Philanthropy in China

April 2019

New Report Shows Chinese Philanthropy Sector Has Quadrupled to USD 23.4 Billion Since 2009.

Landmark study unpacks key trends in Chinese philanthropy, identifies unique strengths and untapped opportunities for strategic engagement with international organisations.

Total giving in China has grown to a remarkable USD 23.4 billion in 2017, with registered foundations increasing by 17% over the last decade and corporate giving dominating philanthropic efforts by contributing more than 65% of total giving in 2016. These indicators reflect the sector’s growth into a powerhouse for development. Published by AVPN and supported by The Rockefeller Foundation, Philanthropy in China is a first-of-its-kind report that looks beyond indices and rich-lists, and details the unique evolution and characteristics of Chinese giving, highlighting key trends, opportunities and challenges that philanthropists – both Chinese and international – can leverage to maximize their impact.
“With the new regulatory environment and rapid growth of philanthropic capital in China, we see a need to marshal resources more effectively towards the delivery of scalable, high-impact solutions,” says Naina Subberwal Batra, Chairperson and CEO at AVPN, which authored the report. “The Philanthropy in China report not only seeks to carve new pathways for philanthropists to adopt more sophisticated social investing practices in China, but also enhance our collective ability to achieve the UN Sustainable Development Goals.”
Primed for Innovation
The report finds that while Chinese philanthropy is relatively nascent, the sector quadrupled between 2009 and 2017 – pumping USD 23.4 billion into social causes in 2017 – and is highly innovative. Traditionally focused on education, poverty alleviation, and healthcare, giving in China has shown growing interest in under-funded areas, such as youth development and environmental protection. Foundations are also looking at more financially sustainable models that can deliver impact at scale. Some foundations – such as Narada Foundation and Yifang Foundations – are experimenting with new social investment tools while there have been more social enterprises that are incorporating positive social impact in their business models.
According to the report, Chinese philanthropists are also ahead of the curve in leveraging cutting-edge technology and the country’s thriving digital services sector to spark greater public interest in charity to solve global development challenges. These innovative approaches have the potential to enhance transparency and accountability, thereby building trust and productivity within the philanthropic sector.
Opportunity to grow
With 819 billionaires, China not only has the largest number of billionaires in the world but also the highest number of millionaires engaged in environmental, social, and governance (ESG)-related investing. Corporations are also playing a huge role in Chinese philanthropy, contributing 65% of giving in 2016.
Yet it is estimated that less than 1% of domestic foundations are pure grant-making foundations, favoring an operating foundation model. The lack of transparency, grant-making capacity and access to the right partners have prompted most Chinese foundations to run their projects independently rather than support existing organizations that have the relevant knowledge, experience and manpower to amplify impact. This highlights the need for a shift towards grant-making foundations to more effectively channel resources and support social organizations.
Global collaboration may prove key to Chinese philanthropic legacy
China’s global ambitions are propelling domestic organisations towards more meaningful international development engagement. The report points to how national strategy plans such as the Belt and Road Initiative and South-South cooperation are openings for such collaboration through sharing knowledge, resources and capital. The increasingly global mindset is also accompanied by growing Chinese interest in more financially sustainable models that can deliver impact at scale, such as new impact investment tools, and the boom of social enterprise.
“More than a century of experience in philanthropy has shown us that transformative impact is partnership-driven,” says Deepali Khanna, The Rockefeller Foundation’s managing director for Asia. “We look forward to working hand-in-hand with Chinese family offices and individual philanthropists, especially the next generation of givers, to unleash the catalytic potential of their philanthropic capital and build the foundations for new philanthropic legacies.”
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