Corporate Philanthropy Index (China)
At the end of 2009, according to CSR Asia, the China Social Entrepreneur Foundation and Horizon Research Consultancy Group jointly produced the first Chinese Corporate Philanthropy Index. The Index is the result of interviews with 203 large and medium-sized enterprises together with a survey of almost 1,300 people from six major cities in China.
The key findings include:
- Companies tend to have specific philanthropic aims – most companies have short-term and specific objectives for philanthropy (around 80 percent of companies surveyed have specific goals for their philanthropic work), and around 70% percent have objectives for public welfare projects.
- External factors drive philanthropy – most companies committed funds and/or resources according to social needs as identified by the government; companies rarely developed strategies linked to or based on stakeholder needs or returns to the company.
- Most philanthropic work is spontaneous – less than 40% of companies actually set annual budgets for philanthropy programs, and less than 30% developed a plan for every project (although there was a surge in philanthropic activity due to natural disasters in 2008).
- Most corporations lack systematic management – only 1% of companies surveyed maintain a specialised department in charge of philanthropy, and in over 70% of companies, management of philanthropy programmes is considered as a part-time job shared amongst a range of departments. Moreover, only half of the companies surveyed have procedures for the management of philanthropy programmes.
- Most corporations lack balance and focus – the Index shows that companies surveyed had philanthropy programmes that concentrated mainly on poverty alleviation, education and disaster relief. The major beneficiaries of these programmes were disaster victims and the poor. Only 6.6% of enterprises provided support to groups such as those supporting health programs.
- Few corporations cooperate with NGOs – less than 20% of companies surveyed developed partnerships with NGO with relation to philanthropy programs. These companies were also observed to have inadequate capacity in the selection of NGOs, supervising programs and putting into operation an evaluation and monitoring system. Only 41.8% of companies required project financial reports from partnering NGOs and only 30% conducted evaluation and monitoring of their philanthropy programs.
- Companies communicate insufficiently – around 60% of individuals surveyed said that a company’s image with regard to philanthropy affected their purchasing decisions. However, it appears that few companies have taken note of this finding. Only 30% of companies surveyed issued any communication at all about their philanthropy programs.
- Insufficient government support – companies surveyed believe that the government has not provided sufficient support to corporate philanthropy. They scored government support at 3.53 out of 5 on average. Companies believed that the government fails to provide NGOs enough access to policies related to public affairs or enough support to NGOs. Companies thought this was insufficient in light of the government’s rhetoric about philanthropy.
- A lack of talent in the NGO sector – many NGOs in China are still in a start-up period and the average salary level is not attractive. Working in an NGO or philanthropic organisation has not gone mainstream and very few graduates, even those majoring in social work, would choose to work for such an organisation. Furthermore, there are a very limited number of degree programmes in Chinese universities that focus on development or philanthropy. On the other hand, existing NGO employees lack work experience. The shortage of development professionals not only affects the quality and outcome of philanthropy projects, but also the partnership between companies and NGOs. One of the results is that companies tend to choose big government-backed NGOs as partners while numerous grassroots NGOs struggle with limited resources. As an official of the Ministry of Civil Affairs pointed out, the lack of talent and knowledge has become the bottleneck in the development of NGOs in China.
- Limitations to the culture of philanthropy in China – the survey found that philanthropy is still an individual issue in China, and has not developed into a social phenomenon or indeed a public topic. 63.3% of individuals surveyed said they rarely talk to others about public welfare issues, and over 20% of respondents never discuss such issues. Although many people are involved in philanthropic activities, they are often carried out by conscientious individuals and have not become a collective action. The survey concludes that this is altruistic and one-way philanthropy, which is deeply rooted in the traditional Chinese culture to “return to the society and contribute to the homeland.” But compared to a mutually beneficial philanthropy paradigm, the Chinese way is regarded as disadvantageous in bringing incentives to companies to do philanthropy and, even more strategically, CSR.
This is a fascinating insight into a global economy that will undoubtedly be pushing for supremacy in the world market during the coming decade, and is well worth keeping an eye on. What will be interesting is to see how philanthropy develops generally in an economy that has the potential to donate considrable sums to charitable causes. Will they learn from countries in the West, who have the experience, or perhaps even the emerging markets of Latin America? Or will they do as they have done for centuries, and stick to their own ideas about things? Whatever happens, it is certainly a country to watch in fundraising terms and I shall be keeping a close eye on developments.