The “Learning from the West School” of Chinese Philanthropy

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As Chinese philanthropy modernizes and internationalizes, one group of pioneers is seeking to break through various obstacles, casting an eye toward the world, and looking westward to “master skills for self-strengthening” in their effort to advance Chinese philanthropy. In the process, they seek to realize their ambitions and dreams, while encountering skepticism and frustration.

On January 2, 2014 , former New York City Mayor Michael Bloomberg, former U.S. Treasury Secretary Henry Paulson, former “junk bond king” Mike Milken, and Richard Rockefeller of the Rockefeller family each arrived in Hawaii on their private planes… Afterwards they all piled into a small van and headed off to a hotel where a group of Chinese philanthropists awaited them. Among them were “China’s Most Charitable” Cao Dewang, Niu Gensheng, who fully embraced charity after leaving the business world, and Lu Dezhi, who became known for proposing a 10 billion yuan [about U.S.$1.6 billion] charitable donation. [Editor’s Note: Cao Dewang, the chairperson and CEO of the Fujian-based Fuyao Glass Industry Group, made news in the philanthropy world when he donated 300 million of his shares in the company (a reported U.S.$530 million value) to establish the Heren Charitable Foundation in 2011.]

This summit meeting represents the most prominent exchange between Chinese and U.S. philanthropists. It was jointly organized by the China Philanthropy Research Institute (CPRI, 中国公益研究院) and the East-West Center [in Hawaii], and jointly funded by the Lao Niu Foundation (老牛基金会), Huamin Charity Foundation (华民慈善基金会), and the Kaifeng Foundation (凯风公益基金会). “On American soil, our Chinese philanthropists having invited U.S. political and business elites and philanthropists to eat and live together. We’ve set aside three days to explore philanthropic cooperation. This is a first,” said Wang Zhenyao, head of Beijing Normal University’s CPRI, to the China Philanthropist magazine.

At first, Michael Bloomberg’s attendance at this forum was seen as his first public appearance after retiring as New York City mayor (though this forum was a private event and closed to the media). He originally planned to stay for half an hour and make a speech, but his interest was so piqued after meeting with Chinese philanthropists that he extended his time to an hour and a half. Henry Paulson participated in the entire three-day discussion. In summing up his career in the U.S. Treasury Department, he said, “I did two things as Treasury Secretary: promote Sino-US relations, and participate in environmental protection.” Mike Milken arrived in Hawaii ahead of time with his grandson, who was diagnosed with cancer this year and expected to only live another 20 months. He never imagined that one day, he would be getting together with Chinese philanthropists. Ray Dalio, founder of the American business investment firm, Bridgewater Associates, also participated. Some philanthropists had just come from ski trips in the U.S., so they brought their ski equipment with them.

“Half of Wall Street’s elite are here,” Chinese philanthropists privately joked.

The lineup of the host’s Chinese delegation was equally formidable. The main participants included: Lao Niu Foundation founder Niu Gensheng; Huamin Charity Foundation founder, Lu Dezhi; Kaifeng Foundation founder and chairperson, Duan Weihong; Fuyao Group chairperson [and founder of the Heren Foundation], Cao Dewang; Dean of CPRI, Wang Zhenyao. They all comprised a group of Chinese entrepreneurs and scholars who became deeply involved with philanthropy relatively early on.

Although China’s philanthropic sector that has only been in existence for less than 30 years, it has developed rapidly. Part of this rapid development is a history of Chinese philanthropists going abroad to draw on and learn from the experiences of their foreign counterparts. At the start of [Deng Xiaoping’s] “reform and opening,” the Ministry of Civil Affairs was established in 1978, becoming the only national mechanism for philanthropy and public welfare; two years later, China’s first charitable foundation – the China Children and Teenagers’ Fund (中国少年儿童基金会) – was established. China’s newly established philanthropy sector urgently needed to borrow from Western experience, and likewise international organizations that had not been allowed in China for 30 years were eager to re-enter. After the establishment of U.S.-China relations in 1979, the Ford Foundation began providing funding to China, thereby opening up a channel for philanthropic exchange between the U.S. and post-reform China.

In the subsequent 30 years, a group of philanthropists advocated for the study of Western approaches to, and experience in, philanthropy. They were all too aware of China’s challenges in this area, whether it was throwing off institutional shackles to open up space for citizen action, or seeking to expand the operational space within the system. They saw that the path of philanthropic exchange between East and West would be one of exploration, advances, setbacks, and reassessment. Some called this group of pioneers the “Learning from the West School of Chinese Philanthropy”.

Looking at the World

“There’s something to the “Learning from the West School” label, but it isn’t very accurate and it sells us short. In fact, Chinese philanthropy does enjoy a long history,” said Narada Foundation chairman Xu Yongguang.

The role of Xu’s “Learning from the West School of Philanthropy” had already been set when he became the Director of the Communist Youth League’s Organization Department towards the end of the 1980s. [Editor’s Note: Xu’s position was an influential one. As Director of the Organization Department, he was responsible for personnel decisions in the Communist Youth League.] Xu, who was then doing research on system reform, was struck by the fact that although pressing issues with youth development existed, the government treasury was not investing enough. [Editor’s Note: “System reform” refers to efforts during the 1980s and 1990s by more liberal-minded officials and scholars in China to reform the old, centrally-planned system that China had inherited from the Soviet Union.] From that point on, he studied how other countries tapped into civic resources to address social problems when the government was not doing enough. Having come across the concept of setting up a charitable foundation, he wrote “Establish the China Youth Development Foundation” into the “Plans for System Reform of the Communist Youth League” which was subsequently passed in the Communist Youth League’s 12th Congress. “At that time, travelling abroad was not a possibility, and so I read any materials from abroad that I could get my hands on, so I could learn how a foundation raised funds, how it was managed and how project planning worked.” When the 12th Congress ended its session in 1988, Xu tendered his resignation and in March, armed with a 100,000 yuan deposit, he set up the China Youth Development Foundation, and assumed the role of Secretary General.

In December 2011, Bill Gates met with Xu during his visit to Beijing.

Many years have passed, but Xu still remembered vividly the day when he was first exposed to Western philanthropy.

When the China Youth Development Foundation was founded, its office was located in an old courtyard. It had some funds from the publication of teaching materials for an educational program on taxation for private entrepreneurs around the country that Xu had managed. He used that money to renovate the premises and put up wallpaper. Shortly afterwards, a government leader came to inspect the premises and, on seeing the newly-renovated office, was shocked that “a foundation could carry out such a nice renovation”, and declared that he would never visit again.

Not long after, a delegation from an overseas foundation visited the premises, led by an elderly lady, who during a chat noted her admiration for the tidiness of the office, saying that this reflected the diligence of the organisation, which would undoubtedly assure potential donors that their money would be used properly.
“Those two views,” said Xu, “could never have been more different! This was the first lesson I learned from my interaction with the outside world- that how an organisation presents itself is essential to its work.”

The West’s emphasis on an organization’s image, as well as the organizational structures, management and outlook of the West, influenced many of China’s philanthropic pioneers profoundly.

The current Secretary General of the Chinese Red Cross Foundation, Liu Xuanguo, joined the Foundation in 2006, and afterwards participated in a number of overseas exchange trips involving the Red Cross system. He visited the Charles Léopold Mayer Foundation for Human Progress in France at the invitation of its then-chairman Pierre Calame in July 2009, and emerged from the trip deeply affected. “While our foundation was focused on alleviating poverty, this foundation’s mission was to further the development of humans.”

At the start of 2013, Liu led a delegation from the CRCF on visits to the China offices of the Ford and Bill and Melinda Gates Foundations and the Southeast Asian offices of the International Federation of Red Cross and Red Crescent Societies. “From those Foundations’ missions and goals, to their standards of governance, it was obvious that China’s foundations lagged far behind,” Liu sighed. In November 2013, he flew to attend a training workshop organized by the National Foreign Experts Bureau on post-disaster building reconstruction, and on his return he wrote seven entries on his experience.

The numerous overseas trips Liu took gave him a more international perspective and “a more profound understanding of the fundamental mission of social organisations. For a government-sanctioned foundation like ours, concerns about how to better link up with the global community, how to overcome cultural communication barriers, and how to show that we are open-minded and eager to learn were always at the forefront of my mind, and gave me much food for thought,” Liu said.

Shortly after taking over the reins at the China Philanthropy Research Institute in 2010, Wang Zhenyao participated, as a scholar, in a study tour to the U.S. for the first time. On his first trip to the West, he set himself a consistent mantra – “be open-minded, and learn.” During his visit of more than 20 days, Wang visited nearly 20 NGOs and think-tanks. During each visit, he asked the host about their project design, management and review processes, as well as their daily operations and their management and review processes, leaving no stone unturned.

China Philanthropy Research Institute Director Wang Zhenyao (photo: Zhang Xu)

In San Francisco, Wang witnessed the professionalism of his American counterparts, and realised the relative backwardness of the organisations back home. “On my return I saw the problems between the government and civic organisations in a more lenient light. It takes two hands to clap, and it would be unfair to point the finger solely at the government for the unfavourable situation in China.” said Wang.

Xu was deeply impressed by the community foundations in the U.S. In 2010 and 2012, he visited community foundations in the Silicon Valley and Hawaii. The former had only $100 million in funds of its own, but was the trustee of the funds of several hundred family foundations and not-for-profit organizations with funds totalling $1.4 billion. It charged a management fee of 1.5 per cent of the assets, and its services included financial management and project implementation. “As a charitable assets management company which takes in more than $20 million in management fees, the Silicon Valley Community Foundation has built a strong team to manage both funds and projects with high efficiency and professionalism,” said Xu. Taking these foundations as examples, Xu has begun to chart the reform path for China’s public fundraising foundations and the China Charity Federation (慈善会).

The Narada Foundation chairperson, Xu Yongguang (Photo: Zhang Xu)

After the first China Private Foundation Forum in 2009, Xu led a delegation of private foundation representatives to the U.S. At the U.S. Foundation Center, Xu and delegation were left with a deep impression. The Foundation Center has operated for more than 50 years, and created a virtual platform which discloses information about 98,000 foundations in the U.S. In front of a huge screen, Foundation Center employees demonstrated the platform’s operation. On a virtual map of the world, clicking on a foundation’s name showed its donor network, and another click of its recipients brought up the flow of funds and how the funds were used. Taking heart from this, Xu decided to revive an earlier 1998 effort to build a similar information transparency platform for China’s foundations.

Seeing the Chinese philanthropy community turn its outlook outwards, other overseas organisations and philanthropists took the initiative to visit China to provide advice and support.

Peter Geithner headed the Ford Foundation’s representative office in China. He had arrived in China at the start of the 1980s to set up the Ford office. Over the last 30 years, he has remained a steadfast supporter of China’s burgeoning philanthropy community, and has a deep understanding of its development and challenges. He was responsible for arranging the study tour of senior Chinese foundation staff to the U.S. in October of 2010. This tour proved to be a turning point for Chinese philanthropy and led to the creation of the China Foundation Center (CFC, 中国基金会中心网).

The activation of the Foundation’s new information disclosure platform.

In 2011, when the CFC’s project preparation team visited the U.S., the U.S. Foundation Center’s director Brad Smith arranged for training by senior staff, giving the team unprecedented insight into his organisation’s operations. In an email to Xu, Smith wrote, “Creating an information disclosure and sharing platform will allow the citizens of both China and the world to gain a greater understanding of Chinese philanthropy, and its vast potential. We are very honoured to be the CFC’s partner during these early stages, and to witness this great milestone in your history.’

The British Council’s “Social Entrepreneurs Skills Programme” has trained more than a thousand Chinese social entrepreneurs since its inception. “It’s been very effective in spreading the concepts of social enterprise, impact investing and other new concepts. I think it’s very promising,” said Xu.

On December 8, 2011, Bill Gates, who was on an unrelated trip to Beijing, visited Xu and Wang in the CFC’s Beijing office. During the one-and-a-half-hour discussion, Gates shared his views about the American philanthropic tradition, his experiences in international philanthropic assistance, and the similarities and differences between Chinese and Americans in charitable giving by the wealthy. In return, Xu and Wang shared their unique perspectives about recent developments in Chinese philanthropy, and expressed optimism that with things having reached a turning point the future looked rosy. However, Gates threw out a thought that struck Xu. “Wealthy Americans find it harder to donate to charitable causes, because their wealth is mainly inherited and so comes with restrictions. In contrast, many of the wealthy Chinese are self-made individuals, and are free to decide how to direct their donations.” Xu began thinking about the possibilities for giving among China’s wealthy. “There is huge potential here, but China’s wealthy must consider carefully how to pass on their wealth and effectively manage their charitable assets. They have to think clearly and avoid focusing on short-term results. In this respect, China’s wealthy still have much to learn.”

While China’s philanthropic organisations and individuals continue to “look out into the world,” China’s different levels of government are also venturing out to draw upon the experiences of others. “Many of the officials currently in charge of China’s philanthropy policies have studied overseas or undertaken trips overseas, and are able to bring back many new ideas and use them to form a new vision of governance,” said Liu. ‘So in recent years, the policy and regulatory environment for China’s social organisations is not that much different from that of Europe or the U.S.”

Promoting Reform

Inspired by its Western counterparts, the ‘Learning from the West’ School of Chinese Philanthropy has been eager to develop local practices and innovations. But it is bound to be a thorny path. This has become particularly evident over the last decade. According to Xu Yongguang, the 1990s was a period when the government withdrew and citizens stepped forward. But after 2000, the reverse happened. [Editor’s Note: Xu’s observation is striking yet controversial given that grassroots NGOs and private foundations grew particularly rapidly after the early 2000s.]

Creating a platform for exchanges among foundation has always been on Shang Yusheng’s wish list. Ever since 1994, he and Xu as well as Yang Tuan [deputy director of the Social Policy Research Centre at the Chinese Academy of Social Sciences] have been working on establishing a China Federation of Foundations, “but we failed eventually because the government wasn’t ready.”

Having studied a number of foreign foundations and worked at the National Committee of the Natural Science Fund (国家自然科学基金委员会), in 1998, Shang Yusheng carried out a major coup in 1998: he facilitated the cooperation between the Ford Foundation and the National Committee in his capacity as the Secretary-General of the China Science Fund’s Research Society (中国科学基金研究会). Sponsored by Ford Foundation, he held a non-governmental organization management conference. Over 200 people attended this four-day conference to discuss topics such as “Foundations, Nonprofit Organizations and the Law”, ‘Fundraising for Foundations”, “Foundation Asset Management’ and ‘Foundations Facing the 21st Century’. ‘It was the first conference in which the development of American foundations was systematically discussed,’ said Shang.

By the end of 1998, under the support of Yan Mingfu, then the president of the China Charity Federation (中华慈善总会), Shang and Xu founded the China Foundation and NPO Information Network, which was later registered as Beijing Enjiu Information Consulting Center (后来注册为北京恩玖信息咨询中心).

Xu has a very high acceptance rate for new things. “I can pick out very quickly what is good, and adopt it if it looks useful. Family foundations, community foundations, United Way, charitable trusts, venture philanthropy, mutual funds and the China Foundation Center are some examples. Xu believes that all of the above can take root in China.

In 1998, Xu took a one-month study tour of the U.S. “That trip allowed me to take in the American philanthropy sector. Many of the things I did after that was influenced by that trip. Some things took over 10 years to push through such as the China Foundation Center and charitable trusts,” said Xu. When he returned to China, he immediately arranged for Cheng Gang, the CEO of the China Foundation Center, to register four domains for the NPO Information Network, using the key words China NPO, China NGO, NPO and NGO.

When visiting the New York Community foundation, Xu was surprised to discover it was so large, managing 1,500 charitable trust funds. “Community trust funds are very diverse, and are entrusted to spend money for philanthropic purposes based on the donor’s request or will.” Xu thought that was a brilliant idea. When he got back to China, he tried to establish a ‘charitable memorial fund’ at China Youth Development Foundation, which allowed a donor to establish a fund in his or her parent’s name with a minimum donation of 10,000 yuan. “Our influence is limited and this effort ultimately did not take off,’ said Xu. Three years later, the Trust Law of the People’s Republic of China was introduced with ‘charitable trust’ on its list. ‘This year, the first charitable trust in mainland China might be set up in Shenzhen.’

Similar actions were taken as a result of years of communication and cooperation between Xu and United Way International. As early as the late 1990s, when Xu Yongguang was visiting United Way International, the CEO of the organization told him that their next goal was to allow Chinese organizations to join. Ever since, Xu has been planning on cooperation between United Way International and the China Charity Federation (CCF). Although the CCF has become a member of United Way International, the cooperation did not work well. In 2005, Xu became Vice President of the CCF, and hoped to reopen the cooperation with United Way International to explore new pathways for non-governmental charities to engage in collective fundraising. This attempt eventually failed and in less than a year, Xu resigned from the CCF. Before he left, he called the former president Yan Mingfu. Yan expressed concerned, but also understanding. He only had one request, “Don’t stop helping to advance the credibility of the sector.”

For the past 26 years, Xu has been promoting China’s philanthropic culture. He’s regarded as the ‘father of Chinese philanthropy’. In the meantime, his bold actions have been criticized on numerous occasions.

Using funds from the China Youth Development Foundation’s Project Hope to invest in keeping the organization running was a necessary evil at the time. In the 1998 Foundation Management Regulations issued by the State Council, Article 9 stated that all foundation staff salaries and administrative costs had to be paid for from the interest income of the fund. This is basically asking foundations to operate at no cost and places a great deal of pressure on the foundation. “Back then, the money used to pay for envelopes to allow students benefiting from scholarships to thank the donor, let alone salaries for staff, could come from the donated funds. Regulations did not allow it and neither would the donor!”

Because the investments are made with donations, and because there are losses from specific investments, Xu was blamed and misunderstood for many years for “misappropriating donations”, ” making investments in violation of the regulations”, and “causing huge losses.” In fact, the results so far show that the capital investment of about 120 million yuan for that year was not only recovered but also earned more than 200 million in profit. “At the time, under pressure from different sides, we could only deal with this by taking back the investment. That investment in several courtyard properties in Beijing would by now be worth around several hundred million, but at that time, we were only able to recover about several million from our initial investment.” Here, Xu expresses a bit of frustration.

“Twenty years ago, the first time I saw teacher Nan Huaijin, he told me “defamation comes with growing fame.” As a result, I’m mentally prepared, but also know that I need to adhere to a moral bottom line and be very calm. I’m thinking my next step is to promote family foundations, community foundations, the United Way, charitable trusts, charitable asset management, and social impact investment. Things that represent future trends need to be pushed one step at a time and then they’ll gain momentum” Xu says.

In addition, Xu Yongguang recommends philanthropic organizations seize the opportunities offered by the Internet.” This may mean that the sector will have to go through a restructuring.” He suggested that the government allow some public universities to be run by nonprofit organizations, thereby converting public universities into private ones. “The Rockefeller Foundation established the University of Chicago and Rockefeller University, which together can claim a total of 105 Nobel Prizes. It’s shameful to think about how much the government in China has invested in public universities in China.” He believes that Xiamen University and Shantou University, which were originally established with charitable donations, could be the first to convert to private universities. “Foundations that establish universities are not under pressure to make a return on their investment and can focus on developing talent. Only in this way can China hope to produce universities like America’s private universities that can cultivate innovative talent and produce great scholars.”

Compared to Xu’s challenging quest, Wang Zhenyao’s progress in philanthropic exchanges between East and West has been much smoother. In just three years time, Wang Zhenyao has helped to establish a “China-US Strategic Philanthropy ” (CUSP) platform, a China-U.S. philanthropy dialogue among wealthy families, the first East-West Charity Forum, have garnered recognition among both Chinese and American philanthropists and widespread praise by the public. “I think there are still too few philanthropic exchanges between China and the U.S., and many Chinese and American philanthropists are hoping to make use of platforms like CPRI to strengthen communication and exchanges,” Wang notes.

After several overseas trips, Liu Xuanguo has proposed some thoughts about the development of foundations. He believes that the foundation is an innovative social mechanism, and therefore should continue to generate innovations. Leaders of foreign foundation’s generally use the title of “president” or “CEO” so “the titles of foundation staff should be on a par with commercial companies, so as to clarify responsibilities, and make it easier to assess performance.” He put this proposal in a report to the Chinese Red Cross Society’s General Assembly, but received no feedback. He also advocated signing a strategic cooperation agreement with the U.S.-based World’s Children Fund, hoping it would help the Red Cross establish a database for fundraising purposes. “For various reasons, promoting this kind of cooperation did not go smoothly,” Liu admits.

However, his recommendations on “strengthening evaluation of public benefit projects” will soon be implemented by the Red Cross. From 2005 to 2012, during a seven year period, the Red Cross Foundation only completed one project evaluation report, but in 2013 alone, it completed three project evaluation reports. “In the future, we need to put more effort into evaluating public benefit projects, since the evaluation process can help us identify problems, and ways to address them,” Liu said.

In studying Western experiences and approaches, and developing local adaptations, these “Learning from the West School of Chinese Philanthropists” are reflecting on their own roles in promoting the modernization and internationalization of Chinese philanthropy, and assuming a greater sense of mission and responsibility.

Building Bridges

Wang Zhenyao is well aware of his role as an intermediary in philanthrophic exchanges between the East and West. “I feel I serve as a bridge or an intermediary. I facilitate communication between Chinese and American philanthropists by organizing various forums,” he said. Wang is highly welcomed by Chinese and American philanthropists, because of his humility and the attention to detail he puts into his professional work. A philantrophist once half-jokingly remarked that “the future Secretary-General must have qualities which Wang Zhenyao possesses”.

“The social good I’ve conributed to pales in comparison to what philantrophists do,” said Wang. He continued, “I’ve learned many new things and ideas while organizing exchanges and facilitating dialogues between Chinese and American philanthropists. I also bring my expertise in China to the table, which is extremely valued by foreign philanthropists.”

Once, an European NGO academic asked Wang if he knew who the first person in the world to donate all his wealth was. Wang cited several Western philanthropists, but was told that the person was in fact “China’s Fan Li, who in a single lifetime went from rags to riches three times, each time donating all his wealth to the wider community.” [Editor’s Note: Fan Li was an advisor to the state of Yue in the Spring and Autumn Period (771-476 B.C.) and later became a wealthy businessman.] The academic also mentioned that China had an enduring history of charity. Wang Zhenyao later compared charity in China to charity outside of China, and realized that the foreign scholar had a point. “Looking at Chinese charity in that light provided me with more faith, confidence and esteem in international dialogues,” said Wang Zhenyao.

According to Xu Yongguang, both Eastern and Western philantrophists have their own unique strengths. In 2012, he travelled to the United States four times, one time attending a prestigious China-US seminar about philantrophy held in Hawaii. The three day meeting began on a caual note, but on the final day, the host allotted one hour for both the Chinese and US teams to separately summarize the proceedings of the seminar and to present what they learnt on stage. Within an hour the Chinese team had set up a Secretariat, elected a Secretary-General, and split themselves into four discussion groups to discuss public trust, capacity building, social innovation and the legal framework for philantrophy. On stage, the Chinese delegation expressed the possibility of discussing these four areas with the U.S. delegation. The US delegation, however, was still composing their thoughts and engaging in vague discussions. The host then noted that “the Chinese group came out with three days worth of outcomes from an hour of discussion, whereas the US group’s discussion generated about 40 minutes worth.”

“Because we developed relatively late, we had to hit the ground running and learn from everyone else. Through the exchange process, we succeeded as late bloomers,” Cheng Gang said. In the past two years, he has attended numerous forums in the philanthropy sector, and developed a new understanding of East-West philantrophy exchanges.

“Western society did not take long to develop innovative constructs such as social enterprise and impact investing. We should catch up with the West in these aspects, or even try to better them,” Xu noted. “Chinese philanthropy has to learn from the West and it has to be as innovative as possible. In 2012, when the China Foundation Center introduced the China Foundation Transparency Index, many Western counterparts were impressed. The president of the U.S. Foundation Center praised it as “a contribution to the world.”

A more common reaction among China’s philanthropic pioneers is that the impact of Western philanthropy, such as its “powerful innovations”, “attention to detail” and “lofty missions,” continues to stimulate and inspire their creativity and thought processes.

At the same time, they are considering how the next generation can inherit this nascent platform for East-West philantrophic exchanges. Under current cirumstances, only government officials, entrepreneurs, and senior staff of foundations are given the opportunity to go abroad. “This is a problem many philantrophists face. Our consensus is that we should provide young people with more opportunities. The China Philantrophy Research Institute will be exploring this area, and establishing a mechanism for training and exchanges,” said Wang Zhenyao. The Narada Foundation, under Xu Yongguang’s leadership, has already began working on this area. Its “Gingko Fellows Program” [which gives fellowships to emerging NGO leaders] includes a number of observation and study projects, including one on “Overseas Study”.

As a bridge and intermediary in encouraging Western and Eastern philantrophic exchanges, both Xu and Wang are perceptive enough to identify misunderstandings which occur as the Chinese philanthropy sector learns from the West. “Learning from the West should been uncomplicated, but we tend to beat around the bush and some have adopted this ultra-leftist mindset that “we have to be vigilant against anything Western,” said Xu.

From Wang’s perspective, “cultural barriers” pose huge obstacles to dialogues with the West. “Our system for transmitting knowledge is problematic, and we fail to grasp a basic understanding of some concepts, resulting in certain misunderstandings when we exchange views. Moreover, China’s philanthropic sector needs to pay particular attention to the need for transparency, and must also respect the need for donor anonymity.”

Today, China has become the world’s second largest economy, and many of her companies have integrated into the global economic system. “Yet because Chinese philanthropy has not yet internationalized, it remains stunted. If philanthropy does not internationalize, China will not have fully stood up in the world,” said Wang.

International responsibility

On December 16, 2013, the China Foundation for Poverty Alleviation convened a People’s Forum on International Social Responsibility at Beijing University’s Yinglie Overseas Exchange Center. Three hundred people attended the forum, including representatives from China’s ministries, the UNDP China office, a delegation from Myanmar, Chinese businesses, multinational companies in China, academics, and international and Chinese NGOs. [Editor’s Note: For more on this forum, see the CDB report “Chinese Aid Abroad: The People’s Forum on International Social Responsibility.”] The forum was also nicknamed He Daofeng’s pulpit, since he is the executive chairman of the China Foundation for Poverty Alleviation. [Editor’s Note: The Chinese term 道场 (dao chang) refers to a place where Daoist or Buddhist rites are performed, or a religious space where someone preaches to influence others, thus a kind of pulpit.]

The Forum was convened by the China Foundation for Poverty Alleviation in Beijing in December 2013.

The notion that China’s NGOs shoulder international responsibility is a controversial one. The Chinese public and media often think that many domestic groups need assistance, and we should solve domestic problems first, before assuming international responsibility.

“If we say we won’t or don’t care about helping others out because we ourselves are poor, then we will only get poorer,” said He. He gave an example: “If our family is poor and can’t afford schooling for our children, can we then do nothing for a very sick child whose family is poorer than us?”

The philosophy He upholds reflects a position that the “Learning from the West School” of Chinese philanthropists share regarding international responsibility.

On August 16, 2011, the news that several Beijing schools for migrant children had been shut down caused concern among the public. At the same time, the news that the China-Africa Project Hope was going ahead to build 1,000 Hope primary schools in Africa within 10 years at a cost of about 2 billion yuan [over U.S.$300 million] sparked public debate. The organizers of the project, the World Eminence Chinese Entrepreneurs Association and the China Youth Development Foundation (CYDF), came under public criticism, a number of donors dropped out, and the project went into a tailspin. [Editor’s Note: On this “scandal” and others that took place in 2011, see the CDB article “The Year of Scandal”.]

“Narrow-minded nationalism and self-contemptuous patriotism undermined the China-Africa Project Hope,” Xu Yongguang noted. “Now there are many Chinese companies investing overseas, their image in Africa is very poor, and they are behaving even worse than the previous [European] colonialists in destroying the environment, among other things. Companies carrying out local charity programs could achieve win-win results by improving the investment environment and becoming a part of the local community. Many foreign companies which have invested in China gave no small amount of support to China’s Project Hope.”

A philanthropist told Wang Zhenyao in private that he earned over a billion yuan in Africa, so he should donate some money to local communities. “A very important reason why Chinese companies in Africa and Europe encountered problems is that their owners have not distributed enough charity,” said Wang. At the East-West Philanthropy Forum, when American philanthropists were told that Cao Dewang would increase his investment in the U.S., they suggested he include in his public relations campaign the fact that he had donated nearly U.S.$1 billion in China. By doing so, he would gain the local community’s trust and understanding.

Cheng Gang thinks that conducting charity abroad is an important way to popularize China’s mainstream values. “Over the past few decades, the Chinese public’s education has been particularly narrow, and we have lost our sense of love and tolerance. This is a failure of our culture and education. It only took a few charity activities to be conducted abroad before some so-called ‘patriots’ began expressing their criticism. When China participates in international affairs, why do we think we’re powerful, yet others see us in a different light? We have to ask ourselves, where’s our international responsibility, and what are our mainstream values”?

Liu Xuanguo visited the USA in November 2013. He was moved when he watched a video by the New York branch of Taiwan’s Tzu Chi Foundation about its global relief efforts. “In the major disasters over the world, Tzu Chi is the first to arrive and the last to leave. It is merely a branch of a Taiwan civil organization in distant New York, but its staff’s quality puts us so-called philanthropy professionals to shame. We are promoting China’s soft power, but a civic organization in Taiwan can promote Chinese culture to the world, and this fact made us think.”

In addition to reflecting on the “right path,” the “Learning from the West School of Chinese Philanthropy” has began to take action, trying to show to the international community how China philanthropy is assuming international responsibility.

In terms of organizations, the China Foundation for Poverty Alleviation (CFPA) is a pioneer. In January 2005, the CFPA, together with the Mercy Corps, donated medicines worth 44 million yuan [about U.S.$5 million] to the tsunami-stricken areas in Indonesia, setting a precedent for Chinese NGOs in their internationalization effort. In 2007, the CFPA instituted a strategic plan to develop into a grant-making, international foundation. Starting in 2008, it began to send aid to Africa where it has built a hospital and sent medical teams with the support of Chinese companies. [Editor’s Note: For more on the hospital, see the CDB article, “The Sudan-China Abu Ushar Friendship Hospital: China’s First Overseas Charitable NGO Project”.]

In July 2011, the Sudan-China Abu Ushar Friendship Hospital built jointly by the PetroChina and the CFPA was completed. The hospital represents the CFPA’s first step in its internationalization efforts, and a new model for PetroChina in carrying out charity overseas.

“As China gradually develops into an economic power, the international community expects more in terms of its role and image on the world stage: changing from an aid recipient to an aid donor, and bearing more responsibility for humanitarian relief, the environment, and conflict resolution. Chinese companies that operate abroad should pay more attention to resource utilization and environmental protection, strengthen their role awareness, and develop appropriate strategies,” said He Daofeng.

The CFPA’s efforts at internationalizing have impressed Liu Xuanguo. “The CFPA has philanthropic activities abroad and carries out projects with local Red Cross organizations there. If anything, the China Red Cross Foundation should be in the lead.”

In fact, Liu has also been thinking about it. In 2010, the China Red Cross Foundation developed a plan to broaden its Red Cross Angels Program to other countries, prepared a budget plan, estimated how much it might need to build a village-level health station in Africa, and contacted several Chinese state-owned enterprises with operations in Africa to develop an action program and research report.

“But there was no real progress,” said Liu regretfully. “In 2013, we developed a program to expand assistance to African and Southeast Asian countries. These projects are being implemented, and will be finished in 2014.”

While social organizations are accelerating their efforts to “go abroad”, China’s philanthropists are also moving in this direction.

In 2009, Feng Lun [of the Vantone Group, a large real estate company, and one of the founders of the Vantone Charitable Foundation] established the World Future Foundation (世界未来基金会) in Singapore, which is the first Singapore-based foundation founded by mainland Chinese entrepreneurs. Niu Gensheng of Mengniu [a large dairy company], which was implicated in the tainted milk powder scandal several years ago, is now actively involved in overseas philanthropic activities. Lu Dezhi [of the finance and investment company, Tehua] began to donate to American universities many years ago. According to the 2013 edition of China’s Top 100 Philanthropists released by CPRI, there were only four Chinese entrepreneurs who made overseas donations of over 200 million yuan [over U.S.$30 million] in 2013.

This is just a starting point. As China philanthropy has modernizes, internationalizes and shoulders more international responsibility, more and more social organizations, nonprofit practitioners and philanthropists will follow.

In 1990, just in his early forties, Xu Yongguang started the first overseas philanthropic exchange. An Bugong, a Japanese citizen who loved Chinese culture, donated 100 million Japanese yen (equivalent to 8 million yuan at the time) to [the China Youth Development Foundation’s] Project Hope. It was a huge donation at the time. As an expression of gratitude, the China Youth Development Foundation collected some Chinese paintings, sponsored a Chinese art exhibition in Japan, and sent these paintings to the Japanese donor.

Xu always remembers the day when he and Li Gang, then director of the Communist Youth League’s International Liaison Department (and currently the director of the the central government’s Liaison Office in Macau), each carried a bag full of tickets for the art exhibition, going door to door to every Sino-Japanese friendship exchange organization, to invite them to attend the exhibition, saying yoroshiku, a Japanese expression meaning “please.” Li had been to Japan dozens of times, and when he met people he knew along the way, he joked that he was “a salesman with a bag on his shoulder.” Twenty-four years have passed since that day.

In Brief

This China Philanthropist article introduces a group of China’s leading philanthropists seeking to professionalize the philanthropy sector in China by studying approaches and models from the West.
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