How Hong Kong is leading the way with social needs and sustainability
Coupled with a rich tradition of philanthropy and its existing role as a global center of business and commerce, Hong Kong is well positioned to lead Asia in addressing social needs and navigating sustainability as well as families’ succession.
Hong Kong has a rich tradition of philanthropy. Both the public and private sectors have been front and center in addressing social challenges throughout history.
The city is the regional center for more than 15,000 charitable organisations. It took a high position of 18th in 2018, according to a global ranking of propensity to donate in 146 places around the world [1]. The number of charities registered with the Hong Kong Inland Revenue Department for tax exemption has increased significantly by 168% to some 9,200 in 2020, since 2001. Public donations increased by 337% to HK$12.7 billion in 2019, representing 0.4% of GDP [2].
Hong Kong Jockey Club is one of the world’s top ten charity donors, and the Jockey Club Charitable Trust is one of the world’s largest foundations in terms of annual donations, giving away on average HK$4 billion (US$513 million) each year [3]. Its operating model serves a textbook standard of doing good and doing well.
Hong Kong is also home to some of the world’s greatest philanthropists including Li Ka-shing, Tin Ka-ping, Ronnie Chan Chi-chung, Lee Shau-kee and Victor and William Fung. Top recipients of Hong Kong’s generosity remains healthcare and education particularly universities, according to Tatler [4].
Philanthropy also plays a key role in Hong Kong families’ succession. A survey suggested 73% of Hong Kong-based family office respondents cited “Ensuring continuity of family values and creating a legacy” as a significant reason for their giving [5]. They saw the merit in philanthropy helping to instill and drive family values, strengthen family bonds, provide opportunities for family members to embrace meaningful responsibilities and transmit knowledge and build capabilities among family members.
Hong Kong families keep up with change of philanthropy and continuously innovate their philanthropic model.
With the increasing emphasis on the impact that is created, the financing source also shifts from pure donation to a blended financing, such as grants from foundations or corporations, debt from funds or banks and equities from family offices and incubator funds.
For example, the Mills is a landmark revitalisation project from Nan Fung Group completed in 2018. It is a destination that consists of a business incubator, experiential retail and a non-profit institution. It aims to celebrate Hong Kong’s rich textile history and improve sustainability in agriculture and food, as well as textiles and apparel industries.
New World Development recently launched a donation platform “Share for Good”. It is Hong Kong’s first large-scale crowd-donation platform using technology to quickly and efficiently match donors and beneficiaries, so that all supplies reach people in need.
In addition, benefactors have become more strategic in where their giving goes. They are increasingly willing to contribute intellectual capital and connections in addition to financial help. They also hire more professional non-family management, and increase essential staff's skills, competencies, and capacities.
Last but not the least, the HKSAR Government provides strong support to optimize the ecosystem of philanthropy and impact investing to propel Hong Kong's growth as an impact center in Asia.
For further information, contact Christine Ho or Dixon Wong at FamilyOfficeHK.
Sources:
[1] CAF World Giving Index 2021, Charities Aid Foundation
[2] Regulation of malpractice of charitable organisations, Legislative Council of the HKSAR
[3] Hong Kong is poised to be Asia’s regional philanthropy hub, South China Morning Post
[4] Giving Back: Top 5 Philanthropists In Hong Kong, Tatler
[5] UBS-INSEAD study on family philanthropy in Asia
