Before we can talk about sustainable investing, let’s examine the state of philanthropy
The concept of philanthropy in Asia is new and evolving and quite unlike the level of philanthropic maturity you find in North America or Europe. Therefore, one is almost forced to lead with sustainable investing and trying to get people focused in this manner first before turning to a purely philanthropic model. However, as in all things Asia over the past 30 years, things move fast and change is accelerating at a pace unprecedented in history, and there is little reason to doubt that a similar rate of change won’t apply to philanthropy in Asia as well.
Philanthropy lags in Asia Pacific but there are some standouts
It’s fantastic to see that philanthropy has caught on extremely fast in China and is growing by leaps and bounds. You see wealthy private donors inside China not just embrace philanthropy first and foremost for China itself, but they’ve started to look outward now as well. So that’s great, and it sets an example for others. However, at present, the rest of Asia lags quite significantly. Philanthropy in Japan is advanced, but it is a market unto itself. Australia has a very developed level of philanthropy, but they are focused on many domestic issues, such as historic indigenous inequality, and more recently climate change.
Philanthropy in Asia must be localized
The real question for NGOs that focus on Asia Pacific to ask is how they can bring about increased levels of Asian philanthropy. If you look at past NGO models, the lessons learned were that philanthropy had been previously viewed through a North American or European lens, and that doesn’t work for the same reason it doesn’t work in many other industries. We need a fit-for-purpose philanthropic model in Asia that gels well with the families and corporate titans that lord over the region.
In Asia, relationships are crucial, but they take time to build
Relationships take time here. You don’t get a mandate after one or two meetings. You’ve got to build relationships and that’s hard enough to do from a business or commercial perspective, so you can imagine what it’s like when you’re asking people to open their purse strings for donations. The entire NGO field must develop a different way of approaching fundraising here – you need persons with deep local relationships and cultural understanding to spearhead these efforts in combination with successful models from developed nations.
Several obstacles impede the development of philanthropy in the region
Perhaps the single most important factor in impeding a more giving society in Asia is the last of a tax scheme to incentivize philanthropy. That’s a huge issue as people give out of their own largesse with little or no tax benefit, which as we understand is a massive incentive in North America in particular. Also, same as from a commercial perspective, you can’t look at Thailand in the same way that you look at Indonesia, or the Philippines or Vietnam or China. Each jurisdiction has its own unique perspectives and set of issues and why there is more or less philanthropic giving. Dealing with these issues and getting people to focus on philanthropic work can be extremely time-consuming and an art in itself. But ultimately, Asian families thrive on and value relationships and this is what must be focused upon.
Ultimately, look to business and investment models
In philanthropy, there are several parallels to business and how investment works. How do you pursue investors alongside the philanthropic mission in these countries? Ask yourself which donors you want to partner with, learn their history, understand their culture and appreciate the needs of their business. Considering these macro and micro issues, it’s not unsurprising that many global NGOs active in Asia are predominantly funded from outside Asia. But just as Asia is constantly evolving and fast, there is hope to believe that we will see ever increasing rates of philanthropy from Asia as the climate discussion takes more prominence in our lives. It’s a new and exciting area to be involved in.
Vincent Rajiv Louis has over 20 years of experience as a global investment executive in Southeast Asia markets including Indonesia, Singapore, Thailand, Japan and Vietnam.
This article was first published on rajivlouis.com on 18 November 2021. It is being republished in Alliance with permission.