Five Types of Irrational Donors

...and 7 Faces of Philanthropy

My blog, along with all the blogs on blogger.com, is currently blocked in China. None of my friends in China can read my completely harmless writings. Since this is not accessible in mainland China, I might as well write something controversial here.

Recently, I had the chance to learn from a group of private foundation leaders from China about the philanthropic environment on the ground. We all know that in the large scheme of things, wealth creation has been a relatively recent thing in China. Charitable donation is still at its infancy stage in China. From the establishment of laws, to NGO capacity building, all the way to donor education, China is decades behind many other developed countries.

Domestic donors in China are heavily dominated by corporations. Most of them are considered to be quite "irrational". They can be categorized into the following 5 types:

1. Extreme Irrational Donor -- corporations make donations as a type of soft bribery. If they donate $1m to a government-linked non-profit organization, in return, they will get $10m worth of benefit and power from it back.

2. Severe Irrational Donor -- corporations make donations because they were forced to by the local government officials to do so. Many local political leaders have started to impose the amount or percentage of income, that corporations have to donate, to the designated government-linked not-for-profit organizations.

3. General Irrational Donor -- corporations make donations for PR or marketing reasons, to correct the brand images, or promote themselves.

4. Special Irrational Donor -- corporations make donations to build hardware, such as school or hospital buildings and insist that their names be engraved on the walls, or getting the building naming rights in return. These donors do not donate for any software, or not-for-profit capacity building works, such as medical or educational professional training programs, that are usually more important then the actually facilities themselves.

5. Ignorant Irrational Donor -- donors who do not care about where the money goes to, or the impacts of the donations.

These categories seem exaggerated, but they certainly have some degree of truth to it.

It doesn't matter which country you look at, there are always different motivations behind identical behavior. This reminded me of the famous The Seven Faces of Philanthropy that most professional fundraisers in the US are familiar with. These are referring to individual donors, not corporate donors though.

1. The Communitarian: Doing Good Makes Sense
2. The Devout: Doing Good is God's Will
3. The Investor: Doing Good is Good Business for Social Change
4. The Socialite: Doing Good is Fun
5. The Altruist: Doing Good Feels Right
6. The Repayer: Doing Good in Return
7. The Dynast: Doing Good is a Family Tradition

I think I am 40% type (1), 20% type (3), 10% type (4), 20% type (5), and 10% type (6).

Do you know what type of donor you are?

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