As we continue our international journey of donor advised funds, let’s next visit Asia, a continent with longstanding traditions of philanthropy amongst the wealthy. In this post, we will explore whether or not donor advised funds are part of the philanthropic landscape and how different countries in the region approach DAF giving.
The Bridgespan Group authored a fantastic report on philanthropy in Asia. It notes that per Nikkei Asia, more billionaires live in the region than in the US or Europe and the number of millionaires is estimated to increase nearly 60% by 2027.
However, there is also staggering poverty; nearly half of impoverished households in the world are in this region. If wealthy Asian families matched the levels of giving from their peers in the US, it could open recipients in Asia up to more than $700B per year (USD) in charitable gift funding!
Corporate Philanthropy
The Bridgespan Group report delved into 67 wealthy individuals from the six largest economies in the region: Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. The majority of those included are first-generation millionaires and billionaires, and the study found a strong link between business and personal philanthropy. This is because most businesses have multiple members of the same family on their boards and their philanthropic efforts are channeled through corporate social responsibility (CSR) programs.
Most companies in the region do not have foundations, and those that do often run their own initiatives rather than distributing funds to external organizations.
Some businesses collaborate with local governments to tackle shared objectives. Interestingly, corporate DAFs are rare in Asia.
However, organizations like Credit Suisse’s SymAsia (Singapore) and UBS’s Optimus Foundation Hong Kong (now merged into UBS SymAsia Donor Advised Funds) have begun integrating DAFs into their corporate giving strategies, which contrasts with the significant growth of corporate DAFs seen in the US in recent years.
Beyond CSR programs, most companies do not have foundations; the ones that do often operate their own initiatives rather than distributing funds to outside organizations. Other companies partner with local governments to tackle common goals.
Interestingly, there is little evidence of corporate DAFs. However, Credit Suisse’s SymAsia (Singapore) and UBS’ Optimus Foundation Hong Kong (which have since merged to become UBS SymAsia Donor Advised Funds), have included DAFs in their corporate giving offerings. This contrasts greatly from the significant growth of corporate DAF seen within the US in recent years.
The Rise of Donor Advised Funds
Although DAFs are not yet a major part of corporate giving in Asia, they are gaining traction among individual donors.
The Centre for Asian Philanthropy and Society (CAPS), which offers research and advisory services for social philanthropy in the region, published a 2023 report on DAFs in the Asia-Pacific region.
According to the report, the first DAF in Asia emerged in the mid-1990’s, when Hasmukhbhai Thakordas Prekh, founder of the Bombay Community Public Trust in India, discovered the concept from the New York Community Trust (NYCT). Frequent readers of this blog will remember that NYCT is the first DAF sponsor here in the US, having been established roughly 70 years earlier.
Soon thereafter, Japan saw its first DAF 1997, when the Levi Strauss Foundation and Japanese Center for International Change established the country’s first DAF.
Since then, a handful of other organizations have started offering DAFs across Asia, including the Public Resource Foundation in Japan, the Japan Philanthropic Foundation, the Community Foundation of Singapore, Give2Asia Hong Kong, the Beautiful Foundation of Korea and the Community Chest of Korea. The vast majority of these were launched within the last 10 to 20 years.
Donor Motivations
A key difference between DAF giving in the US and Asia is the donor’s motivations. In the US, tax benefits and investment growth are often primary incentives for establishing DAFs.
However, according to the CAPS report, many Asian donors are more interested in the professional support, in-depth knowledge of charitable recipients, and the lower costs that come with using a DAF, rather than managing their giving independently.
Additionally, in China, the report notes that the regulations on DAFs (once known as “charity wallets”) are less stringent than other giving vehicles, making them an increasingly popular option.
In stark contrast to the rest of Asia, a report by Temasek Trust, noted that the Singapore government offers an DAF donors an astonishing 250% total tax deduction over a five year period!
Community Foundations
Just as in the United States, community foundations in Asia offer DAFs as well. The Asia Community Foundation in Singapore is one such community foundation. In addition to DAFs, they also offer advisory services to individuals and family offices, as well as a number of impact funds, which support specific pressing issues across the greater region such as poverty, healthcare, environment and women’s education.
In China, several sponsors have collaborative giving accounts that allow donors to work together to solve community issues.
Per the Wealth Management Institute’s recent report, donors in Japan do not have sole authority on the gift recipients- an independent board at each sponsor has the final say on where a gift may go.
Sponsor Minimums
One constant across any country that participates in DAF philanthropy is that the minimum donation to establish a fund varies widely.
Per a legal blog in Singapore, it can range from $50,000 Singapore dollars (~$37,000 USD) to $1 million Singapore dollars (~$740,000 USD) (SymAsia Foundation)!
Per the Wealth Management Institute’s report, the comparably high rate to US sponsors and lack of public awareness of the DAF as a charitable option has kept the number of funds in Singapore lower than the US.
Summary
In summary, DAFs in Asia are still emerging, with the landscape of DAFs being diverse, and varying based on the policies and procedures within each country. While still rare in corporate philanthropy, they are gaining popularity as a flexible and strategic way for individuals to engage in philanthropy and make a meaningful impact.
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Image credit: “Flag map of Asia” by DJ Mapping is licensed under CC BY-SA 4.0.
