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Research Report #22 May 2015

Capital and : Donations from the Wealthy

Morgan Clark

Chien-Chung Huang

Rutgers University

The purpose of this paper is to examine the trends of charitable giving from wealthy indi- viduals in both the and China. This paper includes a history of philanthropy in each nation, as well as the impact of notable wealthy figures on philanthropy. We also asses the motiva- tions of wealthy donors and review the charitable areas that receive the most donations from this population. This paper analyzes and compares the donation trends from the top fifty philanthropists in both the United States and China. Finally, this data is compared with the total asset trends of the fifty wealthiest individuals in each nation. This data depicts that in both the United States and Chi- na, asset size increases more rapidly than donation rates over time. Capitalism offers a possible way to advance for humanity; however, increasing income inequality may damage the advance- ment. While substantial philanthropic engagement from wealthy individuals may be an important mechanism to balance capitalism and income inequality, the statistics indicate that collective shar- ing of capital has a long way to go. 1 Introduction expands when r > g, because this need innovative reforms. As Dr. Lu Though many societies have made means that the rate of return on capital points out, capital is a unique form of substantial social progress, economic exceeds economic growth. The idea is wealth since it can be utilized to pro- inequality and poverty are still chal- that when the returns on capital ex- duce more wealth, and that the wealth lenging problems in our world. In fact, ceeds the returns on labor, the wealth generated from capital should serve income inequality in the United States gap will continually widen between the majority. This is an essential com- has been on the rise since the mid- people who have a lot of capital and ponent of social development. Lu 1970s, with a prominent increase in the those who have less capital and rely (2015) also furthers this idea of a pro- income of the very wealthy (Hatch & more heavily on labor. ductive relationship between capital Rigby, 2015). The Gini coefficient, an Picketty (2014) also depicts ine- and philanthropy by describing mod- income inequality measure, was quality in terms of the forces that can ern philanthropy. Modern philanthro- around 0.391 in 1970s, continually rose lead to snowballing wealth, such as py is a practice that facilitates the col- to 0.481 in 2013, the highest level in that most children of wealthy people lective sharing of capital, and Lu (2015) history (Jongsung & Tebaldi, 2013; often receive access to networks and describes this as the best means to Noss, 2014). Top 0.1% families owned opportunities that lead these children achieve the collective sharing of 10% of total national wealth in 1970, to also be very wealthy adults. Hence, wealth. Capital can be utilized in this the share was 22% in 2012. Likewise, governments should play a construc- way to be a source of economic and there relative shares for top 10% fami- tive role in offsetting this snowballing social development. The use of enor- lies were 70% and 77%, respectively of wealth and the inequality it perpet- mous contributions is what distin- (Saez & Zucman, 2014). This rising uates. Piketty (2014) proposes a pro- guishes modern philanthropy from income of the wealthy and overall eco- gressive annual tax on capital, instead traditional charity (Lu, 2015). To fur- nomic inequality contributed to start of of on income. He argues that this type ther develop modern philanthropy, it the Occupy Wall Street movement in of tax “will make it possible to avoid is essential for more wealthy individu- November 2011, which depicted how an endless inegalitarian spiral while als, who are the people with the largest serious the American public perceives preserving competition and incentives amounts of capital, to take part in phi- the problem of income inequality. for new instances of primitive accumu- lanthropy. Likewise, the income inequality in- lation” (Piketty & Goldhammer, 2014, Like Lu and Pikkety, Gates be- creases substantially in China. The p.572). agrees with this, as lieves that capitalism has the ability to Gini coefficient was about 0.30 in 1970, he feels that “it doesn’t make any sense improve society if utilized in the most kept stable between 1970 and 1979, that labor in the United States is taxed effective ways. However, he also notes and started to increase after the eco- so heavily relative to capital” (Gates, that while it has positively impacted nomic reforms in 1979, the coefficient 2014). Gates (2014) further suggests a the lives of billions, there are still bil- reached 0.40 by 1995, 0.50 by 2005, and on consumption, lions that have been left out by capital- was around 0.55 in 2012 (Xie & Zhou, which would involve wealthy people ism (Gates, 2008). Those that do not 2014). living a lavish lifestyle paying more reap the benefits of capitalism have to Thomas Piketty (2014) depicts ine- taxes than wealthy people participat- rely heavier on government services quality in Capital in the Twenty-First ing in philanthropy. This would en- and nonprofit organizations. While Century by describing that the income courage more wealthy people to par- these institutions currently play a cru- produced by capitalism tends to be ticipate in philanthropy. Piketty (2014) cial role in assisting the less fortunate, concentrated in the hands of a small also supports estate tax, which can be they cannot compensate for the large group of people, whereas income from utilized to invest in education and re- income inequalities on their labor is dispersed throughout the en- search in order to strengthen society. own. Therefore, Gates (2008) suggests tire population. This problematic eco- The significant conclusion to draw the need for a more creative capital- nomic inequality is bound to worsen if from Piketty’s (2014) is that un- ism, in order to create new ways to the economy expands at a slower rate regulated capitalism has led to im- bring more people into the system of than capital earnings. Piketty (2014) mense economic inequalities, which capitalism, a system that has done so illustrates this with his equation r > g, cannot be solved solely by a free- much good in the world and can do so where r is the average rate of return on market economy. much more with the right innovations. capital and g is the rate of growth of Lu (2015) supports this view, and Though contributions to philanthropy the economy. Therefore, inequality that addressing problems related to made by wealthy individuals such as capitalism and the free market will Gates also play an essential role in ad-

2 vancing social development, he pro- of Philadelphia in 1751, which was ents had their own funds to support poses that innovators and businesses open to all deserving men, as opposed the project in the future (Nasaw, 2006). get more involved through creative to just the sons of wealthy families like Carnegie’s new system of scientific capitalism (Gates, 2008). He furthers other colleges at the time. The Acade- philanthropy was unprecedented, and that in order to get more companies my of Philadelphia, later the Universi- had a large impact on the development involved, the companies need to earn ty of Pennsylvania, was established to of philanthropy in the United States. some kind of return as an incentive, prepare students for business and pub- He practiced what he preached as he which Gates depicts as the “heart of lic service, and became America’s first utilized his capital to build 1,680 pub- creative capitalism” (2008). liberal arts college (National Philan- lic libraries in the United States and Piketty, Lu, and Gates each offer thropic Trust, 2012). Harvard Universi- libraries in 2,509 communities world- innovative proposals for enhancing ty and the University of Pennsylvania wide (The Carnegie of capitalism and philanthropy to better remain top regarded universities to- New York, 2014). Carnegie also estab- serve the majority. Piketty focuses on a day; and therefore the contributions lished the Carnegie Corporation of punitive tax approach to reduce in- from John Harvard and Benjamin New York in 1911, a philanthropic come inequality, Gates emphasizes Franklin have not only benefited the foundation which has been to known creative capitalism that employs capi- students who attended these universi- to focus on education, science, and talism to be actively involved in re- ties, but also the millions of people international affairs. Carnegie donated ducing income inequality, and Lu fo- worldwide that have benefitted from about $350 million during his lifetime, cuses on philanthropy that encourages those students’ contributions to socie- which was over 90% of his wealth, and wealthy individuals to voluntarily and ty. Furthermore, ’s would be equivalent to several billion wisely share their wealth. In this pa- will established trusts in Boston and dollars today (Carnegie Corporation of per, we will focus on the level and Philadelphia, which gathered interest New York, 2014). As a man who grew trends of donations from wealthy peo- for 200 years. Boston utilized the mil- up with little means himself, he knew ple in both the United States and Chi- lions of dollars left in the trust to estab- firsthand the benefits of education, and na. lish a trade school, while Philadelphia he felt that the most beneficial way to Notable Wealthy Figures in created scholarships for local high utilize his capital was through philan- America’s History school students (Levenick, 2015). thropic education initiatives. Andrew Carnegie is one of the Another self-made tycoon at that There have been many notable most well-known philanthropic figures time was John D. Rockefeller, who figures throughout America’s history of the 1800s. Carnegie, a rags-to-riches built his fortune by dominating the oil that have utilized their capital in phil- story, elected to utilize his wealth in industry. By 1914, Rockefeller’s net anthropic ways. These figures often ways that benefited the “common worth was over $1 billion (Hylton, put their wealth towards philanthropic man.” In 1889, Carnegie wrote The Gos- 1992), which would be equivalent to causes that they felt would best benefit pel of Wealth to depict the need for the approximately $23.5 billion today. society as a whole. This includes John Wealthy to support the common good Rockefeller was inspired by the philan- Harvard, who in 1638 donated a li- through philanthropy. In his book, he thropic work of Andrew Carnegie, and brary and half of his estate to the new is famous for saying “the man who even wrote to him, saying: “I would university of his name in Cambridge, dies thus rich dies dis- that more men of wealth were doing as Massachusetts (National Philanthropic graced” (Carnegie, 1889, p. 18). He also you are doing with your money, but Trust, 2012). Education continued to be depicted how the rich should distrib- be assured, your example will bear a popular philanthropic trend when ute their wealth in a way that is “best fruits and the time will come when America was establishing itself. In calculated to produce the most benefi- men of wealth will more generally be 1731, Benjamin Franklin and friends cial results for the communi- willing to use if for the good of oth- established The Library Company of ty” (Carnegie, 1889, p.15). This relates ers” (Nasaw, 2006). In 1913, Rockefel- Philadelphia, which was America’s to Carnegie’s support of scientific phi- ler established The Rockefeller Foun- first circulation library. This institution lanthropy, because he wanted to finan- dation in order to "promote the well- was established so that people with cially support programs that would being of mankind throughout the less means could better themselves help the most people, for the longest world,” which has continued to benefit through reading (National Philan- amount of time. Carnegie also created people worldwide after Rockefeller’s thropic Trust, 2012). Benjamin Franklin the matching-grant requirement in death (Rockefeller Foundation, 2014). continued by founding the Academy order to guarantee that grant recipi- Rockefeller also donated enormous

3 amounts to his church, as he felt that that list is another notable wealthy fig- It is also interesting to examine God had given him this money, so it ure in America, Facebook co-founder why high net worth households are was his duty to put the money to good Mark Zuckerberg. Zuckerberg’s total motivated to donate their funds. For use (Gordon, 2015). John D. Rockefel- giving in 2013 was $991 million and example, 72.4% in the U.S. Trust Study ler gave away approximately $540 mil- his lifetime giving is $1.5 billion, which reported being motivated to give be- lion before his death in 1937 (Gordon, is approximately 4% of his current cause they believe that their gift can 2015). Through his philanthropy, $34.7 billion net worth (Forbes, 2015). make a difference (Bank of America, Rockefeller created two of the world’s Similar to Gates’ philanthropic inter- 2014). Furthermore, 91.6% of wealthy most prominent public health research ests, Zuckerberg mainly donates to households reported having some con- universities, assisted the American education and healthcare initiatives. fidence or a great deal of confidence in South out of unrelieved poverty, en- Current Donation Trends of the ability of nonprofit organizations hanced the educations of African Wealthy Americans to solve societal issues. However, the Americans, created the University of wealthy population reported much The U.S. Trust Study reported on Chicago, drastically transformed medi- lower levels of confidence in the gov- giving patterns, priorities, and atti- cal research and medical training in ernment solving societal issues, with tudes of America’s wealthiest house- both the United States and China, and only 25.2% being confident in con- holds in 2013 (Bank of America, 2014). radically improved public health gress’s abilities (Bank of America, This study only included households around the world (Gordon, 2015). 2014). This is a crucial comparison, and with incomes greater than $200,000 Many find similarities between depicts that wealthy households have and/or net worth more than $1,000,000 past charitable capitalists Carnegie and more trust in nonprofit organizations (discounting the monetary value of Rockefeller, and today’s billionaire and than the government when it comes to their home), and found that 98.4% of philanthropist, Bill Gates. Gates has a solving social problems. In 2012, most wealthy households donated to charity current net worth of $78.5 billion, wealthy households donated to educa- in 2013, which represents a 3% increase which makes him currently the richest tion causes (85.2%), which included in this group’s donation rate from 2011 person in the world (Forbes, 2015). 73% who donated to higher education (Bank of America, 2014). Research also They are each regarded as successful and 59% to k-12 education. Additional- found that this population often uses self-made American capitalists, and ly, 56% of wealthy households feel that strategies and techniques when donat- Gates is sometimes referred to as the education is the most important cur- ing their funds. Most wealthy house- Carnegie of this generation (Stevenson, rent policy issue (Bank of America, holds (72.5%) have a specific giving 2010). Like Carnegie and Rockefeller, 2014). This can be connected to the strategy to guide their charitable dona- Gates feels that his wealth gives him a charitable trends of notable philanthro- tions. Additionally, 53.4% of the great responsibility in terms of giving pists in America’s history, such as An- wealthy households reported that they back to advance societal development. drew Carnegie and Benjamin Franklin, monitor or evaluate the impact of their Gates also donates to initiatives similar who stressed the importance of educa- charitable giving (Bank of America, to Carnegie’s philanthropic record. In tion. Education also received the larg- 2014). About 12.6% of high-income fact, Gates has donated more than $325 est amount of donated dollars from the households even reported using strate- million towards libraries (Stevenson, wealthy population, which was 50% of gies such as: “program-related invest- 2010). all donated funds in 2013 between gen- ments, mission-related investing and Gates once put most of his energy eral education and higher education social impact bonds” (Bank of Ameri- towards building his Microsoft-empire initiatives (Bank of America, 2014). ca, 2014). The use of strategies by cur- and fortune, but now spends most of After education, the next charitable rent wealthy individuals relates to An- his time in philanthropy. Gates coordi- subsectors were: religious (12.2%), en- drew Carnegie, who also donated his nates his philanthropic activities with vironmental causes (5.4%), the arts wealth in strategic ways. This demon- his wife, through the Bill and Melinda (3.5%), health (3.4%), and basic needs strates that not only do the majority of Gates Foundation. The Gates couple (3.3%). It is notable that America’s wealthy individuals utilize their funds donated $2.65 billion in 2013 and have population donation trends reflect that for charitable causes; the majority of donated $30.2 billion total, which is only 16% of all American donations this population also donates their 37% of their net worth (Forbes, 2015). went to education, while the majority wealth in an informed and formulated Their large donations make this couple (31%) went to religion (Giving USA, way. #1 on Forbes’ list of “America’s biggest 2014). This trend reflects a major differ- givers” (Forbes, 2015). Number four on ence in the donation trends of wealthy

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Americans and the total American cluded in the annual statistical report and began to use the word “charity” population. of the development of civil affairs, more regularly. In 2004, the positive Furthermore, 89% of wealthy which is released by the Ministry of influence of charity was recognized for households’ total donations were Civil Affairs each year. Between 1996 the first time in documents released by $100,000 or less, with the average total and 2002 (with the exclusion of 1998, the Communist Party (Deng, 2014). gift in 2013 being $68,580, which is a due to a severe flood), the total dona- The growth of the economy, which 28.1% increase from the 2011 average tions received annually remained be- created growth in private wealth, has of $53,519 (Bank of America, 2014). tween 1.4 and 2.8 billion RMB, and also influenced charitable donations However, the percentage of income foreign donations continued to outsize from the wealthy in China. Particularly used for giving has decreased from 8.7 domestic donations (Deng, 2014). since 2003, the wealth of the rich has percent in 2011 to 7.8 percent in 2013 However, as the number of grown exponentially, which had a sig- (Bank of America, 2014). This is a part wealthy individuals in China in- nificant role in the rapid increase in of a continued decline, as wealthy creased, so did this population’s chari- giving by this population. By 2011, the Americans, who earn at least $200,000, table giving. An increase in giving wealth held by the 50 wealthiest peo- also reduced their percentage of in- from China’s wealthy individuals is ple in China had grown to be 10.89 come given to charity by 4.6% between especially noticeable beginning in times that amount in 2003 (Deng, 2006 and 2012 (Daniels, 2015). During 2003. From 2003 to 2010, donations 2014). Also during this time, China’s the same time, Americans who earned from the wealthy dramatically in- regulatory structure improved as a less than $100,000 donated 4.5% more creased, while proportion of wealthy result of the Chinese government of their income (Daniels, 2015). This individuals donating to charitable amending the Regulations on the Man- reflects the possible impact that Ameri- causes also saw growth (Deng, 2014). agement of Foundations in 2004. This ca’s economic recession, which oc- The amount of individuals in China was significant for charitable giving curred from 2007 to 2009, had on chari- with investable assets of at least 10 because the newly amended regula- table giving during that time. The fi- million RMB increased from 361,000 in tions allowed for the establishment of nancial crisis may have worried 2006 to 1,185,000 in 2011 (China Pri- private foundations by wealthy individuals, in regards to their vate Banking Development Report, and individuals. In 2007, the Chinese own salaries as well as their invest- 2012). By 2011, approximately 85% of government also further amended reg- ments, which may be partially respon- wealthy Chinese individuals with net ulations regarding personal income sible for the decline in percentage of assets exceeding 10 million RMB had taxation, which advanced how indi- income given to charity from this pop- participated in charitable activities viduals can deduct charitable giving ulation during that time. However, during that year (Bank of China & Hu- from their taxable income (Deng, while wealthier Americans donated a run Research Institute, 2011). 2014). smaller percentage of their income, the The increasing charitable support Significant events in China have total amount donated still increased by from wealthy individuals in China is also impacted charitable giving. Like $4.6-billion, to hit $77.5-billion in 2012, related to several events. For example, in many other parts of the world, natu- using inflation-adjusted dollars the government’s attitude towards phi- ral disasters and major crises evoke (Daniels, 2015). Therefore, wealthy lanthropy has influenced the giving both compassion and national pride households play an important role in behavior of China’s affluent popula- from the country’s citizens, which then the funding of various charitable initi- tion over the years. Between 1949 and causes an increase in charitable giving. atives. 1978, the government held a negative This can be seen in China after events Donation Trends in China attitude towards philanthropy. Also such as: the SARS crisis in 2003, the Like in America, the wealthy indi- during this time, social welfare was Wenchuan earthquake in 2008, and the viduals in China have also impacted controlled by the government, which Yushu earthquake in 2010, which all both participation in charitable giving impeded the activities of private chari- motivated an increase in donations and the development of philanthropy table organizations (Deng, 2014). From from Chinese people, including in China. Prior to 1994, China’s philan- 1978 to 1994, the Chinese government wealthy individuals (Deng, 2014). In thropy mainly relied on foreign dona- created government-owned founda- response to the SARS crisis in 2003, tions (Deng, 2014). In fact, domestic tions to address social issues, but donations in China reached 5.83 billion donations were so restricted during mainly focused on accruing foreign RMB, which was 2.8 times the amount this time that they were not even in- donations (Deng, 2014). Since 1994, the donated in 2002 (Deng, government has encouraged donation 2014). Therefore, charitable giving in

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China has been largely impacted by ed States have been slowly increasing, tions in the previous five years. A large government attitudes, economic devel- from $7.4 billion to $9.9 billion. How- spike in total amount donated is visi- opment, laws, and substantial national ever, 2014 still saw lower donation ble in 2013 ($20 billion RMB) due to disasters throughout the years. While rates among the top 50 philanthropists the $14 billion RMB donation from domestic charitable donations were than in 2011, 2008, 2006, and 2001. Yun Ma, founder and Executive Chair- once very limited and static in China, a Figure 2 depicts that the assets of man of Alibaba Group. Like in the trend of rapidly increasing levels of the 50 wealthiest people in America United States, national events have donations has been displayed in recent during the same time period have in- had both positive and negative im- years. creased more rapidly than the amounts pacts on the donations from the top 50 Top 50 Donors in the U.S. and donated from America’s top 50 philan- philanthropists in China. For example, China thropists. Many, but not all, of Ameri- a large donation increase occurred in ca’s top 50 wealthiest individuals are 2008 ($13.6 billion RMB) due to an Though wealthy individuals in also among America’s top 50 philan- earthquake in China during that year. both the U.S. and China have donated thropists. While 2011 ($727 billion), However, donations were negatively a portion of their assets in effort to 2012 ($780 billion), 2013 ($895 billion), impacted after the 2011 scandal involv- eradicate social issues, there is still vast and 2014 ($1.5 trillion) represent a ing Guo Meimei and the Chinese Red room to grow in this area. Data indi- steadily increasing trend, as well as the Cross. This scandal caused those in cates that assets clearly increase more largest asset totals since 2001, this China to lose trust in charitable organi- rapidly than donations over time. Fig- trend is not visible in terms of dona- zations. This is reflected by the total ure 1 depicts the total amount donated tions from America’s top 50 philan- amount donated by China’s top 50 in billions by America’s top 50 philan- thropists. Although assets have been philanthropists declining to $8.87 bil- thropists from 2001 through 2014. A steadily increasing among this popula- lion RMB in 2011 and just $4.7 billion large spike in donations is visible in tion since 2009, there was actually a RMB in 2012. Afterwards, the total 2006, which is as a result of Warren decrease in donations after 2011, and amount more than quadrupled from Buffet’s $43 billion donation to the Bill the donations of 2014 were still lower 2012 to 2013 ($20 billion RMB). It is Gates Foundation during that year. than in 2011. This is contrary to the fact certain that recent donations among The years with the next largest dona- that the fact that the 50 wealthiest peo- the top 50 philanthropists in China are tion amounts were: 2008 ($15.5 billion), ple in America had the largest total much higher currently than 10 years 2001 ($12.6 billion), and 2011 ($10.4 asset size ($1.5 trillion) in 2014. The ago. billion). The years with the lowest decrease in total assets from to 2008 to When comparing donations in the amount of donations from this popula- 2009 could have a relationship with the U.S. and China, it can be estimated tion were: 2010 ($3.3 billion), 2005 ($4 aforementioned financial crisis; how- that in 2011, the total amount of giving billion), and 2009 ($4.1 billion). There ever, the total assets rebounded quick- in China was equal to only 4.6% of the is no clear trend in terms of consistent- ly and have been above the total assets total amount of giving in the United ly increasing or decreasing over the of 2008 since 2011. Therefore, while States (Deng, 2014), with the total past 15 years, which possibly demon- wealthy individuals in the U.S. donate amount donated by wealthy Chinese strates the impact of national events on billions of dollars to charitable initia- being between 1.5% and 3% of the total wealthy individuals’ donations. For tives each year, the steadily increasing amount donated by wealthy Ameri- example, the U.S. financial crisis in total asset size of this population does cans (Deng, 2014). Likewise, the total 2007, which led to a global recession not translate to an increasing total do- donation from the top 50 philanthro- from 2008-2012, may have played a nation size from America’s top philan- pists in China in 2013 was 19.9 billion role in the low donations in 2009 and thropists. RMB (about $3.3 billion, 1 US dol- 2010, as even the wealthiest individu- Trends among the top philanthro- lar=6.1 RMB), and the relative number als may have been more cautious with pists in China are harder to examine from their American counterparts was their funds during that time. Further- since there was no single-year dona- 76.8 billion; thus, the total amount do- more, the terrorist attacks on the Unit- tion data in 2006, 2007, and 2010. Fur- nated by wealthy Chinese was 4.3% of ed States in 2001 led to an increase in thermore, the 2006 list included dona- the total amount donated by wealthy national pride, and very likely influ- tion from previous three years, the Americans in 2013. The wealthy Chi- enced the spike in donations during 2007 list contained aggregated dona- nese have donated substantially more that year. Since 2012, donations from tion in previous four years, and the in recent years, but still lag behind the top 50 philanthropists in the Unit- 2010 list covered the aggregated dona- their American counterparts by far.

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Data from the Hurun Research Insti- na is growing at a more rapid pace tions from this population in China tute indicates that the average amount than China’s donation size from the remain behind the donations from the given by the top 100 Chinese philan- top philanthropists. This portrays that wealthy in other nations. In both the thropists account for only 1.3% of their there is more to a nation’s donation United States and China, the data de- wealth (Hurun Report, 2012). In con- size than just the asset size of its picts that assets increase much more trast, the average giving among Amer- wealthiest citizens. National events than donation rates over time. Howev- ica’s wealthy population was 7.8% of such as scandal, national disasters, er, it should be kept in mind that the their net worth in 2013 (Bank of Amer- terrorist attacks, and financial crisis wealthy population in each nation has ica, 2014). Since 2003, the amount giv- each play a role in charitable activi- had a large impact on philanthropy en by wealthy individuals in China has ty. Furthermore, as previously dis- with billions of dollars donated. Future continued to increase. Conversely, cussed, factors such as changing gov- research in this area should assess the both the current amount and the pro- ernment attitudes and reformed regu- impacts of donations from the portion (of total national donations) lations have also positively influenced wealthy. Philanthropy is one possible given by wealthy Chinese is still be- philanthropy in China in recent years. solution to income inequality, but hind levels observed in other coun- Conclusion there is still huge room to grow in this tries. This illustrates that there is still Both the United States and China area, including with the wealthiest room for continued growth in terms of have utilized philanthropy to advance population in both the United States the level of giving among China’s social progress; however, income ine- and China. wealthy individuals. quality remains a challenging problem Figure 4 depicts a trend of increas- in both nations, as well as worldwide. ing total assets among the 50 richest Capitalism offers some solution to people in China, which mirrors the poverty, but most income produced by increasing trend for America’s 50 rich- capital tends to be in the possession of est individuals as well. The most re- a small group of wealthy individuals. cent data shows that in 2014, the total Notable wealthy individuals through- assets in billions RMB for China’s 50 out America’s history have recognized wealthiest people was $2330. Like in the need to share their assets. Past America, 2014 is the year with the wealthy individuals such as Andrew highest total assets among China’s Carnegie and John D. Rockefeller, and wealthiest individuals. The data clear- current wealthy individuals such as ly demonstrates that the wealthiest Bill Gates, have influenced social pro- individuals in China have had their gress in America through both dona- assets increase dramatically over the tions and the establishment of charita- past decade. After 2014, 2013 had the ble foundations. To continue the devel- greatest total asset amount for this opment of philanthropy, it is essential population, with total asset size of for more wealthy individuals to take $1728 in billions RMB. This was also part in philanthropy at a more sub- reflected in the 2013 spike in donations stantial level. from China’s top 50 philanthropists. While the vast majority of Ameri- However, while there was a large can wealthy households donated to spike in wealth for China’s wealthiest charity in 2013, the percentage of in- people from 2010 to 2011, China’s phi- come donated actually de- lanthropy did not benefit from this as creased .Unfortunately, this is a part of there was actually a decrease in dona- a continued decline of giving from this tions from this population between the population since 2006. It is interesting same years. As previously discussed, for future research to explore the caus- this decrease in donations reflects the es behind the declining giving from impact of the scandal during that year wealthy Americans. In China, dona- on philanthropy in China. tions from the wealthy have increased Therefore, like in America, the as- dramatically since 2003. Still, the dona- set size of the wealthiest people in Chi-

7 Figure 1: Top 50 Philanthropists in America 2001-2014

Source: The Chronicle of Philanthropy, 2001-2014, https://philanthropy.com/interactives/phil-50.

Figure 2: Top 50 Wealthiest People in America 2001-2014

Source: Forbes 400 ,2001-2014, https://forbes.com

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Figure 3: Top 50 Philanthropists in China, 2003-2013.

Source: 2004-2014 Hurun Philanthropy List, Hurun Report, 2004-2014.

Figure 4: Top 50 Wealthiest in China, 2003-2014

Source: 2004-2014 Hurun Richest List, Hurun Report, 2004-2014.

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