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More than Simply Making Money

       For some wealthy people, to be rich means their material affluence is well illustrated by their accumulation of luxury goods. For others, it means social recognition and self-fulfilment that comes with making donations to charity.

Though China, historically, has been known as a country whose people value benevolence, education, poverty reduction, and a concern for nature, such concerns are not normally associated with the concerns of the modern Chinese business community.

Luckily, some foreign enterprises have set a shining example in the practice of strategic philanthropy in China. Observers say that they are being responsible corporate citizens, and are particularly appreciated when they do not expect any direct returns from their charitable activities.

Craig R. Barrett, chairman of Intel Corporation, in “A Corporate Science Project” a December 19, 2005, article published in BusinessWeek magazine, wrote, “More US businesses must get involved, not just because it’s the right thing to do, but because it will improve their bottom lines, and the nation’s, by creating a deeper pool of qualified talent at home.” He emphasized the importance of business communities getting involved in social development in pursuit of win-win results.

He said that Intel has made the improvement of American education a top priority. It invests about US$100 million a year in educational programmes. These include the Intel Teach to the Future Programme in China, which was launched in 2000.

Also in China, the American Chamber of Commerce-China (AmCham-China) led fund-raising initiatives among its members—companies such as Amway, Apple Computer, BearingPoint, The Chrysler Group, ExxonMobil, FedEx, Intel, Pfizer, Honeywell, Motorola, Shaklee, Tyco, United Technologies and Proctor & Gamble—that raised a total of 2.83 million yuan (US$350,000) for charity in 2005.

Included in the total was a 1 million yuan (US$123,954) donation to the Yonghe Central Hospital in Ji’an County, Jiangxi Province, presented during the chamber’s Annual Appreciation Dinner in December.

       AmCham-China Chairman Emory Williams said, “Our delegation that visited Ji’an County was impressed by the commitment of the medical staff at the hospital and wished to help them improve their facilities to help the rural poor.”

As a patron of the 2007 Special Olympic World Summer Games, to be held in Shanghai, luxury brand Louis Vuitton will donate a portion of the proceeds from the first day of its sales on November 20 of their flagship store in Beijing to the games.

Regardless how generous business firms are able to be, as a percentage of their bottom lines, they have contributed to an awakening of the concept of corporate social responsibility (CSR) among domestic Chinese enterprises.

This was the case with the China Charity Conference—jointly sponsored by the Ministry of Civil Affairs and the China Charity Federation (CCF)—that was held from November 20 to 21. The conference included the first awards programme for corporate giving of its kind in China. But the conference also revealed that there is still a long way to go in cultivating an awareness of philanthropy among Chinese residents and corporations, and in establishing a sound system for the smooth operation of charitable organizations.

In a related development, China’s non-governmental organizations (NGOs) will, for the first time, get State funds directly that they can use to help the poor, the beginning of a new mode of cooperation between the government and NGOs. The nation's top poverty-relief office and its Jiangxi branch will allocate 11 million yuan (US$1.36 million) to NGOs for projects in 22 poverty-stricken villages. Wu Zhong, director of the State Council Leading Group Office of Poverty Alleviation and Development, announced the path-breaking initiative for the East China province on December 19, 2005.

"The new cooperation between the government and NGOs will lead to a win-win result," said Kang Xiaoguang, a professor and NGO expert at Renmin University of China. "Funds can reach the poor without delay and the government can achieve its aim of poverty reduction; NGOs will have more funds to survive."

In addition, a new Web site, www.ngocb-csrn.prj.cn, was launched in the capital recently, aiming to bring together Chinese NGOs (non-government organizations) and local and foreign-funded companies to carry out charity programmes in the country.

The China Construction Bank (CCB) on December 28 donated 3 million yuan (US$366,000) to the Red Cross Society of China (RCSC) to supporting charity programmes. The bank also signed an agreement with RCSC to issue its debit card called "Dragon Card" to members of RCSC nationwide.

Admittedly, China's charities are still in an initial stage in their views of public awareness and in their creation of donation, legal, regulatory and supervision mechanisms.

The China Charity Federation, one of the largest charity organizations in China, has collected donations of more than 1.5 billion yuan (US$180 million) since it was founded in 1994. But the lion's share came from enterprises, especially transnational corporations.

Although charitable donations from Chinese companies are still considerably lower than donations by foreign enterprises, support from both sectors has helped charities grow. And cooperating with international enterprises is proving to be an effective way for domestic companies to begin taking more social responsibility.

US-based company, Mary Kay Cosmetics, together with the All-China Women's Federation and Mary Kay, started a national programme to aid poor rural schoolgirls in Beijing in October 2005. Also, the Mary Kay Spring Bud programme is expected to select 100 schoolgirls from across China. The programme will provide 5,000 yuan (US$602) to each girl to help the girls finish their basic schooling.

Motorola, Nokia and China Mobile have initiated an eco-friendly campaign called the "Green Box Environmental Protection Plan–Call back of Waste Handsets and Accessories," and they will carry out the plan in more than 40 major cities across China.

Further, some large domestic brands, including PetroChina, SINOPEC, China Netcom and China Telecom, are making progress in the same direction.

The simple act of charity has become a new impetus for socio-economic development in China, social science experts said in Beijing at the Second China Philanthropy Forum on December 21. Charitable giving has become a trend and will contribute more to the country's development, participants said.

Moreover, the Chinese Government plans to forward tax policies to help remove barriers that keep Chinese companies from making charitable donations so they can escape being described as “miserly” when it comes to their social responsibility. A key step in this direction is to increase an awareness of corporate social responsibility, though it remains a novel concept for most domestic firms.

A recent survey found that 99 per cent of domestic enterprises had never donated to any charity.

But there’s more to social responsibility than charitable giving. The severe pollution in Northeast China’s Songhua River, the result of an explosion and the response to it at a Jilin petrochemical plant and all-too-frequent coal mine disasters spotlighted the importance to China that companies lay more stress on social responsibility.

With a new social awareness and tax policies that foster its development, charitable giving is expected to once again bring the ages-old concept of benevolence to the fore in China and give a chance to the rich and powerful in China to advance social development and to provide better protection for those in need.