Charity Begins Abroad?Leave a Comment
“Dà jiā hǎo,” Yale President Peter Salovey said in broken Chinese. “Hello everyone.”
On Oct. 29, 2014, Salovey sat down with Pan Shiyi, one of China’s most influential businessmen and the chairman of SOHO China, a major real estate development company worth over $10 billion. Behind Salovey and Pan, both dressed in dark suits and white shirts, stood two black-clad women prepared to offer ceremonial gifts to the two leaders.
With his three words, Salovey greeted an audience larger than those gathered in a conference room inside one of SOHO China’s futuristic Beijing offices. Rather, Salovey was addressing the broader community of educators, students and philanthropists who would likely take an interest in the gift.
The SOHO China Foundation, established in 2005 by Pan and his wife Zhang Xin to support Chinese education, had just announced a donation of $10 million to Yale in support of low-income Chinese students. This gift was part of a larger $100 million endowment established in 2014 to fund Chinese financial aid at international universities.
“We hope the donations will help Yale admit more Chinese students, and those from modest backgrounds,” Pan announced at the ceremony. “Every person’s potential is like a hidden gem, and education is the tool that unlocks human potential.”
For all the pomp and circumstance of the event — the photo-ops, the official handshakes, the backdrops displaying the SOHO China and Yale logos — the donation, in relative terms, does not amount to much.
According to the University’s most recent financial report, Yale took in a total of $346.4 million in charitable contributions in fiscal 2014, making the SOHO China donation a mere 2.8 percent of Yale’s fundraising total. And the donation was $5 million less than what the couple gave to Harvard earlier in 2014 for the same outlined goals.
Further, compared to Stephen Schwarzman’s ’69 $300 million fundraising campaign in 2013 to establish the Schwarzman Scholars at Beijing’s Tsinghua University, Pan and Zhang’s donation appears even smaller.
“It’s a drop in the ocean compared to what Chinese schools are raising,” said Rupert Hoogewerf, the publisher of the Hurun Report, a monthly magazine best known for its “China Rich List.
But the gift’s significance is not denominated in dollars. Rather, the gift and the reaction to it may symbolize changing Chinese attitudes about philanthropy — changes with direct implications for Western institutions
With Chinese donors giving more and more to foreign causes, “I just suppose that Yale might want to draw more money from China,” said a prominent Chinese newspaper columnist, who spoke on the condition of anonymity due to restrictions placed on domestic journalists speaking to the foreign press.
While Salovey did not travel halfway around the globe to merely pick up a check (he was also in Beijing at the time for the opening of the Yale Center Beijing), Yale’s eagerness stands out among its peer institutions. Harvard President Drew Faust, by comparison, met Zhang and Pan in a Cambridge boardroom and signed documents with markedly less fanfare.
But the buzz around Pan and Zhang’s donation hasn’t been restricted to Yale — it has garnered even stronger reactions outside the US.
“Mr. Pan’s donation is nothing…but it has an eye catching effect and has an effect on the people’s feeling in China,” Shujie Yao, economics professor at the University of Nottingham, said. “Each day [students] go to school and they don’t have even basic things.”
Professor Yao joins a multitude of other voices, both within China and beyond its borders, criticizing the SOHO China gift and other high-profile Chinese donations to elite American institutions over the past few years. These philanthropic gestures have sparked a firestorm of debate about Chinese philanthropy abroad, and about where Chinese donors’ loyalty should lie.
No Good Deed…?
The first seven-figure donation to Yale by a Chinese national occurred in 2010, when Zhang Lei GRD ’02 SOM ’02, founder of Hillhouse Capital Management, pledged nearly $9 million to the School of Management.
According to a 2010 Asia Times article, which quoted then-University president Richard Levin, Zhang’s gift was the largest gift to date from a young alumnus and was also the largest gift to the School of Management up to that point.
Despite the apparent act of altruism, not everyone was happy.
In the days following the announcement of Zhang’s gift, China’s state-run Xinhua news agency had to set up a special forum just to accommodate angry debate on the topic
And when China’s “Global Times” hosted a forum regarding the gift, they received more than 1,000 posts as outraged individuals spewed hate-filled accusations mixed with nationalist sentiment.
“Scum, trash, dog feces, traitor,” wrote one commenter.
The Chinese equivalent of Twitter, Weibo, was flooded with infuriated messages. Zhang was accused of “indifference” to the concerns of his own nation and even labeled a “traitor.”
Five years later, students, professors and experts on China reflected about why these types of gifts have struck a chord with a domestic audience.
“I think there is a very strong sense of nationalism among young people, especially young educated Chinese, who are very vocal and are on social media,” said China Insider director France Pepper, a leading consultant on travel and culture in China. “It is, in some way, surprising because you think these kids are going to the university and are outward thinking, but at the same time they are thinking of China and China’s potential.”
This fall, much of the fury that had subsided since 2010 has been scraped raw once again. And with a larger donation, more publicity surrounding the gift, and more Chinese students on American campuses than ever before, the debate regarding nationalism, philanthropy and education appears far from over.
“It’s a very hot topic right now,” Hoogewerf said. “There has been a lot of criticism in the press of [Pan and Zhang’s] gift.”
Hoogewerf said many critics of the SOHO China Foundation argue that the money could have been better directed at the major problems continuing to plague China’s education system.
“I only want to tell China’s entrepreneurs: think about children in China’s West,” wrote one Weibo user. “[They] don’t have enough food and have no shoes to wear in winter. For those students who study abroad, which of their families doesn’t have connections or money?”
Yao said that in terms of primary and secondary education, China remains much less developed than the U.S., and the existing schools that serve low-income students in China remain underfunded.
So even if higher education itself is well supported in China, many Chinese students could “never dream” of attending domestic universities, Yao said, let alone studying abroad.
“And in this particular moment, [Zhang and Pan] pour so much money into Harvard and other schools?” Yao asked.
Still, when engaged in educational philanthropy, there remain compelling reasons for Chinese donors to look abroad.
Alice Sun, founder of a China/Hong Kong education consultancy in New Haven called Ivy Labs, said there is a sense that donations to Chinese universities — which are largely state-run — will not have the same impact that they can have at elite American schools.
“I heard a lot about the mismanagement of money and a lot of donors will have to question, ‘If I donate to a Chinese university, will they manage it well?’” she said.
Aobo Dong, a student at Wesleyan and the executive director of VOCAL Mentorship, a program that assists Asian students in applying to American colleges, said that the perception of rampant corruption among government officials has left Chinese donors skeptical of domestic educational causes. Echoing Sun, Dong said that donors place greater trust in more reputable private universities in America.
But in defending the gift, Zhang, the CEO of SOHO China, avoided the touchy debate regarding the failings of the Chinese educational system. Rather, Zhang argued that her gifts to American institutions were a form of national expression. Representatives for the couple declined to comment for this article.
“It is important for China to be integrated with the rest of the world,” Zhang wrote in a New York Times opinion column published last month. “Our aim is to enable China’s best and brightest to act as a bridge between China and other nations — an important tool for modernizing the Middle Kingdom.”
But whether those ambitious goals will come to fruition is far from certain.
Chnia’s Great Wall in Education
Despite Zhang and Pan’s intent to support China’s most promising students, some critics argue that these types of scholarships are, at best, a waste of money. At worst, they say, the scholarships can inadvertently strengthen the divide between rich and poor.
“The scholarship will only increase Chinese inequality,” Yao said. “The people who are able to study and travel to enter Harvard, they have to be previously from [a] rich family — there is no peasant family that can go.”
Yao argued that to even consider studying abroad, Chinese students must enjoy a level of affluence. Despite the offer of generous financial aid once a student is accepted to an American university, there is little infrastructure in early education to set students on that path.
According to Dong, these scholarships come too late in the admissions process to offset social inequality. He added that since Yale already operates under a “need blind” admissions policy, a scholarship fund may be redundant.
Yet current Yale student Serene Li ’17 said that Chinese students at Yale are already socioeconomically diverse. Many of her fellow Chinese students are on financial aid and receive generous scholarships, she said.
Yifu Dong ’17 said though he does not know any Chinese Yale students from very poor backgrounds, the Chinese students at Yale are not as privileged as people in China often perceive them to be.
And while he did not provide an exact percentage, Yale Dean of Undergraduate Admissions Jeremiah Quinlan wrote in an email that “most” current Chinese students at Yale are on financial aid.
“We really hope, and the donors hope, that this type of gift really raises the profile of Yale in China and encourages more talented Chinese students to apply,” Quinlan wrote in an email. “There are many Chinese students who probably look at our price tag, don’t understand how financial aid works, and decide not to apply to Yale.”
But Dong suggested that Yale’s profile in China hardly needs raising.
He said Chinese students who are admitted to Ivy League schools or other famous colleges are publicly revered and even “worshipped.”
“A lot of Chinese Yalies are in the newspaper, you read about them online, read about their stories, it is like part of the culture,” he explained.
In recent years, dozens of consulting firms have cropped up around China charging upwards of $300,000 for admissions advice and supplemental courses. One Shanghai student made headlines in 2010 when she received a book deal just one week after her acceptance to Harvard.
So if the donation may have little impact on Yale’s attempts to recruit low-income Chinese students, and if the donation will — at most — have marginal influence on Yale’s already considerable fame abroad, critics have speculated about an alternate motive.
The Price of Admissions
Zhang and Pan have two sons, aged 15 and 16, who both study English and go to international schools. With Chinese students facing increasingly cutthroat competition for spots at top American universities, the timing of the SOHO China gift has not gone unnoticed.
“Isn’t Pan just buying an entrance ticket for his son to attend an elite university abroad?” wrote one Weibo user.
Such speculation isn’t unique to the Chinese blogosphere. Li said she initially thought the gift may have been meant to help boost the odds of admission for the couple’s children.
And Pepper said that with a donation of this size, the couple might be seeking some “bang for their buck” — meaning favorable status with receiving universities — especially given that securing a spot at a top school is of the utmost importance for wealthy Chinese families.
“Even though these people are the elite, they are all obsessed with Ivy League schools,” she said. “Education is the top priority of Chinese families and [they] are likely not going to give their money to a hospital in Iowa, for example.
Even if the relationship between donor and administrator may not be as quid pro quo as some cynics have argued, a high profile gift to a prestigious university has its benefits.
Sun said that although she believed the SOHO China gift and similar donations were “from the heart,” major gifts to universities have perks that can ultimately raise admissions chances. She said that students may be able to get exclusive access to such things as faculty clubs and time with professors, in addition to gaining opportunities such as research experience or summer programs.
But Yale administrators denied that the donation carried unspoken expectations.
Yale Vice President for Development Joan O’Neill said in December that the couple’s generosity stemmed from Zhang’s personal experience studying abroad. In the 1980s, she was awarded scholarships to study in England at the University of Sussex and at Cambridge University.
“With the help of financial aid, I went from factory worker to university student, then became an entrepreneur and eventually, chief executive of my own company,” Zhang wrote in her December Times column. “That opportunity to study was the most dramatic turning point in my life.”
Salovey similarly dismissed the accusations leveled against the couple.
“My experience of philanthropists — from the United States and from around the world — is that they make their gifts to Yale and other institutions from their desire to do good,” he wrote in an email. “In this case, Ms. Zhang and Mr. Pan clearly want to help make possible a future in which students of limited financial means can have access to a great education.”
Whatever the couple’s reasons for giving, donating to a university isn’t a guarantee of getting one’s child admitted. Hoogewerf said though preferential treatment for large donors may be more common at less prestigious universities, there is often greater division between the development office and the admissions office at elite schools. He recalled a case in which a wealthy Chinese family donated a large sum of money to the University of Cambridge only to have their child rejected months later.
Giving and Receiving
Despite domestic backlash, the flow of money from Chinese coffers to foreign institutions seems unlikely to dry up anytime soon.
Pan and Zhang, for example, have pledged to continue providing major gifts to leading American institutions. They stated in October that they have set their sights on Duke and Stanford.
With new money fused with new attitudes, China may be entering a golden age of charitable giving — exemplified by the SOHO China donation, the similar donation by Zhang Lei in 2010, and most recently, a $350 million gift to Harvard from a Hong Kong foundation this September.
“There are a lot of relatively young entrepreneurs who are fortunate enough to create spectacularly successful businesses in China,” said Yale School of Management professor Stephen Roach, a senior fellow at Yale’s Jackson Institute for Global Affairs and the former chairman of Morgan Stanley Asia. “Younger wealth tends to have a different approach towards philanthropy and giving back to society.”
Pepper agreed, saying that though large-scale donations to institutions have been a very American and European concept, these charitable principles are now starting to become ingrained in Chinese society.
And in light of the growth of Chinese philanthropy, the pomp and circumstance surrounding Yale’s acceptance of the gift takes on a new significance.
If Chinese donors present a major source of new income for Yale and other American universities, Yale’s gesture may have been meant to entice more donors.
“If [Yale] is not trying to tap into sources of wealth internationally, they are making a mistake,” said Richard Hesel, a principal at Art and Science Group LLC, a firm that advises colleges and nonprofits.
He added that Yale’s decision to “flatter donors in a public way” might be intended to offer prospective benefactors the promise of affiliation with a prestigious university.
Yale, for its part, acknowledges the potential benefits of courting foreign money, and has seen recent success in doing so.
“Yale has made a commitment to engaging donors around the globe for many years,” O’Neill, the Vice President of Development, wrote in an email. “A number of significant gifts from non-U.S. donors in the past year, while not at the magnitude of Harvard’s $350 million gift, are testament to the growing success of those efforts.”
Though China currently ranks eighth globally as a source of foreign donation to US universities, CEO Zhang Xin argued these attitudes are changing in a big way — for Yale, for Harvard, and for the world.
“I believe that the year 2014 is a turning point in Chinese philanthropy,” she wrote in her NYT opinion column. “This tradition is finally getting the impetus it needs to flourish.”
As Chinese philanthropy looks west, American institutions will look east ready to receive. Those in China may not be so enthusiastic to see money flowing out their country, even as it remains plagued with problems.
But for Chinese donors, even when seven-figure philanthropic gestures and glitzy ceremonies provoke harsh domestic criticism, charity abroad may be worth the price.