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Innovation in Asian Philanthropy is the second working paper in our series on Entrepreneurial Social Finance (ESF), which is a term we coined to capture a growing number of financing models that focus on providing capital and non-financial support to social entrepreneurs and entrepreneurial social ventures. ESF is a broad canopy of practices that includes models such as venture philanthropy and impact investing. In social financing, this approach represents an attitudinal shift from ‘donor’ to ‘investor’ in the relationship with those seeking capital, and operates across a wide spectrum of financial inputs, risk appetite and expectations of return on investment.

With the globalisation of social entrepreneurship, interest in entrepreneurial social finance is rapidly evolving in many parts of Asia, with the potential to offer Asia’s social entrepreneurs key resources they require to initiate ventures and grow them to scale, while offering investors the maximum return on philanthropic capital.

Despite economic progress having lifted millions out of poverty in the last 20 years, one half of Asia’s 1.63 billion people live on incomes of less than USD 2 a day. Sustained economic growth throughout Asia creates an increasing environmental burden and challenges social order from a widening gap between rich and poor. On the other hand, an unprecedented level of personal wealth is being created in the region. The number of high net worth individuals in Asia now exceeds that in either North America or Europe.

Innovation in Asian Philanthropy views the development of philanthropy in Asia through the lens of innovation in three areas: entrepreneurial philanthropy, strategic philanthropy and the philanthropy ecosystem. The study draws on 26 interviewed case studies from 10 Asian countries that illustrate the diversity of innovative approaches being explored by philanthropists and impact investors in Asia today.

One innovation we explored in this study is the Giving Circle, the subject of further research in this series.

 
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A giving circle is an act of collective philanthropy where donors pool their financial capital to support a non-profit organisation. While giving circles have existed for decades, they are finding a fresh expression as individuals rediscover the advantages of giving together. Most of the estimated 600 giving circles in the U.S. started up within the last 20 years. Research in the U.S. suggests that joining a giving circle helps people become better informed about philanthropy, non-profits and community issues. Giving circle members give more generously and more strategically.

Our new study reviews 35 giving circles in eight Asian countries, which are either indigenous or affiliated to networks outside the region. These giving circles demonstrate a wide variety of styles and models. Some circles are informal and volunteer managed; others are more structured and use professional staff. While all giving circles encourage their members to do more than make a donation, some utilise the skills and networks of their members to provide consulting expertise for the non-profits being supported. The annual donations made by members to giving circles in the study varies from US$180 to US$20,000. Such collective model of philanthropy can attract participants across a wide spectrum of disposable wealth, from those of modest means to high next worth individuals. The study analyses the sample of Asian giving circles by promotion, structure, operations and impact, and ends with several recommendations for the growth and development of collective philanthropy in Asia.

 
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Our previous study on giving circles reviewed 35 circles, which we classified as either in- digenous or affiliated to networks outside the region, in eight Asian countries. These giving circles demonstrate a wide variety of styles and models. Some circles are informal and vol- unteer managed; others are more structured and use professional staff. While all giving cir- cles encourage their members to do more than make a donation, some utilise the skills and networks of their members to provide consulting expertise for the nonprofits they support.

In this new study we list 66 known indigenous and transplanted giving circles in 10 Asian countries. We surveyed the members of 38 of these giving circles to understand how mem- bership influences an individual’s knowledge of, and attitude towards, their community, so- cial issues, nonprofits and philanthropy. The survey also explored how joining a giving circle changes the amount given and the ways in which people choose to give. A number of non- profits were asked about their experience of being supported by giving circles and how this contrasted with the support they received from more traditional donors.

 
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Amid the rapid development of philanthropy across Asia, over the past 10 years a number of giving circles have appeared in the region. This form of philanthropy, where individuals pool resources and provide grants to non-profit organizations in their community, is well known and studied in the U.S.

 

This article examines the phenomenon in Asia, and finds giving circles there to be either indigenous or based on models transplanted from the United States or Europe.

While ancient traditions of charitable giving have existed for centuries in Asia, the concept of organized philanthropy in order to effect specific societal benefit is relatively novel, but developing rapidly in several countries.

 

While giving circles are likely to grow in number there, the region’s relatively weak philanthropy ecosystem is a factor restraining their development.