Top universities are largest beneficiaries of philanthropy

Prestigious public universities in China are the biggest beneficiaries of philanthropic donations, despite a decline in overall receipts by universities from such sources during 2022-23, a new report has revealed.

While universities received less money from philanthropic donors amid China’s economic downturn, the report noted that the value of new pledges to donate had grown, even if they had not been received or registered in university foundation accounts for 2022-23, surpassing CNY10 billion (about US$1.4 billion) for the first time in 2022.

The China University Foundation Large Donation Observation Report by philanthropy consultancy Corporate Citizenship in Action (CCiA) has tracked major gifts – classified as those over CNY10 million (US$1.4 million) in value – received by university foundations in China since 2022.

This year's edition, based on publicly available information in annual reports of university foundations, on websites and other public disclosures, found that from 2022 to 2023, large donations received by universities fell, returning to pre-pandemic levels and ending a donation boom.

“The upsurge of charitable donations brought about by the COVID-19 pandemic has gradually subsided,” the report released last week noted.

During the COVID-19 pandemic, Chinese universities saw robust growth in donor funding injected into research on COVID-19 treatment as well as for research into emerging technologies, such as AI.

However, since 2021, both the number of agreed projects that attracted donations and the total value received by university foundations fell year-on-year.

In 2023, the consultancy tracked 236 projects with CNY5.2 billion (about US$733 million) in total funding, with donations sourced predominantly from the private sector. It found that universities’ overall charity income had gone down by 21% compared to 2022, when the total amount also fell by 23% from the previous year.

However, it noted that bigger donors were still very active, and with increased pledges, the outlook for the future looked better. “This reflects that the enthusiasm of major donors for higher education remains strong,” the report said.

Top receiving institutions

Of 116 university foundations listed by the CCiA report to have received major donations during 2022-2023, 112 are public institutions funded by central or provincial governments.

Over this period, Tsinghua University was the biggest beneficiary with donations worth CNY2.8 billion (US$390 million), while second-ranked Zhejiang University received CNY1.46 billion (US$105 million), followed by the private Westlake University with CNY1.05 billion.

Established in 2018, Westlake is China's first nonprofit and private research university, founded by a number of high-profile academics including Shi Yigong, a renowned biophysicist and former vice-president of Tsinghua University. In recent years, it garnered private sector backing via its Westlake Foundation.

Westlake University is also one of only two privately owned institutions that received large donations in 2022-23. The other was Wuhan University in Hubei province.

A few other prestigious ‘Double First-Class’ universities also made it to the Top 10 in donation income, including Wuhan University, Peking University, Beijing Normal University, Beijing Institute of Technology, Xiamen University, Shanghai Jiaotong University and South China University of Technology. Some of these have been frequent recipients of large donations in the past.

Building ‘world-class’ disciplines

The 2024 report dedicated a special chapter to how donations support universities in building world-class disciplines — a key government priority for universities under its Double First-Class programme, representing a departure from its previous approach which put building world-class universities at centre stage.

Building ‘world-class’ disciplines was identified as the top reason for charitable giving since 2017. Medicine, engineering, and interdisciplinary studies received the most generous donations between 2015 and 2023, of which 40% were donations of CNY100 million (about US$14 million) or more, according to the report.

The report noted that apart from the recipient university's strengths, the donor's background is also an important factor in decisions on large donations for specific subject areas.

In particular, in areas such as medicine, economics and finance, engineering, and electronic equipment manufacturing, it saw a strong correlation between the industry in which philanthropists earned their fortunes, and the disciplines they support.

In such cases, charitable giving goes beyond financial backing to facilitate academic cooperation with industry, and helps with wider connections with enterprises with which donors are familiar.

Around 41% of donors were giving to their alma mater — a new high in the proportion of alumni giving. “Alumni donations have become the most important and stable source of large donations,” the report said.

Updated charity law

According to the 2024 China Charity Ranking, released annually for the past 20 years by the China Philanthropy Times, a newspaper administered by the Ministry of Civil Affairs, education remains a favourite cause for major donors, accounting for over half of all charitable giving.

Of 226 philanthropists that made it to the list, nearly 170 or 75% had education as their first choice of recipient, while 17 out of 20 top donors, or those with total contributions over CNY100 milliion, had injected funding into education.

In December 2023, China updated its charity law to encourage philanthropic activities. Officially in effect since September 2024, the revised law included new measures to boost philanthropic organisations by improving procedures for granting charitable status and reducing requirements to allow public fundraising, as well as offsetting donations against taxes.

New rules also came into effect allowing donations for emergency and humanitarian causes.

However, observers said increases in charitable giving still trails behind growth in private wealth, despite efforts such as the government’s "common prosperity" drive to reduce inequality.