How Can Asia Boost Philanthropy?

AsiaGlobal Online

Wealth in Asia is growing rapidly, but philanthropy has not kept pace. Governments should improve regulation and change tax and fiscal policies to make it easier for Asians and corporations to give in a systematic way. They should also ensure donations can efficiently reach organizations working to meet society’s needs.

This article looks at how the Doing Good Index can help governments improve regulations and policies relevant to the philanthropic and charitable sectors by identifying the levers that best enhance local philanthropy across 15 Asian economies.

This article was first published in AsiaGlobal Online.

Who’s Doing Good?

23 April 2018 - 29 April 2018

THE GIVERS

China’s tech billionaires make major donations to domestic universities. As President Xi Jinping urged businesses to step up innovation, CEOs of Baidu and JD.com and their spouses pledged hundreds of millions to Peking University and Tsinghua University. Baidu’s Robin Li Yanhong, his wife Melissa Ma, and the company jointly donated 660 million yuan (US$104 million) to Peking University, supporting cutting-edge research into areas that complement the company’s artificial intelligence technologies. Similarly, JD.com’s Richard Liu Qiangdong and his wife Zhang Zetian gave 200 million yuan (approximately US$31.6 million) to Tsinghua University for research into artificial intelligence, logistics, and other fields.

THE THINKERS

Singaporean government sets new guidelines for healthier food donations. Donating food products is one popular form of individual giving. In line with this trend, the Singaporean government’s Health Promotion Board has released its first set of guidelines for charities, voluntary welfare organizations, and individual donors to choose healthier products when making food donations for low-income families. Recommendations include having at least one item from each of the five main food groups (staples, oils, meat and alternatives, diary and alternatives, and fruit and vegetables) in each donation pack.

THE NONPROFITS

Malaysian charity wins award for refugee support. In recognition of its contributions to approximately 1,100 refugees, stateless people, undocumented students, and other marginalized groups in Kuala Lumpur, the Dignity for Children Foundation was awarded the second edition of the Sharjah International Award for Refugee Advocacy and Support (SIARA), which was established by The Big Heart Foundation in Sharjah, United Arab Emirates. As part of the award, the charity received US$136,000, also receiving a personal donation of US$1 million from Sharjah’s Dr. Shaikh Sultan Bin Mohammad Al Qasimi.

Vietnam Red Cross Society launches Humanitarian Month. On April 28, 2018, the Vietnam Red Cross Society and its Hanoi chapter launched the Humanitarian Month to promote good deeds among the public and enhance authorities’ sense of responsibility towards humanitarian activities.

THE BUSINESSES

Multinational pharmaceutical companies donate ₩25.9 billion (US$24 million) in South Korea last year. According to the Korea Research-based Pharma Industry Association, a total of 26 multinational drug companies donated a combined ₩25.9 billion (US$24 million) in South Korea last year. The 2017 amount accounts for 0.48% of their total revenues and represents a five percent increase from the previous year. The calculated amount includes money donated to various charities, as well as goods and merchandise used during CSR activities.

THE INNOVATORS

Korean steelmaker builds sustainable steel housing. Posco, a major steelmaker in Korea, is using its business expertise to provide sustainable steel homes, playgrounds, and bridges in Vung Tau, Vietnam. This “Steel Village” program has been selected by the United Nations as a leading best practice model for the Sustainable Development Goals.

THE VOLUNTEERS

Meet the Chinese charity worker helping children in Syria. Through his small nonprofit organization called LoveZone Charity Foundation based in Suzhou, China, Zhuang Zhi supplies prosthetic limbs to children in Syria. Zhuang first thought access to education for Syrian children was an important area for him to work in, but after consulting the Syrian ambassador in China and his wife, he shifted his focus to providing mobility to disabled children. As a first step, Zhuang and his organization sent about 300,000 yuan (US$47,300) in donations and visited Damascus in last August. Zhuang now has an ambitious goal of building a factory that could make artificial limbs for about 3,000 children a year.

THE TRUSTBREAKERS

Singapore Commissioner of Charities finds “severe mismanagement” at Sri Veeramakaliamman Temple. The Commission of Charities (COC) found instances of “severe mismanagement” at the Sri Veeramakaliamman Temple at Serangoon Road, one of Singapore’s oldest Hindu temples. In particular, suspected offenses pertained to mismanagement of the religious charity’s funds and assets. For example, key officers had “prevalently issued uncrossed cheques and allowed uncrossed cheques to be exchanged for cash in the Charity’s premises.”

Philanthropy in Asia needs a push from good government policies

South China Morning Post

Ruth A. Shapiro says that governments in the region must send strong signals that they value philanthropy through tax incentives and other policies. This could encourage a more systematic approach to giving and spark innovation in the social sector.

The Centre for Asian Philanthropy and Society has just released its inaugural Doing Good Index, which looks at the factors that both enable and hinder philanthropy and other kinds of private social investment in Asia. We found that Asia has enormous potential to do good. If Asia were to donate the equivalent of 2 per cent of its GDP, the same as the United States, it would unleash US$507 billion (HK$3.9 trillion) annually. This is more than 11 times the foreign aid flowing into the region every year and one-third of the annual amount needed globally to meet the sustainable development goals by 2030.

We did this study after understanding several important dichotomies affecting Asia and its social sector. First, there is enormous wealth being created in Asia but still incredible and at times tragic need. Second, while there is a long history of charity in Asia, philanthropy, or the systematic approach to doing good, is relatively new. Third, while many on the ground are carrying out extraordinary efforts to help relieve suffering and need, there is often a debilitating lack of trust towards the sector. Last, many Asian governments realise that philanthropy is growing and are reacting by crafting new policies and regulations that both encourage and control its flow.

The Doing Good Index is an ambitious initiative. Supported by donors in Asia, the team worked with 34 partners from 15 economies to survey 1,516 social delivery organisations and 80 experts. They answered questions about a range of factors that influence philanthropic capital. The questions fell into four categories – regulations, tax and fiscal policies, procurement and ecosystem. The first three are government-driven, while ecosystem looks at the role that people, communities, companies and universities are playing in addressing social challenges and nurturing the social sector.

We find that people are ahead of government: on average, Asian economies perform better in the ecosystem category than in the other three. Society is rewarding philanthropists and organisations in the social sector. Public recognition and awards are becoming more prevalent in most economies we studied. Many are volunteering both through their companies and on their own, people are serving on boards, and universities are offering classes in philanthropy and non-profit management.

Our study also shows that the right policies and incentives do matter. Tax subsidies contribute a great deal towards the propensity to give across income levels and have an important signalling effect. Asian philanthropists are pragmatic. People want to help their communities but also want to do this in ways that are aligned with their own government’s goals. When a government signals that philanthropy is appreciated, it has a positive influence on giving.

The right policies can address the trust deficit and mitigate the deleterious effect on philanthropy. Many social delivery organisations in Asia are endeavouring to become more transparent and accountable. In our study, 75 per cent of those surveyed have a website and 86 per cent have a board of trustees with nearly all reporting regular board meetings. Organisations in 13 of 15 economies are required to submit an annual report. The right regulations create a culture of accountability and facilitate the ability of organisations to report.

However, regulations need to be calibrated to reduce friction in the social sector and facilitate its growth. In some economies, organisations need to work with many government agencies, with one country having 15 different ministries all with different reporting requirements. This puts a burden on non-profit organisations and encourages underreporting.

Last, the social sector is vastly understudied. There is very little reliable data. For the Doing Good Index, we had to create the data from scratch. More information about philanthropy can help address the trust deficit and showcase which practices, models and policies are best in class. There is no dearth of humanity, creativity and commitment in Asia.

The key is to put systems and practices in place that allow us to learn from each other, contribute to our communities and help Asia become a global philanthropic leader and a centre for social innovation.

Ruth A. Shapiro is founder and chief executive of the Centre for Asian Philanthropy and Society.

This article appeared in the South China Morning Post print edition as: Right policies can boost Asian philanthropy.

This article ran originally in the South China Morning Post.

Doing Good Index 2018

Maximizing Asia's Potential

The inaugural Doing Good Index examines the enabling environment for philanthropy and private social investment across 15 Asian economies. Composed of four areas–tax and fiscal policy, regulatory regimes, socio-cultural ecosystem, and government procurement–the Index reveals how Asian economies are catalyzing philanthropic giving.

If the right regulatory and tax policies were in place, Asian philanthropists could give over US$500 billion, contributing to the US$1.4 trillion annual price tag needed to achieve the Sustainable Development Goals.

The Index serves as a unique and useful body of data for Asian governments, as well as for nonprofits, foundations and charities in Asia, to learn from each other. At a time when policy is evolving, the social sector is growing, and interest in philanthropy is rapidly developing, the DGI shows the potential for Asia to leapfrog and become a leader in social innovation.*

*The latest version as of 19 January 2018 is available for download now.

*Please note that for Korea the 10% rate of tax deduction for corporate donations refers to the limit on corporate income eligible for deduction. The rate of tax deductions for corporate donations in Korea is 100%, with a 10% limit. This change has no effect on the results of the index. For further information, please contact us.

Civil Society Briefs

Asian Development Bank

Introduction: Civil society is a very important stakeholder in the operations of the Asian Development Bank and its borrowers and clients. It is distinct from the government and private sector and consists of a diverse range of individuals, groups, and nonprofit organizations. They operate around shared interests, purposes, and values with a varying degree of formality and encompass a diverse range—from informal unorganized community groups to large international labor union organizations. These Briefs provide an overview of civil society organizations (CSOs), with a particular focus on nongovernment organizations (NGOs). These Briefs were first published by the Asian Development Bank (www.adb.org).”

Click here to read the Briefs.

Transparency and Accountability Practice of Vietnamese CSOs (2015 – 2016)

Nguyen Phuong Linh and Le Quang Vinh (Research Center of Management and Sustainable Development)

In this report, the Research Center of Management and Sustainable Development exemplifies the capacity and practice of Vietnamese Civil Society Organizations (CSOs) in domains of transparency and accountability. With the data collected by the Center’s fieldwork assessments, the strengths and weaknesses of Vietnamese CSOs are analyzed, capacity among CSOs are compared, and recommendations are made to further inculcate the transparency and accountability culture among Vietnamese CSOs.

Click here to read the full publication.