Caixin
Nov 30, 2016 07:36 PM
SOCIETY & CULTURE

Online Donation Services Lead to Spike in Individual Charitable Giving

Illustration by Xu Yuanyuan
Illustration by Xu Yuanyuan

(Beijing) — Individual philanthropy in China is on the rise thanks to the growing popularity of online donation platforms, the state-backed China Charity Alliance (CCA) said.

A 127% increase in small-scale donations made via China's top four online donation platforms last year was a major driver fueling this trend, the CCA said on Tuesday. Over 966 million yuan ($140 million) was donated through the top four platforms run by internet giants Sina Weibo, Tencent Holdings Ltd. and Alibaba Group Holding Ltd. subsidiaries Ant Financial and Tmall.

Annual donations received by Chinese charitable causes in 2015 rose to a record high of 110.8 billion yuan, according to CCA's Annual China Charity Donation Report. It was a 6.4% year-on-year growth and includes money given by both domestic and foreign donors.

Donations from private and state-owned enterprises still made up the bulk of this sum, but contributions from individuals grew by 32% in 2015, outpacing the rise in corporate donations.

Individual sums less than 10,000 yuan grew by 28% from 5.86 billion yuan in 2014 to 7.5 billion yuan.

Privately run philanthropy platforms make it easier for people to donate, a study conducted by the China Association of Fundraising Professionals and Alibaba Group found last year. These platforms are usually linked to other popular services offered by internet companies, which helps them attract a large number of visitors, the research said.

Young Chinese donors have played a central role in the growth in donations via these sites. The top donors on Ant Love were born between 1970 and 1990, according to Ant Financial, the financial-services arm of Alibaba Group. All four platforms also require donors to have a Chinese bank account.

Users on these platforms can choose to make either regular or one-time donations to causes as diverse as a Great Wall restoration fund and an appeal on behalf of impoverished seniors. Like foreign crowdfunding sites, the platforms also allow users to donate to other users, although these crowdfunded appeals mainly involve supporting sick children or other vulnerable groups, rather than Kickstarter-type innovation projects.

Some platforms have also put in place certain verification procedures to ensure funding appeals for projects are from State Council-approved charities to bridge the trust gap created after several high-profile scandals involving charitable organizations in recent years. Individuals are also encouraged to launch their appeals through a registered charity to minimize fraud.

China still lags behind other major economies when it comes to philanthropy. Charitable giving accounts for only 0.17% of China's gross domestic product in 2014, compared to 12% in the U.S., the United Nations Development Programme (UNDP) found last year.

But aside from the annual increase in donations, there are signs that philanthropy is on the rise in China. According to the UNDP, there were more than 4,200 foundations in China in 2015, a 60% increase from 2010. The country's new Charity Law, aimed at improving transparency while reducing obstacles to charitable fundraising, took effect in August.

Contact editor Poornima Weerasekara (poornima@caixin.com)

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