Asia’s wealthy engage in philanthropy primarily to ensure the continuity of core family values and to create a lasting legacy in areas such as health and education, according to a study on family philanthropy in Asia published today by UBS in association with leading business school, INSEAD.
However, among younger and second-generation philanthropists, a “giving while living” approach is also evident, characterised both by increased support for the arts and the environment and a global mindset. Drawing on more than 200 surveys and 100 in-depth interviews with Ultra High Net Worth (UHNW) individuals and families across 10 countries, the UBS-INSEAD Study on Family Philanthropy in Asia is the most comprehensive study on the philanthropic aspirations of Asian families yet undertaken and reveals dynamic change and growth in the region.
While geography and culture continue to be important factors in attitudes towards philanthropy, a clear difference in approach between the first and subsequent generations of Asia’s wealthy is also emerging. A constant factor that remains is the centrality of the family unit to the concept and practice of philanthropy in Asia.
“Driven by phenomenal economic growth over the past two decades, Asia has undergone fundamental change. Nonetheless, an enduring feature is the status of the family as the primary building block of Asian societies coupled with an exceptionally strong sense of responsibility towards the well being of future generations, which is often manifest in establishing formal platforms to engage in social good,” said Kathryn SHIH, CEO of UBS Wealth Management, Asia Pacific.
“Family philanthropy has had a long and distinguished history among Asia’s wealthy and this seminal study, compiled with our partners at INSEAD, fills the void of information about Asian philanthropy, and offers unparalleled insight into the aspirations and challenges faced by Asia’s philanthropists,” she added.
“Successful families across Asia have the potential to exert a transformational impact on the social, economic and environmental challenges facing the continent. With Asia leading the world in wealth creation, it is to be expected that it will soon also lead the way in giving. INSEAD is delighted to collaborate with UBS on this landmark study which will deepen the knowledge about this growing sector and provide a panorama of the rapidly evolving landscape of family philanthropy in Asia,” said Dipak C. Jain, Dean of INSEAD.
While philanthropy is an age-old tradition in Asia, structured family philanthropy is a relatively new phenomenon. Of the 200 initiatives surveyed, more than 75% were established as formal philanthropies since 1980 and more than 60% were established since 1990 while around 45% of funding for regional philanthropic initiatives now comes from first-generation businesses.
The political and economic transformation of Asia has created vastly different approaches to tradition and modernity among successive generations with philanthropy a source of both cross-generational cohesion and dialogue between young and old. Typically, the older generation is influenced by tradition and regards its primary responsibility as with the local community, while the second and third generations are prone to adopt a national/international focus.
Thematically, the older generation tends to focus on education, health and poverty, while their children and grandchildren are more supportive of the arts, civil rights and the environment. Furthermore, the older generation tends to regard giving as an end in itself while their children tend to seek to measure the impact of their philanthropic efforts. In spite of these differences 42% of the families interviewed cited ensuring the continuity of family values and creating a legacy as underpinning their efforts. Families tend to give most to their home country (70% of family giving is directed to national-level causes); to the country they emigrated from or to their own ethnic or socio-linguistic communities. However, philanthropists in wealthier Asian countries are increasingly targeting less advantaged regions with which they have no obvious affiliation. Educational causes receive the lion’s share of philanthropic giving (36% in 2010), followed by poverty alleviation and development (10%), health (9%), and disaster relief (5%).
The importance of education in many Asian cultures is a natural driver of philanthropy in the region. However, the study found that despite a willingness to engage in the alleviation of poverty and development, the agencies that dominate the sector are often poorly placed to accommodate philanthropic giving from families.
The arts (4% of giving in 2010), civil rights (1%) and the environment (4%) have weak support in the region in contrast to programmes with a religious theme although there is little emphasis on systematic, structured contribution to religious causes popular in the US. Some 36% of families interviewed consider social entrepreneurship as the dominant trend.
To have a sustained, transformational impact, the study concludes that family philanthropy in the region will require a sharpened strategic focus, and a more collaborative and professional approach towards implementation. Success will depend on the ability to accommodate the aspirations of different generations and develop models of governance that allow for contributions from all family members. “The study has provided us with a unique insight into the philanthropic aspirations of Asia’s wealthiest families. By bringing together Asian best practices and advising strategies for effective and sustainable giving, UBS is well placed to provide the platform for them to create lasting impact,” Shih added. The 10 countries covered in the study were China, Hong Kong, India, Indonesia, Japan, Malaysia, Philippines, Singapore, Taiwan and Thailand. As one of the leading service providers to UHNW clients worldwide, UBS is very active in philanthropy advisory through its dedicated Philanthropy & Values-Based Investing team. Over 30 in-house experts cater globally to all aspects of philanthropy, strategic charitable giving as well as investing with social impact in a “one-stop” professional approach offering UBS clients a broad range of services spanning from philanthropy advisory, selection and execution of philanthropic projects in the name of and for UBS clients through the UBS Optimus Foundation and investment solutions focusing on combining social change with financial aspects. In 2008 and 2011, UBS was named best private bank globally for Philanthropy Services by Euromoney.