Philanthropy Back to the Drawing Board
Recently, the Chinese edition of my book Philanthropy Back to the Drawing Board: a Future Agenda for Foundations (WalburgPers 2022) was published. Just like the international English version (published by Philea in Brussels), the Chinese publication is not a translation of the Dutch book. Stripped of the Dutch political, cultural, and economic context, I wanted to share the more generic themes, questions, and lessons with the widest possible audience, regardless of a specific national setting. My aim was to formulate the agenda for the future of philanthropy in such a way that it could be recognized and understood by philanthropic organizations anywhere in the world.
The open access character of the English version has so far contributed to a low-threshold and widespread dissemination of the book — exactly as I intended — made possible by Philea with the support of Compagnia di San Paolo and the European Cultural Foundation.
Interest for philanthropy in China
It is wonderful to see that there is now a Chinese edition, translated, edited, and published by the China Foundation Forum (CFF) in Beijing and Philea in Brussels, made possible by the Mercator Foundation from Germany.
For almost ten years now, Chinese and European foundations have met annually within the framework of Philea’s Philanthropic Leadership Platform (PLP): China-Europe. I have participated and presented on several occasions. In addition, I have visited China during my time as director of the Bernard van Leer Foundation and as an advisor to the GSRD Foundation. In both cases, the visits involved meetings with Chinese foundations and civil society organizations, but also, for instance, with the China Global Philanthropy Institute.
Against this background, I wrote this short article, drawing on the insights from the various conversations and presentations in the PLP context. My article is no more than an impression; it would be far too pretentious to suggest that I could capture the essence of philanthropy in China. I comfort myself with the thought that it would not be easy for a representative of the Chinese philanthropic landscape to write a thorough article about philanthropy in the Netherlands either.
Some Facts and Figures
The starting point of organized philanthropy in China was in 1977, after the end of the Cultural Revolution. The first foundations were initiated by the government itself and became known as GONGOs (Government-Organized NGOs). Soon, however, the number of private foundations began to grow, reaching today’s figure of around 10,000 foundations. Two-thirds of these are private foundations, while one-third are GONGOs or foundations established by state-owned enterprises. These form the public foundations.
Private foundations are established by companies, families and individuals such as influencers. Public foundations, in comparison, are larger than private ones in terms of income, expenditure, and staff, and they work closely with government agencies. Private foundations are more numerous but smaller in size. They also often collaborate with the government, while at the same time guarding their independence — which is a delicate balancing act.
The main themes that Chinese foundations focus on are: education, health, labor market participation, poverty alleviation, the elderly, and climate/environment.
The total annual expenditures of foundations in China amount to approximately EUR 22 billion. Public foundations account for EUR 7.5 billion of this, and private foundations EUR 14.5 billion.
Almost all private foundations in China are “operating” rather than “grantmaking”; they implement their own projects. Furthermore, private foundations do not have endowments, they are fundraising foundations. This means that they rely on donations from private donors such as companies, families, or crowdfunding to finance their philanthropic activities. For crowdfunding, private foundations must obtain approval from national or local authorities.
A Few Impressions
I have taken away some interesting impressions from my interactions with Chinese foundations. First, private foundations indicate that there are political boundaries within which they must operate — boundaries they not only must but also wish to respect. The question that arises, and which was explicitly put to me, is: how can we, within those boundaries, be as effective and creative as possible in using private money for the public good? Earlier, I mentioned that the international version of my book seeks to address several generic, universal issues concerning effective philanthropy. That became the focus of our discussion.
My second impression is that there has been enormous growth in the number of foundations, from zero in 1977 to around 10,000 today, two-thirds of which are private. This growth appears to be stagnating at present because of China’s economic development in relation to geopolitical dynamics. The quality of these private foundations is not only diverse but, overall, relatively low. This has created a tremendous need to professionalize and to learn from best practices elsewhere in the world. In the context of the PLP: China-Europe program, but also during my interactions with the China Global Philanthropy Institute, I observed a strong drive to learn from international experiences.
My third impression is that Chinese society recognizes that social challenges are too great to be solved by the government alone. Companies and foundations/civil society organizations are therefore welcomed as partners. This development takes on an additional dimension as the government, considering recent economic developments, is forced to make budget cuts. That in itself causes an acceleration of the process of a government being a sole player in addressing social challenges to a situation with multi-players including private foundations.
What Can We Learn from Developments in China?
From my conversations with Chinese colleagues, I drew an interesting impression that has not yet fully crystallized in my thinking: what does it mean to scale up valuable interventions in a society of almost 1.5 billion people? Several Chinese foundations pointed me in this regard to the “Car Wash” project in Shenzhen.
The target group of this project consists of children with intellectual disabilities. One of the GONGOs in China is fully dedicated to supporting these children, but only during the period in which they are part of formal education. The question then arises: what happens afterwards, when these young people want to enter the labor market? At that point, government provisions do still exist but are seen as inadequate. The government wants to play a role but has no time, resources and above all competence to strive for innovative solutions with private money.
It was into this vacuum that several parents in Shenzhen stepped in 2015 with the Xi Han’er Car Wash project. Their aim was to offer these young people a dignified future rather than merely financial support. Car washing turned out to be the ideal combination of elements: young people can be easily trained for it; it is not an unhealthy occupation; it stimulates physical development; and there is a strong demand for the service among car owners willing to pay a fair price.
When the project proved successful in Shenzhen, it was embraced by private foundations. They began training young people and made it possible for them to work in shifts, alternating between car washing and catching up on cognitive and socio-emotional skills. The young people received a salary and felt respected and part of society.
What started in Shenzhen was scaled up with private funding to nearly 50 other locations in China. Strong central government backing in the form of policy guidelines and directives was provided as the government welcomed the fact that a recognized social problem was being addressed in this way. Universities joined in to contribute to the integration of these young people into the labor market by training their supervisors. Local governments also played a role, often making locations available free of charge.
Scaling up despite contextual differences
My impression is that in China, a successful local pilot can be scaled up rapidly. In the Netherlands, we are often inclined to see each initiative as unique, always assuming that it must be adapted to shifting local circumstances. This puts a brake on the process of scaling. My Chinese colleagues pointed out that in China, they simply do not have the luxury of treating initiatives as unique. The sheer numbers mean that, despite contextual differences between local communities, there is a willingness to scale up — accepting the price that an initiative may not be fully “tailor-made.”
I believe there is an even deeper cause behind these differences between the Netherlands as a Western country and China: the cultural differences between individualism and collectivism. The strong sense of personal identity and autonomy in countries like the Netherlands does not help when it comes to rolling out projects nationwide. People tend to emphasize the differences and see many initiatives as context specific. By contrast, in China, if something works well at a local level, it is not considered problematic to aim for rapid dissemination. There is less demand for local nuance; pragmatism and standardization prevail, with the collective interest taking precedence.
Looking more specifically at the philanthropic sector in Western societies, it seems clear to me that foundations in most cases launch “pilots” that never scale up but instead fade into obscurity as interesting experiments. In my book, I examined this phenomenon at length: the world is awash with small, well-intentioned projects whose organizations deserve praise — but the question remains: where is the systemic change? What we might learn from China is to make the step from ‘pilot’ to scaling up more readily, even if it means losing full control and accepting that compromises will be necessary in the process of wider implementation. A strong central government like in China obviously can support the process of scaling up effectively and efficiently. Of course it assumes that the ‘pilot’ is well thought through because it would be disastrous to scale up an initiative that turns out to be inadequate.
