OK, so I made that verb up. However, with rates of inequality being high in China as in the United States, there are of course a lot of wealthy Chinese. And, given that economic growth in the latter is significantly higher than that in the former befitting its status as a developing economy, there are of course Chinese billionaires. However, one area where Chinese billionaires lag behind their American peers is in their philanthropic activities. Here at LSE IDEAS, we work with colleagues from the Institute for Philanthropy which aims to make giving more strategic in maximizing social returns. That is, the IFP is not a philanthropic organization, but one that offers practical advice to would-be donors seeking to leave a legacy. For obvious reasons, the IFP folks are particularly keen on China, India, and other fast-growing developing countries.Quibble if you will with the social benefits of philanthropy, but Warren Buffett and Bill Gates certainly have their hearts in the right place. The former famously persuaded the former to earmark much of his fortune for charitable activities. More recently, they've conducted roadshows trying to get other (mostly American) billionaires to do the same, with often positive results. Just look at those who've signed up. (If you need further background on the genesis of this project, see this Fortune feature on the "$600B Philanthropy Challenge".) In essence, the "giving pledge" they're trying to persuade others to sign is a commitment to give at least half of their wealth to philanthropies of their choosing.
However, it seems these billionaires with hearts of gold have met with some reluctance in China. As it is not a developed economy, there is obviously less of a history of charitable giving in the PRC. Moreover, the dynamic duo are encountering some suspicion of their motives. From the Vancouver Sun:
China's richest are worried that Bill Gates and Warren Buffett are coming to Beijing later this month to strong-arm them into making charitable donations. The Microsoft founder and investment guru are bringing "The Giving Pledge" campaign to the Chinese capital on the heels of their success in the U.S. convincing 40 mega-rich to donate half their wealth to good causes - about $125 billion US - either while they are alive or on their death beds. But according to Chinese media, several of the 50 invited to the dinner Gates and Buffett will host have declined and many have phoned to ask for clarification.Interesting stuff. Regardless of whether Buffett and Gates meet with success on their Eastern roadshow, there is no doubting where the next growth market for philanthropic donors lies.
Chinese media quoted Ray Yip, head of the Giving Pledge program in China saying: "A small number of people have declined the invitation to attend, while many of the invitees called to ask whether they would be required to pledge a donation at the dinner." Yip said Gates and Buffett may send letters making it clear their dinner is about "sharing ideas" not collecting money. Yip told Beijing's Economy Observer newspaper that many of the hyper rich Chinese felt "they might be embarrassed at the party."
It is hard to say whether billionaire entrepreneur and investor Chen Guangbiao, the first to publicly accept the Gates-Buffett dinner invitation, helped calm nerves or fuelled even greater concern among his rich colleagues when he announced on his website Sunday that "when I leave this world...I will donate all my fortune to charity." Yip was not available for an interview Monday.
Chinese are second only to Americans in the global billionaires club, as defined by Forbes Magazine's annual rich list. But they are also Johnny-come-latelys. It's only been 30 years since their economy was opened to the world and 20 years or less since private entrepreneurship has really flourished. It means that while it is commonplace for people to help out families and friends, there is little history yet of public philanthropy on a large scale.
