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    Can Giving Circles Break Down the Barriers to Philanthropy in China?

    A new, community-driven type of charity is starting to gain traction in the country, one that may have the ability to revolutionize the country’s staid philanthropic sector.
    Jul 08, 2021#charity

    This May, representatives of 15 social groups gathered in Shanghai to discuss how best to achieve their aims. What brought them together wasn’t a shared mission but a common model in which communities with shared interests or passions pool funds before deciding which social issues and organizations to support financially.

    Known as “giving circles,” this model has the potential to revolutionize China’s staid philanthropic sector. For all the advances China’s social organizations have made over the years, there remains an acute shortage of grant-making foundations in the country. Compared to the United States, where over 95% of private foundations are grant-making foundations, only a small subset of foundations in China issue grants, leaving NGOs reliant on limited government funds and corporate donations.

    Although giving circles remain relatively minor players — the 15 mentioned above have donated 8 million yuan ($1.26 million) across some 60 cities and towns nationwide — they have immense potential to mobilize givers from outside traditional philanthropic circles and fund projects that would otherwise go unsupported.

    Take Unlimited Her, for example. Founded in 2019 by a mix of hobbyist and professional women climbers, including the well-known mountaineer Han Zijun, the program grew out of a shared desire to climb Mount Kilimanjaro. Some had previous experience donating to charities, and as a group decided to set up a program to support the education of girls in remote mountain areas by fundraising off their climbs. Today, the group has more than 60 active members and has raised 2 million yuan.

    The emergence of groups like Unlimited Her reflects the shift in charitable giving and fundraising that has taken place in China over the past half-decade. In a 2017 report on giving circles in Asia written by the academic Rob John, he highlighted only two such circles on the Chinese mainland. Both were initiated by foundations or public welfare professionals and patterned after international models. 

    As early as 2016, however, a new wave of giving circles began to spring up around the country, many founded by private citizens unaffiliated with the country’s philanthropic sector. Whereas earlier professionalized giving circles typically focused on recruiting strangers, the new wave of giving circles function more like an extension of people’s social circles. While the participants’ ages, occupations, and backgrounds are often diverse, the majority share a few commonalities: they are relatively wealthy, have the means to participate in public welfare activism, possess a high level of education, and are generally open-minded.

    Traditionally, giving to those in need in China took the form of individual mutual assistance, typically within clans or among people from the same geographic region. Since the founding of the People’s Republic in 1949, the provision of public goods and social welfare has been the near-exclusive domain of the government. As such, individuals had few opportunities and less interest in participating in charitable giving outside of their traditional networks — a mindset that outlasted the government’s commitment to comprehensive welfare.

    The 2008 Wenchuan Earthquake marked a turning point, awakening the Chinese public to the importance of philanthropy and providing aid. Over the ensuing decade, social organizations took off around the country, but their main sources of funding remained government grants and corporate donations, which limited their reach and scope. Nowadays, most government procurement projects focus on improving people’s livelihoods through meeting basic needs, and their target populations are relatively small. The emphasis is on dealing with issues it considers more pressing, such as rural poverty alleviation and assisting orphans, the elderly, children, people with disabilities, and other vulnerable groups. Most corporate donations, meanwhile, go to large organizations with established brands and reputations.

    This left many small, grassroots NGOs under intense pressure to survive. The rise of giving circles thus represents an important step in the direction of increasing funding diversity.

    They may also awaken individuals to the possibilities of philanthropy, encouraging the Chinese people to do things that the government considers outside its remit or where enterprises see no profit. Whereas before, the charitably minded had to rely on nonprofit organizations for volunteering opportunities, with giving circles, they can create their own opportunities for philanthropic engagement. In addition to poverty alleviation projects, giving circles are moving into fields that have previously received little attention, such as mental health, the arts, and sports.

    Of course, the model remains immature, and there are problems still to be solved. For example, initiators of giving circles sometimes expect too much to come from their donations to domestic public welfare organizations, which are themselves still in a fledgling state. When the results fail to live up to expectations, it can dampen enthusiasm for further giving. The long-term development of giving circles also requires improved societal and state support. Currently, the government maintains strict regulations on charitable fundraising and donations. This means that, while giving circles can informally donate to NGOs, they often lack the legal status to engage directly in fundraising or grant-making.

    Still, there is room for optimism, especially with regard to giving abroad. China is home to one-fifth of the world’s population but accounts for only a tiny fraction of charitable giving. If giving circles can awaken Chinese to the potential of charity, not just as a response to an immediate disaster but as a way to express their values and interests, the impact is likely to stretch far beyond the country’s borders.

    Translator: David Ball; editors: Cai Yiwen and Kilian O’Donnell; portrait artist: Zhou Zhen.

    (Header image: DigitalVision Vectors/People Visual)