In this article for WINGS, Give2Asia's Ly Tran shares a roadmap for accelerating cross-border giving in Asia.
by Ly Tran, Partnerships Advisor at Give2Asia
Massive economic expansion around the globe has transformed private wealth in just a few short decades. This is especially striking in Asia, which is now home to one-third of all billionaires. As of 2022, there are 1,133 billionaires in China alone—the highest concentration in the world.
Growth in private wealth has led to a significant increase in philanthropic capital. Between 2009 and 2019, total charitable giving in China quadrupled. But despite the rise in Asian philanthropy, cross-border giving within the region remains relatively limited.
To understand the dynamics that drive cross-border philanthropy within the region, a team of non-profit organisations—including Give2Asia, the Asia Philanthropy Circle, and the King Baudouin Foundation—examined the trends and barriers to giving overseas in 15 geographic markets in the Asia Pacific region.
Our final report, Unlocking Cross-Border Philanthropy in Asia, identifies several significant characteristics of cross-border philanthropy. It also uncovers opportunities to build the region’s cross-border giving infrastructure. The report gathers its information from hundreds of interviews with donors and non-profit leaders. It also assessed regulations and sector research in each market studied.
One key finding is an information gap between donors and charitable organisations. Non-profits across the region report difficulty accessing exposure to networks of individuals, corporations, and foundations funding causes related to their work. Similarly, many donors cannot easily identify and evaluate overseas causes in markets that are different from their own.
Laws and regulations in Asia are evolving. Donors, charities, and grantmaking intermediaries are experiencing an overall stringent regulatory environment but with varying levels of enabling policies regarding cross-border giving. Several markets, such as India and Nepal, severely restrict cross-border giving. Domestic funders are prohibited from investing in overseas projects unless they receive special permission from the government or on specific occasions such as for disaster relief. The regulations are ambiguous in other locations, including Vietnam and mainland China. This creates uncertainty and perceived risk for donors.
Even in Asia’s more favourable giving markets, funding projects across borders is difficult. Singapore offers an extremely generous 250% tax deductibility for donations supporting domestic charities, but 80% of the money raised publicly must be spent domestically—and any money going overseas offers no tax benefit to the funder.
However, the landscape is already improving in some markets. Australia’s recent regulatory reforms open the door for Australians to support overseas poverty alleviation projects through local charities registered as “public benevolent institutions.”
Ultimately, trust is a crucial factor affecting cross-border giving and one of the main barriers. For donors familiar with supporting causes in their local community, the prospect of sending money abroad requires a leap of faith that few are currently willing to take. Unless the donor has a pre-existing relationship or deep connection with the grantee, this trust is difficult to create from scratch.
Furthermore, there is a limited regional infrastructure to ensure effectiveness, transparency, and accountability of cross-border activities—and to build trust and confidence between donors and grantees across the region.
How cross-border giving in Asia can grow
The study offers three key recommendations for accelerating cross-border giving in the region. These include:
- Engaging in donor education to increase demand
- Working with governments to enable favourable regulations
- Creating ecosystem infrastructure that focuses primarily on fostering trusted relationships
Strategies for implementing these recommendations vary widely across the region. Of the markets studied, the four with a high level of readiness for cross-border giving are Australia, Japan, the Republic of Korea (South Korea), and Hong Kong SAR PRC (Special Administrative Region of the People’s Republic of China). Key factors of readiness include relatively favourable government regulations, infrastructure for international grantmaking, and donor demand for cross-border giving.
New Zealand, Singapore, and mainland China demonstrated a medium level of readiness, while the other markets scored lower.
The research indicates that philanthropic intermediaries can be central in building trusted relationships. National institutions from high- and medium-readiness markets could cooperate on a roadmap that includes enabling trusted cross-border relationships, facilitating giving with reliable and practical services, and advocating for more open regulations.
Based on these recommendations, NGOs from Australia, New Zealand, Japan, Hong Kong SAR PRC, and Singapore are meeting regularly to form an initial Asia Pacific cross-border giving network. Interested philanthropic organisations and funders are invited to join this conversation.
Building a successful network will require a concerted effort by the broader philanthropy ecosystem and a deep understanding of the unique giving culture in each market. Ultimately, the sector must empower local institutions to develop their own cross-border giving services, create opportunities for giving between donors and grantees with aligned interests, and cultivate an outward and impact-driven giving culture in the region.
To learn more about the report’s findings and recommendations, visit the website for Unlocking Cross-border Philanthropy in Asia.