Chinese Philanthropy Slides Nearly A Fifth In 2011

Tara Loader Wilkinson

9 May 2012

Donations from China's wealthiest philanthropists fell by 17 per cent last year to an average $16 million, as global economic uncertainty curbed even the most generous appetite for giving.

The list of the 100 biggest givers in China was compiled for the ninth year by the Hurun Report, measuring individuals by the value of their cash or cash equivalent donations from 1 January 2011 to 31 March, 2012, according to the Hurun Philanthropy List 2012.

For the third year running windscreen maker Cao Dewang is China’s most generous philanthropist, donating $580 million last year, followed by Xu Jiayin with $120 million and Wang Jianlin with $44 million.

The numbers may look high, especially in comparison to the UK's most generous charitable gift of £76.5 million ($123.5 million) donated by artist David Hockney, according to the Sunday Times Philanthropy List. The UK's average gift just topped 1 per cent of their personal wealth last year, for the first time, while the average donation for the top 100 in China was 1.3 per cent of their personal wealth.

However, according to information from the UK-based Charities Aid Foundation, Chinese philanthropy as a proportion of the nation's wealth is still woefully lacking. The foundation ranks China as 140th on the index of the world's most generous countries. North America is number 1, Ireland is second, Australia third, New Zealand fourth and the UK fifth. Hong Kong comes in at number 11 but China, where the population of billionaires is only second to the US, does not come in until 140.

The Chinese list is skewed by a few larger givers at the top. If you disregard the donations made by the top two philanthropists Cao Dewang and Xu Jiayin, then the average donation drops to 0.8 per cent of their personal wealth.

Twenty philanthropists donated more than RMB 100 millon (equivalent to $16 million) over the past year, a reduction of three individuals from that of last year.

As a caveat, China's billionaires may not necessarily be less generous than their Western counterparts, but possibly more discreet. Philanthropy in the Communist country has historically been considered a private affair. The report said: "In addition to those included on the list, it is recognized that many low-key Chinese philanthropists who would otherwise have been included on the list have remained untraceable."

Type and trends

The average age of the top 100 in China was 51 years, the same as in 2011 and also the same as the Top 100 richest individuals on the Hurun Rich List. At 73, Yang Qizhao is the oldest philanthropist on the list, whilst Sun Mingnan is the youngest at 28.

There are ten female philanthropists on this year’s list, 3 fewer than last year, and 5.5 per cent less than the percentage of women on the Hurun Rich List. This year’s female philanthropists include: Bian Haiyan, Wu Yajun, Yang Huiyan, Lin Xiaohong, Yang Wenjuan, Zhang Haixia, He Qiaonv, Zhang Ronghua, Zhang Yin and Zhao Yilan.

Again mirroring its sister report, property came out as the biggest source of wealth for philanthropists.

Universities are the biggest receiver of donations, led by Tsinghua University, Peking University, Xiamen University and South China University of Technology.

Over a third of philanthropists have personal charitable foundations, which means a big opportunity for private banks like Coutts and Credit Suisse, which are building up philanthropy initiatives. These include the “Heren Foundation” named after Cao Dewang’s father, the “Hou Changcai Foundation”, and the “Pearl River Education Development Foundation” which Zhu Mengyi named after his company.

Chinese Wealth

With China's burgeoning wealth should come a rise in giving. There are 2.7 million high net worth individuals in China today, according to The Chinese Luxury Consumer White Paper 2012, released by Hurun Research Institute in association with the Industrial Bank. The white paper identified HNWIs in China with personal assets of more than 6 million Chinese yuan (equivalent to $950,000).

Furthermore, China now boasts 63,500 ultra-high net worth individuals with assets of more than 100 million Chinese yuan ($16 million).

But China's Communist past means the legacy of giving is not completely established as a means to give back to society. In a survey of Chinese luxury consumers, said the Hurun Report, philanthropy came in second after payment of taxes, when asked what is the most important way to give back to society.

To make the list, the Hurun Research Institute surveyed 3000 of China’s most successful entrepreneurs, including the 1000 from the Hurun Rich List 2011, cross referencing the results with media reports and charitable foundations.