“But Why Do We Need Philanthropy?”

July 20, 2012 by ANDY HO

Earlier this week I gave a presentation at the University of Virginia to a group of Chinese media professionals spending a week here learning about funding, the media, and nonprofits. The presentation was on trends in U.S. philanthropy and an overview of the U.S. philanthropic sector.

This isn’t the first time I’ve presented to a group of Chinese officials and scholars. At the end of every presentation, during the Q&A, the question from someone in the group comes up: “But why do we even need philanthropy? Why doesn’t the government just take care of the social needs of the people?”

The question is a simple one, and uncovers a fundamental difference between a worldview shaped by the Chinese communist government, and one shaped by American democracy, a difference that plays out in attitudes and cultures. In a democracy such as in the U.S., the people don’t necessarily want the government to take care of everything, even if it had the money right now. There is a freedom to choose to take individual responsibility to give back to one’s community, and to express your values and desires through philanthropy, and not have the government interfere with this expression of individualism. The government incentivizes this behavior through the charitable deduction.

In China, people are used to the government making the decisions about what gets funded and supported, without much (if any) input from the people, and generally prohibiting any initiatives that get created from the community. For the things that don’t get support, it was assumed that it was not worthwhile to support. So it is natural then, that one of the participants jumped to the conclusion that Bill Gates created such a large foundation ($33.5 billion) mainly as a tax avoidance strategy and nothing else. We’ll never know the true motivations for why Mr. Gates started his foundation, but judging from his involvement, I’m fairly certain that it wasn’t purely a strategic financial move on his part.

All societies have some form and understanding of charity. But organized philanthropy is not yet understood by many in developing countries. The question of why China needs philanthropy, and the answers, will evolve, as the thinking and culture of philanthropy in China develops.