Yanni Peng, CEO of the Narada Foundation, one of China’s leading grant-making organizations, shines a light on the development of philanthropy in China.
At the inauguration of President Biden in January, the gifted young poet, Amanda Gorman, set the world alight with words that shone with the hope of a new era: “For there is always light / If only we’re brave enough to see it / If only we’re brave enough to be it.”
The words were electric, finding greater resonance than the poet could have imagined. They made me reflect on the role of hope in philanthropy. Philanthropy feeds and fosters hope. It provides a means of scaling solutions to ensure that those with the most urgent hopes, often for basic human rights, are served.
In China, this notion is quite new. The development and history of philanthropy here is curiously different to that of the West. It is a story that is unfolding in a way that is unique and deeply intertwined with our past. One slowly and surely finding its heroes — those brave enough to create ripples.
In May 2008, a devastating earthquake struck Sichuan in southwestern China, killing more than 69,000 people.
It changed everything.
We call this “year zero” of modern philanthropy in China. Prior to this, philanthropic giving had been negligible. The earthquake brought a nation together. So many families were directly affected and others across China felt their pain; a huge number of people went to Sichuan to do volunteer work. Many nongovernmental organizations were set up during this time.
The quake marked a quantum leap in public awareness. In just a year, domestic philanthropic giving went from US$ 3.45 billion (2007) to US$ 14.4 billion (2008) — a fourfold increase. China began to experience unprecedented growth in philanthropic involvement.
This was actually a revival of deeply entrenched values. Philanthropy has strong roots in our culture — in Confucianism, Taoism, and Buddhism. But these values were buried for a long time. The brutality of the 10-year Cultural Revolution (1966–1976) meant the destruction of traditional values, and people attacked one another rather than caring for each other. With reform came the opening up of people’s mindsets — from needing to focus on scraping together enough resources to support one’s own development, to having the means and motivation to nurture others.
When wealth is centralized, the people are dispersed. When wealth is distributed, the people are brought together.
Today, China has 1,058 billionaires, the largest total in the world. The richest 1% of individuals here own a third of China’s wealth.
Although this shows gross income inequality — and the government is working hard to address this — a positive aspect can be found: we have more and more big donors. Many high net worth individuals now set up their own foundation, a family office or trust to do philanthropic work.
The pride and passion to be found in donating wealth is snowballing, but it’s also become almost an obligation. There is a saying: “to whom much is given, much is expected.” This sentiment applies here. The government places a lot of emphasis on social responsibilities for the big corporates. The largest companies all have their own foundations. But not all of these are working as effectively as they should; for all philanthropy and social investing there is a learning curve. It is very different from the West; in China, this is all at such a fledgling stage. But this also means there is great opportunity.
As both tremendous wealth and civil responsibilities are inherited among families, a pattern of increasing creativity in philanthropy is emerging. Whereas the first generation tended to separate business and philanthropy very clearly, often saying “I will only donate money,” (“pure” philanthropy), their successors are more open to new means of achieving change at scale, for example, impact investing. They don’t mind mixing different financing vehicles. This is exciting. Impact investing is at a very, very early stage in China.
I see three key trends emerging. The first is increasing diversity. We are seeing an increasingly broad range of organizations, as well as hybrid models.
The second is the power of digital philanthropy. Chinese tech giants, such as Tencent, Alibaba, and TikTok, are rapidly becoming some of the heroes of the story.
Tencent, one of the largest internet companies in China, launched an annual philanthropic campaign called 99 Giving Day. The public donates to participating nongovernmental organizations via the messaging app WeChat. Tencent matches the amount of money raised. The idea spread like wildfire. In the first year, 2015, 127.9 million yuan (US$ 20m) was raised. In 2020, the three-day event raised 2.3 billion yuan
(US$ 356m), with a staggering 7,932 NGOs participating.
The third trend is volunteering. In general, people’s economic status is improving, and they have the time, spare money, and motivation to do their part for a great cause. The catastrophic impact of COVID-19 catalyzed volunteer work across the country.
The journey is not straightforward. One of the main challenges is infrastructure-building. In the U.S., there are many big foundations, for example the Bill & Melinda Gates Foundation and Ford Foundation, that continue to invest in philanthropic sector infrastructure — the rails that keep the sector moving — in every corner of the world. In China, so far, very few philanthropists do this.
Defining success is also difficult. When it comes to philanthropy, what does feedback look like? How do you measure impact? Often, this won’t be seen for years, or even generations. We are trying to empower nongovernmental organizations to consider how they will define change and indicate success from the very outset.
The element that binds the successful initiatives together is that they spark connections. Why do people give? Because they connect with a story; they want to be a part of it.
This is a reminder for the professionals working in the philanthropic sector. It’s not just about solving a social problem. Philanthropy is also about creating social capital; building trust in society.
One way of creating transparency and gaining trust is to connect donors with the impact of their donation. Following up a campaign with inspiring personal stories of progress — this is an area that is garnering more and more attention from nongovernmental organizations. Developments such as the use of blockchain technology also increase transparency and trust, combating data falsification.
Both foreign relations and the pandemic have made global collaboration in the philanthropic sector challenging in recent years. The hope of the major Chinese foundations is to work as capacity builders connecting philanthropists and social investors, igniting and nurturing international partnerships that will benefit everyone. We engage with many field-building partners including the Chandler Foundation; WINGS, a global community of thought-leaders and change-makers across 57 countries; as well as the Asian Venture Philanthropy Network and Rockefeller Philanthropy Advisors. This gives us all the hope and confidence that in the future, mutual learning will increase.
When I visited a number of foundations in the U.S. in 2011, my peers were curious about the future of philanthropy in China. My answer is always that diversity, creativity, and thinking about the long-term narrative are the keys to progress in this field, not just for early-stage philanthropy in China, but for the whole world. As beacons of light, we can brighten the path for others.