Philanthropy in China: Corporate Social Responsibility is Key

Beijing – Clare Pearson is no ordinary lawyer.

Half an hour before a scheduled meeting at a downtown café last Thursday, she was already sitting comfortably in a corner table, typing furiously on a compact laptop. With her brows locked in a concentrated frown, fingers skipping across the tiny keyboard, and body leaning slightly towards her computer screen, Pearson skillfully segregated herself from the noisy crowd, occasionally turning to her notebooks to flip through pages filled with seemingly illegible scribbles.

It was almost unnerving to disturb her. But Pearson looked up, quickly acknowledged her visitor, and immediately launched into a full-length lecture on philanthropy in China.

“The role of government is essential to business survival in the mainland, and it’s no different to philanthropic efforts,” she said. “The government is your oxygen, and your ability to succeed highly depends on your quality of relationship with the Chinese people.”

In addition to her full-time employment at the law firm DLA Piper, Pearson also works as the overseas executive editor of the philanthropy magazine, Charitarian, the only privately-owned English-language media organisation with an official publishing licence in both Hong Kong and China.

Its objective is to reconcile differences between rich and poor, urban and rural; the Charitarian does not strive to be the ultimate “free media,” but aims to offer a counterbalance to the western media on charity-related issues from an insider perspective.

“The government is pro-NGO now,” said Pearson, “and fund-raising is not difficult if you know how the guanxi system works.”

A system that involves heavy relationship-building, background-investigating, dinner-buying, alcohol-consuming activities, the goal of guanxi is to build up a network of relationships and obligations with the objective to being able to call on favours to some degree, sometime, somewhere along the way.

As an expert on Corporate Social Responsibility (CSR) in China, Pearson emphasised the importance of being pragmatic when proliferating philanthropic efforts, a valuable lesson she learned from both her corporate and non-profit experiences.

“Business in China needs to serve the innate interest of the government, the political sectors and the population,” said Pearson, “and this year the big buzz word is CSR.”

As China adjusts its domestic development strategy to address fast-changing economic, social and environmental challenges, companies have begun to pay more attention on maximizing tangible social benefits to the community. With a mere 0.5 pct of GDP donated to charity in 2007, Chinese government intends to fuel philanthropic developments by encouraging social entrepreneurs, who are expected to contribute 85 pct of the total charitable donations in coming years.

“2010 will be a year of CSR revolution in China, or being a centrally controlled country, a year of GSR or Government Social Responsibility,” said Pearson, “foreign companies that commit resources to non-profits will be welcomed, but you’ve got to understand how differently CSR works in China.”

In the latest edition of the Charitarian, Pearson analyzed the shift of CSR programmes from U.S.-centric to China-focused in the post-recession era.

“Before the credit crunch your client might have been the CEOs of Wall Street firms and your CSR program might have prioritized New York Headquarters and downplayed Chinese government,” said Pearson, “but I would recommend you literally reverse this priority list post-credit crunch.”

And as a result of this fundamental change in the CSR paradigm, the Chinese government, Chinese media and GONGO (Government NGOs) have became the top three strategy-focuses for charities.

“In China any philanthropic efforts or CSR project would fail if it’s not aligned with government objectives,” said Pearson, “for grassroots foreign NGOs, the most sustainable method to executive non-profit projects is to either partner with a GONGO or function as a consulting company – it’s about access, access, and access!”

To maximise charitable efforts, Pearson advises foreign NGOs to keep local residents and enterprises in mind when conducting business.

“When in China, do as the Chinese do,” said Pearson, “so you make friends, not enemies.”

And that means no “sacking” because it leads to a loss of faith; no “squeezing” local businesses because it breeds antagonism; and a lot of “pleasing” to avoid angering the government.

With the highly anticipated “Charity Law” due for release in 2011, the philanthropy landscape in China has rapidly evolved over the last six years as the government assumed a more positive attitude towards the potential benefits to society brought by NGOs.

“Philanthropy in China is definitely flourishing,” said Pearson, “just as what the magazine advocates, ‘everyone can be a Charitarian’.”