Working with philanthropists in Australia and the US, I’ve wondered about the evolution of charitable giving in China, with growth in significant wealth over the last 30 years.
China is the fastest growing producer of millionaires in the world today. Whilst the amount given to philanthropic causes has been on the rise in China, increasing from RMB 10 billion in 2004 to 100 billion in 2014, it is still just a fraction of the levels in the United States who’s charitable giving is 20 times that of mainland China.
According to a report by Charities Aid Foundation, China ranks 144 out of 145 countries for charitable behavior. There are many reasons for the lack of giving including:
- concern over transparency and accountability
- public trust with perception of misuse of funds
- lack of clear rules and regulations
- tax treatment and lack of incentives.
Individual mainland donors are required to pay income tax on the donations over 30 per cent of their income, while companies must pay income tax on the part of donations that surpass 12 per cent of their annual net profits.
Only around 15% of charitable donations went to mainland China, with higher education institutes the most popular. The majority of charitable giving went to Macau, Hong Kong and foreign institutions.
China’s top legislative body has begun deliberating the country’s first charity law which could go some way to reversing Chinese people’s reluctance to give. The new law, if passed, will clarify charities’ legal status and finally address tax deductions for donations, thus pave the way for a take off in Chinese philanthropy.
China Philanthropy Research Institute, at Beijing Normal University, has compiled a list of the top 100 mainland philanthropists for 2014: