Pragmatic Philanthropy

Front matter

pragmatic philanthropy asian charity explained yojo

RUDE A EARO with Manisha Mirchandani and Heesu Jang Foreword by Ratan Tata and Ronnie C. Chan

Praise for Pragmatic Philanthropy

Foreword

Today, we often hear of the differences between India and China. And while there are differences, there are also some striking similarities. Both countries have extraordinary histories, great and enduring philosophies and have arrived in the twenty-first century having rekindled their importance on the global stage. Both are moving past the damaging influences of colonial legacies as well as self-inflicted wounds while strengthening institutions and recognizing the benefits of being part of a globalized world.

As you read this book, you will see how much India and China have in common. In both countries, as in Asia more broadly, there is a tradition of taking care of one’s family, one’s clan, one’s village. It is a tradition of charity where the more fortunate are expected to step up and help take care of those less so. There are expectations that when you are in need, the affluent will lend a helping hand. The richer helping the poorer has a long and storied history in our countries.

We also face similar challenges. Both countries have pulled millions out of poverty but both still have millions continuing to endure economic hardship. Both countries have created extraordinary wealth but wrestle with the challenge of extreme income inequality. Both countries are grappling with how to best organize local giving while at the same time dealing with the agendas of foreign donors. We are also trying to come to terms with China and India’s international influence increasing at a time when the world order that has been in place since the end of World War II is in a state of flux.

There are other fundamental questions on the table. What does it mean to be part of a community? What are the responsibilities of those who have toward those who have not? And how does ancient ways of interacting with vii viii FOREWORD one another meld with modernity, technology and a cosmopolitan worldview? All of these big questions are embedded within the world of philanthropy.

This book looks at how these questions play out in the choices people make about how to help each other in eleven Asian economies. Culture and history surely play a role as does information and data. Throughout Asia, societies are evolving and new models of governance are being tested. Some of them will succeed and others will not but in the iterative process of moving forward, we will all continue to explore and experiment with the relationship between governments, companies and people.

Since the end of World War II, the United States has been the most dominant power in the world, with its soft power extending far beyond military and economic might. America has helped shape the way we think, the way we act, the way we dream and the way we treat one another. Much of this influence has been very positive and the world has welcomed the values prescribed in a Judeo-Christian set of principles. Now, at a time when India and China are once again becoming dominant world powers, the question is: what will be the influence of our soft power? This book, by casting a spotlight on Asian philanthropy, is coming at a pivotal moment in time.

We are pleased to be part of this conversation. Both of us have long embraced our fortunate ability to make contributions to improving people’s lives and helping to progress societies. We see more and more of our peers coming to the realization that we have a role to play and we should do so with intention and with care. Post war modernity, globalism, education, and various reforms have accelerated job and wealth creation as well as philanthropy.

This book fills the important need of shining a light on the patterns of philanthropy and volunteer organizations in Asia today. It provides models and strategies of effective engagement as well as showcasing the changes now taking place.

We are pleased to be part of bringing this important book to the growing number of donors and philanthropists, government policymakers, non-profit leaders, teachers and students who may be drawn to social service and philanthropy and who can really use the information and insights contained here. For while we are living in extraordinary times, our humanity is what makes our world worth living in.

Chairman Ronnie C. Chan Hang Lung Properties Ltd.

Hong Kong SAR, China

Chairman Ratan Tata The Tata Trusts Mumbai, India

ACKNOWLEDGMENTS

This book is based on a 2-year project that could not have been pulled off without the support and teamwork of a great many people. This space is where I get to thank them.

Great thanks go to my co-authors Manisha Mirchandani and Heesu Jang. Manisha managed the case study project, edited a number of the cases, and wrote the one on the SEE Foundation herself. Her insights, her superb writing skills, the amazing way she befriends everyone and pulls them into our joint work will always be appreciated. Heesu jumped into the deep end with his chapter and pulled it off with great insight and aplomb. Mehvesh Mumtaz Ahmed stepped up as a great help with research when we most needed it. Sandy Collaco helped to make sure all appointments were made and kept in an always upbeat and positive manner.

I want to thank our board of trustees (Ronnie Chan, Daniel Tsai, Jamshyd Godrej, and Lizzie Zobel) and advisory board (Ratan Tata, Nazir Razak, Shin Dong Bin, and Vichit Suraphongchai), who agreed to take on this role due to a sincere desire to further our mission of improving the quality and quantity of private social investment in Asia. They also believed in me, for which I am incredibly grateful. I especially want to thank our Chairman Ronnie Chan. I have worked with Ronnie for 20 years, and it has been a very rewarding partnership. Together we built the Asia Business Council and now CAPS (Centre for Asian Philanthropy and Society). Ronnie is my boss (as he often reminds me!), my friend, and my collaborator, all enabling me to take on big goals and succeed with them.

We could not have done the case study project and built CAPS without our donors. There are very few independent research organizations in x ACKNOWLEDGMENTS

Asia, and thus little familiarity with funding these types of endeavors. Our donors took the risk because they saw the opportunity and benefit that topnotch research could bring to the sector. Our donors to date are: The Aboitiz Foundation, Husodo Angkosubroto, Rahul Bajaj, Ronnie Chan and Hang Lung Properties Ltd., Fang Fang, Jamshyd Godrej and the Grodrej Trusts, Liu Chuanzhi, Azman Mokhtar and Yayasan Hasanah, Manny Pangilinan and the PLDT Foundation, Nazir Razak and the CIMB Foundation, Anthoni Salim, Stan Shih, Shin Dong Bin, Thapana Sirivadhanabhakdi and the Thai Beverage, SK Corporation, Vichit Suraphongchai and the Siam Commercial Bank Foundation, Tessie Sy-Coson and the BDO Foundation, George Tahija, Ratan Tata and the Tata Trusts, Daniel Tsai, Mary Ann Tsao, C.C. Tung, Zhang Lei and Hillhouse Capital, Susan Zhu, Jaime Zobel de Ayala and the Ayala Foundation and most recently, the Bill and Melinda Gates Foundation. Victor Fung of the Victor and William Fung Foundation not only underwrote a case study but also supported me both financially and spiritually in writing this book.

I would like to thank our many partners throughout Asia who helped write the case studies. These individuals and organizations worked with us to identify and write about exceptional nonprofit organizations and social enterprises whose stories and achievements help us to understand what it takes on the ground to bring about meaningful change. Among our partners, I would especially like to thank Tatsu Ohta at the Japan Association of Charitable Organizations, Jia Xijin and the Institute of Philanthropy at Tsinghua University, Wang Zhenyao and the China Philanthropy Research Institute, Jennifer Chen at Nanhua University, Huang Ping-der of the National Chengchi University, Danny Lam at Hong Kong University, Terence Yuen at the Chinese University of Hong Kong, Zhu Jiangang at the Sun Yat-sen University, Felix Tonog at Philippines Business for Social Progress, Carn Abella and her team at the Ramon Magsaysay Foundation, Kemal Soeryadja and his colleagues at Company-Community Partnerships for Health in Indonesia (CCPHI), Maria Radyati at Trisakti University, Professor Lam Swee Sum and her colleagues at the Asia Centre for Social Entrepreneurship and Philanthropy at the National University of Singapore, Madame Juree Vichit-Vadakan at the Center for Philanthropy and Civil Society at the Thai National Institute for Development Administration, Martin Tan at the Institute of Societal Leadership at Singapore Management University, Deval Sanghavi and his colleagues at Dasra, Tata Institute of Social Sciences, Kiran Pasricha at the Ananta Center, Lisa Dacanay and the Institute of Social Entrepreneurship in Asia, and Nini Daing and her colleagues at MyHarapan.

ACKNOWLEDGMENTS xi

I would also like to extend my great appreciation and admiration for all the social delivery organizations (SDOs) and social enterprises we profiled in our case studies. The men and women who are involved with these organizations are the true heroes of this story. They toil day-in and dayout, often in very difficult circumstances for typically low pay to make our world a better place. Among this group, special thanks to Nellie Fong, Yao Li, Michael Chen, Rili Djohani, and Dr. Jemilah Mahmood.

I want to thank Sara Crowley-Vigneau at Palgrave Macmillan, who saw the promise of this book and answered every query with a way forward and great enthusiasm and support. My editor Dan Newman and copy editor John Zipperer provided sharp and insightful suggestions and knew when to add useful examples or cut unnecessary prose.

I would like to thank my daughters Shana and Zoe who have always cheered me on and given me the best reasons to spend my time working to address societal challenges. Lastly, I want to thank my best friend and husband Michael Gallagher, who has supported me in every way and put up with an absent wife so that I can fulfill my dream of creating the Centre for Asian Philanthropy and Society.

Founder and Chief Executive Ruth A. Shapiro The Centre for Asian Philanthropy and Society Hong Kong SAR, China

Contents

Asian Philanthropy Explained Ruth A. Shapiro

Old Money—The History of Giving in Asia Heesu Jang

Changing Laws or Taxing Changes: Policies in Flux Ruth A. Shapiro

Index

List OF AUTHORS

Heesu Jang is Research Associate for the Centre for Asian Philanthropy and Society. Prior to this, Heesu has worked for the United Nations High Commissioner for Refugees in Seoul, and for Bloomberg in Hong Kong. Heesu holds a Bachelor of Arts with Departmental Honors and Cum Laude in Political Science from the University of California, Los Angeles, where he focused on Chinese and Korean domestic politics and foreign policy. He has lived in Korea, China, and Hong Kong, and he is fluent in English, Korean, and Mandarin.

Manisha Mirchandani is an experienced researcher and author, who has written for the United Nations Development Programme, The Economist Group and The Economist Intelligence Unit (EIU). She has covered a wide range of topics on development and economic prosperity in Asia and was responsible for designing and executing bespoke research programmes for corporations, government organisations and multilateral institutions. She served as the project director at the Centre for Asian Philanthropy and Society in 2015-16. Manisha holds a BA from the University of Liverpool and an MSc from the London School of Economics.

Ruth A. Shapiro is the Founder and Chief Executive of the Centre for Asian Philanthropy and Society (CAPS). Ruth has spent her career focused on addressing social challenges in Asia. She founded the Asia Business Council and served as its Executive Director since its inception in 1997 until May 2007. She spent the early part of her professional career in the field of international development and held management positions at the

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Academy for Educational Development, the Harvard Institute of International Development and Global Outlook. Ruth holds a doctorate from Stanford University and Master’s Degrees from Harvard University and George Washington University. She completed her undergraduate work at the University of Michigan.

Chapter 1

Asian philanthropy is not well understood. Although charity has come through individual and family efforts in the region for millennia, only in recent years has philanthropy developed as a widespread, systematic practice. It is growing and becoming increasingly important to society. Studies on the topic are rare—there are more than ten times as many books on American philanthropy as on Asian philanthropy—despite the evidence of a new approach to giving in Asia. Asian philanthropic ventures are not following the path of their Western counterparts, but rather are advancing along their own lines. These uncharted waters need maps.

This book aims to show how Asian philanthropy works. The traits of Asian philanthropy differ from similar practices in the West. These traits are visible across national lines, under many kinds of government, and in a variety of disciplines. They are adaptations to the unique environment in which Asian giving takes place.

What makes Asian philanthropy different, and why has it been so little studied? The most obvious answer is that until relatively recently, Asia has been poor. Given the region’s remarkable growth in recent years, it is hard to remember that only in the last generation have significant numbers of Asians approached the common living standards of the West. Korean development was slow following the “temporary” conclusion of the

© The Author(s) 2018 1 R.A. Shapiro et al., Pragmatic Philanthropy, https: //doi.org/10.1007/978-981-10-7119-5_1

Korean War in 1953. It wasn’t until 1978 that South Korea became a middle-income economy. In India, almost a third of the population lives below the poverty line. Even China, which has moved more people out of extreme poverty in the past 30 years than any nation has done before, still struggles with its impoverished past; more than 200 million Chinese continue to live on less than $1.25 per day.”

When lifting itself out of poverty, Asia naturally focused on economic development first. Without much perceived wealth in a given nation, less attention went to sharing it. But that has changed dramatically in recent years. Singapore, which at the time of its independence in 1965 lacked adequate sanitation and housing, now has a per-capita income of $56,700, the third highest in the world. China now has more billionaires than the United States.*

It is difficult for those outside of Asia to see how rapid and transformative the growth in wealth has been. China went from having a per-capita income of $1100 in 1994 to $6300 in 2015. India went from $600 to $1800 in the same period. Indonesia’s leap has been even greater, reducing the percentage of those living in poverty from 23.4 percent of the population in 1999 to 11.3 percent in 2014, an extraordinary achievement.*

While the average per-capita income in many Asian countries might still not be high, the numbers reflect much more disposable income in general. Many people and many nations in Asia have moved firmly into middle-income status, and within them, there are high earners with incomes far above the mean.

There are many analyses of what Asian countries did right in order to bring about this dramatic shift. One of the most influential of these was The East Asian Miracle, published by the World Bank in 1993, which explained the rise in income of eight Asian economies from 1965 to 1990 due to two fundamentally important policies and programs: (1) sound fiscal policies creating overall macroeconomic stability, and (2) the development of human capital through the provision of universal primary education."

It makes sense that the poor are not philanthropists, nor is there a widespread tendency to create nonprofit organizations to help others when one is worried about food, shelter, and health care. Only with the availability of disposable income can philanthropy rise, alongside the creation of social delivery organizations (SDOs). Until recently, most philanthropy in Asia came from Western foundations and through development assistance. This is changing. Asia is the most dynamic and fast-growing economic region in the world, and philanthropy is rising as the economies grow.

A second reason for the sparse track record of Asian philanthropy is a dearth of information. Until now, Asia-based universities have focused their attention on other issues. Given the need to concentrate on economic development, this is not surprising. It is also not surprising that the situation is changing rapidly. University departments looking at philanthropy and civil society have come into existence in the past few years. In some of the region’s top universities, departments dedicated to the study of philanthropy and/or nonprofit management are emblematic of this trend. The National University of Singapore (NUS) created a program in 2011, Hong Kong University in 2014, and Tsinghua University in Beijing in 2015.

THE “ASIAN Way”

To get an accurate picture of the charitable sector in any region, it helps to understand how society views philanthropy and social delivery organizations. The cultural propensity to give and receive charitable donations varies not only by place but also over time. In Chapter 2, we provide the historical overview by country. Here, we can note that while there is great variation throughout Asia, there is one clear strand throughout much of Asian history: the tendency to give first and foremost to family and clan.

Even in the West, philanthropists give partly out of self-interest. Certain wealthy donors like to have their gifts noted for the public, or even to have new buildings and developments named after them. Some gifts are made partly for tax purposes. Asian donors value these things, too, but they go a step further. In making philanthropic donations, Asians commonly donate as a function of personal contacts as well as to organizations that expand their business networks. Thus, donations typically enhance personal and business relationships while also providing support to some important work.

Support for such efforts is influenced by each nation’s legal and regulatory environment, which in turn stems from historical precedent. Laws encouraging or discouraging the giving and receiving of philanthropic donations change with time. In Asia, such laws are in flux to a greater degree than in the West. There is widespread ambiguity and confusion about what the sector can do. There are two major reasons for this.

One reason is that in Asia, people are still shaping their views about who is responsible for supporting the social sector. Isn’t government supposed to be responsible for providing education, health care, jobs, and livelihood? Isn’t government supposed to insure the health, well-being, safety, and security of its citizens? In short, of course, the answer is yes. But organizations and individuals can also help provide a social good. In a modern world, with decentralized information and ample digital tools, government might no longer be best suited to delivering all services and goods deemed necessary for the social contract. In the wake of the Asian and global financial crises, governments might also not be ideally positioned to promote all programs for the general good. Public and private outreach can work in tandem to keep a stronger social contract.

The second reason is that, in Asia, there is not widespread consensus on the value proposition of civil society and the role of private citizens. For a Western reader, this question may seem surprising as the establishment of nonprofit organizations, of think tanks, of private philanthropy does not, in the overwhelming majority of cases, pose any existential risk to the government. In a robust democratic society, multiple opinions, analyses, activities, and outcomes are not only tolerated but also lauded. In the West, a paramount role of civil society is to check the power of the government and of the private sector. Civil society is an integral component of a pluralist system. Even the term civil society is often used to mean the collective voices of the people as opposed to government and business. In Asia, many see democracy as a messy process with unclear benefits. In fact, democratic participation isn’t as widely valued as economic growth, stability, and other measures of societal progress. In Asia, the term civic engagement might be more accurate than civil society.

If this sounds like modern China, such values are indeed in place. But questions about the costs of democracy come up in many places, with many people. Even in countries with strong democratic histories such as India and the Philippines, there is more than a little frustration expressed about the difficult nature of democratic decision-making processes and the role of civic actors further complicating the process. This frustration can help to explain why in both countries, “strong men” Narendra Modi and Rodrigo Duterte were recently elected as the heads of state. In countries with more authoritarian regimes, the question of what role private actors play in delivering a social good becomes a front-burner issue. In fact, in many Asian countries today, including India, China, Malaysia, Indonesia, and the Philippines, new laws and regulations for the creation and conduct of philanthropic and social delivery organizations are being proposed and enacted, some promoting the practice and others restricting it.

When governments implement restrictions, they are frequently aimed at advocacy groups. When Westerners read about governments limiting the reach of non-governmental organizations in Asia, they are typically reading about groups endeavoring to change the status quo in ways broader than addressing the specific societal challenge. A group seeking to improve eye care in rural China or Indonesia may well be accepted, but one aiming to strengthen citizen legal representation may not.

Though the discussion about the role that advocacy groups play in society is a worthwhile one, it is not the point of our study and of this book. We are confining our analysis to social delivery organizations (SDOs), those aiming to provide social benefits within the given political framework of each nation, and even among those, to groups working in areas associated with basic human needs such as education, health, poverty alleviation, and the environment. Advocacy organizations working in areas such as human rights, legal reform, and labor issues do important work, but it is also necessary to clarify the differences between these types of efforts and those that seek to address challenges lower on Maslow’s hierarchy, which places food, shelter, and health among our basic needs.

The distinction between SDOs and advocacy organizations can be difficult to ascertain. Many SDOs also advocate for regulatory change around a specific set of issues. As we will see later in the book, a number of the organizations we studied were encouraged to provide input to the government. Bainian Vocational Services, for example, worked with the government to change the scope and availability of vocational training opportunities for children of migrant workers and the rural poor. Eden Social Welfare Foundation pushed government to create greater access for the disabled in Taiwan, and the Magic Bus was instrumental in getting the Indian government to change educational policies and programs around sports and athletic programs.

But when we talk about advocacy organizations and those that are encountering resistance in Asia, we are specifically referring to those organizations that combine two elements: (1) they do not have intervention programs and spend 100 percent of their time and financial resources on policy change; and (2) these changes are perceived by government as antagonistic rather than complementary. Throughout Asia, the largest donations to these types of organizations come from outside the region. For this reason, states such as India and China are reassessing the way that foreign funding comes into the country and the types of organizations it supports. Currently, in many countries around the world, the degrees of freedom for foreign-funded advocacy organizations are shrinking. This book does not make a judgment about these changes, but merely attempts to describe the phenomena and the possible ramifications on local philanthropy and SDOs.

In the chapter on changing government policies we will explain in greater detail why this is the case, but the simple answer is that within the Asian context, there is far less appetite to fund efforts that publicly criticize government. Although there has not been perfect harmony between the views of government and private businesses or individuals, they have often worked in tandem on aligned agendas related to economic growth. While that is true to an extent in other parts of the world, we will see throughout this book that there are important differences between Western civil society and Asian civic engagement.

What are the roles of philanthropic and non-governmental, SDOs in Asia?

The primary role is to help others in need because it is possible to do so. Helping others is an integral tenet of what it means to be human and has been promoted through the ages in civilizations around the world. The premise and intent are clear. More difficult to determine are the differences in definition and motivation between charity and philanthropy. Are they alike? Charity is the act of giving money, food, or other kinds of help to people who are poor, sick, or need other types of help. Philanthropy is an active effort to promote human welfare. In other words, philanthropy is a formalized and systematic process of being charitable. This book deals with organizations and organized, systematic approaches to helping those in need.

The context for such efforts necessarily includes government. Individual and corporate philanthropy is on the rise, but it is a small amount compared to public spending. In the United States, with the largest and most active philanthropic sector in the world, American foundations together spent about $375 billion on all programs and sectors, compared to $3.8 trillion in federal spending for 2015. Of that federal money, more than $1 trillion went to health and human services. Private donations remain much smaller. This means that even in the United States, with the largest and most robust philanthropic organizations, private funds equal only a small fraction of the financial resources spent by the government.

As a result, one effective use of philanthropic investment is in areas not ordinarily underwritten by government. This thinking results in pilot projects, basic research, riskier ventures in a variety of sectors, and much of the support for arts and humanities.

Our research shows that in Asia, there is an implicit social contract at work. As will be described in greater detail later in the book, Asian philanthropy tends not to go to advocacy organizations, but is in line with and often in partnership with governmental objectives. Though societal forces are driving a revision of this contract in many places, our study shows fundamental differences in how philanthropy and nonprofit organizations work alongside and with governments in the region. Much of this can be understood by looking back at the concept of the “Asian way.”

The concept of Asian values or the term Asian way came into popular use under Lee Kwan Yew of Singapore and Malaysia’s Mahathir Mohamad in the 1990s. The term is used to describe a cultural predisposition toward harmony and collectivism rather than individualism. These preferences also entail greater acceptance of benevolent authoritarian regimes, those offering greater material wealth and a rule-based, but harmonious, society.

The term Asian way has been both embraced and condemned. The notion that there is a difference in how societies in Asia are structured and evolve, compared to their Western counterparts, has been disputed for years. Many scholars predicted that Asia would be like the West once given enough time as many Western nations had more similar conditions a generation or two ago. Indeed, the term Asian way has been out of favor for years, and the region’s heterogeneity means the concept is probably too grand and sweeping to cast much light on its modern connotations. But as seems clear from our study, there is some truth to elements of an Asian way, an implicit social contract with government and the deeply rooted tendency to seek harmony.

With this concept, Lee and Mahathir strove to counter the view that Asia is remarkably diverse by saying that within their own multiethnic countries, there are common traits and behaviors that allow for a more collectivist mindset and agenda. It’s a bold aim. How can one make statements about a region that covers 50 countries and more than 4.5 billion people? While it would be ridiculous to say that Asia is homogeneous, one can say that there are certain cultural tendencies and behaviors that can be seen across many countries, especially those in East, Southeast, and to a certain extent South Asia. Certain concepts that have emerged from our research—community, cooperation, collaboration—underpin societies across the region, and they provide useful hooks on which to place understanding about Asian philanthropy.

With the above points in mind, a number of Asian governments have begun to come to terms with the existence and benefits of encouraging private philanthropy and the organizations that receive these funds. This is not to say that there are not also rules as to how, when, and where the funds and their beneficiary organizations are to work.

The effect of these rules can easily be seen in Singapore, one of the leaders in recognizing the positive role of citizen engagement in the social sector. Since 2009, qualifying donations have been granted a 250 percent tax deduction including a period of time when it went up to 300%. Not surprisingly, charitable contributions have gone up significantly; 30 percent since the law took effect.° According to many donors, this move by the government was important not only because of the tax benefit, especially as the tax rate in Singapore is low, but also because it signals to the public that the government endorses this kind of giving. Such signals carry tremendous weight in other Asian nations as well. In Singapore’s case, as in a number of other Asian countries, it is important to understand that only those organizations aligned with government policies are able to get the appropriate accreditations to qualify for receiving these donations.