Rich in HK are not big givers | South China Morning Post
  • Wed
  • Mar 4, 2015
  • Updated: 6:47am

Rich in HK are not big givers

PUBLISHED : Sunday, 22 April, 2012, 12:00am
UPDATED : Sunday, 22 April, 2012, 12:00am

While philanthropy in Asia generally lags behind the levels seen in more developed countries, Hong Kong is an unusual case - the city as a whole gives more than other Asian nations, yet the wealthiest give less.

According to the Hong Kong Council of Social Service, 86 per cent of adults in Hong Kong make donations to charity, giving an average of HK$2,986 per head a year, more than in other Asian countries, according to Nathalie Sauvanet, head of individual philanthropy at BNP Paribas Wealth Management. She says the tradition of philanthropy and charity is more developed in Hong Kong than elsewhere in Asia.

However, when Hong Kong's richest people are compared with those around the world, they give proportionately less, says Thelma Kwan, director of wealth advisory at Barclays.

'In a report on philanthropy which we published in November 2010, we found that the HNWIs [high-net-worth individuals] in Hong Kong ranked lower than the global average in terms of considering giving to charity one of their top spending priorities,' she says.

'Only 16 per cent of respondents surveyed had it as one of their top priorities, compared with the global average of 23 per cent.'

However, with Asia the source of the fastest-growing number of wealthy individuals, philanthropy is set to grow in the region, says Lee Woon Shiu, head of wealth planning at the Bank of Singapore.

Overseas exposure is one factor that is encouraging the trend, he says.

'A large number of these HNWIs also tend to have either been educated in Western countries or been exposed to Western approaches towards charitable giving, and are thus likely to want to emulate these role models - think Bill Gates - in the way they contribute to society,' Woon says.

Interest in social business and social entrepreneurship in the region has also been growing, pointing to a slow but seemingly broad-based deepening of the city's philanthropic evolution from passive cash-giving to a more long-term and holistic approach.

The release of a long-awaited consultation paper proposing a wide-ranging regulatory regime for charities has sparked interest and debate on charities, their effectiveness and their governance, says Fan Choi, director of wealth planning at Coutts & Co.

'The trend is towards professionalism, by focusing on scientific ways of measuring the effects and sustainability of the philanthropic activities of the charities the donors support,' she says.

Donors are now starting to give more than just cash.

'As well as giving financially, the donors are prepared to contribute intellectual and human capital. There is also more partnering and collaboration with other charitable organisations and the public sector,' Choi adds.

Esther Heer, deputy chief executive officer of BSI Asia, said companies were making charitable donations an integral part of their business strategy. She says that many businesses realise that simply injecting cash into a good cause is not enough, and that to be sustainable and effective, donations must be integrated with their business practices and their engagement with the community, government and regulators, and clients and staff.

'Many family foundations, for instance, are looking to modernise their way of operating, by bringing this business-like approach to their philanthropy, by being more strategic in their giving and measuring its effectiveness,' she says.

Heer attributes this trend to increasing global awareness of the different areas of the world and the specific needs of individual communities, as well as more and easier ways of encouraging participation - for example through social networking - and increasing opportunities to co-operate with non-governmental or entrepreneurial organisations.

Impact investing - where investments are made based not only on potential financial returns but also on the likelihood of creating a positive social or environmental impact - are gaining in popularity, according to Christina Tung, head of philanthropy services for North Asia at UBS Wealth Management.

'There has been a marked increase in the number of philanthropists or socially-minded investors seeking to become involved in impact investing,' she says.

'Invariably, impact investing complements traditional philanthropy. Indeed, it builds on socially responsible investment by aiming to generate tangible and measurable social development.'

In Hong Kong, private corporations provide the structure for about 70 per cent of the city's charitable institutions, according to the consultation paper.

Hong Kong philanthropists prefer grant-making foundations over the operating foundations that are popular in Southeast Asia, according to Tung.

In Southeast Asia and Taiwan, the wealthy are increasingly choosing corporate or family foundations as vehicles for their philanthropy. These kinds of structures allow families to directly manage and control their philanthropy programmes.

'Wealthy families in Hong Kong tend to follow a Western model and focus on endowments to local projects, which have the capability and local expertise to deliver services or programmes to local people,' he says.

Heer said Hong Kong's preference for foundations and trusts was partly a result of the British colonial influence. They have flourished because of the city's low-tax regime and a relaxed legal framework, which has encouraged the emergence of many non-profit organisations that offer health, education and other social services.

$290b

The amount, in US dollars, given worldwide to charitable organisations in 2010. Of this, 73 per cent came from individuals

Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

 
 
 
 
 

Login

SCMP.com Account

or