Supported by the Bill & Melinda Gates Foundation, Global Family Business Research Center, National Institute of Financial Research, Tsinghua University (NIFR) at Tsinghua University PBC School of Finance (Tsinghua PBCSF) conducted the research on the philanthropy of Chinese ultra-high-net-worth (UHNW) families.
The report’s topline takeaways include the affinity for locality, shifting donor compositions, the growing generational transition from business to philanthropy, and the degree of volatility in funding priorities—factors of which are with potential to shift regional philanthropy significantly.
Key findings are as follows:
Philanthropy evolved with structural changes on the Rich Lists
Within less than a decade from 2009 to 2020, the growth drivers of the Chinese economy have shifted from traditional manufacturing to real estate and later to high-tech. Billionaires on the Rich Lists evolved accordingly with an increasing number coming from the high-tech industry.
The changing industrial mix on the Rich Lists correlated with the changing composition of the Philanthropy List. Over the recent years, the average per capita donation from tech donors have far surpassed others.
Inheritance triggers donations, and the "First-Generation Entrepreneurs" are transforming into the "First-Generation Philanthropists" in China
The charitable donations of entrepreneurs born in the 50s and 60s have increased strongly in the past couple of years. As the 50s and 60s generation groups retire and retreat behind the scenes, they focus more on family philanthropy. The phenomenon of large donations caused by inheritance will appear more frequently in the future, and the "First-Generation Entrepreneurs" are gradually transforming into the "First-Generation Philanthropists".
Donations reflected a high degree of home-province loyalty
Chinese donors give back more to their home provinces than other localities. According to donation data on the website of China Foundation Center in 2015, 43.5% of the total amount of the donations through foundations flew to the donor’s home provinces, 53.5% to other provinces nationwide, and merely 3% outside China, illustrating the presence of home loyalty in the donors’ mindset.
Chinese family donations are influenced by the national strategy and actively participate in poverty alleviation
Building on the “Targeted Poverty Alleviation Plan 2015-2020”, Chinese families contributed a larger proportion of donations to poverty-stricken areas in 2018. The amount of donations to hometowns through the foundation accounted for 23.22% of the total donation, and the proportion to other provinces in the country was 76.78%.
As the main battlefield for the nation's poverty alleviation, Guizhou Province received the largest amount of donations, accounting for 44.9% of the total foundation donations that year. So far, all impoverished counties in Guizhou Province have all been lifted out of poverty.
Four coastal provinces display leading philanthropic practices
The coastal provinces of Jiangsu, Zhejiang, Fujian and Guangdong took up the majority of charitable donations by UHNW families in China. In almost all of the studied years, charitable donations from these four provinces accounted for over 50% of the national total. Situated along the coastal area and as the pioneers of China’s Reform-and-Opening-Up, these provinces were known for their business acumen. Their philanthropic activities reflect both practical-mindedness and professionalism, with foundations as the preferred model of management.
Family foundations typically prioritize education, whereas corporate foundations typically prioritize poverty alleviation
Family foundations tend to prioritize education, embodying their commitment to talent development. The biggest beneficiaries are universities, most of which are very prestigious. Other than education, family philanthropic foundations are starting to focus on healthcare, retirement and arts.
Corporate foundations tend to prioritize poverty alleviation and the development of the philanthropic sector, matching their needs to both corporate development and the fulfillment of social responsibilities.
The abridged English report can be downloaded in the attachment. The full version Chinese report will be published by the People's Publishing House of China soon.
The Philanthropy of Chinese UHNW Families.pdf
