The rich and the spirit of charity

By Grayson Clarke
0 CommentsPrint E-mail China Daily, August 20, 2010
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The European heritage is one of more solidarity - hence the fact that until recently there were no individual savings accounts in the social security system. This is a long tradition. It dates way back to the middle ages when trade guilds were active in helping their members and the wider poor.

Again it would not be right to say there are no similar examples in the Chinese world. I have just got back from Penang in Malaysia where five Chinese clan associations founded in the second half of the 19th century are still going strong supporting their temples and communities, particularly in the area of education.

This however brings us to the absence of a strong tradition of charity law and protection of charitable property. Charity law has one of the longest traditions in British history dating back to when the crusaders used to entrust others with the protection of their children's rights in the event of death in the battle. Trustee law is now one of the most important foundations among Anglo-Saxons, essential to the operation of the whole charity sector as well as occupational pensions.

In fact China enacted a trust law in 2001 under which some company pension schemes were set up. But the law is not part of Chinese tradition and the crux of the law - the fiduciary duty of the trustee to act on behalf of those whom the scheme is meant to benefit - is very poorly respected. To put it simply, why would anybody bother to donate his/her money to a good cause if someone will simply run off with it. And there is never anyone to prosecute malefactors or recover those assets.

The government cannot do much about changing culture, not in the short term at least, but it can do something about the development and implementation of proper law and regulations.

One final thought. There has been much talk in the press recently of the problems of how children of China's first-generation entrepreneurs can be taught skills and encouraged to take over and develop family businesses.

Charitable foundations can play an important role in that process. If you leave all your wealth to an only son or daughter, there is a reasonable chance he/she will blow it on high life. But leave only one-third to your son or daughter and the rest to charitable foundations and your son or daughter will want for nothing and the foundations, which need the revenue to support their good work, may be the ones to develop the business for the next generation. Charity and corporate social responsibility - that is a nice combination.

The author is an international consultant with the EU-China Social Security Reform Cooperation Project.


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