Education and the purpose of philanthropy

Education and the purpose of philanthropy

A Chinese property baron has sparked a debate about the worthiness of charity recipients, writes Raymond Zhou.

Philanthropy is generally not a hotbed for controversy. But here in China you are watched closely if you hold your purse strings tight or let your money flow, and, in the latest case, the direction in which your money flows may also be a cause for concern.

Pan Shiyi, a real estate tycoon who is a celebrity in his own right, ruffled feathers when he and his wife decided to donate $15 million to Harvard University in the United States.

The news on the grapevine was more dramatic: It said Pan gave $100 million. Later, he clarified that, saying he planned to set up a fund with a total of $100 million, of which $15 million is earmarked for Harvard, and specifically for needy students from China. Other schools being considered include Yale and other prestigious universities in the US and the UK.

Yao Shujie, an economist, spoke for many when he questioned Pan's motives: "Pan made his fortune from the property market in China. Why should he go all the way to the US for philanthropy? He forgot where his roots are."

Others suggested that Pan's donation was an effort to win admission for his son into the Boston school. Their rationale: the benchmark set by Pan for eligibility is 65,000 yuan ($10,500) in annual family income, which most middle-class Chinese families can easily cross and, therefore, not many from China will meet this requirement anyway.

Now, Pan is no Chen Guangbiao, a philanthropist who made his millions in recycling. Pan has dabbled in entertainment, even playing the male lead in a feature film, yet he does not go around trumpeting his altruistic deeds. He does have a much higher profile than most businessmen in China, but he earned it not from his business feats, but rather from his micro blog comments on public affairs.

As a matter of principle, Pan has the right to donate to whichever individual or organization he sees fit. It is none of the outsider's concern whether the recipient is Chinese or foreign. Every person has his or her own priorities when it comes to choosing a target for help.

Most Chinese now totally get this. Had this happened a decade or two ago, public feedback would have been predominantly negative, I'm certain, because most would have equated such an act with a lack of patriotism. This feeling still lingers, but it's shared by fewer and fewer people because the public can more easily understand the distinction between public and private rights.

A few years ago, Zhang Lei, a Chinese financier, donated $8.88 million to Yale University, his alma mater. Had he been better known, he would have borne the brunt of a major ill-will campaign.

Detractors, for all their misplaced zeal to dictate private citizens' choice of charity, do apply a crude principle of economics when they see something like that. For a school such as Harvard, they reason, this money is the icing on the cake. It has so many donors that Pan's money would not yield the highest return on investment, if it is seen as an investment.

Ordinary Chinese do not use calculus to figure out which school needs donations the most, but we do have two colorful sayings that correspond to the rule of microeconomics: "Adding flowers to a big bouquet", and "Sending charcoal to someone trapped in snow." You get more bang for your buck if you do the latter, but that will require independent thinking.

Most investors, professional or otherwise, would follow the herd mentality and chase objects everyone else is already hotly pursuing. You would feel you have rubbed off some of the glitter if you give money to Harvard or Tsinghua University in China. In fact, the top universities in China get proportionately much more in both private donations and public funding. They are the largest, most-prominent bouquets in the garden of higher education, and throwing roses or petals at them would probably yield more psychological returns than tangible ones.

By this yardstick, the problem with charity recipients is not their nationality, but rather which is in dire need of such help. Harvard may have a much larger budget than Tsinghua, which, in turn, is much better funded than a regular college in China. The ones most worthy of such financial assistance, as the logic goes, are those in poverty-stricken areas that cater to the lowest-income families.

As I gather from empirical evidence, this social stratum is given short shrift and deserves a strong and consistent inflow of funding. Education, if it be the great equalizer, should give students from underprivileged families equal opportunities so they can make a fresh start with their lives. But philanthropy alone is unable to solve this problem. It has to be from the State, which is implementing all kinds of programs for that purpose, but there is still great room for improvement.

A year ago, a photo surfaced online of a father carrying a desk to school for his daughter. It outraged the country. Shouldn't this be the responsibility of the local education authority, not the parents? Only in those areas not covered by the State can philanthropists fill the void.

There are many grassroots programs. The one that provides free lunches is especially touching because it funds students who can barely pay for their meals. The money provides a slightly better diet, and the students get a higher level of nutrients when their bodies need them most.

One can question which is the better economic choice: a large sum for a world-renowned institution or a similar sum that may benefit tens of millions of hinterland children. If you push the argument further, you will realize that there are youngsters who suffer from even worse poverty and misery. They may not be in a country you are familiar with, but the same amount of money may be able to make a greater difference to their lives than in a Chinese backwater.

However, that is just one way of calculating the worthiness of a recipient. You can also use a different gauge and see how much money is wasted in overheads or on unnecessary expenses. And you may choose a recipient that is better managed and yields the least waste in the process.

Then there is the possibility of using philanthropy as a public relations tactic - to smooth the wrinkles of business dealings or boost one's personal image. If handled deftly, such a fusion of business and non business strategies would not raise eyebrows. If Chinese businesses have an eye for the global market, why not non business affairs, such as charities? Shouldn't one expand his or her horizon to that of the whole world?

I don't want to second-guess the motives behind Pan Shiyi's decision to fund Ivy League-bound Chinese students. He has made many donation to poor children in China's inland provinces. He may see the new move as helping those on the verge of success and the schools as incubators for tomorrow's leaders. Zhang Xin, Pan's wife, says: "I want the best students to receive the best education, regardless of whether their families can fund it."