The term “philanthropy”, meaning "love of humanity", was coined by Greek playwriter Aeschylus and it has garnered worldwide attention, thanks to large scale ‘giving’ by famous celebrities Bill Gates, Warren Buffet, Michael Bloomberg, Orpha Winfrey, Mark Zuckerberg, Richard Branson, Ray Dalio, and many others.
The dictionary definition of “Philanthropy” is “the desire to promote the welfare of others, expressed especially by the generous donation of money to good causes.”
Since the words “charity” and “philanthropy” are often confused and used incorrectly, we want to clarify their definition as well. According to an article in Giving Compass:
- Charity is a natural, emotional impulse to an immediate situation and giving usually occurs in the short-term. Charity can take the form of monetary donations or volunteering or in-kind support.
- Philanthropy addresses the root cause of social issues and requires a more strategic, long-term approach. In addition to giving money or volunteering, some philanthropists participate in advocacy work.
America – The Most Philanthropic Country?
As the “most philanthropic country” in the world, Americans donated nearly $449.6 billion in 2019 and the number continues to grow. American philanthropic foundations are also among the wealthiest in the world. US-based foundations include the Rockefeller foundation, Bill & Melinda Gates Foundation, Ford Foundation, Kellogg Foundation, among others. For those curious, the Novo Nordisk Foundation (Denmark) and the Stichting Ingka Foundation (The Netherlands), founded by Ingvar Kamprad, founder of Ikea, are two of the wealthiest foundations in the world.
As per a Statista study, "The highest concentration of foundations is in Europe (154,271) while North America also has a considerable number (91,850). Unsurprisingly, philanthropy is more common in high-income countries where they control serious levels of cash."
So What Causes Does All This Money Support?
In terms of causes that philanthropy supports, apart from religious donations, education is one of the most supported causes. However, one criticism that this subject often attracts is that a big part of the giving to education is concentrated on higher educational funding that the wealthiest folks make to their alma matters.
According to an article by CharityX, “Higher education receives the greatest total gifts value, underscoring the affinity that UHNW donors feel towards education and their alma maters. This is opposed to what is seen in the American general population, where the majority of charitable donations went to religion (32%), education (15%), human services and grant-making foundations (12%) and health (8%).”
Note: UHNW stands for ultra-high net worth individuals i.e. individuals having a net worth of at least US$30 million.
A thought to ponder here, though, is that according to The Guardian, philanthropy usually benefits the super rich and that.
“There are more philanthropists than ever before. Each year they give tens of billions to charitable causes. So how come inequality keeps rising?” The article goes on to say that the biggest donations in education in 2019 went to the elite universities and schools that the rich themselves had attended, and that “a lot of elite philanthropy is about elite causes”.
Anand Giridharadas talks about this "phenomenon" in his book, "Winner Takes All", but that's a separate discussion altogether.
The History of Charity in China
With widespread increase in “charitable giving” on a global scale, it is also important to know that it has a long history in China. Deeply influenced by Confucianism, Taoism and Buddhism, “giving”, and helping the poor are merged in traditional Chinese culture for thousands of years.
Lao Tzu, the Chinese philosopher in Chu dynasty once stated, “The Master has no possessions. The more he does for others, the happier he is. The more he gives to others, the wealthier he is”.
Unlike western philanthropy foundations, philanthropy in China has been originally been carried out by rich individuals. The spirit of generosity can also be found in scenes from classic Chinese historical TV dramas. During one particular famine, a rich man set up a table at his house and gave food to the poor. This form of benevolence has carried on to modern China.
In 2008, an 8-magnitude earthquake hit Sichuan province. With more than 80,000 people dead or missing in this catastrophe, charitable donations reached 100 billion yuan ($14.7 billion), which marked a turning point for the philanthropic landscape in China.
In recent years China, an increasing number of people have been choosing to make individual donations to various causes. In fact, Chinese philanthropy has quadrupled from 2009 to 2017, based on the research supported by the Rockefeller Foundation.
Skepticism, Challenges and Opportunities in Equal Measure
Though charitable giving has been institutionalized in the country, trust issues and concern still exist because of an apparent lack of transparency in some cases. With the expansion of philanthropy in China, the Chinese government published in 2016 the New Charity Law to promote the culture of donation, regulate charitable organizations, and increase transparency.
What we cannot deny, though, is that the Chinese public is showing an increasing interest in making charitable donations. Even amongst the super-rich, this awareness has remarkably increased, thanks to a more access to information, higher social media discussions on social and environmental issues, impact of globalization, rising wealth, technological access, as well as the historical significance of Chinese culture.
Further, the mainstreaming of the 2030 Agenda and achieving the UN’s Sustainable Development Goals (SDGs) has been popularly accepted within China’s philanthropic sector. Since 2015 there has been continuous growth in the number of foundations and projects. In fact, as of 2018, project expenditures contributing to SDGs have risen by 94%.
An explosion of crowdfunding platforms, government funding, institutional grant, impact investment and fresh ideas and strategies are allowing to reshape how receivers raise more funding and how donors plan when and how they give aid to.