Bill & Melinda Gates Foundation: China sees significant increase in charitable giving

Note: Q&A with Rob Rosen, Philanthropic Partnerships Director of Bill & Melinda Gates Foundation

1. Any common characteristics so far detected among those who join the Giving Pledge initiative?

Rob Rosen, Philanthropic Partnerships Director of Bill & Melinda Gates Foundation

People who have joined the Giving Pledge are united by a shared commitment to learning and giving. It's a movement to give back and to learn from the experiences and ideas of other philanthropists. Many of them have had very successful careers in business and are now devoting their energy and skills to solving some of the world's toughest challenges.

One of the great things about the Giving Pledge is the differences between the people who join and the broad range of perspectives that they have. It helps everyone in the group continue to learn from each other. We have people from five continents and 16 countries. The oldest is 101 (David Rockefeller) and the youngest is 30 (Cari Tuna, wife of Dustin Moskovitz). Giving Pledge signatories have had careers in technology, medicine, biotech, the arts, science, finance, and other entrepreneurial endeavors. The issues that they focus on in philanthropy are equally diverse, and they are developing innovative approaches to a wide range of issues including poverty alleviation, disaster relief, global health, education and medical research.

2. Do the participants have to be billionaires? Any threshold amount of their wealth?

The Giving Pledge is focused on billionaires, however it is inspired by millions of people around the world from all backgrounds who give generously, and often at great personal sacrifice, in order to make the world a better place.

3. How do you expect newly rich Chinese to join the initiative?

We think what matters most is that more people are committing their time, money and ingenuity to help solve the world's toughest challenges. If they choose to join the Giving Pledge, we will be glad to welcome them. But we believe there are many ways to get involved in philanthropy. One benefit of the Giving Pledge is that people can join a community where they can learn from each other and candidly discuss how they can better serve those who are most in need. Our hope is that if more wealthy Chinese join the Giving Pledge, it can provide a way for their peers in other countries to learn from the best practices in philanthropy in China.

There has been a significant increase in charitable giving in China over the past couple of years, and we expect that trend to continue. More and more of China's wealthiest individuals are dedicating huge amounts of their wealth, time, and wisdom to philanthropic causes. Jack Ma of Alibaba and Pony Ma from Tencent are two well-known examples. Then, of course, there is Niu Gensheng, the founder of Mengniu Dairy, who recently became the first individual from Mainland China to join the Giving Pledge.

If you look at giving among wealthy Chinese, the trajectory is really encouraging. According to aHurun report, overall charitable donations from China's 100 most generous individuals increased 50%last year compared to the year before. What's even more impressive is that donations over the past year(between April 2015 and March 2016) were five times what they were in 2013.

Of course, there is still room for growth. China has the world's second-largest pool of wealth behind the United States, yet charitable giving is equivalent to just 0.2% of national GDP compared to 2% in the U.S. We have to remember that modern philanthropy is still at an emerging stage in China.

4. How do you promote the initiative in China?

Bill and Melinda Gates and Warren Buffett regularly have conversations with people about the Giving Pledge. They have also met with many of China's business and philanthropy leaders, exchanged ideas and best practices about how to make the greatest impact with philanthropy, and heard about successful examples of philanthropy in China. Their main focus is to foster conversations about philanthropy and how it can improve society.

It's important to remember that the conversation about philanthropy is not restricted to the very wealthy. A big part of the Gates Foundation's work in China is working with the government and a range of organizations and individuals to build understanding of and engagement in philanthropy. We also support policy research and advocacy on issues such as nonprofit registration and tax incentives. The China Global Philanthropy Institute in Shenzhen, which we support, is focused on developing management capabilities and promoting the development of a healthy, professionalized philanthropic sector.

5. After Niu Gensheng, who are likely to be the next one from China to make the pledge?

There are already many wealthy individuals in China who are actively engaged in philanthropy, whether or not they are involved with the Giving Pledge. We hope that more will join the Giving Pledge and use it as an opportunity not just to commit their wealth and time to giving, but also to exchange ideas with their peers in other countries. An important part of theGiving Pledge is learning from the experiences and ideas of other philanthropists.

Though we obviously see a lot of value in the Giving Pledge, we also have a great amount of respect for people who give in different ways. There is no one-size-fits-all in philanthropy.

6. What are the social or government supports for people to donate?

The philanthropic ecosystem in China has been improving over the past years. The new Charity Law has been an important step forward in this respect. It provides a clear definition of what philanthropy is and what constitutes a charitable trust, and it defines more clearly how organizations can raise funds and people can donate more effectively. More generally, it will improve transparency and oversight. These are all very positive developments.

Looking at society more broadly, social media has played a big role in fostering engagement in philanthropy. Social media can be a great platform for organizations to share information and raise funds. From the user's perspective, it means the debates and issues that matter to them are much more immediate and accessible. It's very easy to donate directly to your favorite cause via social media using, for example, Tencent's donation platform. All in all, we're really optimistic about the prospects of the philanthropic sector in China in the coming years.

7. Many said Chinese are reluctant to donate, what's your comment on that?

The clear trend over the past few years in China has been towards greater giving to philanthropic causes from people of all financial backgrounds. According to Hurun, donations have risen 50% in the past year to a total of US$4.6 billion among the 100 biggest donors in China. According to the China Foundation Center, last year 290 charitable foundations in the country invested close to 18 billion RMB. Of course, there is room for these numbers to grow, and there are areas of policy, such as tax incentives, that need to be looked at further. But it's clear that whether you look at government, philanthropic organizations, or individuals, engagement in philanthropic giving is on the rise.

8. When you shared the idea first with rich Chinese, were there any responses from them which you didn't expect?

Overall, the response from the people we've spoken to in China has been very positive, as it has been elsewhere. People don't always immediately understand exactly how the Giving Pledge works, but when we explain it, they are very positive about it.

It surprises some people that pledgers have no obligation to commit their wealth to a particular cause. We respect the fact that people have different causes and issues that they are passionate about. Some people want to tackle a big global issue, others want to invest in their local community. Some are focused on health, others on education or the environment. We want to encourage what we call “giving more, giving sooner and giving smarter.” It's up to the individual person to decide what shape that takes.

All the Giving Pledge asks is that people make a moral commitment to using the majority of their wealth for philanthropic causes. That commitment creates great value for society. For people who join the Giving Pledge, it is a chance to be part of a community with a huge diversity of experience and perspectives that they can share and learn from.

9. Now the world's economy is slowing down including China and how do you think that would impact the initiative?

Obviously, having a strong global economy is good for everyone for many reasons. One thing we've found over the past six years of the Giving Pledge is that people's generosity continues even through ups and downs. We are really pleased with the growth of the Giving Pledge since 2010. We started with 40 individuals and couples in the United States in 2010. In 2013, we expanded internationally. And now we have 154 pledges from 16 countries.

10. There is an annual event of Giving Pledge and will that come to China some day?

The annual event for the Giving Pledge has been held in the United States for the past six years. It's a private event for people who have joined the pledge to come together and learn from each other and from experts about how to have a greater impact through philanthropy. At this time, we don't have plans to move the event outside the United States. We also hold learning sessions several times a year that focus on specific topics (for example, impact investing or support for basic science research) in great detail. We haven't planned any of those in China yet, but we would welcome the opportunity to have these types of sessions in China in the years to come.