Hong Kong outperforms larger markets in its donations, thanks to vivid memories of past poverty, belief in the life-changing power of education, and faith in the rule of law that many other Asian economies lack, writes Dr Ruth Shapiro in the South China Morning Post.
The Charity Aid Foundation recently released its annual World Giving Index. To collect data for the survey, people are asked if, over the past month, they have helped a stranger, donated money to a charity or volunteered time at an organisation. Hong Kong ranked 25th out of the 139 economies in the survey, with 43 per cent saying they had done at least one of these activities in the last month.
The index offers one lens to see how charitable people are but there are other means to evaluate giving. Last December, the chairman of our board hosted a dinner in Hong Kong for Rafael Reif, president of MIT. He noted that among those attending were some of the largest contributors to Harvard, Yale, the University of Southern California and a host of other universities.
John Wood, founder of the charity Room to Read, noted that Hong Kong had consistently been one of its top four fundraising regions and “punches way above its weight, outperforming larger markets such as Australia, Switzerland and Canada”. Each year, around 10 per cent of its global fundraising comes from Hong Kong alone.
Why has Hong Kong come to be such a philanthropic centre? A mixture of Chinese values, unusual history and commitment to a strong legal foundation have worked together to underpin this largesse.
First, in recent decades, much wealth has been made in Hong Kong. From 1990 to the present, Hong Kong’s per capita gross domestic product has grown from US$5,000 per year to more than US$38,000 in 2013. Many people have done extremely well and have enough disposable income to be quite generous. Additionally, many can still recall a time when their families did not have enough. According to Forbes, there are more than 55 billionaires living in Hong Kong, ranking it seventh in a list of territories by that measure.
The second reason is that Chinese people have always greatly valued education. A proverb says, give a man a fish and feed him for a day, teach him to fish and feed him for a lifetime. According to Harvard’s Kennedy School 2015 report, China’s Most Generous, 57.5 per cent of total giving from China’s top philanthropists goes to education. According to Coutts, in 2014, the single largest recipient of donations in Hong Kong was the University of Hong Kong. The great majority of the Centre for Asian Philanthropy and Society’s benefactors support education generally and scholarships in particular.
Hong Kong’s devotion to social investment dates to at least its establishment as a British colony in 1841. The British, with limited numbers, were unable and at times unwilling to provide many social services. They encouraged the creation of local self-help organisations to address social issues. Thus, Hong Kong people’s tendency not to rely on government but organise citizen-driven social efforts is embedded in the DNA of our city.
Of the 395 non-profit organisations listed in the city’s Directory of Social Services Organisations in 2016, 49 per cent of their total income comes through government contracts and project funds. This is the highest amount of government support to independent non-profit organisations in all of Asia.
When the government procures the products and services of social delivery organisations, there is an implicit endorsement and validation of their work. This is important as a signal to the public at large that social delivery organisations are credible, important players in the community. There are many governments in Asia and around the world who do not procure services from social delivery organisations at all. Hong Kong stands in stark contrast.
Hong Kong also has philanthropic organisations as part of its social fabric. After the second world war, when Hong Kong struggled to overcome the destruction caused by the war, the Hong Kong Jockey Club created its foundation to channel a significant portion of its funds to charitable causes. Since that time, the Jockey Club Foundation has become the most important philanthropic institution in Hong Kong. The formation and success of the foundation has cemented the linkage between wealth, entertainment and charity in the minds of Hongkongers.
The last critical factor of Hong Kong’s philanthropic strength has been the rule of law. Throughout Asia, the lack of trust that people feel towards non-profit organisations is profound. The Centre for Asian Philanthropy and Society attributes this lack of trust to several factors, including a murky regulatory environment around NGOs and the prevalence of headline-grabbing stories of fraud and fiscal abuse. In Hong Kong, the laws have been and remain clear and there has been a noticeable absence of scandals involving non-profit organisations. Hong Kong people trust social delivery organisations to carry out legal, helpful and important work.
Many of the things that make Hong Kong successful are unique – its geography, its governance, its people. But there are factors in place in Hong Kong which are helpful to foster philanthropy in any economy. Philanthropy thrives under the conditions it promotes: belief in education, government support of non-profit efforts, and the strong rule of law. Together, they encourage the giving and receiving of philanthropy to allow an easy and transparent way for those who want to improve society, both in Hong Kong and around the world.
This article ran originally in the South China Morning Post.