Bill Gates has urged China’s extraordinarily wealthy business elite to shed its aversion to philanthropy and donate to the poor, a potent message in one of the world’s most economically divided societies.
“Only when we help poor people break away from destitution and illness can the whole world achieve sustainable development,” Gates wrote in the People’s Daily, a mouthpiece of the country’s top leadership. “Investing in poor people requires the involvement of every social strata. I believe that the returns from investing in poor people are just as great as [returns] from investing in the business world, and have even more meaning.”
China had 358 billionaires at the end of 2013 – a rise of 41 over the previous year and the second-most of any country in the world, after the US. Yet in terms of charitable giving, it ranks among the world’s worst. According to the World Giving Index 2013, an annual survey by the NGO Charities Aid Foundation (pdf) (pdf), China ranked 115 among 135 countries for donating money and last for volunteering.
Income inequality counts among the country’s most pressing social ills. According to a 2012 survey by Peking University, families in China’s cities and coastal provinces earn significantly more than their rural and inland counterparts. An average Shanghai household, for example, brings in £2,790 a year, while an average family in the inland province Gansu makes less than £1,200.
While handfuls of individuals have profited enormously from China’s economic boom, few have shown willing to share their wealth. In 2010, Gates, who runs the bn Bill and Melinda Gates Foundation, and the American business magnate Warren Buffet asked 50 of China’s richest people to join a charity dinner in Beijing. Many turned down the invitation, reportedly because they were uncomfortable being asked for donations.
Yet the country’s philanthropic record is slowly improving. On Friday, Jack Ma and Joe Tsai, co-founders of Alibaba, China’s biggest e-commerce company, announced plans to fund a bn foundation, the country’s largest. The amount represents about 2% of the company’s equity, all of it from the founders’ shares. According to state media, the foundation will focus on environment, education and healthcare. Yet other details, such as its name and how the money will be distributed, remain unclear.
Ma, China’s eighth richest man, stepped down as Alibaba’s CEO last year and has since dedicated much of his time to charity efforts. He sits on the Nature Conservancy’s board of directors and helps lead kung fu star Jet Li’s One Foundation.
“When you register a new foundation in China you need a supervisory agency, so a lot of people have worried that by registering a private foundation they’d be giving up control over their personal wealth,” said Anthony Spires, a sociology professor at the Chinese University of Hong Kong who researches China’s civil society. “Many of these folks are used to being in charge – they have very clear issues that concern them … and they don’t want the government to tell them how to spend their money.”
Spires called the size of the promised foundation “staggering”.
“This will be the largest foundation in China, if they really do it,” he said. “It’s on par with Michael Bloomberg’s philanthropy.”
Alibaba is preparing a high-profile initial public offering on the New York stock exchange. Analysts expect the company to be valued at more than 0bn, which would make its IPO one of the biggest in history.
“My wife and I had this thought of setting up a personal charitable fund when we started the business,” Ma, 49, told the state newswire Xinhua. “We’d like to earn money before we turn 50 years old and do charitable work in our time after 50.”
Gates has responded to Ma’s announcement, saying that the foundation will “do an immense amount of good, particularly in this remarkable time in the development of philanthropy in China”, the newswire reported. Warren Buffet has called the two Alibaba founders “extraordinary leaders in business [who] have now become leaders in philanthropy”.
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