The pandemic has ravaged countries economies the world over, and none more so than the U.S. who recently reported that last year their GDP had contracted by 2.3% to $20.93 trillion. Coincidentally China’s economy grew by 2.3% which has led to a new recalculation by economists that it will be 2028 when the Chinese economy (based on current projections) will eventually overtake the U.S.
This shift will also bubble over into the world of philanthropy with a recent landmark study by the Asian Venture Philanthropy Network (AVPN), with support from The Rockefeller Foundation, revealing how Chinese philanthropy is seen as a major global player in the space and could end up shaping the future of international giving and development, largely driven by the country’s private sector and a new generation of citizen wealth.
The contrast is palpable, with America becoming indicative of a new gilded age, one where any tinkering with philanthropic vehicles is largely benefiting the richest individuals of our society. And while philanthropy has played a major role in the history, legacy and stature of this country, we must also acknowledge that much of this was built on the backs of the most vulnerable in our society, those they ironically seek to serve in their giving.
If anything, the past few years have shown us that America is naively holding on to an old narrative of their success, becoming more introspective in their outlook and actions and retreating from global progress on climate, diplomacy and free trade – areas they should be leading the discussion on, not stymying. And while a change in leadership will see the rejection of many of the Trump era policies, the world has caught a glimpse of just how divided the country is.
For some that will be just enough to try and fill a vacuum of leadership in certain areas including that of philanthropy and foreign aid.
Global philanthropy, as it becomes more mature, informed and innovative is beginning to shift its outlook too with a number of regional players looking to build out their philanthropic infrastructure to be more agile in the shifting winds and to take advantage of new investment opportunities. This includes Asia, Europe and the Gulf nations.
The race to become that international hub has started in earnest, with The Beacon Collaborative, a collective impact movement in the UK recently releasing a report that sought to position the region as a global center of excellence for international philanthropy and social investment.
The report astutely pointed out that “Sophisticated global philanthropists and social investors will seek out jurisdictions that can support their global giving with unambiguous policies, targeted and clear regulation, world-class infrastructure and an innovative environment.
By welcoming responsible global citizens who are seeking positive social impact, the UK can enhance its position as a world-leading centre for progressive global finance and wealth management and send a powerful signal to the world about the UK’s commitment to responsible global leadership in a post-Brexit and post-Covid world.”
Its recommendation to achieve this was through a range of legislative and regulatory change, tax incentives and investing in digital tools that could drive new innovation and impact measurement.
While this report raised a number of pertinent points, I just couldn’t move past the reality of the ‘Asian Century’ that is about to occur and what their influence will mean for philanthropy across a variety of applications.
I was first introduced to this line of thinking when I worked for the Australian Federal Parliament and hearing a speech on the topic from then Treasurer Wayne Swan to a packed hall at the Australia-China Business Council:
“This is truly the Asian century.
China’s economic expansion is not only changing the lives of more than a billion Chinese, but all of our lives – and especially the lives of us in this region.
It is changing what we do, the opportunities we have, the challenges we face.
It is changing how we think about our future.
China’s growth, together with the growth of India’s economy, the growth of Korea, Taiwan and South East Asia, and the continuing importance of Japan mean that the weight of the global economy is shifting into our time zone.
Over 70 per cent of our goods exports are now sold within this region.
For 200 years Australians saw themselves on the periphery of the global economy.
But now, with the development of this immense Asian economic community, and the rise of China, Australia finds itself not on the periphery of the global economy, but close to its centre.”
Re-reading that transcript from 2008 while researching this piece then got me thinking. Why can’t Australia be at the core of global philanthropy?
And the more I thought of the concept, the more I could see Australia’s potential as one of the biggest beneficiaries for a new era of world wide giving and investment.
My first involvement with philanthropy came during a Queensland University of Technology (QUT) Council Meeting of which I was an appointed member. During the Vice-Chancellor’s report, he mentioned the support of Chuck Feeney and how his investment in the University was having a transformative effect on it’s growth. I jotted his name down and then after the meeting did a bit of research into who this mysterious benefactor was, seeing the work of The Atlantic Philanthropies and his bold vision to advance opportunity, support biomedical research, bolster higher education and promote the work and values of equity and dignity.
It’s funny to reflect on an American philanthropist investing in Australia, when I’m an Australian now working in philanthropy in America. Not the same amount of zeros in our work but I digress.
I have a great hope that Australia can be a blueprint for a ‘new philanthropy’ and one that works in tandem with government to create a more dynamic tax code and promotes a culture that spurs a new golden generation of giving.
There is a terrific article by Swinburne University of Technology Professor John Fitzgerald about how philanthropy can provide a new path for engagement with China, highlighting that “Philanthropy can play an important role in helping to achieve clarity on complex and often sensitive issues because private donors are independent of government, tend to have a bolder risk appetite, and are able to support and convene problem-solving teams, representing different sectors and perspectives, to explore ways forward in building constructive bilateral relations.
“Despite regulatory constraints in both countries, philanthropy can be a helpful partner to government, to business and to the community in helping to shape future relations between Australia and China in ways that are fit for purpose and suited to the times in which we live.”
Fitzgerald goes on to say “Philanthropy in China, although larger in scale than Australia, has limited international reach. Private donors and foundations in China contribute around $32billion annually to a wide range of charitable causes, with philanthropic trusts and foundations contributing around $13 billion of the total.”
What is most intriguing though is that one third of respondents to a recent survey of major foundations in China reported making at least one donation overseas during the survey period and the value of overseas donations in 2015, totaling $135 million, exceeded the value for the previous seven years combined.
Australia has long been mooted as a financial services hub and recently The Financial Services Council (FSC) came out in favor of taking advantage of an opportunity presented by the current turmoil in Hong Kong.
The FSC has already promoted policies, including abolishing stamp duties on insurance products, reforming taxes and encouraging new investment vehicles, that it says would build on the country’s existing strengths.
“We would welcome all efforts by the Australian Government to remove the barriers that are holding back Australia from growing as an international financial center,” CEO Sally Loane said.
So would it make sense to approach a philanthropic angle in tandem with the push within financial services? It’s definitely worth the discussion especially when both will need changes to the Corporations Act to make its regulations more internationally attractive.
Australia has the opportunity to weave charity into the very fabric of its society, and its international identity, one that is already personified through ‘mateship’. But this won’t happen overnight and will require bold leadership from Australian philanthropy to convene and partner with leading players in the philanthropy sector across Asia, de-risking foreign investment concerns by showcasing success through the co-funding of joint activities with each side supporting its own participation consistent with national laws and local regulations.
At the end of the day, Australia has the ability to seize an estimated AUD $322.6 billion global opportunity to become the epicenter for international philanthropy and social investment, and in the backyard of the fastest growing economic region in the world. With the nation’s response to COVID the envy of many, a move in this direction will be another signal of its commitment to a new progressive and responsible global leadership.