Hands-On Giving: The Asian Approach to Philanthropy

The world of philanthropy is often associated with Western generosity, but a recent report from Bridgespan Group reveals that family fortunes in Asia are taking a distinct approach. Rather than simply writing checks or setting up foundations, Asian families manage their charitable efforts with the same intensity they apply to their business dealings.

Bridgespan’s research shows that 95% of wealthy families in Asia’s middle-income economies use an “operating foundation” model, where families oversee and administer their own philanthropic projects. In contrast, only 28% of high-income families elsewhere take this approach. This hands-on approach is a departure from the more detached method favored by many Western donors.

Gwendolyn Lim, head of Southeast Asia at Bridgespan and an author of the report, attributes the Asian approach to the country’s history. During the conglomerate era, Asian tycoons built sprawling business empires by identifying “gaps in the market” and operating independently. When they turned to philanthropy, they applied a similar logic, seeking out areas where non-profits struggled or governments were unwilling to act.

Asian families’ willingness to roll up their sleeves is also reflected in their tendency to partner closely with government agencies. More than three-quarters of Asian family philanthropies collaborate with the state, compared to 58% outside Asia. Lim notes that this is due to the fact that Asian families are accustomed to dealing with ministries through their businesses and see no reason why they should not do so again through their charities.

However, this hands-on approach has its drawbacks. According to Bridgespan’s report, relatively few families in Asia or elsewhere take the time to measure outcomes – i.e., how things change because of what an organization did. This is surprising given that Asian philanthropists are more willing than their Western counterparts to report on outputs such as schools built or teachers trained.

Lim notes, “They go: ‘I don’t want to pay you to measure outcomes, but I want you to report on outcomes.’ That’s pretty terrible.” The implications of this approach are far-reaching. As the world grapples with a massive development funding shortfall of $26 trillion through 2030, family philanthropy is being called upon to fill the gap.

Philanthropic giving fills the spots where corporates may be too nervous to invest. Asian families are at the vanguard of this effort, but their approach raises questions about the sustainability and effectiveness of hands-on giving. The Hong Kong Jockey Club tops Asia’s corporate rankings with an annual giving average of $774 million, but the top 20 Asian philanthropies together gave just $2.7 billion annually – a paltry sum compared to the global top 20’s $21.4 billion.

Lim says, “We call philanthropy the first line of risk.” As family philanthropy in Asia continues to evolve, it will be interesting to see whether their unique blend of business acumen and charitable spirit can serve as a model for others – or whether their approach ultimately proves too hands-on even for its own good.