The Billionaires to Donations Ratio in China is Skewed
The Billionaires to Donations Ratio in China is SkewedJun 07
The number of billionaires in the People’s Republic of China has increased significantly in the last decade or so, but their charitable giving has not kept pace. In 2015, China saw a rise in the billionaire population of 38%, with a net worth of $830 billion, meaning that country has the second largest number of billionaires after the United States. But the United States far outpaces China in charitable giving.
There are a number of reasons for this, but one of the most significant is a lack of transparency on the part of charitable organizations. In recent years, there have been a number of scandals involving charities in China, especially as pertains to the use of funds, which has made many people cautious. The government has stepped in to address the situation, but as is common in China, that has largely been to restrict who can claim charity status, and what they can focus their mission on. The result is that many charities are now beholden to the government.
Some billionaires, a class that has only recently come into being in the nominally communist country, are reasonably cautious about how the government perceives them, and so they must choose their donations very carefully. But there also aren’t many tax incentives for donating in China. Here in the United States, although many people donate out of the kindness of their hearts, there are a number of tax benefits that companies can claim by donating to charity, and they make sure to do that. Regardless of why a person, or a company, donates to charity, the end result is still a donation.
While the number of charitable organizations in China has increased in the last few years, up to 4,211 as of 2015, giving to those organizations is still slow. The Chinese government does seem to be interested in finding ways to get people to support select charitable causes though, so this may change over the next few years.