How Asian philanthropists are donating more — but differently

Belinda Tanoto is a 38-year-old graduate of Harvard Business School and the youngest daughter of an Indonesian palm oil billionaire. But her philanthropy is motivated by a far more humble family history.

“Both of my parents never graduated from high school . . . not because they didn’t want to, but because of family circumstances they couldn’t,” she explains. “Very early on, my parents knew they wanted to give back.”

It was in 1981 that her father, Sukanto Tanoto, and mother, Tinah Bingei Tanoto, started to address one of Indonesia’s biggest problems: poor access to schools. It had left the country with one of the world’s lowest rates of children entering secondary education, according to the Paris-based OECD.

The couple, using their vast wealth — Sukanto’s current net worth is $3.1bn according to Forbes — funded the construction of a village kindergarten and elementary school in an impoverished and remote area of North Sumatra, the home of endangered tigers and orangutans.

Today, education has become a major theme for other Asian philanthropists, too, as the region’s growing number of billionaires — 927 in 2022, more than any other region, according to the World Population Review — see an ongoing need to improve schooling and literacy levels.

A report by consultancy Wealth-X estimates that Asia’s wealthiest families — those with net worth above US$30mn — increased their donations to all philanthropic causes by 17 per cent between 2020 and 2022, to US$24.2bn.

But, still, the region lags the west, where billionaires — while fewer in number — gave at higher rates.

In North America, the 891 billionaires donated $90.6bn to good causes in 2022, Wealth-X found — more than three times more than their Asian counterparts. In Europe, 612 billionaires gave $62.2bn in 2022, more than double the Asian total. However, as Asia continues to advance economically, future largesse may prove greater.

The Centre for Asian Philanthropy and Society says that, if Asian billionaires gave at the same rate as western billionaires, as much as $701bn could be unlocked for social giving. And, if the number of billionaires in Asia also rises in line with economic growth, the potential for even more wealth to flow to charitable causes is clear.

The Tanoto Foundation demonstrates this philanthropic potential. Since its early days funding village schools, it has diversified its giving internationally and across sectors, although its focus remains on early life development. Overall, the foundation donates about $35mn-£40mn per year to philanthropic causes, says Belinda, who sits on the foundation’s board.

One recent initiative was aimed at reducing “stunting” in children, a widespread affliction in Indonesia caused by malnutrition and poor sanitation. It can lead to impaired cognitive development as well as stunted growth. So far, the foundation has donated $3mn to a collaboration between the World Bank and the Indonesian government to provide better nutrition and train “human development workers” in about 75,000 villages.

“There has been an under-investment in the first 1,000 days [of a child’s life],” says Belinda. “Worse still, we discovered that the stunting rate in Indonesia was extremely high. These kids will never develop to their full potential. Stunting knocks off about 10 points from their IQ.”

The programme has been a big success, helping to reduce stunting among Indonesian children under the age of five to 21.6 per cent in 2022 from 30.8 per cent in 2018, according to Unicef statistics. But this still leaves an estimated 4.7mn children under five suffering from the condition.

Increasing effectiveness

The Tanoto Foundation’s method of organising its donations is similar to that used by many of Asia’s richest families and corporations. Unlike philanthropists in the west, which often separate their activities from government programmes, Asian charities say working with official institutions increases their effectiveness.

Belinda notes the distinction: “What’s the difference between Asian philanthropy and typical American philanthropy? In Asia, we see our approach as being complementary to the government.”

One reason for this is that Asia is a region containing half the world’s poor, where governments are still actively involved in addressing the challenges of low incomes and ill-health. It therefore makes sense for Asian philanthropists to pool their efforts with government initiatives.

However, self-interest is another factor, some analysts suggest, as large corporations are aware that supporting a government’s development initiatives can improve relations with state officials making decisions that impact their business.

“Giving is business development,” argues Edward Cunningham of the Harvard Kennedy School. “When you look at who is giving, and where, in China, it is often philanthropists and their companies in [sectors] that are highly regulated at the local level, like real estate.”

The Tanoto Foundation stresses that, while it enjoys strong official ties, “engagement with government organisations is not the primary goal”.

It also says it operates independently from RGE Group, the diversified paper products conglomerate chaired by Sukanto Tanoto, which has attracted criticism from Greenpeace for extensive deforestation in Indonesia.

The money that funds the Tanoto Foundation comes entirely from the family, not the RGE Group, points out Belinda. The foundation, itself, states that “RGE’s business groups that operate in the forestry sector have explicit no deforestation policies in place.”

Going it alone

Another characteristic of Asian giving is the tendency of donors to go it alone. In the west, people tend to think of a charity and a funder as separate entities — the former does the work, while the latter provides the money. But, rather than making grants, many Asian philanthropists prefer to run the programmes themselves.

According to Pritha Venkatachalam, managing partner for Asia at The Bridgespan Group, a social sector consulting firm, this difference is often driven by personality.

“All of these funders have been used to having full control over their businesses, the way their money is spent, and the results achieved,” says Venkatachalam. “They want to replicate that in their philanthropy.”

An additional reason is history. Unlike in the west, where charities have had centuries to develop, the social sector in Asia is relatively young and its development has been stifled by laws limiting civil society. As a result, there are fewer reputable organisations to which philanthropists can donate.

But an ecosystem in which the wealthy control both the philanthropic capital and the means of distribution can make Asia a difficult place for non-governmental organisations to operate.

The Synergeia Foundation, an NGO that aims to improve the quality of basic education in the Philippines, has encountered this problem.

A dearth of philanthropists willing to provide financing meant the NGO had to rely on the generosity of multilateral organisations, such as the UN, from which funding can, at times, be slow and bureaucratic.

“It is a tough funding environment,” says Milwida Guevara, chief executive of Synergeia.

Nevertheless, Synergeia has persevered. Its mission is to raise education standards in the Philippines — where rote learning and limited resources relegated the national education system to 77th out of 81 assessed by the OECD in 2022.

Nowhere was its determination to make an impact more apparent than in Valenzuela, a city of 620,000 north of Manila, where maths and reading scores were slipping alarmingly.

Mary Ann Centillo, a single parent and factory worker living in Valenzuela, sums up the problems. Her daughter, Elsa Rose, aged 11, was struggling in school. “She was unable to read in English or Filipino, and she was painfully shy,” says Centillo.

The mayor’s office brought in Synergeia to fix the problem. Part of its formula was to inject more fun into the classroom.

“I got support on techniques to help teach reading to my students, such as pronunciation awareness, and fun activities that they could take home, like songs, chants, and vocabulary games,” says Analyn Roque, a Valenzuela teacher.

They also focused on the parents, hosting workshops to help them encourage their children to learn and giving them educational materials, such as stories to read together and creative writing activities.

“My children used to call me the dragon because shouting was the only way that I could communicate with them about their schoolwork,” says Christine Taguinod, a parent of four Valenzuela students. “But, during the programme, I learned how to communicate with my children, and opened an avenue where I could help them with schoolwork.”

The programme succeeded. Across Valenzuela, Synergeia achieved noticeable results. By 2018 — five years after the programme was launched — average reading scores had risen by 20 per cent across the city and the number of students who were a grade behind in reading levels dropped by 43 per cent.

India stands apart

India’s philanthropy stands apart from other Asian countries. Its wealthy have given more money for charitable works than any country in the region, estimated at $14.8bn in 2022 by the consultancy Dasra.

The nation also boasts a vibrant civil society and has a requirement for large listed corporations to give 2 per cent of their net profits to charitable causes.

Yet India’s needs can seem overwhelming. Some 155mn people live off less than US$2 a day, and the health system is ill-equipped to deal with the world’s largest population.

The Tata Trusts foundation, established in 1919, is the oldest and largest of India’s private philanthropic bodies. Funded by the Tata family, owner of India’s largest conglomerate the Tata Group, the foundation mobilises $100mn a year to support education and health for India’s poorest.

“They have had the most outsized footprint in India,” says Naina Subberwal Batra, chief executive of the Asian Venture Philanthropy Network. “They have been the role model, both operating their own programmes and giving grants to smaller organisations.”

So, when cancer mortality rates in India started to rise over a decade ago — doubling between 1990 and 2016 as an overburdened health system failed to keep up with demand for screening and treatment — Tata stepped in.

Since 2017, the Tata Trusts foundation has worked with national and local governments to fund the construction of a network of screening clinics and has built seven specialist cancer hospitals. It has also trained doctors and provided equipment to hospitals to ensure that late-stage patients can get quality care close to home.

In addition, it has gone into communities to reach more people, entering a partnership with US pharmaceutical group Pfizer that has so far screened 2.5mn impoverished people for cancer.

But even organisations with the proven impact of Tata Trusts still face challenges.

For example, the Indian government has introduced laws requiring NGOs and philanthropist groups to obtain licences to receive foreign funding in an attempt to prevent interference in internal politics from overseas bodies.

This has made it harder for Indian organisations to get funding from international philanthropists, putting strains on Tata as it tries to fill the funding gap.

Nevertheless, the work done in India and across the region shows how Asian philanthropy is evolving in an approach quite distinct from that of the US and Europe. There are clearly growing pains as donors seek to match the size of western giving but, in India, the success of Tata’s cancer programmes emphasises its potential.

By running their own programmes and setting up partnerships with governments and corporations, Asian philanthropists are playing an ever more important role in the development of the region.

This article is part of FT Wealth, a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment