Asian philanthropists tend to focus on short-term results, but they’re also relatively innovative and entrepreneurial in their charitable activities, says the recently released BNP Paribas Individual Philanthropy Index from Forbes Insights.
The Index grades philanthropists from the United States, Europe, Asia and the Middle East in four categories—how much of their wealth they currently give, how much they plan on giving, how innovative they are in their philanthropy, and how willing they are to promote philanthropy—and then creates a composite score. The closer that score is to 100, the closer the region is to reaching a “philanthropic ideal.”
Not surprisingly, the U.S. and Europe received the highest scores, at 53.2 and 46.3 respectively. Asia was not far behind at 42.4, and the Middle East scored 29.4. All four regions are still far from obtaining the “philanthropic ideal,” but considering how philanthropy is usually considered most matured in the U.S., the other regions are actually not so far behind.
Here’s a look at 5 inferences about Asian philanthropists from the Index scores and the accompanying survey.
1) Asian philanthropists tend to focus on the short-term.
69% of Asian philanthropists said they wanted to see the results of their giving within 10 years, 20% were willing to wait 10 – 25 years, and only 11% said they were willing to wait 25 or years or more for their philanthropic efforts to come to full fruition.
This focus on the short-term results may prove quite the funding hurdle for Asian organizations working on deeply entrenched social and environmental issues, which could take generations to undo or rectify. However, the survey also finds that Asian philanthropists are fairly innovative, receiving the second highest Innovation Score among the four regions. (Innovative, as the Index defines it, is being results-oriented “with an emphasis on quantitative metrics, cost-effectiveness, sustainability of beneficial effects and replicability.”)
One reason the survey offers for this is related to nonprofit sector development. Outside of the U.S. and Europe, the tradition of funding nonprofit organizations to implement programs is not yet common. Instead, non-Western philanthropists tend to operate their own programs, and doing so allows them to get creative and hands-on with their philanthropy. Their perspectives on running programs could prove helpful to social organizations later on as Asian philanthropists become more serious and professional about their giving — but it’s still dependent on whether Asian philanthropists will increase their collaborations with nonprofits in the first place.
2) The most urgent global cause among Asian philanthropists at this time is the environment.
Environmental issues emerged as the top global cause among 44% of Asian philanthropists, followed by hunger/food at 34%. Another 33% of philanthropists prioritized health as the most important global issue at this time. In regards to their own region or town, health became the top issue for 54% of Asian philanthropists, then the environment (38%) and education (33%).
The fact that the environment was cited as the top global concern can likely be attributed to the tangible, far-reaching effects of industrialization and climate change happening in Asia at this time. (See the daily twitter feed monitoring Beijing’s air quality, or the emotional plea of Filipino diplomat Yeb Sano for an understanding of just how dire the environmental situation is becoming). In contrast, the localized concerns seem more reflective of donors’ actual funding preferences, though this survey’s results do depart from the traditional understanding that Asians tend to fund education-related causes the most. Health’s surpassing of education as the top cause for concern may signal a shift in future funding priorities, but it could also reflect a slight disconnect between what donors believe is the top concern affecting their communities and what causes they are personally drawn to.
3) Philanthropy is not as high on the social agenda in Asia as it is the U.S. or in the Middle East.
Just about 41% of Asian survey respondents believe philanthropy is “extremely urgent” in their country, as opposed to 67% of philanthropists in the U.S. and 65% in the Middle East. The only region with a lower share of respondents who believe philanthropy is extremely urgent in their country is Europe, at 39%. The numbers grow slightly when philanthropists are asked about the urgency of philanthropy in their region/town in particular: in that case, 49% of Asian philanthropists believe philanthropy is extremely urgent; 72% in the Middle East below so; 67% in the U.S.; and 45% in Europe.
The fact that Asia has a multitude of socioeconomic and environmental issues that still need to be addressed is not up for dispute, so for less than half of Asian philanthropists to believe that philanthropy is not of the utmost importance in their country suggests that philanthropy has not yet been widely embraced as a catalyst for social and environmental change. There are at least two explanations for this hinted at in the report: first, in many Asian countries, the state is still seen as the main entity charged with social welfare and development, so many in Asia leave it to their governments to address societal-wide issues. Second, perhaps Asians are just very optimistic about their future prospects. A number of the people interviewed in the survey pointed out that Asia survived the recent global financial crisis relatively unscathed, and with the so-called Pacific Century at its dawn, many believe that economic growth in the region will only continue. As a result, Asians may not feel the need to emphasize philanthropy as much as their global counterparts.
4) For Asian philanthropists, it’s not really about tax deductions.
Only 41% of Asian philanthropists said that policies in their countries encouraged them to give more, compared to 62% of philanthropists in the Middle East, 46% in Europe, and 45% in the U.S.
Another 31% of Asian philanthropists said policies in their country actually led them to consider decreasing their giving, and 28% said policy had no impact on their giving. Tax deductions do not seem to factor much into Asian giving. However, it should be noted that laws concerning tax deductions for charitable donations in many Asian countries are vague or absent. If there were more straight-forward, favorable policies towards giving put in place, perhaps we would see these numbers change.
A desire to give back to society and altruism were the top motivations cited for giving.
5) Philanthropy is as much about changing social dynamics in Asia as it is about helping people and the environment.
Laurence Lien, Chairman of the Lien Foundation and Community Foundation of Singapore, offered a telling quote about philanthropy in his country:
Philanthropy is not about the money. It’s about developing a civil society where people connect with those who are being left behind. From my point of view, the urgency is because the social capital of our citizens is low, and the sense of ownership of all our issues and people has not been there. We have to change the nature of the relationship between government and the people, in the sense that the government needs to do less and citizens need to do more.
Though philanthropy is no substitute for good governance, Lien’s comments are insightful and can be applied to other Asian countries as well. The roles of the individual and the private sector are expanding in Asia as individuals and businesses take greater charge of wealth creation. They must now do the same for closing the inequality gap and building a more environmentally sustainable future. Philanthropy can help accomplish this by bringing people from different walks of life together to understand our common concerns and how we can address them collaboratively. When practiced thoughtfully, philanthropy in Asia goes far beyond redistributing wealth — it builds community.