This article is an abridged translation of an article that originally appeared on our Chinese website here.
Defining terms
Like many other concepts, the term “philanthropy” has different meanings in English and Chinese. In China, what constitutes philanthropy has also changed greatly over time. The defining characteristics of philanthropy in ancient China, republican-era China, post-1949 China, and reform-era China all vary. In the wake of economic reform, civil society in China has grown, and the legal environment has, in general, become more welcoming. During this process, the stakeholders of the NGO movement have at times alternately strengthened and weakened the concept, in order to unite or avoid various risks. Thus, the usage of the term “philanthropy” has become more and more complex.
However, in order to compare philanthropy in China and the US, one must establish a reference point. This article chooses to use a very broad definition of philanthropy. Its defining feature is that private sector resources (including from business, families, and individuals) are mobilized to serve the public good. This sense of philanthropy is broader in comparison with traditional notions of “charity” that focus on disaster or poverty relief. Philanthropy includes environment, health, education, community development, art, rights protection, and conflict resolution. In China, the most popular term used to describe these areas is often “public welfare” (公益). However this paper chooses to use “philanthropy” instead of “public welfare” because the author believes that public welfare covers more activities than philanthropy does. For example in China welfare provided by government bodies is also sometimes termed ”public welfare”, a word sometimes used interchangeably with “public interest”, while “philanthropy” usually refers to welfare provided by non-state actors. In many countries in the world, including the United States, “philanthropy” is often used to refer to just private resources. A final reason for using the term “philanthropy” is that it assists in making statistical data more comparable.
Why compare?
The Chinese philanthropy sector really began to grow after the Regulations on the Administration of Foundations were implemented by the government in 2004. The Regulations for the first time tried to develop organized private resources in China and make them available to Chinese non-profit organizations. This is quite similar to what happened in the US around one hundred years ago, after an economic boom had accumulated enormous private wealth. Today in China, private wealth is also beginning to pour into philanthropy. This is the first reason for comparison. Another reason for comparison is to recognize the differences and see if China can learn from past experiences. This article therefore aims to explore the differences between Chinese and U.S. philanthropy and through doing so make an analytical contribution to the growth and development of the Chinese NGO sector.
How large are the sectors?
In 2012, total donations in China reached 81.7 billion RMB. In the same year donations in the U.S. totalled 316.2 billion USD. The US figure stands at roughly 24 times that of the Chinese figure. Donations account for 2% of GDP in the U.S., whereas in China they stand at just 0.16% (12.5 times fewer than that of the U.S.). Meanwhile the total GDP of the U.S. is only slightly more than 2 times than China. The gap in terms of sector size is therefore huge. What about looking specifically at individual donations? In China only 32.4% of the donation comes from individuals. In the U.S. the percentage is 81%. In 2014, the average individual donation in China stood at 60 yuan. In the U.S. the figure was $1007.6 USD, 103 times more than the Chinese figure. China’s ratio of donations to disposable income (0.25%) is also much lower than the U.S., which stands at a large 8.4%.
What can be read into this? One thing to note is that donations from businesses and foundations are often related to the state of the economy as well as laws and regulations. However the level of individual donations reflects the overall maturity and sustainability of philanthropy in a country as a whole.
Where do donations go?
The top five fields where philanthropic money flows to in China are as follows: education, poverty alleviation and social development, medical assistance, disaster alleviation, and human services (basic humanitarian and social services). In the U.S. the top five fields are: religion, education, human services, foundation, and healthcare. Comparing the two reveals several interesting facts.
Firstly, religion. Donations to religious institutions always come top in the U.S. In China, however, the survey category does not even include “religion” although some statistics show that around 0.1% of charitable giving goes to maintaining “religious facilities”. Obviously the religious background and culture in the two countries are the reason for such a gap.Secondly, foundations. In China, 37% of funds flows into foundations – both public fund-raising foundations and non-public fund-raising foundations. This is a number much higher than in the U.S. A major reason for the difference is because of taxonomy. In China the term “foundation” refers to a category of registered “social organization” rather than a “field”, explaining why the Chinese figure does not show in the chart. In the U.S. large private donations are endowed to establish foundations that make grants to various “fields”. However, in China “foundations” includes both those that have been endowed with large donations, and operating foundations that are equivalent to “public charities” in the U.S.
Thirdly, disaster relief and reduction. In China, this has always been one of the top fields to receive donations since data was first made available. There are a number of reasons for this. China is regularly confronted with natural disasters. Disasters such as the 2008 Sichuan earthquake boosted total donations in this field. From a positive perspective, the strong response to the 2008 earthquake shows the large potential in Chinese philanthropy. From a negative perspective, the strength of this field over others suggests that Chinese philanthropic culture lacks maturity. In terms of disaster-relief, how to add-value and cooperate with government is also an emerging issue for philanthropic actors in China. An additional reason for the strength of this field is also that it is attractive to Chinese donors because they can see the results of their donations very quickly. Compared to other fields such as education and environment, disaster relief requires less long-term attention.
Finally, international programs. Since the end of World War Two, the U.S. has been heavily involved in international development. Although involvement overseas declined during the recent economic crisis, in 2012 international donations still accounted for 6% of overall donations in the US. In comparison, China’s international donations remain minimal. One issue lies with the fact that the Chinese public remains sceptical about overseas giving. Aside from dissimilar policies and levels of wealth, differences in values and culture also contribute to this gap. For example, the continuing emphasis on “victimisation” in Chinese culture is not conducive to Chinese engagement in international humanitarianism. This is unfortunate for the overseas image of China.
Comparing behaviour
When analysing philanthropy from the perspective of the family and individual, we see that in the US the average donations per family are consistently at a rate of 2% regardless of economic situation or household income. This figure shows that philanthropic giving is not the sole preserve of wealthy families. Additionally, it suggests that strong philanthropy is influenced by culture and not necessarily impacted by external factors such as taxation or income. Philanthropic organizations in China have begun to realise this important fact and have launched campaigns to encourage micro-philanthropy (微公益) and promote the fact that “everyone can be a philanthropist” (人人公益). However, something like the “Giving Pledge” (http://givingpledge.org/) proved culturally unadaptable in China. While it was very successful in the US and many other countries, the reception of Warren Buffett and Bill Gates’s project in China was only lukewarm. This may be due to a difference in attitudes towards wealth, trust, and maybe even aspects of Chinese culture that strongly emphasise the family.
When people talk about “philanthropy”, we often only consider the side of the donor. Yet philanthropy is an eco-system. According to the flow of money, donations are in the upstream. Downstream are philanthropy foundations and non-profit organizations that are serving those in need and trying to solve problems. In the U.S., NGOs are a big industry that accounts for 6% of GDP and 9.2% of the total work force. In China, both figures are likely to still be below 1%.
Notions of citizenship and volunteerism also play an important role in differences. In the US, strong emphases on individuality and independence impact the development and organisation of NGOs. In China, NGOs remain strongly under the influence of government and to a lesser extent business. In the U.S. there is strong youth involvement in philanthropy. The reason is because they were immersed in a philanthropic culture from a young age. Significantly, China still lacks this. Strong ideals of volunteerism in the US encourage people to do philanthropy no matter what their social status, job, income, age, or religion. China has her own volunteerism values which are also strongly encouraged. However sadly in practice it is quite the opposite. In China, the motive to volunteer often comes from the top, and sometimes it is even forced.
Comparing responses to emergencies
The response of a philanthropic sector to an emergency is a reflection of the development state and culture of philanthropy in that country. After the 2008 Sichuan earthquake, people in China threw themselves into helping out in the relief effort. Organizations mobilized resources, volunteers flooded to the frontline, and countless people donated money. However the attitude of people in China towards disaster relief remains different to that in the US. Almost every humanitarian crisis and natural disaster across the world see’s the involvement of U.S. NGOs. In China, however, support for overseas assistance is largely dependent on nationalist sentiment. This is especially apparent when it comes to countries that have territorial or diplomatic disputes with China. For example, the destruction wrought by typhoon Haiyan in the Philippines received almost no response from the Chinese philanthropic sector. True philanthropy should be universal and detached from these narrow-minded political issues.
Historical comparison
In the U.S., religions from all over the world stimulate people’s desire to donate and it is unsurprising that 70% of US donations are to religious organizations. A bond of unity and caring was developed in the US early in the development of its national character. This has been successfully transmitted to contemporary U.S. society. As a nation of immigrants, characteristics such as benevolence and caring are strongly encouraged. Money constantly flows back to a migrant’s homeland as well as to their local community in the US. The US also has strong social capital. Every part of the philanthropic chain – from donors to NGOs or foundations to recipients, is built on trust. It is the guarantee that the system will run smoothly.
In contrast, perhaps the biggest problem with Chinese philanthropy today is the break between traditional forms of philanthropy and the modern philanthropy sector. While today’s philanthropy sector can be said to be growing rapidly, China remains a closed society and its citizens are denied full access to a strong civil society due to a lack of awareness, suspicion, and unaligned and out-dated policies. Even though the supply side of philanthropy in China is booming, both government and regulations still hesitate to welcome it.
Conclusion
The U.S. will continue to take the leading role in philanthropy. It will produce more and more innovations such as social enterprises, social impact investment, and venture philanthropy. As the country with the worlds second largest economy and second largest number of billionaires, in the future China’s own philanthropy sector will likely see a rapid development. However, large challenges remain that mean that it will unlikely catch up with the US any time soon. The biggest problems remain the policy and cultural differences that are outlined above. Undoubtably they are interconnected. In today’s China, policies related to philanthropy represent a complex and sensitive issue, especially due to the prior entanglement of the public and private sectors. On the cultural side, when a state transitions in the rapid way that China has done, it risks losing important building blocks of its civic life. Philanthropic culture seemed to have disappeared in China for several decades. Yet looking back at what has been achieved over just the past decade, and despite all the remaining challenges, we should ultimately have confidence in the ability of institutions to reform, to better serve a stronger civil society and promote a culture of philanthropy. Hopefully, as with the economy, China’s philanthropy sector will also threaten to overtake the U.S. in the future.
