We discuss the trends shaping philanthropy in Asia and ways to go about creating an impact with your wealth.
For many, philanthropy is about more than giving wealth away. It often involves committing to a purpose and supporting causes that create a positive impact on society. And, as the world grapples with the economic fallout caused by a global pandemic, pressing social and environmental issues have come to the forefront.
The landscape of wealth is also shifting. The number of billionaires in Asia Pacific is expected to rise faster than the global average within the next five years. The region is set to be home to over a third of the world’s billionaire population.
The COVID-19 pandemic has led high-net-worth individuals (HNWIs) to shift the focus of their philanthropic efforts while the changing landscape of wealth in the region could further amplify this trend of charitable giving.
Philanthropy has traditionally encompassed private initiatives for the public good. Recently, this definition has started to evolve. “Rather than the term philanthropy, we like to use the term ‘social capital’ because it encompasses a broader vision of what philanthropy is and what it could be in the future,” explains Dr. Paula Murphy Ives, managing director, Social Capital and Impact, Enterprise Strategic Client Group at RBC Wealth Management in Canada.
Murphy Ives explains the idea that social capital can go beyond writing a cheque. “It’s about thinking long-term and being more strategic about how as an individual – or families and communities – think about impact and the kind of world they want to build.” She says it could be working together or within a new family foundation or social enterprise to benefit society. Murphy Ives stresses the importance of having a lasting vision and centering it on the legacy one might want to create to make the world a better place.
The rise of the next generation of HNWIs also played a part in contributing to the surge in philanthropic activity.
“The second generation of HNWIs in Asia are increasingly engaged in different formats of giving,” adds Vivian Kiang, managing director and head of Wealth Planning and Fiduciary Services at RBC Wealth Management in Asia. Part of this generation also belongs to the broad network of Asia’s global families. They may have crossed borders for education, employment or property acquisition. As most of this generation is educated abroad, they’re more exposed to western values and increasingly aware of global issues. “They have that knowledge and they do not want to blindly donate,” she explains. This generation is now approaching investment in a new light, seeing it as a way to create a lasting, positive impact.
Networking also plays an important role in Asia’s philanthropy landscape by sparking conversations. “For the second generation, they have the social circle, they have their friends and they have the network,” says Kiang. “They are very outspoken about donations and if they keep talking about it, they will impact other people to make a difference. And I think we are starting to see that kind of ripple effect in Asia.”
When it comes to giving back to the community, Murphy Ives sees many different strategies to do so. These can range from supporting a charitable cause, which doesn’t take much time or effort, to setting up a long-term fund with the potential to grow many decades into the future. “An established fund can be used to invigorate the next generation,” she adds, “and spur them to take up the baton to run a social enterprise that can help to further those causes that were identified.”
Murphy Ives invites families or groups to sit down together and think about their individual and collective passions for social change, what’s missing and what needs to build on that.
Kiang also thinks having a common purpose can bring a family closer together. “Every family is structured in a different way but adding a donation-giving project within the family to manage together will pull everyone together for one good cause.”
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