Hong Kong leads the way in trust-based philanthropy
Since the pandemic, donors in Asia have started to experiment with trust-based philanthropy - and Hong Kong is at the forefront in the region.
Unlike traditional philanthropic approaches, with trust-based philanthropy there’s no lengthy grant application process, nor extensive reporting requirements.
This means it can be used to disperse funds more quickly and effectively. It’s not about using legal trusts - it refers to the true meaning of the word. It’s about having confidence in the probity, intentions and capabilities of the recipient.
These unrestricted grants offer non-profit organisations (NPOs) flexibility in allocating funds to areas with the greatest need, when it is needed most. The decision rests with the NPO, which isn’t always the case.
Our support
This trust-based approach is becoming increasingly popular globally, especially in the UK and US. The bank is involved in several test cases in Asia, with Hong Kong currently leading the way.
A number of HSBC clients in Hong Kong, including the DH Chen Foundation and the Chen Yet-Sen Family Foundation, practise trust-based philanthropy.
Our Philanthropy Advisors take the time to get to know the beneficiary NPOs and the bank supports with due diligence requirements. This support provides our clients with the confidence they need to donate in this way. We expect donors in other markets in Asia to follow suit.
Measuring impact
While this approach provides flexibility, perhaps unsurprisingly, business-minded donors question whether it’s possible to know the impact trust-based giving is having when there’s less oversight, feedback, and evidence.
However, I believe the impact can be measured. It just means donors must spend more time getting to know an organisation and assessing how the NPO’s mission fits with their giving strategy – this is where HSBC can help.
At the same time, giving needn’t be entirely based on one approach or another. A sophisticated investor diversifies. Similarly, philanthropists can allocate a portion of their giving budget for trust-based practices while elsewhere maintaining their targeted approach that requires clear outcomes and metrics.
Our foundation
HSBC is passionate about philanthropy, with the bank making its first philanthropic donation in Hong Kong back in 1878.
In 1981, HSBC set up The Hongkong Bank Foundation to give back to the community that has helped the bank flourish over the years.
It’s this philanthropic knowledge, this deep expertise that clients trust. Working together we can ensure donors in Hong Kong, Asia and beyond give in a way that works best for them and has the most impact.