Along with the recent explosion of wealth in Asia has come a hope that the level of charitable giving will rise at a similar pace. To date the region has lagged behind compared to its western peers, but one reason for thinking the situation could change is the increased financial clout of women on the continent.
Asia's wealth growth has been extraordinary in recent years, with the region now boasting the highest concentration of billionaires in the world. But gender equality has been slow to progress. A 2016 Global Gender Gap report by the World Economic Forum gave low marks to several Asian countries, including China, Japan and South Korea.
At the same time, the region's philanthropists are capable of giving around 11 times more than they presently are, according to a 2018 index from the Centre for Asian Philanthropy and Society.
To take an optimistic approach to the results, that leaves plenty of room for improvement. According to new research from The Economist Intelligence Unit (EIU), commissioned by RBC Wealth Management, 81 percent of respondents in Asia believe they have more opportunity to tackle societal issues specifically through investing compared to 56 percent in the West.
Commissioned by RBC Wealth Management, The EIU undertook a study of 1,051 high-net-worth individuals (HNWIs), including 220 respondents in parts of Asia (China, Hong Kong, and Singapore), from March to May, 2018. The survey explores how the meanings of legacy and wealth are being redefined across regions, genders and generations.
A new path to giving
Janice Park, director of client strategy and business development at RBC Wealth Management in Singapore thinks a shift may already be underway.
In her position, she deals with new clients, and has noticed a redefinition in the role women are playing in family wealth allocation and transfer, with women taking the reins of family finance in a way that would be rare in previous generations.
“Traditionally, Asia has been a really male dominant society and culture," she says. “But I think more and more we're seeing females have that same authority and are playing an increasingly influential role in the conversation."
According to The new face of wealth and legacy research, the majority of Asian HNWIs surveyed—75 percent—think society has become more inclusive, compared with 58 percent in the West.
The next generation is leading a change
As with much social progress, there's a generational shift at play here. This is due to the numerous children of high net worth (HNW) and ultra-high-net worth (UHNW) Asian families heading to Europe or North America to be educated, and then returning to take on a larger role with wealth planning, armed with new ideas about charitable giving.
“In the West there are environmental issues, social issues, giving, and all of these are a little more mature compared to Asia. So the kids that are more exposed to these ideas, and come back to Asia with that knowledge and experience, I see they're influencing their parents too," says Park.
According to The EIU, 76 percent of HNWIs in Asia consider impact investing to be a form of giving, compared with 50 percent in the West. Furthermore, 86 percent of the younger* Asians surveyed think they have more opportunity to tackle societal issues through investing, and the share of younger Asians saying they align their investments with their giving goals is 54 percent.
The future of women
At the same time, with significant transfer taking place from one generation to the next, women are increasingly taking on leadership roles in family finance, business succession and retirement planning.
With this enhanced influence, there's a sense that women are taking a more proactive approach to charitable giving, says Vivian Kiang, head of Wealth Planning at RBC Wealth Management in Hong Kong.
“Based on my experience, in [mainland] China, especially in the main cities, and Hong Kong, the woman is a very important part of decision making when it comes to wealth planning and how to distribute assets, and which charitable organizations to give to," she says.
There are also clear signals that women tend to attach more value to the idea of philanthropy and charitable giving, than do men.
The EIU survey found 76 percent of female respondents in Asia believe societal causes have become more important than wealth, versus 68 percent of male respondents in Asia. The implication here is that an increase in female control of wealth could lead to a more rapid shift to charitable giving, and more stipulations around assets that are transferred to the next generation.
“When I look at men, what they are focused on is actual allocation, so they look at how much of their money's allocated to their sons and daughters," says Park. “When it comes to women, what I notice is they're more focused on execution and putting more conditions around [wealth transfer]," says Kiang.
These conditions will often revolve around charitable giving or ethical investing she says. “To me what that shows is women are more focused on transferring the values and also they're more interested in getting social values right as well as the financial values."