Asia: Hong Kong Is Priming The Pump

As Hong Kong's richest man, Li Ka-shing has given away plenty of dough -- and quite a few oranges, too. Through the Li Ka Shing Foundation, Li and his companies have dispensed some $640 million since 1980, footing the bill for projects such as an 18-story building at Hong Kong Polytechnic University and a literacy program in the city. And Li isn't above the sort of grand geste that earns him a bit of good press: During the SARS outbreak last spring, the foundation donated a million fresh oranges to local health-care workers.

Li's penchant for public giving is something of an anomaly, though. Far more common are lesser tycoons, who give away millions but do little to publicize their generosity. The result is that charitable giving doesn't have the same profile in Hong Kong as in the U.S. -- or the same level of public participation. "In the U.S., there's a whole [philanthropy] industry," says Christine Loh, CEO of Civic Exchange, a local think tank. "Here, there's a lot less transparency and it's not as sophisticated."

That may be changing. Like Li, a handful of charities in the city are getting savvier. Hong Kong Polytechnic this year launched an alumni outreach program to try to boost its funding. The Hong Kong Council of Social Service, which brings together some 300 groups that work with the poor, last year started seminars for members and potential donors. And the local Society for the Prevention of Cruelty to Animals in November created the post of business development director after seeing its donations fall over the past three years. "I need more money in the bank to do the work," says executive director Pauline Taylor.

Why the push to professionalize? With the economy in a funk, big donors have been slowly closing their wallets. Donations to the Community Chest -- an umbrella group for dozens of charities -- have fallen by 25% since 2000. So organizations are hitting the streets more often to raise money directly from the public. The government, which had allowed charities to raise funds from pedestrians only on certain Saturdays, is now permitting such outreach on weekdays. "During bad times, the needs of the unfortunate grow," says Darwin Chan, vice-president for Asia of United Way International and former head of the Community Chest of Hong Kong. "But many companies are now making donations on a more limited scale."

Charities may soon get a further boost from new government initiatives. In most countries, tax breaks encourage giving. But under Hong Kong's flat-tax system, even the wealthiest pony up only 15% of their income. "There's little tax incentive to donate more money," says Joseph Chan, a professor at the University of Hong Kong. To kick-start giving, the government in March announced a program to match donations to local universities, and it has raised the limit of charitable donations taxpayers can deduct from taxable income. Activists also want an amendment to the tax law that would let donors deduct from their taxable income two times the amount they give. If it passes, Li Ka-shing might want to calculate just how much 2 million oranges are worth.

By Bruce Einhorn in Hong Kong

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