This analysis explores the emerging trend of Asian philanthropy and its implications for the evolution of regional and global funding models. Asia’s share of the global philanthropic capital is increasing while remaining non-institutional and operating within the context of family businesses or corporate social responsibility. But does this difference mean that Western charities are missing out on game-changing collaborations? Are global nonprofits and funders underestimating the power of Asian philanthropy?
The practice of giving by Asians – from tech billionaires who have been known to donate billions in a single night to the integration of profit and philanthropy in various industries – is as complex as it is intriguing. In this article, we will compare and contrast Asian philanthropy with Western models, present some surprising success stories, and discuss what global nonprofits need to do to gain access to funding from the East.
Asia’s billionaire population is growing rapidly, with China seeing one of the fastest increases in wealth. However, while Western billionaires like Bill Gates and MacKenzie Scott have dedicated most of their wealth to philanthropy, Asian billionaires tend to give away their donations in a more private and targeted manner.
For instance, Azim Premji, the former chairman of Wipro in India, has given more than $21 billion to education and social development – making him one of the world’s biggest philanthropists. However, his donations are not as well-documented as those of high-profile Western donors. In the same manner, Jack Ma and Pony Ma in China have contributed several billions of dollars each to charitable activities that are aligned to technology driven education and poverty alleviation but their giving is heavily influenced by the government.
Philanthropy in Asia is driven by family legacy and Confucian values, and thus, most major philanthropic foundations, including the Li Ka Shing Foundation, are family-owned and controlled philanthropic ventures that sustain social change while ensuring the family’s lasting legacy. This approach is quite different from that of the West where donors often establish independent boards and delegate the running of the organization to professionals.
Increasingly, western philanthropy is moving towards data-driven, evidence-based impact-oriented evaluations. For instance, the Ford Foundation is concerned with accountability and looking at how far the projects that it funds have an impact in the long term, a model that many Asian philanthropists consider as too bureaucratic.
Food for thought: Is the Western preoccupation with data and impact measurement limiting the region’s ability to engage with Asian philanthropy, which is often fast, spontaneous and intuitive?
Corporate social responsibility in Asia is often difficult to distinguish from business strategy. For instance, when Tencent, a Chinese company, announced it would donate $7.7 billion to government-inspired “common prosperity” programs, including wealth redistribution. It is interesting that while most Western companies clearly distinguish between charitable giving and business, Asian companies often incorporate philanthropy into their day-to-day operations and make the distinction between the two facets of giving and growth minimal or non-existent.
On the other hand, Western corporate philanthropy is made through structured CSR programs and are considered as separate from legal entities of profit and charity. Microsoft and Google, for example, have set up their own foundations and thus stand between philanthropy and business.
Key debate: Is the Asian model of integrating philanthropy into the core of businesses more sustainable than the western model of separate corporate giving?
Impact investing is growing rapidly among Asian investors who are putting their money into companies that can create social change and financial return. LeapFrog Investments, a Singapore-based company has received more than $1.15 billion for projects in Asia and Africa and shows that philanthropy does not have to mean sacrificing profit.
Major philanthropists in the West, particularly those affiliated with big foundations, have been slower to grasp for-profit philanthropy. Grant-based giving is still prevalent in the United States and Europe despite the understanding that impact investing can produce better and more sustainable solutions.
Shockingly, while Western non-profits are still debating the ethics of profit-driven philanthropy, Asian investors are already changing lives with large-scale, financially sustainable projects. Perhaps the West should reevaluate its position on business and charity?
The Hong Kong Jockey Club Charities Trust is one of the world’s biggest charitable donors having approved donations of HK$10.2 billion (about US$1.3 billion) in the financial year 2023/24. These funds support educational, healthcare and cultural projects and programs. Nevertheless, the Trust is not a household name outside Asia, which raises the question of why such important philanthropic organizations operate below the radar of their Western partners.
Alibaba has replicated an e-commerce based giving model in which a part of the sales is rounded up and donated to charity. Similar micro-donation programs can be found in the West (e.g., AmazonSmile and PayPal Giving Fund), but Alibaba has made this model popular in China’s e-commerce platforms and has raised hundreds of millions of dollars in donations. Could this model at such a scale be able to change the face of corporate philanthropy all over the world?
Philanthropy in the region is not only growing; it is also changing the nature of giving globally. From billion-dollar donations by billionaires to philanthropic foundations to tech-based micro-donations, the region is experimenting with new, faster, more adaptive, and often more integrated models of philanthropy.
Nevertheless, the Western philanthropy still sets the tone and the standards to which all the giving is compared. But what if the next big revolution in philanthropy is not going to come from Silicon Valley, but from Shenzhen or Mumbai?
In order to remain relevant in this new environment, global nonprofits must move beyond the assumptions and have a look at Asia’s dynamic and fast emerging market of philanthropy before they get locked out of the next big funding stream.