“Hong Kong overtook New York to become the world’s largest ultra-high-net-worth city.” Perhaps you saw this widely shared headline from the recently released World Ultra Wealth Report. While it was the latest study to put Hong Kong’s ultra-wealthy in the international spotlight, it is just one of many reports on the theme.
According to the Hurun Global Rich List, Hong Kong had the world’s fastest-growing high-net-worth individual (HNWI) population and fastest-growing HNWI wealth from 2008–2015 (21% and 22% annualized growth, respectively). Hong Kong now has more billionaires than all but two other cities (131 in Beijing, 92 in New York, and 80 in Hong Kong). At the lower end of the wealth spectrum, a recent Citibank study revealed that Hong Kong has one million millionaires (measured in Hong Kong dollars), meaning that with a population of 7.36 million, one in seven Hong Kongers is a millionaire.
With headlines like these, it is no wonder that nonprofit organizations from all over the world have an eye on Hong Kong. In addition to the 9,000 local charities vying for donations from these wealthy individuals, many overseas universities are also actively cultivating their alumni and connections in Hong Kong for major gifts.
Why universities? While hard data on philanthropy is sparse for Hong Kong and across Asia more broadly, many studies support the fact that education is the region’s top philanthropic cause of choice. In Knight Frank’s Wealth Report, 66% of respondents in Asia chose education as the philanthropic cause donors are most likely to support, higher than the global average of 54%.
So just how do overseas universities fundraise in Hong Kong? Some, like the University of Chicago, have brick-and-mortar enterprises in Hong Kong with programs and staff on site. Others have an office in Hong Kong that supports a variety of the home institution’s work in the region, such as the University of Southern California’s Hong Kong and South China Office or the University of Oxford’s China Office.
Many universities have set up their own registered charities in Hong Kong, running these foundations on their own or with the support of a law firm like Withers or an agency like Global Philanthropic. According to the list of Charitable Institutions and Trusts registered in Hong Kong, over 50 overseas universities have such charities in place. A sampling of this group, by country, includes:
- United States: Brown University, Columbia University, Johns Hopkins University, MIT, University of Michigan, Tufts University
- Canada: University of British Columbia, University of Toronto, University of Waterloo
- Australia: Macquarie University, University of Sydney, University of New South Wales
- United Kingdom: University of Cambridge, University of Manchester, and Edinburgh Napier University
Another route some universities take is setting up a fund within a family of foundations, allowing Hong Kongers to make tax-advantaged gifts to an organization like The Chapel & York HK Foundation, which processes the donation, issues gift receipts, and passes the gift along to the home institution.
Although Hong Kong has a legendarily low tax rate, the opportunity for a charitable tax deduction is still an important factor for many donors. Under the Inland Revenue Ordinance, individuals may be able to claim deductions for up to 35% of their income or profits. Aside from these monetary savings, having a way to make tax-advantaged gifts also sends an important message to the donor: that the university takes their donations seriously, that they are not the only one in Hong Kong making gifts, and that there is a commitment to the Hong Kong community. And, as Ruth Shapiro argues in the recent book Pragmatic Philanthropy: Asian Charity Explained, tax benefits also signal that the local government endorses giving to these organizations, a signal that carries more weight in Asian nations than in many other parts of the world.
Universities take many different approaches to staffing their Hong Kong fundraising operations. At one end of the spectrum, the University of Manchester has a Head of Philanthropy for Asia living and working full-time in Hong Kong. At the other end, institutions like the University of Michigan and Macquarie University have international engagement officers and fundraisers who live at the home institution but travel to Hong Kong on a regular basis. In between these two approaches are examples like the University of British Columbia or University of Alberta, with one or more staff in Hong Kong whose wide-ranging job responsibilities include fundraising support.
What’s the right approach for your organization to take in Hong Kong? As this overview suggests, there is no one-size-fits-all answer. In the coming weeks, I will be sharing insights from a variety of the institutions above, including why they are set up as they are, the advantages and challenges of their structure, and what advice they have for everyone else reading those global wealth reports and turning an eye to Hong Kong.
Stay tuned for more on this topic! And if you’d like to share what’s made your own fundraising program successful in Hong Kong, contact me at email@example.com.