Asia’s wealthy are turning the tide on philanthropy: Instead of big foundations, they’re using their family companies.

Chan, who earlier this year gave away his 41-year-old son, Adriel Chan, said: “I don’t like a family that gives charity so much that it loses its way of making money. He says: “I think that being together is a better solution.

In the US, philanthropy has long been dominated by wealthy tycoons: Andrew Carnegie and John D. Rockefeller during the Roaring Age; Mark Zuckerberg and Bill Gates in the digital age. Earlier this year, Michael Bloomberg donated $1 billion to Johns Hopkins University through his philanthropic arm, Bloomberg Philanthropies. The gift will allow many medical students to attend a US university for free.

For more than a century, US businessmen have traditionally preferred to give their money to large family foundations, such as the Carnegie Corporation of New York (founded in 1911) and the Rockefeller Foundation (founded in 1913). Foundations are driving the majority of US philanthropy, giving $103.5 billion by 2023, up from $557.2 billion, according to the Lilly Family School of Philanthropy at Indiana University. (Corporations, by comparison, provided a relatively paltry $36.6 billion.)

Asia has its fair share of high-net-worth individuals — think of Indian mega-mogul Mukesh Ambani, whose family recently had a wedding reportedly worth $600 million — yet the region’s wealthiest rely on large foundations for their humanitarian work.

Instead, the company is leading in Asia. “There is very little difference between philanthropy and corporate philanthropy” in Asia, says Ruth Shapiro, co-founder of the Center for Asian Philanthropy and Society (CAPS), a Hong Kong think tank. Kong. “There are no Ford, Gates, Rockefeller foundations here.”

Corporate outsourcing comes with its own set of advantages: on-the-ground experience, existing distribution systems, and personal connections. Shapiro explains: “Companies want to finance where they work. “Why send it through another agency,” when companies can do it themselves.

For example, Jollibee Foods Corporation, a Filipino fast food giant, works directly with small farmers in the Philippines through the Jollibee Foundation. “We are trying to cut out the middleman by trying to work with farmer groups to supply vegetables directly to our JFC products,” CEO Ernesto Tanmantiong said. Good luck in an interview earlier this year.

Tanmantiong described the relationship with farmers, as well as investing in education, as a way to make rural life attractive to young Filipinos. “In the past, children did not intend to become farmers. They would rather go to the city and try to support themselves,” he said. Since Jollibee started helping the farmers, “some children started coming back to help their parents.”

Politics also play a role, of course.

“It’s in everyone’s best interest to help the government,” says Shapiro. “There are people who want to stay in business, and they continue to make money.”

In 2021, Chinese president Xi Jinping called for “common prosperity,” a goal to reduce inequality in Chinese society. Chinese companies freed up their finances, donating billions of dollars to poverty alleviation campaigns. Business leaders would also be trying to prove that they are good corporate citizens. Alibaba, for example, has promised to donate $15 billion, equivalent to two-thirds of the company’s total profits in 2020, just months after being hit with a multi-billion dollar fine. two for privacy practices.

That openness in working with government marks another difference between giving aid to Asia and giving in to, say, the U.S. In Asia, “people want to work in agreement, at least, with government,” Shapiro said. say, “which is not a big thing. point US”

Jollibee also works with the government for its relief programs, and even extended its relief program to the Philippine Department of Education, Tanmantiong said. Good luck earlier this year.

Asian migration still lags the US CAPS estimates that if Asians contributed the same amount as the US—roughly 2% of GDP—an additional $702 billion would be generated. I was released. Unlike the US, which offers many tax incentives to family foundations and other charitable organizations, the policy in Asia can vary greatly between countries, with some combining lower limits and fees. lower tax deductions.

Measuring is doing well

In June, CAPS released it Creating a Good Index for 2024. The list examines “social giving organizations,” or SDOs—a CAPS term for any organization that performs public functions, including nonprofit, for-profit, and related organizations. and the government.

Broadly speaking, CAPS found that the SDO landscape across Asia is very stable, with financial conditions remaining unchanged.

Another concern among public service organizations—similar to their counterparts in the private sector—is talent. About 75% of SDOs say they struggle to recruit staff, and just under 70% say they have problems retaining them.

The problem is even more acute in rich countries such as Japan, Thailand and Hong Kong, where more than 90% of SDOs report difficulties in attracting staff. The high cost of living and many private sector opportunities mean that it is difficult for non-profit organizations to compete.

But young people find other ways to do good. “We’re seeing a large number of social enterprises,” Shapiro said. Young people see social enterprises as a way to “make money and do good.” Governments love it, too: Shapiro notes that the CAPS study found that governments gave more money to public enterprises than to nonprofits because of their initial ability to create jobs.

Of course, SDOs also strengthen their staff with volunteers, and receive help from the corporate sector. More than 60% of SDOs in Asia reported having corporate volunteers, with rates reaching 80% in China, Hong Kong and Taiwan.

Employees are increasingly reporting that they want purpose in their jobs, and companies are using volunteer programs to give them that. “It’s a great source of satisfaction, and employees feel proud of their company for creating those opportunities,” says Shapiro.

One of the largest foundations in the region is the Hong Kong Jockey Club’s Charities Trust, which donates about $640 million a year to local urban causes such as talent, elderly care, poverty alleviation and other issues. of the community. The HKJC – the only legal guardian of gambling in the Chinese city – has given the surplus to the trust since 1955.

Succession is also involved in philanthropy

Earlier this year, Ronnie Chan—the honorary chairman of CAPS—announced that he was stepping down as chairman of the Hang Lung Group and handing over the reins to his son, Adriel Chan.

However the former chairman also provides donor relations to organizations such as CAPS, Harvard University, the US think tank Asia Society, and many other charities in the US, Hong Kong and elsewhere.

Much in the same way that a business leader thinks about succession, Chan said his family is still thinking about how to pass on this philanthropic responsibility. “We continue to engage the next generation in philanthropic decisions.”

Chan is upfront about the options her children have when it comes to philanthropy. He says: “My son has a special privilege, when he realizes the many relationships that the family has with those who may find it. “It’s up to him to choose,” he added, adding that he has been surprised by where his son decided to put his energy.

He says: “It’s history. “He is the future.”