Asia’s embrace of social enterprises: governments lean in

Philanthropy Impact Magazine, Autumn 2017

Asia is awash with enthusiasm for social entrepreneurship, and Asian governments are demonstrating their faith in it not only with ancillary services but with cold, hard cash.

This article looks at government support for social entrepreneurship, particularly in India, South Korea, Hong Kong, Singapore and Thailand.

This article was first published in Philanthropy Impact Magazine.

Charity in China, Where Giving Begins on Your Phone

Shen Bin (Sixth Tone)

As the largest economy in Asia and only second to the United States in the world, China boasts a technologically advanced society. The use of mobile payment is just as common as swiping a credit card or spending cash. Homegrown high-tech manufacturing firms, software conglomerates, and creative startups such as Tencent, Xiaomi, and Alibaba are at the forefront of China’s economic growth and are an integral part of Chinese citizens’ day-to-day lives.

The reach of China’s technological ecosystem is now seeping into the industry of doing good. With a few touches on their smartphones and free mobile applications, individuals can make quick donations to charitable causes and organizations. Furthermore, these tech companies are applying their creative abilities and ideas to promote individual philanthropy on an unprecedented scale. From matching donations as part of their corporate social responsibility to hosting social media donation competitions, China is making philanthropy cool and trendy.

Shen Bin’s article in the online publication Sixth Tone provides a comprehensive snapshot of and introduction to this intersection between technology and philanthropy in China.

Click here to read the full article.

 

Hong Kong’s spirit of charitable giving is strengthened by its history, laws and belief in education.

South China Morning Post

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.

Dangers to Going It Alone: Social Capital and the Origins of Community Resilience in the Philippines

Greg Bankoff (Continuity and Change)

Abstract: Robert Putnam’s influential article ‘Bowling alone: America’s declining social capital’ puts forward a number of possible factors to explain the decline of civil society in the USA. Many of these same forces are also at work in America’s erstwhile colony in Asia, the Philippines, where almost the opposite outcome is true if one can measure such things as social capital by the activity of formal and informal associations and networks devoted to mutual assistance. Unlike Americans, however, Filipinos are exposed to a much higher degree of everyday risk. This article traces the evolution of mutual benefit associations and networks and suggests that it is in precisely those geographical regions most exposed to personal misfortune and community danger that they proliferate most readily.

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Asian companies develop new forms of philanthropy

Nikkei Asian Review

Anxiety about the gap between rich and poor has spread to Asia.

Rising joblessness led South Koreans to replace the dominant Saenuri Party in April. Even in the Philippines, with the healthiest economic growth since 1970, voters rejected the ruling elite in favor of the anti-establishment Rodrigo Duterte, who campaigned on profanity-laced vows to cut poverty. Yet not all solutions to social problems are political. Around the world, companies are seeing community engagement as not only in their own interest but also as an important part of their role in society.

Donations already play a large role. Corporate philanthropy has been on the rise for a decade and continues to grow. In 2012, 66% of all charitable giving in China came from corporations, as estimated by the Conference Board, a non-profit business research group.

India now requires top companies to pay 2 percent of after-tax income into certified philanthropic activities. According to Finance Minister Arun Jaitley, such giving totaled Rs 8,347.47 crore in the last year, about $1.5 billion USD. We do not know if the money is being spent wisely or efficiently, but it is clear that the bottom line is massive and will trickle through to increase the impact of many charitable programs throughout India.

Companies can help in at least four other ways, starting with sharing technical expertise. Some companies are already using their skills alongside financial resources to build capacity and bring about sustainable change. In India, the Axis Bank Foundation (ABF) opened a strategic partnership with Dilasa Sanstha, an organization devoted to helping farmers increase production and earn stable livelihoods. The ABF helped Dilasa expand rural credit, strengthen internal budgeting and create an evaluation system. For the first time, Dilasa could collect critical data on beneficiary income, household assets, education levels, diet and investment plans.

Similarly, support from Khazanah Berhad, Malaysia’s sovereign wealth fund, helped improve the capabilities of Mercy Malaysia, a medical response group active after natural disasters. Khazanah helped Mercy develop systems that assist it in managing people and resources and deploying them efficiently to disaster zones. The partnership has helped Mercy become an internationally acclaimed provider of disaster assistance.

Social delivery organizations may be non-profits, but they need to think more like businesses. To maximize their impact, they should be concerned with transparent accounting, financial forecasting, strategic planning, organizational management and development and a host of other skills that have traditionally been labeled as business skills. The private sector has plenty of these skills. In both of these cases, the companies provided financial resources and technical resources. They committed to the social delivery organizations for the longer term.

Another way companies can help is through shared value initiatives. Shared value, a term coined in 2006 by Harvard professors Michael Porter and Mark Kramer, is a strategy in which companies bring economic value to themselves while addressing a social need. In the Philippines, Manila Water figured out how to decrease siphoning and protect the pipeline so that clean, cheaper water reached those in the poorest districts of Manila. This successful project improved water access for the poor and increased Manila Water’s bottom line.

Uniqlo owner Fast Retail provides another example of shared value. With garment factories in Bangladesh, Fast Retail knows first hand the difficult circumstances facing many workers there. Uniqlo has launched a line of products inspired by traditional designs. Proceeds from these clothes go toward continuing education for women working in their factories.

Not surprisingly, there is considerable excitement around the notion of shared value. When the company and the community both prosper, the initiatives are more sustainable. Still, shared value initiatives are new globally and very new in Asia, and we can expect to see much more innovation of this kind.

A third strategy for community engagement is when companies work on their own. They believe and with some justification, that they have the skills to deliver a social good more efficiently than by working through an NGO. Shopping mall operator SM Prime Holdings in the Philippines is building clinics and schools, through its BDO Foundation, in the typhoon-ravaged areas of Leyte and Samar. The Reliance Foundation, the philanthropic arm of India’s Reliance Industries, carries out work through its own rural development, health and education initiatives.

Lastly, in some cases, corporations find it useful to develop alliances to bring about change. In China, corporate leaders have come together to create the SEE Foundation to work on environmental issues and the Ai You Foundation to provide medical aid to children. The Philippines’ largest conglomerate, the Ayala Group, and the telecommunications firm PLDT together created the Philippine Disaster Recovery Foundation to build a disaster operations center to coordinate the private sector relief efforts during major disasters.

How can companies evaluate whether they are doing enough? There are several key questions to ask.

First, how robust is your volunteer program? According to a Deloitte survey, 90% of HR managers believe that volunteering aids in building an employee’s leadership skills and according to a Price Waterhouse Coopers study, employees are less likely to resign if they feel engaged with their companies including through volunteer programs. A robust volunteer program can assist local charities while at the same time boosting employee company pride and loyalty.

Second, what subject areas best align with a company’s strengths and goals? Community engagement is much more sustainable when aligned with key competencies. It makes sense for Uniqlo to be utilizing clothing to engage with the community or for Axis Bank to focus on livelihoods and financial inclusion. Not everything a company does must be aligned with its interests and strengths, but it is helpful to know what these are and how they can be utilized to benefit the community.

Third, tone from the top is critical but innovation at all levels of the company is equally important. Employees have ties to the community and understand the needs of those living there. Creating programs that allow some latitude in addressing community concerns can harness this knowledge.
The rise in corporate involvement is clear. There is no question about whether a company should engage with the community, the only question is how. With their technical expertise, shared values and productive partnerships, Asia’s corporations are poised to be constructive, long-term stakeholders in the region’s continued growth.

Ruth Shapiro is chief executive of the Centre for Asian Philanthropy and Society, an organization dedicated to facilitating excellence in philanthropy.

This article ran originally in the Nikkei Asian Review.

 

Private Philanthropy in Multiethnic Malaysia

Elizabeth Agee Cogswell (Macalester International)

As with most other social and economic activities in Malaysia, private philanthropy in multiethnic Malaysia also remains to be determined by the division between ethnic groups of Malays, Chinese, and Indians. By interviewing philanthropists, private foundation staff members, charity fund raisers, non-governmental organization executives, professional fundraising staff of international NGOs, and employees in charge of corporate foundation and direct giving programs. Cogswell teases out the status quo, the intricacies, and issues that private philanthropy in multiethnic Malaysia as it further develops.

Click here to read the full publication.

Building a Partnership for Social Service Delivery in Indonesia: State and Faith‑based Organisations

Minako Sakai (Australian Journal of Social Issues)

Abstract: Contrary to the secularisation processes in modernisation theory, religions and faith-based organisations (FBOs) are thriving in contemporary Indonesia. Strongly supported by community members, religious organisations have begun to extend their services beyond the traditional areas of education and health to operate in disaster relief and poverty alleviation programmes. These FBOs have been offering assistance to the disadvantaged whose needs have not been adequately met by the state. Social programmes run by the FBOs are an important safety net at the grass-roots level in Indonesia; how to effectively coordinate and offer such services are important social policy issues. This paper will show that the Indonesian Government is keen to remain the key provider of social services and often perceives the services of FBOs as a threat. Some recent state policies to regulate the funding sources of Islamic organisations have posed a significant logistical challenge for their future operation. In addition, theological differences across various religious groups have made it difficult to form inclusive and extensive partnerships among the FBOs, who tend to compete with each another resulting in rivalry. These socio-political contexts have limited the formation of effective partnerships for offering coordinated social services.

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Popular Mobilization and Democratization: A Comparative Study of South Korea and Taiwan

Jai Kwan Jung (Korea Observer)

Abstract: What is the role of popular mobilization in the process of democratization? Based on a thorough critique of the elite-centric perspective in the literature of democratic transitions, this paper proposes an alternative view. If popular mobilization played a significant role in the initial phase of regime transition, it is likely to have an enduring effect on the development of democracy in the period that follows, because the collective memory of advancing democracy from below shapes citizens’ favorable attitudes toward direct civic action and increases their commitment to democracy. A comparison between South Korea and Taiwan’s paths toward democracy effectively shows how this dynamic operates. While the Korean democratization movement successfully mobilized a massive wave of protests in response to the opening of political space, such a large scale of popular mobilization was absent in Taiwan. The difference in this distinct feature of the early phase of transition appears to be reflected in the degree of public confidence in democracy in the two countries.

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The Legacy of the British Administration of Hong Kong: A View from Hong Kong

Ming K. Chan (The China Quarterly)

Abstract: As the one and a half centuries of British colonial rule draw to a close on 30 June 1997, it is timely to review the true legacy of British administration in Hong Kong. It would be naive to resort to any simplistic blanket judgment or to issue any sweeping endorsement or condemnation on the mixed record of the British administration. It would also be dangerous to look only at the attainments in the final days of the British regime and use them to reconstruct, or even to substitute for, the full span of British rule. Even given a charitable view of this sunset era of the British regime as its finest hour in Hong Kong, a more informed and balanced assessment of its past deeds must be appreciated in the fuller context of the actual inputs and outputs of British officialdom in shaping developments in the territory and the life of Hong Kong people during the entire course of British rule.

Hong Kong today is globally recognized as a remarkable example of a liberal society with a vibrant economy where its population of more than six million enjoy their freedom and opportunity. For this, the British can indeed claim considerable credit. As portrayed by the last British Governor Christopher Patten, four of the major British contributions to Hong Kong’s success – the rule of law, the civil service, economic freedom and democratization – can be a useful starting point to articulate the true British legacy from a Hong Kong perspective.

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