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McKinsey on Society


Voices How We Give

Big Ticket Philanthropy in Emerging Markets

The rapid economic transformation of the developing world has spawned significant wealth creation and the emergence of a vibrant local philanthropy sector. Voices on Society interviewed three creative philanthropists who are applying their ingenuity and capital to make a difference in the fast-changing societies of Sub-Saharan Africa, India and greater China.

Mark Yu-Ting ChenManaging Director
Chen Cheng Foundation

Residence: Taipei
Source of Capital: Donations
Philanthropic Focus: Education, spiritual uplift

Mark Yu-Ting Chen is a Taiwanese philanthropist whose family has been prominent in both politics and philanthropy since the time of the Civil War in China. Today he manages the Chen family’s extensive philanthropic work in greater China, much of which focuses on education. He also works as a consultant helping wealthy Chinese business owners devise sound philanthropy strategies.

How to blend wisdom with compassion

The TakeawayTaiwanese philanthropist Mark Yu-Ting Chen presents a new model for philanthropy in greater China, based on the traditional idea of balancing wisdom and compassion.

Voices: How does your family approach philanthropy in the context of greater China?

Mark Yu-Ting Chen: We have been through several stages of philanthropy. The first stage was traditional philanthropy, which started soon after my grandfather passed away in 1965. The Chen Cheng Foundation was founded in the late 1960s and has since provided about 50,000 scholarships to deserving students. The foundation also established the top-ranked boarding school in Taiwan. I call this traditional philanthropy because we were addressing a very obvious social need. People couldn’t get education, so we helped out.

The second period lasted roughly from 1994 to 2000. During those years the whole family was very moved by seeing a lot of tough humanitarian situations in mainland China. We supported hundreds of field projects, ranging from education, to old age homes, to cultural initiatives, to environmental projects, to helping handicapped people. We are not a very wealthy family, but because of my father’s and grandfather’s reputations, a lot of people trusted us and we were able to channel about $15 million to those projects. That’s not a big number compared to US foundations, but we tried our best.

“Chinese people have it ingrained in them that once their business and family lives are OK, they need to think about the country and the society.”

In those years, I would have to say that we stressed compassion over wisdom. I think that in doing philanthropy you need to find a good balance between compassion and wisdom. Compassion is all about the heart, while wisdom is about the brain. And that’s what led us into social or impact investing, which blends compassion and wisdom because it is designed to help people by promoting economic uplift. For example, we built a combined vocational school and factory on the mainland. At its height, we employed about 1,400 migrant workers. They came from farms and had very limited education, mostly primary- and junior-high school level. So we took them in, gave them all kinds of education, and also tried to develop some business out of it.

Voices: You’ve advised many Chinese philanthropists on their giving strategies. What are some differences that you see in the culture of philanthropy in Taiwan versus the mainland?

Mark Yu-Ting Chen: There’s a very big difference between China and Taiwan. In Taiwan we have some established foundations that do traditional philanthropy, but most business leaders aren’t used to thinking about philanthropy in a strategic way. So historically there hasn’t been much social enterprise, social investment, or impact investment in Taiwan. It’s starting to change though. For example, there’s now a push to pass legislation in Taiwan that would create the equivalent of the United States’ B corporation, a special corporate status for companies that wish to address social and environmental needs as well as profit.

The mainland is still at an infant stage of development in terms of philanthropy. Very few wealthy individuals from the first generation of business founders have launched serious philanthropic ventures. Because the business environment in China is still so difficult, the founders tend to focus mainly on their companies. I’ve even had business leaders tell me privately that it’s tough to give money away outside their companies, because everyone inside the company starts to say, “Wait, you’re this great benevolent guy now, but what about us who helped you make all this money?”

I do see hopeful signs among the second generation of wealthy mainlanders. For example, I know a number of major business figures whose sons returned to China with degrees from major Western universities and then spent a year in the poorest villages to try and understand what China is really like and how they can help. That never would have happened before. I think these people will be fully empowered in another 15 to 20 years because of their family businesses, and then you will really start to see a new model of Chinese philanthropy.

Voices: What would a distinctively Chinese model of philanthropy look like?

Mark Yu-Ting Chen: I think it starts with business leaders looking at their employees and other stakeholders from a philanthropic point of view. It’s not about just giving everybody a raise. What can companies do to help their employees have better lives, which in turn will help the company? That’s quite different from the conventional Western understanding of corporate social responsibility. It’s more inward looking and more spiritual.

Voices: What’s driving this more inward, spiritual outlook among wealthy Chinese?

Mark Yu-Ting Chen: In general, Chinese education really emphasizes the individual’s responsibility to society. Chinese people have it ingrained in them that once their business and family lives are OK, they need to think about the country and the society. I think that’s why a lot of people are starting to be interested in philanthropy.

Looking at Chinese business leaders in particular, I see several factors driving this distinctively spiritual approach to philanthropy. Part of it is that many people simply develop a different outlook as time passes and they achieve a certain amount of wealth. Another factor is that the Chinese system puts extraordinary pressure on wealthy people, and spirituality is a way for them to deal with that pressure. Another factor is that many people from all walks of life are genuinely worried about the future of China. They’re concerned that the current way is not sustainable. They’re very concerned about corruption and what they see as a general decline of morality in China. They’re wondering what can be done for the society and where China should be heading.

Voices: How do you plan to harness this heightened interest?

Mark Yu-Ting Chen: We’re looking at philanthropy at a higher level, looking at how to help nonprofit organizations professionalize, how to help them do better. We’re even working with the Ministry of Civil Affairs in Beijing to draw up a future road map for Chinese philanthropy. It all comes back to balancing wisdom and compassion. Chinese philanthropists often come to me and say “Mark, I want to be the leading philanthropist in China. I want to run the biggest and most successful foundation. And then I want to become a global force in philanthropy.” I scratch my head and I say, “Well, that’s nice; what do you intend to do exactly? What are you passionate about, what issues do you see, and how do you plan to help?”

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