas donations relative to domestic donations, from 12.5% in 2010 to 10.9% in 2011. Both of these are lower than 2009's 14.1% figure. As in previous years, Hong Kong was the biggest source of overseas donations.

Corporate donations continue to surpass individual giving, although 2011 saw a moderate increase in individual giving from 28% to 31.62%. This increase is especially promising given the Guo Meimei incident of 2011 and its expected negative effect on individual giving. Businesses accounted for 66% of total giving in 2010 and 57.48% in 2011; remaining giving largely came from government sources.

In 2010, we also saw the promising trend that an increasing number of wealthy people began to actively participate in disaster relief donations or charitable activities. 173 philanthropists whose personal monetary donations reached at least RMB 1 million, and total donations from listed philanthropists amounted to nearly RMB 7.43 billion.

Notable examples include Chen Guangbiao, who advocated for the wealthy to bequest all of their estate upon their death, Wang Jianlin’s donation of RMB 1 billion to a temple in Nanjing, and the establishment of a family foundation by Cao Dewang and his son through the donation of company stock. Another list of 707 companies whose donations reached at least 1 million yuan was also published. Their total donations hit RMB 11.6 billion in 2010.

Where Donations Went
As noted above, 2011 witnessed fewer major natural disasters than 2010, and as expected giving to this area decreased in 2011 as a result. While in 2010 the two areas which received the most donations were disaster relief and education, each receiving about a quarter of total donations. In 2011 education remained popular receiving 33.7% of donations while poverty alleviation was the second largest recipient area with 29.0% of donations.

One major problem in the current landscape of Chinese charitable giving is the large proportion of donations going to government fiscal revenue, foundations, and GONGOs. The report also showed the fast growth of China’s nonprofits, which increased in number from 431,000 in 2009 to 445,000 by the end of 2010, with the number of volunteers exceeding 31.24 million. We hope moves to relax NGO regulations in Shenzhen and give NGOs more room to operate independent of government involvement will not only succeed, but serve as a model for social sector regulation all over China.

- Lily Liu

Links that Make you Go Hmm for the Week Ending July 15

“Happy Chat Rooms” offer psych services: A free service out of Guangzhou provides free psychological consultations online, through phone calls, and in person. "In this transitional period in society, people are under unprecedented psychological pressure,” Chen Jun, director of the Applied Psychology Department of the South China Normal University, told China Daily.

Bill and Baidu Tackle Smoking in China: Bill Gates and Robin Li, founder of Chinese search engine Baidu, announced a partnership to take on smoking in China last week. In a country where smoking is a national habit, Baidu has boldly banned smoking on the company’s entire premises; however CFO Jennifer Li (no relation to Robin) is on the Phillip Morris’ international board. Yikes.

Compulsory Education for Disabled Children: In the next five years, China will extend its compulsory education to disabled children. China has made great strides to provide children with nine years of school, but a lack of resources and understanding of the needs of disabled children has meant some of them are locked out of the system. The new plan will eventually provide disabled children with 12 years of free education.

More Problems for China’s Red Cross: (In case you’ve missed it) the Red Cross Society of China faces another round of criticism as more allegations of overspending and misuse of funds arise, in addition to the recent outcry over a lavish feast hosted by the organization. A survey finds that the Chinese public is increasingly distrustful of country’s largest and most visible charity.

Do More Than Give: A new book published in March titled Do More Than Give: The six practices of donors who change the world by Leslie R. Crutchfield, John V. Kania and Mark R. Kramer illustrates a ‘catalytic’ approach to philanthropy. The book aims to “to highlight effective problem-solving philanthropy and to provide a roadmap for all donors who aspire to maximize the impact of their charitable resources.” For more info see Philanthropy UK’s review.

Discrimination Faced by People with HIV: A report from UNAID finds that Chinese living with HIV face significant discrimination in the workplace, with medical professionals, and other areas of the public sphere. Nearly 50 percent of people received support from their families.

Links That Make You Go Hmmm…for the week ending January 21

Ten buzzwords of philanthropy: Never heard of celebvocates or B corporations? Lucy Bernholz explains the most important buzzwords in philanthropy with a nice dose of wit.

Jet Li’s One Foundation Approved: Despite speculation just a few months ago that Li’s One Foundation would be shut down (see our post here), the organization has finally achieved legal public foundation status. It’s the first time an organization has transitioned from private charity to public foundation in China.

Chinese customers want better CSR: A report from Tsinghua University and Ruder-Finn Asia shows that an increasing number of Chinese consumers want to know that the goods and services they purchase are of good quality. Additionally, they are concerned that companies are environmentally friendly and have managerial integrity.

Doing Good: SVG's Winter Newsletter

Our lastest newsletter is out today! We're introducing a slightly tweaked format that is shorter (for all you busy types) and easier to read, while maintaining up-to-date information on the Chinese social sector and SVG.

In this issue:

• China Charity Gifts: The first charity gift catalog on the Mainland!
• Migrant kids in the movies
• Shanghai fashion design with a conscience
• News in China's social sector

Doing Good is available in English and Chinese.

Happy reading, and please email us at info@socialventuregroup.com if you have any questions or comments.

—The SVG Team

Fundraising for Grassroots NGOs in China: A Look at Shanghai United Foundation

The State Council’s “Regulations on the Management of Foundations” only allow for public foundations to legally conduct public fundraising. As a result, grassroots NGOs’ financial support mainly comes from targeted fundraising within a limited circle of acquaintances and business contacts. While many NGOs are eager to develop stable fundraising channels, they need greater access to the community.

The Concept of Lianquan
This is where Shanghai United Foundation (SUF, also known as, Lianquan) comes in. SUF grew out of Nonprofit Incubator (NPI), an NGO service center. As NPI worked with grassroots NGOs, they noticed that these organizations needed a public, independent and efficient fundraising platform that could help them to develop stable financial support. A public foundation was the only type of organization that could fill the role in China, and so SUF was born.

China’s Rich List & Philanthropy

The 2010 Hurun Rich List (for info on the 2009 list see our post here) was announced earlier this month and shows both the fast upward mobility of China’s entrepreneurs and the speed with which they can fall. Over the past several years, the Hurun List has been an increasingly popular measuring stick for the analysis of China’s wealthy class and that includes their charitable activities. The Hurun report reflects a number of changes that will impact the social sector (both directly and indirectly). Below are several ideas brought out by the List:

The New, Young, Up and Coming Wealthy
The report found that on average Hurun listers are 15 years younger than their entrepreneurial counterparts in the West, and they’re multiplying more rapidly. Over the past year, known RMB billionaires (US $150 million) have increased from 363 to 1,363. Although they still make one-third less than their male peers, China has 11 of the top 20 richest women in the world.

Does the Chinese Market Respond to Corporate Philanthropy?

In March, China Policy Institute published a study questioning the market reaction to Chinese corporate philanthropy. This topic is an important one as corporate social responsibility (CSR) gains ground in China and the market pays more attention to those companies exhibiting responsible and generous business practices. In the weeks and months following the Sichuan earthquake, the public showed considerable favoritism to companies that donated money and resources to the area. Conversely, many companies that failed to give to the standards of the public were lambasted and experienced a decline in their stock market.