Ruth A. ShapiroandTao Ze

Opinion | Crowdfunding for charity: why mainland China leads Hong Kong in online giving

Apart from the mainland overtaking Hong Kong in the use of mobile payment systems, the Chinese government’s endorsement of certain online charity platforms reassures donors that funds will be put to good use

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Commuters use their mobile phone as they ride on a subway in Beijing on April 8. While the mainland lags behind Hong Kong when it comes to smartphone penetration, it is far ahead in mobile payments. Photo: AFP

Ruth A. ShapiroandTao Ze

Published: 5:00pm, 23 Jun 2019Updated: 2:07pm, 25 Jun 2019

Online giving is changing charity in Asia. Crowdfunding, especially, changes the way the social sector operates, and its reach is growing rapidly. Nowhere is this more true than in mainland China, where crowdfunding has skyrocketed in recent years.

According to the Ministry of Civil Affairs, in 2018, of the 8.46 billion yuan (US$1.22 billion) in donations made to charitable organisations, 3.17 billion yuan went to the 20 outline platforms available on the mainland. This is a 26.8 per cent increase from 2017, with no sign of slowing down. We see similar growth across Asia in the preliminary data from our annual Doing Good Index, but online giving is especially popular in mainland China due to its reliability and ease of use, along with changing social norms.

Hong Kong provides a good point of comparison. Smartphone usage is even higher in Hong Kong than on the Chinese mainland, at 80 per cent and 54 per cent respectively, but what those users do on their phones differs considerably.

According to the market research firm eMarketer, by 2021, 80 per cent of users in mainland China will be making payments through their phones. In Hong Kong, according to the Productivity Council, 68 per cent of the population does not have an understanding of how to use their phones to make payments.

Mainland China also benefits from new structures supporting online giving. Encouraged by the new charity law, “turn-key” or click-easy platforms created and promoted by corporate firms enable crowdfunding as a means to carry out corporate social responsibility. The top three online platforms accounted for the majority of funds raised.

These were corporate platforms, those of Tencent and Alibaba. Large corporate platforms have both brand and access advantages to attracting online donors to their site. Governmental oversight of crowdfunding reassures donors about the trustworthiness of the site and the donations made on it.