May 22, 2017; Forbes
In May 2017, Tencent became one of the world’s top 10 most valuable companies. According to Forbes senior editor and Shanghai bureau chief Russell Flannery, Tencent and its founders as individual philanthropists are making their mark on the world of charitable giving as well. In 2007, Tencent became the first Chinese Internet company to establish a charity foundation.
Tencent is a Chinese investment holding company. Its subsidiaries provide media, entertainment, payment systems, and Internet and mobile phone services. Tencent also operates online advertising services in China.
Headquartered in Nanshan District, Shenzhen, Tencent is the world’s largest gaming company. Its many services include web portals such as QQ.com, e-commerce, and an array of mobile and multi-player games. It is perhaps best known for its instant messaging and commerce service called WeChat, which is ubiquitous in China.
NPQ writes regularly about the state of civil society in China, including the two topics that Flannery addresses in his Forbes article: Charity Day and how the Wenchuan earthquake in 2008 that killed 69,000 people contributed to the spontaneous rise of charitable giving in China. Located only 1,000 kilometers away from the earthquake’s epicenter, Tencent was prepared to intentionally respond.
The Wenchuan earthquake “was the turning point” for the company’s efforts in philanthropy, said Charles Chen, a Tencent co-founder and then chief administration officer who was also the first chairman of the Tencent Charity Foundation, the company’s in-house fund. Expanding beyond a web location that was created in 2007, Tencent by 2013 went on to add a new philanthropy site to its hugely popular WeChat social platform. As of March 31 this year, WeChat boasted some 938 million users.
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The results have been impressive. Tencent Charity, the company’s mobile and desktop donation site, has become one of the world’s busiest of its kind. To date, some 100 million users have donated 1.7 billion yuan, or $250 million, an average of only 17 yuan, or $2.50, each. A chunk of that was raised last September during Tencent’s September 9 second annual “99 Charity Day” online charity event, during which 6.8 million users donated 300 million yuan, or $44 million.
Today, Tencent Charity Foundation offers WeChat users an online giving service that emphasizes monthly giving, providing text updates on their donations. Users can make small donations of less than $1 and select from more than 24,000 causes to support.
The 46-year-old Chen serves as the honorary chairman of the Tencent Charity Foundation and personally donated $348 million to education causes in 2016, ranking No. 1 on the Forbes China Philanthropy List. Chen’s Yidan Prize is the world’s largest award given in the field of education. An international judging committee manages the Yidan Prize. The prize gives out $7.7 million in annual awards divided into two categories: Yidan Prize for Education Research, and the Yidan Prize for Education Development. Each Yidan Prize Laureate receives a gold medal and $3.9 million in awards, including a cash prize of $1.9 million and a project fund of $1.9 million.
China’s first charity law was passed in March and became effective in September 2016. The law confirms charities’ legal status and seeks to make it easier for at least some charities to register and raise funds. The law also improves tax incentives for giving. China’s Foreign NGO Management Law was passed in April and took effect in January 2017.
China has enormous potential for philanthropy. China, with 1.19 billion people, is second only to the US (540) in its number (251) of its billionaires. China has the most new billionaires. By 2015, China’s middle class became the largest in the world, with 109 million Chinese adults possessing wealth between $50,000 and $500,000, compared to 92 million in the U.S. out of a total population of 311 million. Despite this new wealth accumulation in China, charitable giving lags far behind the U.S.
China established a market economy system some 30 years ago. Only recently did it begin to open the social sector. With leaders such as Tencent and Chen helping to build the country’s philanthropic infrastructure, China has the potential to become a world leader in charitable giving. We might occasionally be critical of China’s progress in the area, but hopefully we can also help nurture a new generation of Chinese professionals who are committed to developing China’s independent sector.—James Schaffer