Corporate Philanthropy Off to a Mixed Start in Vietnam

vntraffic
Image Source: Padmanaba01 / Creative Commons

 

When it comes to business matters, the people of Vietnam are eager to learn from the West. You can see it in the 25,000 copies of Forbes Vietnam circulating around high-end offices in the country, you feel it in the collaborative workspaces cropping up in major cities, and you know it’s arrived when a communist government decides to fund its own Silicon Valley-style incubator.

But while the Vietnamese private sector has embraced many of the dressings of Western-style business, one idea that’s been slow to gain traction is corporate philanthropy.

Corporate philanthropy is considered a form of corporate social responsibility (CSR), a new but not unknown concept in Vietnam. However, up to now, CSR discussions in Vietnam have generally focused on the ethical, legal, and environmental responsibilities of doing business, and conversations are usually led by multinationals responding to demand for greater transparency in their global supply chains (as opposed to the local business sector). Vietnamese corporate philanthropy wasn’t widely explored until a study by the Asia Foundation last year.

What that Asia Foundation study revealed was something of a mixed bag. On the one hand, the majority of Vietnamese firms surveyed in the study reported that they had some knowledge of CSR and a good 77% said they practiced charitable giving. In total, the 500+ firms surveyed accounted for 113 billion VND (5.4 million USD) in financial contributions, 14 billion VND (664,000 USD) in in-kind contributions, and 19,500 volunteer hours in 2012.  Given the sample size and late emergence of Vietnam’s private sector, those are respectable figures.

However, the Asia Foundation study also found that most corporate philanthropy in Vietnam is ad hoc and done without any engagement strategy in mind. This can be seen in the fact that ‘people in need’ and ‘disaster relief’ emerged as the two causes that benefitted the most from corporate philanthropy. Giving to people in need and disaster relief is important (especially in a disaster-prone country where the average per capita GDP is just about  $1,600), but these causes tend to be associated with event-based giving. They are short-term patches rather than long-term solutions.

Vietnamese corporate philanthropy gave little support to advocacy and policy-related causes, which may not be surprising considering the country’s centralized governance and nascent civil society. But it’s also a bit ironic, because most firms cited corruption, unemployment, and environmental pollution as their top three concerns for Vietnam’s future. There seems to be a disconnect between what firms view as important and where their resources are being applied.

In many ways, corporate philanthropy in Vietnam does not seem to differ much from individual philanthropy either. Most Vietnamese firms give on an as-they-can basis, and the beneficiaries of their philanthropy were usually the surrounding community or the village of the firm’s leader. The top reasons for giving included the company tradition, the interest of staff, and the interest of leadership. 58% of respondents said that there was no business strategy linked to their charitable activities.

In that 58% statistic, we realize how corporate philanthropy has yet to be fully take off in Vietnam. When practiced effectively, corporate philanthropy looks inward to see where a company’s core competencies can be applied to social good and outward to understand what the community’s needs are. Benefits accrue to both society at large and the firm itself.  But Vietnamese corporate philanthropy is not based on leveraging a company’s strengths, and many of the firms interviewed in the Asia Foundation’s report were actually hesitant of any conflation between business goals and charity:

Some seem to feel like they have to apologize, in order to prevent any misunderstanding that might arise, before going on to say that their philanthropic activities are implemented by their marketing department

 

[…]

 

People generally consider that philanthropy should be detached from any self-interest and to be pursued according only to moral principles. A similar attitude can be observed in the Japanese culture. Partly it may be also a defensive response by businesses to negative stories in the media accusing businesses of engaging in charitable activities with the insincere motivation of ‘polishing their image.’

Their moral quandaries are certainly not unfounded — the fictional Claire Underwood’s dicey dealings with SanCorps in the American  ‘House of Cards’ comes to mind! — but profits and social good aren’t necessarily mutually exclusive. It will take time for Vietnamese firms to get accustomed to the idea that corporate philanthropy can align with long-term business objectives in an ethical way.

A second factor for corporate philanthropy’s slow rise may be a lack of trust in Vietnam’s NGO sector. Vietnam’s civil society is still emerging, so businesses don’t have a very favorable opinion of domestic organizations as of yet. 33% of firms viewed domestic NGOs as trustworthy, 15% believe they are untrustworthy, and 17% did not give an answer. When Vietnamese firms give, they usually give directly to beneficiaries or through the local government and mass organizations (like the Women’s Union or Vietnam Fatherland Front). While most firms believed that the people behind Vietnamese NGOs have their hearts in the right place, they also believed NGOs to be unprofessional and not well-run. Only 7% said they had worked with NGOs.

Does this mean that corporate philanthropy in Vietnam is a lost cause? Absolutely not. As the Asia Foundation report points out, it is imperative that corporate philanthropy in Vietnam expands, because foreign donors will begin withdrawing as the country grows into middle-income status, and domestic actors will need to increase their support for civil society to mature.

A 2012 study by the LIN Center already hints at the possibility for greater collaboration between the nonprofit and private sector. In a general survey of over 1000 individuals, 47% said they were more likely to try a product if profits went to a charity. That’s more cause marketing than it is corporate philanthropy, but it could segue way into some meaningful private-social partnerships.