In the US, an individual is entitled to charitable deductions of up to half of his adjusted gross income, provided that the money is donated to government-approved tax-exempt organizations. It is argued that the lack of such ‘tax shield’ mechanisms is one reason why the amount of donations in Asia still trails those in the West. Last year, the Singapore Government provided donors a tax deduction of 300 per cent of the amount given out. This has spurred philanthropy in the region, as per a recent study conducted by UBS survey along with Campden Research. The study found that around 50 per cent of family offices in Singapore are currently engaged in philanthropy with an average endowment of 2 per cent of asset under management, or US$6 million to US$7 million per annum.
Thus Asia’s wealthy have been quietly stepping up their commitment to philanthropy, pouring significant fortunes into causes such as education. Many established private banks have dedicated units to advise their wealth management clients on matters related to philanthropy. Credit Suisse Private Banking Asia Pacific has created SymAsia to help its clients set up charitable foundations. They have facilitated the setting up of around 30 foundations with a total giving worth about $60 million. Similarly JP Morgan Private Bank, Philanthropy Centre in Asia Pacific, has advised around 110 individuals or families this year. They have witnessed about 40 per cent of the donations going to education, and 20 to 25 per cent going to health and elderly care, while another 20 per cent supporting emergency relief. The Bank of Singapore, which has seen a roughly 25 per cent year-on-year increase in the number of charitable trusts, has also witnessed clients focusing mostly on education for philanthropy.
The role of family philanthropy in Asia is also evident in the Lien Foundation, set up by the late banking tycoon Lien Ying Chow in the 1980s. Today, it is one of the region’s most well-known charity organizations, and the patriarch’s legacy is handled by his grandson, Mr. Laurence Lien, who is Lien Foundation’s current chairman. To better rally and coordinate the activities of his peers, Mr. Lien co-founded Asia Philanthropy Circle, as a platform of collaboration between regional philanthropists.