Opportunities and Challenges: Family Philanthropy in China

Authors

• Nina Zhou

  Former Communications Associate, CiYuan, BSR

Philanthropic behavior is becoming a widely practiced form of civil society engagement among China’s wealthy family-run business community. With more and more high-profile events taking place, perhaps now is the time to pause and consider how Chinese civil society can fully realize the societal benefits that well-thought-out philanthropic activity can provide.

In November, I attended the China Philanthropy Forum, which brought together government elites, academia, and world business leaders, including former U.K. Prime Minister Tony Blair, to further advance the development of Chinese philanthropy through dialogue among senior leaders of different countries and sectors. What struck me was the degree to which philanthropy is understood, or perhaps misunderstood in some cases, among China’s business elite. Throughout the event, three key missing elements became clear:

• A gap in operational strategy among the “first generation” philanthropists 
• A misunderstanding of the potential that China's "second-generation rich" (Rich2G) can offer this sector
• A lack of value placed on a clear set of values, mission, and goals to measure the success of philanthropic behavior

Follow the Money Trail

Chinese philanthropists have yet to engage with what constitutes “best practice” when it comes to philanthropic activity. The most talked-about example at the China Philanthropy Forum was Guangbiao Chen, a Chinese businessman worth more than 500 million Yuan (US$80 million) and famous for his controversial giving approach. His philanthropic activities have included handing out cash directly to those in need and being photographed in front of a wall of banknotes. He states that his drive for publicity is motivated by his desire to set an example and encourage other wealthy individuals to give.

These types of campaigns manage to successfully attract the public’s attention, but discussions at the forum indicated that philanthropists need to have a follow-up plan, so they can see how their money is being used, who they are reaching, and what impact they are having. 

Family-Run Foundations Require a Clear Mission and Values

Over the last 30 years, Chinese “trillionaires” are emerging in increasing numbers and now total 63,000. They are part of China’s "first-generation rich," born in the 1950s and 1960s, and their philanthropic practices are mostly focused on their “family-run” foundations. While they are eager to give back to society, as they go through this process, they need to clearly define the mission and vision of their foundations—and the long-term goals of what these foundations will achieve. To do this effectively, and to create real social impact, these Chinese philanthropists need to develop opportunities to learn what constitutes best practice for foundation operations. 

Misconceptions of China’s Second-Generation Rich

The Chinese "Rich2G" group, typically  born in the 1980s and 1990s, is often labeled as a group of young people that lack the ability to work hard and get things done. However, most Rich2G have received a world-class education, are quick and eager to learn new things, and are more innovative in their approaches to philanthropy than their parents' generation.

For example, Kelly Zong, president of China’s biggest beverage manufacturing company, Wahaha, and considered as one of China's most powerful businesswomen, has demonstrated that young Chinese entrepreneurs can be both business-minded as well as socially driven. With her strong sense of social reponsibility, Zong set up the FuLi Charity Foundation in 2007 to "contribute to society as much as we could."

Despite how today’s philanthropists approach giving, their primary goal should be to begin with the clear mission, vision, and goals that they want their money to achieve. In many cases, philanthropists need to practice this activity in the same way they would approach their corporate careers. This will pave the way for a more robust Chinese social sector and create more impactful outcomes for beneficiaries. As Tony Blair said in his opening speech, “The measure of a society is not only by what the government does, but by what people do for themselves and others. More than giving money, philanthropy is a means for change.”