Asian philanthropy is an emerging force in international relations. As social impact investors, philanthropists in Asia are non-state actors transforming civil society and diplomacy. The recent record-breaking gifts of $350 million to Harvard University’s School of Public Health and $20 million to the University of Southern California’s occupational science and therapy program by brothers Gerald and Ronnie Chan underscore Asian philanthropy as strategic stewardship. As Hong Kong-born American citizens with global industry and philanthropic interests – Hang Lung Properties Ltd and Morningside Foundation – the Chan family members represent a small, but expanding echelon of Asian high net worth individuals (HNWIs) whose stewardship of social capital has far-reaching global impact.
According to the 2014 World Wealth Report, released by Capgemini and RMC Wealth Management, the aggregate investable wealth of HNWIs worldwide has reached $52.62 trillion, a 13.8 percent increase over the past year. Asia-Pacific boasts an estimated $14.2 trillion, with Japan taking the lead. Hong Kong ranks fourth, with about $626 billion in HNWI assets. Asia is home to the fastest growing HNWI population, with 65 percent of total Asia-Pacific HNWI wealth residing in Japan and China.
For many Asian HNWI families, wealth brings a sense of social responsibility. The characteristics of Asian philanthropy reflect cultural values. The family unit plays an important role in driving philanthropy in Asia, seeking out and reaping many benefits from philanthropy: “1) it teaches principles like compassion, courage and tolerance, 2) it fosters capacities for leadership, innovation and responsibility, and 3) it supports family cohesion by providing a common activity and goal for the family to pursue as a unit,” a 2011 UBS INSEAD philanthropy in Asia report explains.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
Asian philanthropists are catalysts of civil society. Civil society – the nexus of cultural values, civic consciousness and community empowerment – fills the gaps beyond the business and government sectors. Civil society germinates social capital, whereas business generates market capital, and government creates political capital. Asian philanthropists invest in social capital, social cohesion and civic engagement for the betterment of the community and humanity writ large and thus play a pivotal role in shaping state-society relations. Their investments in education, environment, health and other areas affect capacity-building and social connectedness among local and global communities. In July 2013, the Impact Investing Policy Collaborative launched the London Principles of Impact Investing, which could serve as overarching guidelines for governments and industry to formulate more policy-relevant strategies to facilitate impact investing in Asia, Europe and the United States.
Philanthropists in Hong Kong, Japan and Singapore are increasingly engaged in strategic philanthropy, which focuses on impact, metrics, innovation, scalability, and long-term social benefit. The Nippon Foundation – Japan’s largest grantmaking foundation – is refocusing its approach to be more impact oriented. Singapore’s Temasek Foundation – a major player in Asian community development and disaster relief – forges strategic partnerships with governments to support long-term sustainability and scalability of social programs.
In the case of China, high profile HNWIs such as Jack Ma, founder and CEO of Alibaba, Yang Lan, founder of Sun Culture Foundation and also known as the “Oprah of China,” Yao Ming, former basketball player of the Houston Rockets, and actor Jet Li are among a growing list of social investors who are unofficial public envoys of people-to-people diplomacy. As those who have benefitted from American cultural education and business opportunities, Chinese philanthropists are change agents in bridging cooperation among U.S., Chinese and Asian business elite and public communities. With its vibrant philanthropy culture, Hong Kong is generating innovative approaches in impact investing. Its leadership in facilitating greater philanthropic transparency and accountability in China is critical to Chinese civil society’s development.
The outlook for Asian philanthropy is promising, but there are myriad challenges. “The litmus test of effective philanthropy is not determined by how much is given, but whether the stewardship of that gift was properly administered and its intended outcomes were achieved,” observes Victor Kuo, former board member of the American Evaluation Association and founder of VK Global Advising. In China, pervasive state control and lack of regulatory accountability are formidable challenges in the country’s non-profit space. Despite such obstacles, Asian philanthropists and philanthropic entities affirm that universal values transcend national and cultural borders to benefit all of humanity.
Mercy A. Kuo is Chief Strategy Officer at CHINADebate and formerly a senior project director and director of the Southeast Asia Studies and Strategic Asia Programs at the National Bureau of Asian Research, a US-based foreign policy think tank. Angie O. Tang is Senior Advisor of Asia Value Advisors, a leading venture philanthropy advisory firm based in Hong Kong. She served as U.S. Secretary of Labor Elaine Chao’s spokesperson and regional executive.