Editor’s note: The following article is by Cynthia d’Anjou-Brown, head of philanthropy advisory, North Asia, and family governance advisor, at HSBC Private Bank. A version of this article has appeared in the Hong Kong Economic Journal, and is republished by this website with HSBC’s permission.

Asian philanthropy is growing, fuelled in large part by a generation of Chinese self-made businessmen who desire to share some of their fortune with the less well off in society. But without proper planning, all too often their efforts can either be diminished, wasted, or worse, reflect negatively on the good name of the donor.

Philanthropic giving is a minefield: all too often the donor is willing and the need seems obvious, but the path between the two can easily turn into the road to disaster.

This is particularly true in countries with evolving charity law like China, where triangulating a course between many donors including governments, the still nascent social sector, and the broader social or environmental impact of a donation is particularly challenging.

Local communities have demonstrated poor follow-through and many philanthropists have seen their generosity re-cast in the media as self serving after an ill-considered donation.

But there are ways to avoid these traps. The process that guides effective philanthropy are familiar to any successful businessman: identify a need, work out what is required to fulfil that need, and then establish or locate an effective and trustworthy non-profit organisation to deliver one to the other.

HSBC, home of Asia’s largest wealth management operation, has been advising philanthropists for more than 60 years. The recommended first step is to define a clear focus for giving. Some philanthropists want to help an ancestral home town, perhaps fund a particular sector such as health, education or poverty alleviation. 

For a donor who wanted to help underprivileged children in Gansu, our Private Wealth Solutions office suggested funding a model early childhood development centre operated by Right to Play, a well-established and respected non-profit organisation which had conducted a detailed community needs assessment including child demography, a survey of the children’s current education situation, and existing resources and support to be drawn from the community.