Chinese philanthropists favour local causes

By added on 28/01/2016

Chinese philanthropists favour local causes and educational institutions in particular, a study that tracks giving by billionaires has found, reports the Financial Times.

The biggest donor in the study of China’s top 100 is Wang Miaotong, the head of Huatong Group, the manufacturing conglomerate. Mr Wang has given away 5.6 per cent of his wealth, according to the Ash Center for Democratic Governance at Harvard University’s Kennedy School.

The men and women who made their fortunes from China’s three-decade expansion are reaching an age where they begin thinking about what to do with their money. But they face a wasteland of charity options because China’s communist revolution dismantled traditional charity channels such as clan associations. Beijing remains suspicious of prominent religious groups or non-governmental organisations.

But they are slowly joining the ranks of wealthy Asians, especially in Hong Kong, who have decided to make their mark in a sector dominated by the fortunes of America’s gilded age.

Beijing has revised some tax structures and other incentives to make charity more attractive since a 2010 “billionaires’ banquet” hosted by Bill Gates and Warren Buffett launched a national debate over why China’s wealthy give less than their foreign counterparts.

The China Philanthropy Project found that the preference for giving locally benefits the more prosperous, private enterprise-oriented regions that have engendered China’s biggest success stories. Many of the recipients identified by the study are government entities.

Giving locally may reflect gratitude to the causes that influenced the donor and good business sense, says Peiran Wei, who co-authored the study. “The more local the gift, the more direct the impact on one’s immediate network, and one’s political and social capital.”

Donor choices reflect in large part a traditional reverence for education and the fact that top universities such as Peking or Tsinghua are trying to mimic their US counterparts in tapping graduates’ largesse.

Of the 100 donors tracked by the study, 17 have created foundations to channel donations. That could reflect the lack of institutional charities and a desire to control their own donations after a series of scandals involving the Chinese Red Cross.

Mr Wei said: “Much of this activity is linked to strengthening the donor’s ability to shape giving in a national philanthropic landscape that is still emerging. It is harder to give to organisations other than those you can control.”

But do not expect a charitable legacy to match those of Andrew Carnegie or the Rockefellers, at least not yet, said Shawn Shieh, an authority on Chinese civil society and philanthropy. “Most foundations are very young, under-resourced and lack a clear sense of direction,” he said.