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Commuters use their mobile phone as they ride on a subway in Beijing on April 8. While the mainland lags behind Hong Kong when it comes to smartphone penetration, it is far ahead in mobile payments. Photo: AFP
Opinion
Opinion
by Ruth A. Shapiro and Tao Ze
Opinion
by Ruth A. Shapiro and Tao Ze

Crowdfunding for charity: why mainland China leads Hong Kong in online giving

  • Apart from the mainland overtaking Hong Kong in the use of mobile payment systems, the Chinese government’s endorsement of certain online charity platforms reassures donors that funds will be put to good use
Ruth A. Shapiro
Tao Ze
Ruth A. ShapiroandTao Ze
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Online giving is changing charity in Asia. Crowdfunding, especially, changes the way the social sector operates, and its reach is growing rapidly. Nowhere is this more true than in mainland China, where crowdfunding has skyrocketed in recent years. 

According to the Ministry of Civil Affairs, in 2018, of the 8.46 billion yuan (US$1.22 billion) in donations made to charitable organisations, 3.17 billion yuan went to the 20 outline platforms available on the mainland. This is a 26.8 per cent increase from 2017, with no sign of slowing down. We see similar growth across Asia in the preliminary data from our annual Doing Good Index, but online giving is especially popular in mainland China due to its reliability and ease of use, along with changing social norms.

Hong Kong provides a good point of comparison. Smartphone usage is even higher in Hong Kong than on the Chinese mainland, at 80 per cent and 54 per cent respectively, but what those users do on their phones differs considerably.

According to the market research firm eMarketer, by 2021, 80 per cent of users in mainland China will be making payments through their phones. In Hong Kong, according to the Productivity Council, 68 per cent of the population does not have an understanding of how to use their phones to make payments.
Mainland China also benefits from new structures supporting online giving. Encouraged by the new charity law, “turn-key” or click-easy platforms created and promoted by corporate firms enable crowdfunding as a means to carry out corporate social responsibility. The top three online platforms accounted for the majority of funds raised.

These were corporate platforms, those of Tencent and Alibaba. Large corporate platforms have both brand and access advantages to attracting online donors to their site. Governmental oversight of crowdfunding reassures donors about the trustworthiness of the site and the donations made on it.

In Hong Kong, only 36 per cent of the social delivery organisations measured in our 2018 Doing Good Index said they plan to use crowdfunding in the coming year, compared with 80 per cent on the mainland, reflecting the different headwinds for online donations.

And unlike Alibaba and Tencent in mainland China, Hong Kong tech companies have not created online giving platforms. Much online giving focuses on specific events and specialised needs.

A boy collects donations on a street in Hong Kong in September 2006. Street-side fundraising remains a popular way for charitable organisations to raise funds. Photo: Samantha Sin

According to HK01, of the 98 projects which have raised funds on their 01 Heart Platform, the highest amount, HK$392,188, went to the Alliance of Self-help Groups for Occupational Injuries and Diseases, paying the funeral expenses of a bus driver killed in a traffic accident.

Since the Hong Kong government adheres to laissez-faire mechanisms, there is also no government oversight of crowdfunding platforms here. It is difficult to know how much sites are trusted without such endorsement or known brand value. In Asia, the lack of trust in the social sector is profound and government approval in mainland China allows technology to offer transparency and accountability for non-profit organisations.
Like any sudden trend, there are pros and cons to online giving. While massive funding is raised through online platforms, it currently goes to traditional causes that appeal to the emotional reaction of online donors.

China’s charity apps – the gift that may not keep on giving

Certain projects are more likely than others to receive online funding, especially in mainland China, where crowdfunding sites are evaluated by the government on the quantity of funding raised. That encourages little appetite for more innovative and “risky” solutions or those with less emotional pull.

It isn’t yet clear if crowdfunding will develop in depth as well as popularity. There is a difference between charity and philanthropy. Charity is the human act of responding to a grievous situation and, so far, it receives the bulk of crowdfunding attention in the social sector.

Philanthropy is a systematic effort to put a solution in place and it has yet to benefit as much from online giving, perhaps because of competition in emotional appeal from charitable causes. As more people engage online, perhaps the long-term impact of crowdfunding will become as impressive as its sudden growth.

Dr Ruth A. Shapiro is chief executive of the Centre for Asian Philanthropy and Society. Tao Ze is president of Yishan and former president of the China Foundation Centre

This article appeared in the South China Morning Post print edition as: The changing face of charity giving in Asia
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