Tycoons face torrent of abuse over benevolent donations

SOHO China Chairman Pan Shiyi has been in the media spotlight recently, following his donation of $10 million to Yale University. Pan said the aim was to improve educational opportunities for Chinese students, many of whom cannot afford the fees charged by the prestigious university. But not everyone has been impressed.

SOHO China Foundation, an organization funded and operated by property giant SOHO China, announced Wednesday an agreement with Yale University to provide $10 million in aid for Chinese students to get undergraduate education at Yale.

The donation "is a long-term plan, and aims to provide the best possible educational opportunities for the most outstanding students from the Chinese mainland," Pan said.

However, Pan's benevolent move, which came only three months after Pan and his wife Zhang Xin donated $15 million to Harvard University in July, was criticized by the public. Just a few minutes after Pan posted a report about the donation on his Weibo account, hundreds of Internet users commented on it. Some said Pan was just trying to improve his son's chances of getting into Yale. Others said he should have donated the money to Chinese schools instead.

This was followed by more critical comments, which analysts said reflected a mood of simmering resentment toward the rich.

"Some entrepreneurs are afraid to make charitable donations, as it could attract criticism," Li Jianming, deputy director of the China Enterprise Confederation, told the Global Times Thursday.

But Li thought that donations by entrepreneurs would someday be more widely recognized and respected among the public if more efforts are made to improve China's systems for charitable donations.

Skeptical environment

On the same day as the news of Pan's donation, the Hurun Research Institute released its Hurun Philanthropy List 2014, ranking the 100 most generous individuals from the Chinese mainland.

Jack Ma Yun of Alibaba was recognized as China's most generous philanthropist of all time, with a donation of Alibaba stock worth $2.4 billion to a foundation set up together with Joe Tsai, Alibaba's other main individual shareholder.

Real estate tycoons made up 48 percent of the list. Huang Rulun, chairman of Century Golden Resources, ranked second with donations amounting to $97 million, and Wang Jianlin, chairman of Dalian Wanda Group, came third with donations of $73 million.

Criticism from Internet users of these entrepreneurs' charitable moves has also been intense. One user said the gap between the rich and the poor is too large in China, and that these rich people simply wish to "show off" their wealth through their donations.

Some said the rich businessmen, especially those from the real estate sector, had earned their money through bribing government officials and questioned whether they were being genuinely charitable or trying to reduce their taxes.

"Giving should be a voluntary and private choice, and should be praised," Lu Dongbin, a professor at the School of Business at Renmin University of China, told the Global Times Thursday, adding that there is not an accepting environment for philanthropy in China now.

Lu said resentment toward the rich is due to the growing gap between the rich and the poor. It would help to ease this social problem if there was a more fair and legal commercial environment in China.

Change of mind-set

To change the public attitude toward their donations, entrepreneurs might need to modify their own philosophies, said Li.

"Some entrepreneurs see donations as a way to promote their brands or improve their relationships with government bodies, who sometimes are the organizers of public charities," Li noted.

With regard to public concerns about illegal activities like bribery, business leaders should strictly regulate themselves so as to improve their public image, said Li.

Lu noted that "creating wealth and jobs through good management is also a form of philanthropy."

Better regulation needed

Despite the skeptical attitude of many Internet users, charitable activities in China are still on the up.

Since 2008, when a devastating earthquake hit Southwest China's Sichuan Province, people from across society and enterprises have pledged money and materials to help with reconstruction in the affected areas.

Chinese companies have also paid more attention to their corporate social responsibility, including giving to charity.

In 2013, the total value of charitable donations hit 110 billion yuan ($17.93 billion), around 25 percent higher than the previous year, according to a China charity development blue book issued in May by the Chinese Academy of Social Sciences.

However, charity organizations led by government departments, which play a leading role in China's public donations, suffer from various issues such as "low work efficiency and disorderly management," according to the blue book.

Corruption cases are "likely to happen, due to the current poor management system," it said.

These problems with public charity organizations are another reason for the skepticism about benevolent donations in China, Li noted.

Some firms have chosen to set up their own charity foundations, such as SOHO China, which established its foundation in 2005.

"Money management will be one of the major challenges for private foundations, which need professional management," Li noted.

Pan told the Global Times Wednesday that Yale has a "very mature management model for the scholarship fund," adding that it will choose the most appropriate financial products to invest in, in order to ensure high yields for the fund.

"We will not join in the investment directly, but Yale will inform us about the yield and how many Chinese students it has supported each year," Pan noted.

Pan said public criticism of his donation was not unexpected, but said he would continue to support public education.