It has been almost 30 years since Deng Xiaoping began the process of liberalisation that has stimulated tremendous economic growth in China and an explosion of new wealth creation. There are now an estimated 635,000 individuals in China with assets of over Rmb100 million ($15.9 million) according to a late-March report from the Hurun Research Institute.
This generation of entrepreneurs that have grown up amid the expansion are now reaching an age where they must contemplate the challenges of passing their wealth on to successive generations.
To help meet this need, many international banks in the region have instituted education programmes to reach out to the children of their clients. These efforts focus on the theory and practicalities of managing significant wealth. While welcomed in most cases, there may be some understandable scepticism around the independence of this advice, with many families asking: “Would my peers give me different advice than my banker?”
Unlike their wealthy counterparts in Europe and America, where there is significant “old money” made generations ago that offers many useful examples, Asia’s new wealthy have fewer local models to learn from for managing the succession of family wealth and build a legacy through philanthropic giving.
To address this challenge, Tsinghua University and the Kai Feng Foundation co-founded the Tsinghua Kaifeng Family Heritage Center (TKFHC) in late 2011, dedicated to paving the way for family heritage development in the country. Through educational programmes, a research agenda and small discussion forums, they aim to facilitate a peer-to-peer dialogue between wealthy Chinese and international families for their mutual benefit.
The idea of families helping families, and building a global network to serve this purpose, has struck a chord. An example of this cooperation was Peggy Dulany Rockefeller’s visit to India in January and Hong Kong and China in February to meet some of the country’s wealthy individuals, as part of the Global Philanthropists Circle programme. The Rockefeller Foundation was registered in New York in 1913 and has now reached its sixth generation of descendants.
This year’s programme also includes a trip to London and Paris for an opportunity to meet several international families and family heritage experts to discuss how businesses are run in the context of the family as a controlling shareholder. Rockefeller will also meet family office chief executives to understand first-hand the infrastructure supporting successful wealth-owner families. Representatives from the Rothschild, Poniatowski, Bamford and Desmarais families will take part, as well as Martin Jenkins of Oxford Place, which advises wealthy families.
While mutual benefit to the families is a worthy aim, a key difference is the focus on inspiring Chinese wealthy to give back to society in innovative ways. China’s continued economic growth brings challenges to the wider community, some of which can be addressed by philanthropic giving.
By fostering leadership and responsibility at the family level, TKFHC hopes to see initiatives developed that are positive for the families in transferring wealth effectively, but that also benefit the wider population.
These sentiments are echoed in recent comments by Microsoft founder Bill Gates – “Remember what you have received. Forget what you gave” – citing a Chinese proverb to describe the growing popularity of philanthropy in China.
Gates believes China will surprise the world in its embrace of philanthropy, observing in a recent interview with Xinhua that “there is noteworthy philanthropy going on at all levels of society in China, not just among the very fortunate”.