Interview with Tony Saich: Chinese Philanthropy on the Cusp

Photo of Tony Saich in 1976 with Beijingers celebrating the end of the Gang of Four.

 

This article is the first of a three part interview with Tony Saich, director of the Ash Center for Democratic Governance and Innovation and Daewoo Professor of International Affairs at the Harvard Kennedy School. The interview was conducted by CDB’s Tom Bannister and Yimei Chen in Beijing in September 2014 while Professor Saich was attending the China-US Strategic Philanthropy (CUSP) workshop. In his capacity as Ash Center Director, Tony also serves as the director of the Rajawali Foundation Institute for Asia and the faculty chair of the China Public Policy Program, the Asia Energy Leaders Program and the Leadership Transformation in Indonesia Program, which provide training programs for national and local Chinese and Indonesian officials.

TB: You’ve been involved in China for much of your life, when did you first really become interested in it?

AS: Like a lot of things in life, it was a mixture of choice and luck. When I was an undergraduate someone (David Goodman) taught a course that included some classes related to China. I was actually planning to do something quite different but David said ‘no matter what happens, China is going to influence all of our futures – in your lifetime China will be significant’. I thought about it and it made sense so when I went to graduate school I started working on China. At that time nobody really thought you could actually go to China. But the British Council started its reciprocal exchange scholarship program and I was lucky enough to be sent through that.

The other reason I got interested was to do with politics in Europe. Of course, coming out of the ‘60s there were many student movements and a lot was talked about Maoism in China and so on. A lot of it made sense if you lived on the Parisian south bank or something, but I always wondered in the context of China what discussions of the ‘bourgeois right’ really meant and so on. So it seemed to me that it was reasonable to study it.

I never for a moment thought that I would carry on engaged in work on China, but every time I thought about doing something else, something new and interesting happened here. Each time I thought “well, I’ll just watch it for another year or two” and I kind of just kept hanging around the place. On a serious level, whatever you think of it, whatever your political view is, whatever your take on it is, China really has been one of the most exciting stories, if not the most exciting story of the last part of the last century and the first decade of this century. So why not be involved with it and keep in touch with it? I’ve been extremely lucky, I’ve gone through multiple iterations of engagement: as a student, as a researcher, working with the Ford Foundation, and now doing training programs for government officials and still carrying on the research programs and so forth. China’s been good to me.

TB: You’ve spent much of your career connecting actors in China with those in the West. What do you think the role of the West should be in contributing to the development of China’s NGOs and philanthropy sector?

AS: I think it’s changing. I think the whole relationship between the West and China is changing in the broader framework; the days of the arrogance of the West, of coming solely to teach best practices and so on, I think that’s long gone. So that’s my general starting point. I do think that at a practical level there are still obviously a lot of best practices, for example the CUSP workshop talked about social innovation, influences of new technologies, of ways of giving and I think those things are all still extremely useful but as everybody now understands it’s a time to think about partnerships. About how do you work together to develop things? It’s true that the philanthropic sector in China is still immature so perhaps there are learning experiences, for example how do you structure giving in a more organized way? How do you think more strategically about processes of giving? But China itself has a long tradition of both charitable and philanthropic giving; I think more of that needs to be brought in. I think that what I have seen in a lot of the discussions about civil society, philanthropy, the initial phase was ‘let’s see what the West does’, ‘let’s think about the West’. And some of those practices may be appropriate and some of them not, so I think what you’re seeing now is a more sophisticated community developing within China. So I think that’s more a basis of partnership; thinking about joint projects and development.

The other important thing that is a real game changer is the rise of private wealth in China. Obviously the Chinese government hasn’t worked out how to deal with that yet, although things are moving in the legislative realm and also in terms of toleration of the use of private wealth, not just for charity but also more structured philanthropic giving. But I still think there’s a suspicion there; things like pay-out rates, where they are treated as a business, not having tax exemption, all of which is to keep in the back pocket the possibility to, not necessarily close down the sector, but moderate its growth until the government can see how it evolves and how it develops. But that dramatically changes the role for foreign organizations here. When I was at the Ford Foundation, we were one of the very few players in town and a $100-150,000 grant meant a lot to Chinese grantees. That doesn’t mean so much now. Now the Chinese government has a lot more money, Chinese philanthropists have a lot more money, and so I think it’s not surprising that the Chinese government, once it sets the parameters of what is acceptable to support and what is not, it’s going to trust Chinese organizations far more than foreign organizations. So I think generally it’s getting easier for certain Chinese organizations to operate and more difficult for foreign organizations. Then there’s the question of what can foreign organizations do, given that their funding is much more limited in comparative terms to what it was in the past. So where do you look to work in that sense? It is very hard, it’s a rapidly changing context and I would say completely different from when I was working in the philanthropic sector in the 90s. That’s really a very significant change. So I think, there is more acceptance, more tolerance for the use of Chinese wealth and more caution, more wariness around foreign organizations.

So what can they do? I do think that there are three things. First of all, the obvious thing is ‘best practices’. There are still areas to work for that. Secondly, thinking about areas which are important for Chinese development but which probably are not going to be covered by the government or they don’t know quite how to cover them. I think one example of that is in the informal sector. If you are talking about urbanization and you’re moving several hundred million people off the land, where are they going to find work? A lot of it is going to be in the informal sector but I don’t think the government has a real grip on what the informal sector is, the size of the informal sector, how do you train people working in the informal sector? How do you think about providing safety regulation for people working in the informal sector? Question of aging which again is a huge topic now. How do you think about not just the institutional infrastructure but also given that the Chinese people at the moment retire so young, how do you think about ways of ensuring there’s still active engagement for them? Then of course there are the other areas which are more contentious, what Jude Howell has called ‘organizing around marginalized interests’, ones that are very difficult for the Chinese government to engage in and probably still too contentious for a Chinese philanthropist to engage in. We all know now that there are areas that it’s tolerated to work in and where NGOs don’t need the guakaodanwei [supervisory unit] and so forth, but there are problematic areas such as commercial sex workers, lesbian-gay communities and so on. They are important social issues and are becoming more prevalent social issues with greater awareness within Chinese society, but it seems to me that the Chinese government and Chinese philanthropists are still going to shy away from working in those sorts of areas. So that seems to me an area where international organizations can work in.

Thirdly, the potential to work together on international and global issues becomes increasingly important. The honest truth is that we don’t know what role China wants to play in the global community and there I think you don’t just want to necessarily leave it to governments to decide. So I think there is a role for partnerships between philanthropic organizations working on issues such as climate change, energy, good investing overseas in Africa, and corporate social responsibility. I think those are all areas where international NGOs have good experiences and as China is trying to find its way in an increasingly globalized set of encounters, there are probably fruitful areas for interaction and collaboration. I think also highlighting best practices in China. How can you still try and help produce good social outcomes in a more restrictive environment? I think all those would be interesting experiences to share.

TB: So in terms of a flow of ideas and experiences, innovations, best working practices and so on, in the Chinese philanthropic sector, it’s mainly been from the West to the East. Do you see any interesting developments in China that other countries can learn from?

AS: I do think China has some good experiences, for example after the collapse of the rural health system, trying to think about getting better health outcomes in poor conditions and distressed rural environments. I think there are a number of experiences one can learn about that. I think there’s also the experience of leapfrogging technologies, some of which is good, some of which is bad. But I do think, China can provide examples of how you use technology platforms to produce educational health materials for more remote areas or communities that don’t have institutionalized structures for that kind of transfer of knowledge. I think all of those are areas where I can imagine a lot of developing countries might benefit from. I was very impressed at the CUSP meeting by some of the things that are being done here in China, for example social investing and the use of crowd sourcing for funding. I think these are interesting experiences, I don’t think that’s one transferring knowledge to the other, I think these are things that are developing in parallel. And that’s in a sense what I meant by ‘leapfrogging’, yes there is a certain amount of catching-up, but there are also areas where China can jump over some of the intermediate steps. How do you use this new technology and innovations to produce better social equity and social justice? So I think those are fruitful areas for collaboration and exchange with other countries.

I think that another important thing is more specific to the Sino-American relationship. It is now the cliché that it’s ‘the most important bilateral relationship in the world’. But trade, military, politics are always going to be prey to varying winds. But a good relationship operates at many different levels. And I think China’s weakness in the past is because it’s a government-dominated society, it really hasn’t developed deep mechanisms for interaction at the social level, at the cultural level and so forth. So I think now with this emerging philanthropy, there’s the potential there for greater engagement, for building relationships that might survive the storms and winds and travails of the broader political challenges and issues.

TB: Quite a few of your former students at the Harvard Kennedy School are active in NGOs and philanthropies in China. Was it a strategic decision to recruit them?

AS: What we look for at the Kennedy school is a mix of people. So even though we’re a school of government, that is interpreted in a very broad sense. It could be leadership positions in NGOs, it could be leadership positions in business, it could be leadership positions in government, what we do look for though is that everybody has some notion of contributing to the public good and public value. I think not just with China but I think of the Kennedy School graduates, 35% probably go into the private sector and don’t go into government at all. So we look for a range of skills and really most of the people that come in this particular program, the mid-career, they’re already pretty much set on where they’re going and it’s not as if we have a quota or a predisposition that you should be working in the third sector or media or whatever. It’s just good people doing good things.

I think the question of why it’s important, partly I answered before in that in our view producing public goods and public value crosses all sectors so in that sense we do see the not-for-profit sector as being important and increasingly important and in China as increasingly important. We’ve just been talking with Beijing Normal University about cooperation for a new program around philanthropy that would include research, fellowships and training. And that is responding to a large extent to development in China, China is now getting to a stage where people are thinking about that in a more systematic and structured way and if you want to train people who have influence in different sectors, you can’t ignore that sector. The Chinese government now is increasingly realising that its extraordinarily ambitious programs cannot be achieved by government alone so it’s slowly trying to work out how to take some benefits from the not-for-profit sector but at the same time keep controls around it. The cage is getting bigger but the cage is still clearly there. So I think for the School of Government to be involved in that process is exciting and beneficial.

But I think the last thing to say on that is why come to the Kennedy School? I think the advantage of coming to the Kennedy School is that it’s a very international school. I think 47-48% of our students are not from the US and actually a lot of the benefit is not so much in the faculty but it’s from fellow students. It’s fantastic, when I have a class, I used to teach a core class in institutions and development and a lot of those from developing countries would tend to do that class, and it was great! You’d have people from Africa, Latin America, Asia in the class and you’d say X and someone would say yes, but it just doesn’t work in Latin America, you have to organize it this way, the government has a different perspective and so on. So I think for Chinese students, students from any country, to sit in that environment where you’ve got people from almost every country from around the world, it’s illuminating. So we do a lot of training for government officials but it’s also important to make sure that people from other sectors are part of that, whether it’s the media world, not-for-profits or business, I think it’s important.

TB: You’ve come into contact with lots of wealthy individuals in China, some of them philanthropists and some of them not. What steps can these people take to become world-class philanthropists?

AS: I think that Chinese philanthropy is on the cusp of developing into something very exciting. People like Wang Zhenyao and others working here are better qualified to answer this than I am. But I do think there is a shift from random gifts of kindness to a more structured way of thinking about giving. Traditionally you built a school in your hometown or you build a hospital, a very traditional charitable form of giving. So in a sense there’s a shift from charity to philanthropy. And I think that process is starting.

But I think what is now happening is that you have a set of people who have become extremely wealthy and are really thinking about what next. From the limited conversations I’ve had, I know one or two of them think of themselves as a Rockefeller, a Carnegie, a Ford, the birth of American philanthropy. These are new wealth, the first generation of wealth in China, and they’re beginning to think about questions of social justice, what do they give back to society and realizing that random giving is not going to resolve that. So I think part of the answer to your question is helping them shape and think about building a structure that will survive them. What kind of institutional infrastructure do you need? How do you organize it? Do you want to be an operational foundation? Do you want to be a grant-making foundation? How do you set priorities? Do you just want to be known as education? Do you want to be known as culture? Do you want to be known as helping poor children? Those are discussions that you can now have in China. I think that’s a huge push forward over the last decade that those kinds of conversations now are very common.

It’s not just money, money’s plenty but it’s more about having that sort of awareness of thinking about giving. The real big challenge of course is going to come when the generation that created the wealth pass away, will the institutions be sustainable or not? But this is not just a problem for China. Many of these people have got a lot of money because they have been forceful in business and they think they can run a philanthropy in the same way. So one of the big problems is you have a charismatic and inspirational individual who has to trust others to carry out the mission. And that’s a very difficult transition to make I think. So that seems to me one of the biggest challenges and the biggest part of the process. Will they actually let go and say I do want to do X, now I trust you to build an institution that will help me meet that objective? I think that’s what a lot of the training is going to be about, going back to the earlier question of what they can learn from Western philanthropy, such as groups like the Rockefeller Philanthropy Advisors and the whole Rockefeller family. I think they can help a lot with that sort of thing. How do you keep the legacy of the original donor but structure it in a way that adapts to change within society and also create a viable institution to carry out the programs once that donor is gone? So that’s going to be the set of challenges that they’re going to be facing.

 

Part two of this interview will be published in the next few weeks.

Interview by Tom Bannister and Chen Yimei

Reviewed by Patrick Burton

Edited by Patrick Burton

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