Written by Edison Tse, Associate Professor of Management Science and Engineering at Stanford University
Chinese technology companies are donating tens of billions of dollars for social initiatives as part of a national goal for common prosperity, says Edison Tse, the author of a new book titled “ Do Good and Prosper: Interplay Between Philanthropy and Business Innovation,” which came out on 30th August and coincides with the country’s national 99 Giving Day (a phased period of charitable giving running from late August to 9th September).
This book asks why so many technology companies in China engage in public welfare activities, even when they might not immediately translate into profits. This differs from the approach taken by the West, where companies like Apple and Meta, typically allocate a small portion of their profits to charitable activities under the popular guise of ‘Corporate Social Responsibility’. According to Nonprofit Quarterly, the majority of charitable donations in China come from the corporate sector. Whereas in the US, 80 per cent of charitable donations come from individuals and 14 per cent from business initiatives. The author argues that the sharp rise in China is largely down tech innovation and growth, “feeding the world’s passion for efficiency and progress, but also the poor.”
We look at the key differences between public welfare models and charitable giving in the East and West. What factors contribute to these differences and what lessons can be learnt?
How charity initiatives positively influence business
China homes the largest number of internet users and the fastest growing e-commerce market. This has coincided with a surge in tech companies driving more charitable giving. In recent years, mainly due to the rise of the internet and large social media and e-commerce enterprises, philanthropy has taken on a new meaning in China. Online platforms and social media driven initiatives have transformed how its people think about giving to charity and their impact on the world.
Mass involvement has changed China’s philanthropic landscape. 120 million internet users donated through online fundraising platforms in 2021, attracting millions of donors, and tens of thousands of institutions and enterprises.
99 Giving Day
Chinese internet tech giant, Tencent, raised over 400m yuan during its 99 Giving Day last year.
Founded in 2015, 99 Giving Day is now the most renowned charity campaign in China, uniting enterprises, charities and donors to address challenges that affect communities. Tencent became the first internet company to launch an in-house foundation for charity in 2007, contributing one to two per cent of annual profits to charities in China. The tech giant has successfully built a group of regular donors that have rapidly accumulated: mainly by introducing creative campaigns that resonate with local communities and using technology to make giving simple yet fun.
Indeed, China’s internet philanthropy system as a whole can provide valuable lessons for the Western world. China has seen a wealth of successful philanthropic projects over the years launched by welfare organisations such as Sina Charity, which has supported thousands of projects online with donations from 40 million users over 10 years.
The integration of online and offline practice has also helped to drive success – another feature of the emerging China model. For example, each year, Tencent hosts a China Internet Public Welfare Summit where online and offline efforts meet.
How China is bringing philanthropy into apps and games to drive donations
China can be seen as a leading light on how to engage regular donors online. Many companies are seizing opportunities to leverage the country’s fast growing ecommerce market, and vast base of internet users – the largest in the world – to fundraise to great effect. And online experiences enhanced by gamification, have proven especially powerful for encouraging the next generation of donors to turn charitable giving into regular practice.
China’s mobile-based and gamified approach to fundraising allows nonprofits to weave charitable giving into the daily habits of donors and future donors. For 99 Giving Day, donors can donate to their favourite charities via WeChat – a format which has helped Chinese nonprofits to drive significant donations, especially from the younger generation.
Gamification can take fundraising to the next level. For instance, WeChat, which boasts more than 1.3 billion users, and is deeply embedded in everyday lives in China – combining social media, games, shopping, and payment in one handy app – is cleverly amplified for 99 Giving Day by the creation of ‘red flower’ tokens that users collect, convert into money and donate to charity. Tencent even brought the magic of video games to children in hospital in Paris, with free games featuring adaptive technologies to ensure inclusivity.
In China, charity is not only about giving, it’s also about handling. By providing free trials and engaging with charitable initiatives, many Chinese enterprises have driven loyalty by acquiring a huge army of fans. What people often fail to realise is that charitable initiatives can positively influence businesses by translating into commercial success later on.
Differences in digital giving
In the West, digital payment adoption varies, but it’s generally not as widespread or integrated into daily life as in China. As we’ve seen, China has rapidly adopted platforms such as WeChat Pay and Alipay, which are deeply embedded into every aspect of people’s everyday lives. In the West, digital payment platforms like GoFundMe and PayPal are popular for online donations, however, while digital giving is growing, more traditional methods like checks and in-person donations are still common. In the West, digital giving platforms tend to focus more specifically on fundraising and donations rather than providing a vast range of integrated services.
Community and peer Influence
In China, digital platforms do well to drive peer influence, where individuals might donate in response to peers promoting specific causes. The ‘WeChat Pay Do Good Together’ project uses digital feedback to connect compassionate people and those in need – a thank-you message is sent to a donor, inspiring peers to also share kindness.
In fact, it was the first 99 Giving Day, launched by Tencent in 2015, which ushered in the new ‘Donate Together’ charity model, where WeChat users encourage their social group to give by clicking on the ‘donate together’ button – a simple but effective model to inspire peers.
Embedded into culture, united in a shared cause
China has worked hard to enable charitable giving to be fully embedded not only in its society but also its culture, not least by cultivating the spirit of 99 Giving Day, which has significantly aided the development of Chinese charity culture. Time and time again we see the masses united in a shared cause or joining forces to get behind a national giving day, such as Alibaba’s Singles Day, which was first launched to bring together solitary figures in China. In the West, charitable giving tends to be driven by individual preferences. The personal values of tech leaders often guide the company’s philanthropic endeavours, such as Steve Jobs placing a huge focus on donations to AIDS-related charities over the years.
The differences between the Western world and China in terms of charitable giving, including the way digital platforms are used to drive initiatives, are largely influenced by cultural norms, technological adoption rates and societal dynamics. An understanding of these nuances is key for evaluating what sets the Eastern and Western worlds apart, but both can learn from each other to enhance their charitable giving strategies, increase their impact and address a wider array of societal changes.
About the author
Edison Tse, Associate Professor of Management Science and Engineering at Stanford University, is the Director of Asia Center of Management Science and Engineering, which has the charter of developing executive training programs for executives in Asian enterprises, conducting research on development of the emerging economy in Asia and establishing research affiliations with Asian enterprises, with a special focus in Greater China: China, Hong Kong, and Taiwan.