In ancient Athens, wealthy citizens were required by the government to engage in philanthropy. The Greek city-states asked rich citizens to make voluntary donations to help the society. [1]. The ancient Greeks appeared to limit philanthropy to wealthy individuals rather than the middle classes. But is this type of top-down philanthropic system beneficial for the development of philanthropy and society?
In China, the situation is rather different.
Published by Harvard Kennedy School Ash Center in 2020, China Philanthropy Project revealed the pattern of Chinese giving during the pre-Covid period. After examining 74 percent of national giving in 2018, Chinese donations were dominated by large corporations instead of wealthy individual donors. And giving was mostly supported by the government in the area of poverty alleviation. [2].
Sources of Giving
The top donations came from one state-owned enterprise and two private corporations. The number one donor was Evergrande Group, a real estate conglomerate based in Guangdong. Its donations were primarily focused on poverty reduction ($302.48 million – given to Bijie County, Guizhou Province), and education, with $151.24 million donated to Sun Yat-sen University. Country Garden Holdings, the second real estate conglomerate, also focused on poverty alleviation. A portion of their donations in 2018 went to Guangdong Poverty Alleviation Foundation (102.13 million yuan, or $15.12 million). The third was China Three Gorges Corporation, a state-owned energy conglomerate based in Beijing. Their donations were concentrated on alleviating poverty in Liangshan, Panzhihua, and Yibin counties in Sichuan Province [3].
Sectors of Giving
Real estate firms dominate the ranks of top donors. Real estate donations contributed 8.28 billion yuan, making up 28.56 percent of the total, followed by healthcare and services, which contributed 5.46 billion and 3.66 billion respectively. It is likely that many of these elite givers had a real estate background. From the 1990s to 2018, real estate’s share of GDP increased from 2 percent to 7 percent — demonstrating the immense wealth tied up in the sector. However, rapid technological development and the adjustments to real estate policy mean that eventually top donors might come from the internet and communication industries [4]. Therefore, the central government policy has a significant impact on elite donations.
Worthy Causes
As mentioned previously, giving primarily focuses on the cause of poverty alleviation. Receiving almost one-third of donations, poverty reduction echoes China’s macro-level direction of policy-making, and it also demonstrates government support behind the scenes of philanthropic activity. Total donations for poverty alleviation were 6.13 billion yuan, which comprised 29.76 percent of total elite giving. The second-biggest recipient of donations was education, which accounted for 23.12 percent of donations. Elite giving to education mainly went to top universities. Tsinghua University received the largest amount of money followed by Peking University, while Westlake University, the first not-for-profit research-oriented university in China, received 4.3 billion yuan in 2018 toward its operational costs. It is important to note that Westlake University itself aims to cultivate future elite researchers in STEM (Science, Technology, Engineering, Mathematics) subjects. Yet, the elite-oriented pattern at Westlake University has attracted plenty of donations. [5].
Elite giving is mainly limited to one or two areas, as highlighted by a research team from the China Philanthropy Project. In other words, elite giving is especially “narrowly-focused, driven by the fact that donors often give to causes in which they have expertise or knowledge”. [6].
Despite heated concerns regarding air and water pollution, Chinese philanthropists donated less than 500 million yuan to environmental causes, representing only 0.22 percent of the total donations. From the lens of microeconomics, the environment is a common-property resource, which means that there is no way to make people pay for it. Thus, in the absence of government interventions, private users will tend to overuse resources while donors will be prone to overlook the importance of their donations. [6]. Also, environmental protections require collective actions instead of individual donations, which may be another reason why it is neglected by elite donors. [7]
Geography of Giving
The narrowly focused donations can also be seen in the geography of giving. Elite donors often made donations to their home provinces, while some poorer regions were overlooked. Poor provinces such as Tibet, Xinjiang, Gansu, Yunnan, and Qinghai, obtained only 1.69 percent of the total donations, while Guizhou received over 2.46 billion yuan, or 8.49 percent of the total. Elite donors mostly make their donations within China, with very few making donations abroad. [8]
Conclusions
At first glance, philanthropy is the privilege of the rich. Elite giving is the primary source of the donations, but it does not mean that the general public is excluded from philanthropy. We can see from the pattern that Chinese elite giving is concentrated in poverty alleviation, and the donations generally go to the preferred regions of the wealthy. In addition, education is the second area that received the most donations; in part this is an elite-helping-elite framework, that essentially follows an apples-to-apples inner pattern.
In this sense, civil engagement is equally important with elite donations. A healthy philanthropic system cannot live without the “bottom-up” model of giving. Middle-class donations can contribute to the areas that are overlooked, such as the environment and disaster relief, and expand the sources of donations to different geographical regions. [9].
Thus, a better question should be how to encourage more middle-class individuals to participate in philanthropy and how to optimize the efficiency of the current system. Despite the increasing private philanthropy delivered by large corporations, Chinese private foundations rarely engage in grant-making with Chinese NGOs, instead focusing on funding projects of their own. Consequently, NGOs may not receive benefits from elite donations. In this sense, enlarging the capacity of Chinese NGOs will require more donations from ordinary people. [10]
References:
[1] Reich, Rob. Just Giving: Why Philanthropy Is Failing Democracy And How It Can Do Better. 1st ed., Princeton University Press, 2018, p. 29.
[2] “The Ash Center For Democratic Governance And Innovation”. Philanthropy In China, 2022, https://chinaphilanthropy.ash.harvard.edu/.
[3] Ibid.
[4] Ibid.
[5]”Westlake Facts | Westlake University”. En.Westlake.Edu.Cn, 2022, https://en.westlake.edu.cn/about/westlakefacts/.
[6] Krugman, Paul, and Robin Wells. Microeconomics. Macmillan Learning, 2021.
[7] “The Ash Center For Democratic Governance And Innovation”. Philanthropy In China, 2022, https://chinaphilanthropy.ash.harvard.edu/.
[8] Ibid.
[9]”Private Foundations And State Supervision”. Medium, 2022, https://medium.com/@chinaphilanthropy/private-foundations-and-state-supervision-406043aef7e3.
[10] Ibid.
