Charities in Asia Work to Keep Donors Engaged During the Recession

For the past 10 years or so, China and parts of East Asia have been seen as burgeoning philanthropy powerhouses.

But with the economic crisis hitting Hong Kong, Shanghai, and the region’s other financial centers, some observers worry the wealthy, corporations, and other donors will be more cautious about giving.

And while some speculate that governments will seek to bolster charitable work as the downturn exacerbates the region’s already difficult social problems, many are less optimistic.

“In general, my sense is that the economic recession’s net impact on philanthropy in Asia will be more negative than positive,” said Allen C. Choate, who lives in Tokyo and is vice president of the Asia Foundation, a charity that supports causes throughout the continent.

Mr. Choate said that many foundations in the region have lost between 20 percent and 30 percent of their assets, like their American counterparts, and that his organization’s work to spur cross-border charitable giving between developed Asian nations has been stymied.

“It was tough sledding before, but the difficult economic environment has made it doubly so,” he said.

Declining Wealth

Fund raisers in the region report similar concerns.

“All the news we are hearing is that people’s wealth is declining,” said Krista Slade, who lives in Singapore and is executive director of Asia-Pacific efforts at the Council for Advancement and Support of Education, which assists universities and colleges with fund raising and alumni relations.

Ms. Slade is giving Asian fund raisers advice similar to what American ones are hearing: Keep communicating with donors. “Not reaching out to people is the worst thing you can do,” she said.

Nonprofit experts caution that it is still too early to say how the economy will affect Asian philanthropy — and in China, at least one corporate leader has announced big charitable plans despite the recession.

In February, Cao Dewang, a wealthy entrepreneur, became one of China’s largest philanthropists by pledging roughly $600-million to a new foundation. His gift would be in the form of stock from the Fuyao Glass Industry Group, which Mr. Cao helped establish, and the deal requires the approval of Chinese regulators.

In recent years, the Chinese government has sought to develop regulations to govern charities, and a 2008 disaster brought major attention to the role nonprofit groups and volunteers can play.

In May, an earthquake hit central China, killing nearly 70,000 people. Donations poured into the Red Cross Society of China and other relief groups.

“This earthquake is the biggest event in the history of the Chinese Red Cross,” said Yiman Jiang, senior executive vice president of the charity. “We can say that at present the Chinese Red Cross enjoys more public trust and more government recognition of our role.”

The organization has sought to turn one-time disaster donors into long-term givers, but it has been somewhat hampered by the economic downturn, she said.

“In terms of the economic situation, now I think we are clearly aware we can’t achieve the same amount as we did last year,” said the Red Cross official.

‘A Proposal Factory’

In Southeast Asia, charities report similar fund-raising difficulties.

In the Philippines, where nonprofit efforts are relatively well developed, giving is down, though not across the board, said Mayan G. Quebral, executive director of Venture for Fund Raising, a charity in Manila that helps Asian groups garner donations.

She said corporations have pulled back, but individuals continue to give for the most part, and that the recession has meant increased business for Venture.

“I have been like a proposal factory in the past four weeks,” said Ms. Quebral. “There seem to be more NGO’s [nongovernmental organizations] requiring our services. Business for us as consultants has never been better.”

Habitat for Humanity Thailand reports that fund-raising revenue declined 10 percent in both January and February. As a result, it has turned to Thai donors as contributions from American companies, like the American International Group and Citibank, have dried up, said James Yarbrough Jr., Habitat’s director of resource development for the Asia-Pacific region.

Mr. Yarbrough, who lives in Bangkok, said historically the group has received most of its support from non-Asian sources, but he is trying to change that.

To help bring attention to Habitat’s house-building work in Asia, its best-known backer, former president Jimmy Carter, will visit Thailand for a week in November.

“We are seeing this as a chance to tell our story,” Mr. Yarbrough said. “We are really engaging a lot of Thai companies, and the good news is that they are being very responsive.”

Operation Smile Thailand, which provides cleft-palate surgeries to children, has taken a similar approach. The group, which has relied heavily on donations from multinational companies, is working to attract Thai donors. It has set up employee-giving programs with automatic payroll deductions and placed donation drop boxes at hospitals, banks, and other public places.

“Maybe this is a bit of a wake-up call for us to go local and not depend so much on the multinationals,” said Kevin J. Beauvais, chairman of the Bangkok charity’s executive committee.

So far, the strategy appears to be working; Mr. Beauvais said the group expects to make its first-quarter fund-raising goal.

Other groups, especially small charities, are feeling more vulnerable, and some have been forced to reduce their programs because of a decline in support.

“At this point we are quite nervous and have made the decision not to take on any more children until we can stabilize our income,” said Jon Ryder, chairman of the Imagine Cambodia Foundation, a charity in Phnom Penh that houses and feeds orphans. “This means that many more orphaned children will be left on the streets.”

Singapore’s Policy

As Asian foundations cut back their giving, it is likely that small organizations will be the ones hurt, said a program manager at a large grant maker in the region, who requested anonymity. With less money, the foundations will probably concentrate their giving on big international organizations and universities that are better at writing proposals, managing donations, and reporting results, she said.

With many charities facing rough times, at least one Asian country has sought to spur giving by expanding tax benefits.

For 2009, Singapore has raised the percentage that donors are allowed to deduct from their taxes from 200 percent to 250 percent.

The island city-state has for several years sought to be a hub of nonprofit activity in Southeast Asia and wants to continue these efforts during the downturn. “Our focus is to make it a nice base for nonprofit organizations,” said Jonathan Kua, director of the New Businesses Group at the Singapore Economic Development Board.

Last year the government started the International Organizations Program Office to woo large charities. Since 2005, the island has doubled the number of international nonprofit groups with offices there to 70.

Mr. Kua said bringing nonprofit groups to Singapore helps the economy by attracting talented people to the country and diversifying the career options for residents.

With other countries unlikely to adopt similar charity-friendly measures during the economic crisis, fund raisers in Asia said they will have to rely on something else to survive: hard work.

“I am not going to listen to the economic doom and gloom,” said Mr. Beauvais of Operation Smile in Thailand. “If we have to work three times harder to raise the same amount of money, so be it.”

Speaking about the children who depend on the charity for medical aid, he said, “I don’t think the kids need to be worrying about the world economy. We just need to make their lives better.”

Martha Ann Overland contributed to this article from Hanoi, Vietnam, and Caroline Preston contributed from Washington.