Observations and Predictions about China’s Emerging Nonprofit Sector

By Eileen Heisman

This summer, I was invited by Chinese officials to speak to 150 leaders in their emerging nonprofit sector about American-style philanthropy. I was heartened and inspired by their motivation to engage in individual giving—a concept that is relatively new and just starting to gain traction in China.

As we discussed our different practices and approaches to philanthropy, I noticed a number of key differences—and some similarities—between the charitable landscapes of our two countries, many of which provide a unique insight in the future of the country’s nonprofit sector.

Three Biggest Differences
The role of government and business in philanthropy: For decades, the government has been the primary provider of social services in China. I heard from a number of conference attendees that supporting causes or organizations, like your alma mater or local museum, is not something that private citizens commonly do because the government already does. Furthermore, corporations in China account for more than 80 percent of charitable donations (conversely, in the U.S., individual giving accounts for 80 percent of total giving and 14 percent comes from companies). When there is so much government and corporate dominance in the sector, it is unsurprising that emerging nonprofit leaders are still trying to find the best way to harness the power of individual giving.

The challenge of visibility and transparency: The number of operating nonprofits is growing in China, but that doesn’t mean they receive the same recognition. We know that there are a limited number of large, national charities that receive government approval and support, like the Red Cross Society of China. In my observation, there are smaller, local nonprofits emerging—some with government approval and some without. This tiered kind of structure makes it difficult for transparency to evolve with the growth of the sector. I would point out that transparency principles in the U.S. are relatively recent. When I first started in the nonprofit sector, the IRS 990 forms took over a year to receive and were only available in hardcopy. The emerging practitioners in China were particularly interested in the ways American donors research charities using online resources and the information that the IRS 990 tax form provides to the public.

The existing infrastructure: I noticed a number of seemingly small, but impactful differences in services that affect daily life in China. For instance, the Chinese financial system does not use paper checks. Also, charitable direct mail doesn’t really exist. In the U.S., direct mail is still the most popular way for nonprofits to appeal to donors and many donors send a check in response. These seemingly small differences in our daily lives can present challenges to the emerging nonprofits in China that want to create communication and a convenient way to give for potential donors.

Three Important Similarities
The developing infrastructure: Now forget what you just read. There are differences between our societies with respect to the existing infrastructure, but the emerging practices—using social media and other technology to communicate—are putting the U.S. and China on equal footing. The immediacy with which you can reach someone is making the world smaller and faster. Videos and photos are also making the message more impactful.

The growth of private wealth: Between mainland China, Hong Kong, and Taiwan, there are 177 billionaires. The only other country with more billionaires is the United States. Private wealth is expanding rapidly in China, as it has in America. With it comes the encouragement to give back as evidenced by Bill Gates and Warren Buffet’s multiple trips to China to recruit signatories for their Giving Pledge (wherein the world’s wealthiest commit most of their assets to charity). The fact that they want to learn how to solicit gifts from private individuals makes sense. It is a tactic for emerging nonprofit leaders to embrace given the newly wealthy Chinese families and industries.

The giving impulse: The impulse to give is something ingrained in American culture, but it is not unique to us. According to nearly everyone I talked to, the biggest impetus for this change was the 2008 earthquake in Southwest China that killed more than 80,000 people, including young children. In the wake of the disaster, individual donations in China soared and total giving reached $15.7 billion, three times more than the previous year. While giving levels in China have dropped slightly since then, the desire to grow the nonprofit sector and encourage private donations has only increased.

One Major Prediction
These observations and the conversations I had with the insightful and motivated people who attended the conference led me to a single, meaningful conclusion, which is this: At some point, Chinese philanthropy could easily leapfrog over philanthropy in America.

The lack of existing structure—old guard or traditional methods—lends them an enormous amount of freedom. The emerging nonprofit leaders in China will learn from the philanthropic culture in the U.S. and elsewhere, then take the successes and adapt them to suit their own communities, causes, and organizations. I expect they will harness the power of new technology to connect people and create a groundswell of momentum towards individual giving. When that happens, I will applaud their success and, hopefully, we can all learn from it.

Eileen Heisman is CEO of National Philanthropic Trust. Since its founding in 1996, NPT has raised more than $3.4 billion in charitable contributions and currently manages more than $1.7 billion in charitable assets. NPT is one of the 25 largest grantmaking institutions in the United States, administering more than 80,000 grants totaling almost $1.8 billion to charities all over the world. NPTrust.org.