Recently, the China Charity and Donation Information Center released the 2009 First Half-Year Report on Charitable Donations in China. The report provided macro data of philanthropy given to Chinese charitable causes including the total size of donations, the portion of donations received from overseas sources, a breakdown of donations received by each charitable sector, and a demographic of donors. Below I summarize some important findings from the report.
Total Donation Size: Down 78.4% from 2008 Number
2008 saw an unprecedented boom in charitable giving in China due to the earthquake. The total size of donations in the first half of 2008 reached the highest level in Chinese history with US$8.9 billion, of which 90% was given after the earthquake. This rise, however, did not continue into 2009. According to the report, donations given in the first half of this year were only US$1.92 billion, down 78.4% from last year. The majority of charitable giving in 2008 was one-off donations for the earthquake.
Looking at donations received in 2007, a year that had no large natural disasters, gives us a good point of comparison with 2009. If we prorate the 2009 data with the US$4.5 billion received in 2007 (there is no data for the first half of 2007), then we find that giving is only slightly lower this year, which I believe is directly tied to the economic downturn. This data suggests that charitable giving has not so much declined as normalized since the earthquake.
Overseas Donations: Being overtaken by Local Giving
Similar to the general situation, overseas donations this year also experienced a substantial reduction falling from US$1.97 billion in the first half of 2008 to US$600 million in 2009. Additionally, these donations account for only 31.1% of those received in the first 6 months. A 2006 McKinsey report showed that about 80% of the total charitable donations in China in 2005 were from foreign resources. It is clear that local giving is overtaking overseas donations, which is a positive and encouraging trend.
In terms of where these overseas funds came from, the report found that Hong Kong was the primary source, contributing 64% with the U.S. (13%), Taiwan (6%) and Macau (5%) following.
Local Donations: Privately-owned Businesses and Individual donations exceeded past giving.
According to the report, privately-owned businesses in China donated more than other groups or individuals. Their giving totaled 43% of all local donations. Together with state-owned companies and wholly foreign-owned enterprises, businesses in mainland China contributed 60.3% of all the local donations, making for-profit companies the biggest donor group in mainland China.
One thing to note: supporting charitable causes is still a rare action for state-owned companies. Based on the profit totals released by the China Ministry of Finance, their charitable giving (US$180 million) was only 0.22% of their profit (US$80.8 billion)for the first half of 2009.
Another finding of the report was that the portion of local individual donations in 2009 was higher than the historical level. Before 2008, donations from individuals had never exceeded 20% of total local giving. In the first half of 2009, the percentage for individual giving was 26.3%. Although it fell from an all time high of 58% in 2008, this number was still above the historical average. Apparently, the boost from the earthquake has continued to encourage giving among Chinese people. It will be interesting to observe how long the post-earthquake increase of individual donations lasts in the future.
Charity Sectors: Education Received the Most
The China Charity and Donation Information Center was able to track the destination of US$1.09 billion of the US$1.92 billion donations. Based on the data disclosed, education received the most funds with US$500 million, 46% of the monitored funds. Colleges and other higher education entities were the largest beneficiaries, receiving 70% of the US$500 million donations. After education, the following sectors were disaster relief (15%), poverty (8%), health care (6%), science and arts (3%) and the environment (2%).
In conclusion, the year 2008 had significant impact on the Chinese charity sector. Both charitable donations and volunteerism were the highest in Chinese history. Although we are not likely to see anything reaching 2008's level this year, I think that, overall, Chinese minds have been opened to philanthropy by the earthquake. More and more people are getting involved in charitable activities and there is an increasing sense of responsible philanthropy with accountability and transparency. I believe we are moving towards a more engaged civil society, which is expressed in local donations overtaking overseas giving, the increasing weight of individual donations, and the active involvement of private-owned companies in Chinese charitable causes.
--Leo
Leo, a very well written synopsis which is helpful to the sector, thank you.
Jonathan Hursh
Posted by: Jonathan Hursh | October 10, 2009 at 12:49 AM