Asiamoney: Philanthropy evolves in Asia

Asiamoney.com, August 2011

Last week Dipak Jain, Dean of Singapore’s blue chip business school INSEAD, told an audience a little about his childhood in India’s northeastern Assam province. His father was blind, he said; his mother never went to school. Yet he and his four siblings have all done well for themselves – in Jain’s case, well enough to have been dean not only of INSEAD but Kellogg School of Management at Northwestern University. The opportunity to do so, he said, came chiefly from the fact that he was able to receive an education.

It’s a common story in Asia: education is the great leveller, the opportunity for one generation to transcend its predecessor in terms of wealth and influence. So it’s perhaps not surprising to find that education dominates philanthropy in Asia to a far greater degree than elsewhere in the world.

According to a new study by INSEAD and UBS, education is expected to account for 35% of giving in Asia in 2011. The next biggest cause – poverty alleviation – accounts for just 12%, followed by health with 9% and disaster relief 5%.

“It is hands down the most supported cause in Asia,” says Jenny Santi from UBS Philanthropy Services. “There are strong cultural roots that support education, tied to Confucian, Hindu and other Asian traditions.” But more than that, it perhaps reflects a sense of what some people feel they missed, or were the first to receive. “Given the massive wealth transformation we have seen in Asia, we notice many wealthy individuals grew up with very little,” she says. “One of the most deep seated reflections they have is that they were deprived of a high quality education, so want to give back in that sector; or they recall that the only reason they were successful was because somebody gave them a handout and made a difference in their lives.”

In this respect, the popularity of education reflects the generational transition so widely talked about in Asian private banking. As the UBS-INSEAD report points out, for most Asians the rise from poverty to wealth has a genealogy of one or two generations, meaning that the recollection of personal or family deprivation is very much alive within many newly wealthy families. Huang Rulun, for example, the chairman of Century Golden Resources Group, is now a noted philanthropist; and because he had to drop out of school aged 12 to support his family, the bulk of his philanthropic contribution in later life has been around educational causes in China. The generation that has made that shift wants to make sure that the new generation, who had it easier, is in some way connected or aware with efforts to help those who have yet to elevate themselves from poverty.

There are other reasons too. If you give to an educational institution, it’s usually transparent, and with an easily measurable outcome: if you pay to build a school, you can go and see it. If you give an award to the National University of Singapore for one of its medical schools, you can quantify what difference the money has made. Asian educational institutions are often better organized than other socially oriented institutions, the report says; it notes that Chew Kheng Chuan, the chief university advancement officer at Nanyang Technological University in Singapore, has described universities as “leading the professionalization of philanthropic funds solicitation across Asia.”

A forthcoming wealth management report will look in more detail at the nature of philanthropy in Asia. But it seems that more and more givers follow the advice Jain’s father gave him: “to focus on the three Rs of reading, writing and ‘rithmetic.”