LONDON, Oct. 10, 2012 /PRNewswire/ -- Philanthropy Management magazine reports that the growth of private philanthropy in China remains hampered by the lack of a supportive legal framework.
"China has begun to make substantial inroads into philanthropy, but real growth depends on legal reform," said Richard Schwartz, Philanthropy Management's editor. He noted that the newly wealthy in Chinese society are cognizant they lack the strong tradition of philanthropic giving in most major economies. He pointed to The Charity Aid Foundation's recent naming of the US as the most generous country in the world with China ranking 140th.
According to a UBS-Insead study, the earliest Chinese foundations were established barely 30 years ago but Chinese philanthropic initiatives are growing rapidly, with more than 70% formed since 2000. "While family giving is an established practice in much of Asia, China lacks a longstanding culture of structured philanthropy, though there is increasing social pressure on China's newly wealthy to give more generously," said Schwartz. In 2011, Chinese entrepreneur Cao Dewang gave $700 million in donations. Although this is dwarfed by Margaret A. Cargill's $6 billion bequest last year, it would have placed Dewang at number two in the US.
Chinese philanthropists today give a higher proportion of their donations to health-related causes than any other Asian country — around 17% in 2011, compared to 9% across the region. Approximately 8% of China's private donations were directed to disaster relief, and a relatively modest 6% was earmarked to causes related to poverty and development, despite widespread poverty outside of the coastal areas. One challenge for China's philanthropists is government regulations. Although the central government introduced legislation permitting the establishment of private foundations in 2004, it remains difficult to register as a non-profit organization in China and receive and disburse funds.
According to a recent report in China Daily, the government understands the need to create more effective legislation for the philanthropic sector. However, experts on the ground told Philanthropy Management that legislative relief is a work in progress. This has prompted the rise of scalable, professionally run for-profit companies with revenue goals tied to social enterprises, such as improving the environment or promoting culture. However, Schwartz observed that even these often require the support of provincial and city governments, and that it may take years for China's philanthropic institutions to flourish free from government involvement.
The complete story is available in the print edition and at the newly launched, www.philanthropy-management.com, which highlights multimedia offerings and provides daily online-only content.
About Philanthropy Management
Philanthropy Management, an Asset International publication, focuses on the financial, operational and strategic services provided to foundations, endowments and other large-scale grant makers by banks, asset managers and other professional advisors. Edited by Richard Schwartz, it is distributed globally to more than 11,000 senior executives within the largest grant making entities in the Americas, Europe, Asia and Middle East, including foundations and endowments, family foundations and family offices. Philanthropy Management aims to provide philanthropic institutions with a broader and more refined range of tools, resources and research to measure their own success and the impact of the advisors they use. Please visit philanthropy-management.com.
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SOURCE Philanthropy Management