On 25 March 2015, I attended a meeting in Beijing of the board of directors of WINGS and several Chinese public and private foundations (in China public foundations may solicit funds from the public, unlike private foundations which may not, and which require capital by its founders to fund its activities). The meeting, hosted by the China Foundation Centre and China Foundation for Poverty Alleviation, provided some fascinating insights into the way philanthropy is developing in China.
Two decades ago the growth of foundations in China was driven by the government’s response to the growth of civil movements, which was to encourage the creation of government-organized non-governmental organizations, better known as GONGOs. As the meeting indicated, over the last five years there has been a new surge of foundations driven by the growing wealth in society and by the private sector.
Chinese foundations still suffer from a lack of confidence in them on the part of both the government and society at large due to lack of transparency and accountability. In efforts to improve the situation, the China Foundation Centre has managed to increase the rate of data disclosure by foundations from less than 30 per cent in 2011 to more than 90 per cent in 2014. Disclosure includes data on governance (eg official registration, board membership, charter), public reporting (eg annual report and website), financial data, project data, and source of funding including key donors. It is hoped that such disclosure will increase confidence in the sector and enhance cooperation between civil society at large, including foundations, private sector and government, to solve key societal problems.
Discussions in the meeting highlighted some areas where Chinese foundations feel they need to strengthen their capacities and these include:
- Setting the right balance between being operational and grantmaking
- Defining the appropriate tools to help philanthropists to be strategic
- Building the ecosystem for effective cooperation among all stakeholders. The ecosystem would include not-for-profit organizations (NPOs), foundations, private sector and government. Cooperation is essential if foundations are to be able to measure the impact of programmes that aim to solve key societal issues.
Chinese foundations admit that they have been guided by practices from countries like the USA. However, they also realize that they cannot simply copy US foundations: it is imperative that whatever is borrowed should build on local traditions and preserve traditional giving motivations and practices. The pace of growth and change in China is so fast that Chinese philanthropy, too, will continue to evolve rapidly, developing its own unique characteristics and contributing to the rainbow of global philanthropy that is so rich in its diversity.
Atallah Kuttab is founder and chairman, SAANED for Philanthropy Advisory, and chairman of WINGS.