Philanthropy in China is at a turning point:
The Sichuan earthquake in May 2008 had a tremendous impact on increasing awareness around philanthropy in China. The disaster resulted in increasing demands by government and the public for increased NGO transparency as well as greater attention to the state of the broader philanthropic landscape. Business’ contribution to society came under increased scrutiny, NGOs were recognized for their important role in carrying out disaster relief efforts, and private foundations quickly sprang up across the country.
Just two years later, there are now over 1,500 foundations across China, and the proportion of domestic donations doubled from 14.1 percent in 2007 to 28 percent in 2009. Both domestic and foreign businesses are now finding innovative ways to make social investments that have greater impacts.
Other trends currently influencing the development of the Chinese philanthropic sector include:
Chinese companies are approaching philanthropy more strategically by diversifying their support and focusing more on impact.
The number of private foundations is rapidly growing, and they are seeking innovative ways to leverage their founding entrepreneurs’ diverse resources, skills, and networks.
Grassroots NGOs are acquiring more domestic funding and increasing their staff capacity and professionalism, while established NGOs are becoming increasingly innovative.
Despite these positive trends, challenges still remain, including: an unfavorable policy environment for NGOs, a lack of effective use of corporate resources, and the operational inexperience of foundations.
To this end, BSR has developed CiYuan (慈源), or the China Philanthropy Incubator, a three-year effort which will build cross-sector partnerships to enhance the value of social investment in China.