Hong Kong SAR – Indicators of International Philanthropy from Asia

Hong Kong SAR – Indicators of International Philanthropy from Asia

This is the fourth in a series of twelve articles looking at factors influencing international philanthropy across ten Asian countries, paying particular attention to giving in the areas of international aid and education.

The study identifies nine country-specific factors affecting the propensity of people to give offshore funds to these two causes. By using nine general indicators and adding the aid or education indicator, organisations working in either sector can assess background issues determining their ability to raise philanthropic gifts in a particular country. For a full explanation of indicators used, please refer to Article 1: Introduction to the series.

 

Assessment of international philanthropy from Hong Kong

 

Political & Economic Security

Rating: 4

Comments: Hong Kong has in the past experienced mid to high levels of inflation and unemployment but measures by the government have significantly decreased this. Hong Kong is an autonomous administrative region of China. The country wholly governs defence and foreign affairs but other sectors are influenced by Chinese administration. Hong Kong is considered one of the least corrupt countries in the world. [1]Euromoney Country Risk

Capital Accumulation

Rating: 3.5

Comments: 3,200 ultra high net worth individuals with collective wealth $500 billion. May deserve a higher rating as wealth is concentrated within a small area and people are well-networked. [2]Wealth-X. 2011. World Ultra Wealth Report 2011: Uncovering Pockets of Opportunities

Incentives

Rating: 3.5

Comments: Moderate level of tax incentives available for donors and exemptions for charitable organisations. The Hong Kong Inland Revenue Ordinance provides for tax exemptions for charitable organisations that operate in the fields of poverty alleviation, education and religious activities even if they are operating in areas outside of Hong Kong. Some tax incentives are offered for individual donors who give but as the tax rate in Hong Kong is low it would not be the main reason for people to be responsive to philanthropic appeals. The University Grants Committee of Hong Kong SAR provided a brief period of matching funds to stimulate philanthropy for the territory’s universities. This will not be available for development assistance. [3]UBS Insead. 2011. Study on Family Philanthropy in Asia [4]Jung, Ky-Hyun. 1994. Evolving Patterns of Asia Pacific Philanthropy. Institute of East and West Studies. Korea. Seoul Press [5]University Grants Committee.

Trust in NGOs

Rating: 3

Comments: The (Hong Kong) Law Reform Commission’s Charities Sub-committee recently recommended that a charity commission be set up as the regulatory body for charities. This reflects belief in Hong Kong that charities are not as well run as they should be. A Charity Commission would likely improve public information about foundations in Hong Kong. [6]Jung, Ky-Hyun. 1994. Evolving Patterns of Asia Pacific Philanthropy. Institute of East and West Studies. Korea. Seoul Press

 

Priority of Human Development

Rating: 4

Comments: High level of giving to poverty alleviation and development. Studies suggest 19% of giving from family philanthropies is focused on this area. [7]UBS Insead. 2011. Study on Family Philanthropy in Asia

 

Propensity to Give Internationally

Rating: 3.5

Comments: High level of giving to other Asian countries, predominantly China. Past studies have shown that most of the education and poverty alleviation projects supported by Hong Kong philanthropists are in mainland China. Other countries supported include Macau. [8]Jung, Ky-Hyun. 1994. Evolving Patterns of Asia Pacific Philanthropy. Institute of East and West Studies. Korea. Seoul Press [9]UBS Insead. 2011. Study on Family Philanthropy in Asia

 

Overall Level of Philanthropy

Rating: 4

Comments: High level of philanthropy in Hong Kong. Past studies have ranked Hong Kong the highest in Asia for charitable behaviour. Strong tradition of giving in Hong Kong families. Hong Kong ranked 18 in the World Giving Index for 2010, with 70% of the population donating money to charity. [10]The Economist, Economist Intelligence Unit. 2011. Something’s gotta give: The state of philanthropy in Asia. [11]UBS Insead. 2011. Study on Family Philanthropy in Asia [12]Charities Aid Foundation. 2010. The World Giving Index: 2010.

 

Fundraising Practice

Rating: 3

Comments: Moderate level of fundraising practice in Hong Kong. Past research has indicated that the sector has suffered from limited professional capacity from NGOs, a slow development of a giving culture and lack of transparency between donors and organisations. Moves have been made by the charity sector in Hong Kong and government over recent years to address this. Much effective fundraising is done by society volunteers. As a consequence, fundraising as a profession is not highly valued and there are few professional development opportunities. The USA-based Association of Fundraising Professionals has a small chapter in Hong Kong. [13]The Asia Foundation. 2005. Hong Kong Donor and Corporate Engagement Program.

 

Development of Giving Foundations

Rating: 5

Comments: Very high level of giving foundations in Hong Kong. Common practice for major trading firms and corporations is to establish foundations or trust funds for the benefit of the local community. There is an expectation from the community that corporations will return some of what is taken from society. [14]Asia Pacific Philanthropy Consortium. 2002. Investing in Ourselves: Giving and Fund Raising in Asia [15]Jung, Ky-Hyun. 1994. Evolving Patterns of Asia Pacific Philanthropy. Institute of East and West Studies. Korea. Seoul Press [16]Chapel & York. 2007. Directory of Asia Pacific Grantmakers

 

Financial Openness

Rating: 5

Comments: Hong Kong received the highest possible score of +2.5 in the Chinn-Ito (KAOPEN) index for financial openness; indicating that it is a country with a high degree of capital account openness and minimal controls for cross-border transfers. [17]Chinn, Menzie D and Hiro Ito. 2008. “A New Measure of Financial Openness.” Journal of Comparative Policy Analysis: Research and Practice 10 (3): 309-322. [18]Chinn, Menzie D and Hiro Ito. 2010. “Notes on the Chinn-Ito Financial Openness Index 2008 Update.”

 

Giving to Education

Rating: 3

Comments: There is a moderate focus on giving to education in Hong Kong. A study by UBS-Insead showed that 32% of giving from family philanthropies in 2010 was directed towards education. [19]UBS Insead. 2011. Study on Family Philanthropy in Asia

 

 

 The total scores for Hong Kong are:

  • Index of International philanthropy for aid from Asia 38.5

  • Index of international philanthropy for education from Asia 37.5

Jacqueline Cameron

Jacqueline Cameron

Consultant & Research Manager at AskRIGHT
Jacqueline is a dedicated, motivated and results oriented fundraising professional. She enjoys the variety in fundraising, and brings broad experience to clients on all aspects: from identifying prospects to liaising with donors, advising on collateral, writing case statements and bequest brochures, data mining and analytics, and developing fundraising strategies.

To find out how Jacqueline can help your organisation, email j.cameron@AskRIGHT.com.
Jacqueline Cameron
Dr Daniel McDiarmid

Dr Daniel McDiarmid

Principal Consultant at AskRIGHT
Daniel is a highly experienced and innovative fundraising professional with more than 30 years of success raising funds for higher education, research, religious and other organisations in Australia and New Zealand.

To find out how Daniel can help your organisation, contact d.mcdiarmid@AskRIGHT.com.
Dr Daniel McDiarmid


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