Feb 10, 2015 07:10 PM

Donations from Top Philanthropists Double, but Most Money Goes Abroad

(Beijing) – Donations from the country's top 100 philanthropists more than doubled last year compared to the figure for 2013, and four-fifths of the money went to overseas groups, a report by researchers at Beijing Normal University says.

Alibaba Group Holding Ltd. chairman Jack Ma donated 35 million share options in a deal that would net a foundation 16.9 billion yuan, according to the report published on January 6 by the university's China Philanthropy Research Institute. Alibaba vice chairman Joseph Tsai was No. 2 on the list, giving the same foundation 15 million shares, or 7.42 billion yuan.

The e-commerce giant's prospectus shows Ma and Tsai gave the shares in their names to SymAsia Foundation Ltd., a non-profit charity in Singapore, in preparation for launching a charitable trust. Alibaba Group announced the plan for the charitable trust in April last year, but it is unclear who the gifts will benefit.

Soho China chairman Pan Shiyi and his wife also donated money abroad, giving Harvard University US$ 15 million via their Soho China Foundation. The couple, which ranked No. 13 on the list, took some criticism for giving money to a U.S. university instead to for educational purpose at home.

In all, the top 100 Chinese philanthropists donated 30.4 billion yuan last year.

Zhang Gaorong, a research fellow at the research institute, attributed the large amount of donations to overseas recipients to tax exemption and breaks donors and recipients get in foreign countries.

"But in China, both donors and recipients have to pay taxes on their donations because they are regarded as business transactions," he said. "A donor company that plans to list on a market would have to pay more tax after listing."

A charitable organization that gets donations from a listed company in the form of shares has to pay a tax of 25 percent on any increase in the share price, Zhang said.

He said that charitable groups in other countries, such as Singapore, do not have to do this.

Chinese donors' preference for overseas charitable groups comes amid doubts among the public that domestic charities are reliable. In 2011, a woman Guo Meimei claimed to be a general manager of the "Red Cross Chamber of Commerce" when she posted photos of herself online with luxury goods and an expensive car. That organization does not exist, but the Red Cross' reputation was hurt anyway.

Later on, smaller problems were found at the Red Cross Society of China and other groups, affirming the public's distrust.

Zhang said donors were shunning domestic charitable organizations over a general lack of transparency, but that could be changing because the central government has addressed some of the concerns of donors regarding tax policies and oversight.

He Xiangjian, the founder of Chinese appliance maker Midea Group, ranked a distant third on the list, giving 425 million yuan.

A majority of the top 100 donors are business people, but former premier Zhu Rongji was ranked 87th. He gave 15.22 million yuan to the Practical Education Foundation, where he is chairman of the board.

An anonymous sports lottery winner from the eastern province of Shandong was ranked No. 56, giving 20 million yuan. Another lottery winner from the northern province of Shanxi donated 12 million yuan, good for 92rd place.

(Rewritten by Li Rongde)

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