Depth report

　　

Hong Kong tycoon Li Ka-shing regards it as his "third son." The founder of Alibaba believes that it is worth spending 2% of the world’s largest initial public offering (IPO) valuation. For a group of wealthy Asian businessmen, it provides an opportunity to save large tracts of coral.

    "It" is the charity foundation. Nowadays, philanthropy is a big cause in Asia. There are billionaires in Asia-According to the latest data released by Wealth-X, a data provider that tracks the super-rich, there are 560 millionaires in Asia worth more than one billion US dollars. There is growth in Asia. The rich people here are basically of humble and poor backgrounds, and they have started from scratch to fight the world, so they are eager to give back to the society.

    The desire of wealthy families to devote themselves to charity has passed from the United States and Europe to Asia. Asia is emerging as the next billionaire wealth creation center. UBS Singapore Asia Philanthropy Forum will explore how wealthy families successfully establish family heritage through innovative philanthropic behaviors.

    UBS and PricewaterhouseCoopers recently released the "2015 Billionaires Report" that the average age of Asian billionaires is 57 years old, and many of them have begun to consider how to maintain and pass on their wealth. This demographic feature of wealth may trigger a wave of charitable donations.

    "With the growing size and complexity of Asian billionaire families, succession planning and second-generation participation are very important for building a lasting family heritage. Charity is increasingly becoming a social cohesion. Let family values be passed on from generation to generation.

    At UBS, our dedicated philanthropy consulting team has provided advisory services to the philanthropic ambitions of many clients for generations. "Said Josef Stadler, head of UBS Wealth Management's global ultra-high-net-worth client department.

    Mario Marconi, head of Philanthropy & Values-based Investing at UBS, said: “The focus of philanthropists’ donations is as diverse as their motivation to donate. However, one thing is becoming more and more important. It is becoming more and more obvious that they are looking for measurable projects for their charitable contributions.

    Take Li Ka-shing, one of Asia's wealthiest tycoons, for example. The charity foundation he called the "third son" will receive an equal share of his own inheritance.

    Just as he said when he received the Forbes Lifetime Achievement Award in 2006: "I grew up in war and recalled how profound it was to wrestle with poverty and destiny. Everything is really not an easy journey. "

    "Since the age of 12, I have been working for 66 years in a flash; my life is full of challenges. With the blessing of heaven and hard work, I have gained a lot and experienced a lot."

    Nearly 10 years later, he said: "Social capital is the key. Compassion, compassion, trust, shared values, social participation, volunteerism, social networks, and citizenship are all assets that have quantifiable value. These assets are measurable. "

    Jack Ma, the founder of the Chinese e-commerce group Alibaba, put a 2% stake in Alibaba (at the time of its IPO a year ago, Alibaba was valued at $168 billion) and 0.3% of its total annual revenue into his charitable trust.

    These numbers are still growing. The investment bank UBS (UBS) analysis of tax authorities' data (because the tax authorities' data does not include personal donations, the total amount of actual donations should be higher than this) shows that there has been some significant growth in the past ten years-for example, Chinese donations The total increased from US$830 million to an astonishing US$16.5 billion last year.

    Donations have also evolved from large donations—for example, donations to universities (usually the donor’s alma mater), such as the Hong Kong Chen family’s donation of US$350 million to Harvard University in the United States.

    So far, everything is logical. Asia has always respected education, and, just like clothes, the bigger the better: here you can see the “Li Ka-shing Centre for Health Information and Discovery” at the University of Oxford and Harvard University's THChan School of Public Health (THChan School of Public Health).

    However, more interesting activities appear in lower donations—the new generation of donors pays more attention to giving donations to local beneficiaries and aims to help them gain the ability to support themselves.

    "Today's donation method is more structured than it was ten or twenty years ago. In the past, you just wrote a check and didn't know how the money would be spent," said Christina Tung, head of philanthropy and value investing at UBS.

    Annie Koh, the academic director of the Business Families Institute at Singapore Management University, added that the problem of money spoiling the next generation is now also emerging. "Older generations don't want younger generations to take their own property for granted, so they set up foundations to ensure that their children don't get too much property and that the wealth can flow to society," she said.

    Others believe that the foundation can also be used to house descendants of the family who do not want to join the family business, so that they remain part of the family business. The foundation can also be used to train descendants of families who wish to join the family business in the future.

    Finally, given the generally low tax rates in Asia, the tax factor may be less effective in promoting philanthropy in the region than in other parts of the world, but it can still play a role in promoting charity.

    China has raised the upper limit of the pre-tax deduction ratio for charitable donations to 12%, but there are strict restrictions on the charities that donate deductions apply. Singapore, which is eager to keep charitable funds in the country, provides the highest pre-tax deduction ratio among other countries. For domestic charities where the rules apply, the donation amount can be deducted up to 3 times.

    Most donations in Asia are donated to the local area, but they can also be donated overseas, just like the recent donation to save the large coral reefs that run through Indonesia and the Philippine islands to the Great Barrier Reef near Australia.

    However, given that Asian philanthropy is still in its infancy and billions of dollars are being invested in this cause, a whole new industry is being born, together with its banking ecosystem.

    However, the tycoons and the beneficiaries of their philanthropy certainly hope to avoid the problems that have plagued other industries, whether it is simply value destruction, poor management, or more shameful embezzlement of funds.