The Culture Behind Asian Donations to U.S. Universities

On September 8, Harvard University received the largest alumni donation in its 378-year history when alumnus Gerald Chan gave a whopping $350 million to the School of Public Health. Harvard is by no means a stranger to massive donations from its alumni. According to reports from The Crimson, alumni donations contribute greatly to Harvard’s enormous endowment of over $30 billion, and donations to Harvard totaled $596.96 million in 2010 alone. Up until Gerald Chan’s donation, the largest donation Harvard had received was, from Kenneth Griffin, billionaire hedge fund manager, who pledged $150 million towards financial aid, thus getting his surname on the financial aid office as well as on 200 undergraduate scholarships, among other things.
However, Chan’s was the first donation to result in a school being renamed. Chan specifically stipulated that Harvard rename the School of Public Health in dedication to his late father, T. H. Chan. Up to this point, only two surnames had graced the name of a Harvard school: John Harvard’s (Harvard College and Harvard University) and that of John F. Kennedy (Kennedy School of Government). Now, the School of Public Health will be renamed the Chan School of Public Health. Though Kenneth Griffin and other alumni donors have gotten their surnames on various buildings throughout campus, none have come close to reaching this level of recognition. And what’s most surprising is that Harvard should rename one of its schools after an Asian surname, officially giving the highest level of recognition to a donor who does not seem to fit the archetypical mold of a classic Harvard alumni donor: that is, Caucasian.
It may seem strange at first that Chan, an international businessman, would want to donate such a vast amount of money to a U.S. university. However, Chan’s donation fits with a growing trend of international donors, especially those from Hong Kong and China.
According to a Wall Street Journal analysis of U.S. Department of Education data, Hong Kong has become the top international source of large gifts to U.S. colleges. As a matter of fact, Hong Kong donations make up 17 percent of the world’s total donations to U.S. universities. Both China and Hong Kong figure prominently in the list of top ten sources of donations to U.S. colleges from January 2007 to November 2013. Hong Kong is first, with $181 million worth of donations given to U.S. colleges. China is eighth, at $60.4 million. Furthermore, the biggest beneficiaries of these donations are elite colleges in the U.S., such as Princeton, Yale, Stanford, the University of California at Berkeley, and Harvard.
This trend can be explained by the rising prominence that U.S. universities play in international education. Gerald Chan himself received his doctorate at Harvard University, and he is not alone.
As Chan has stated in the Wall Street Journal, “many Hong Kong families have been educated in America or have children who have gone to school there, so there is a strong sense of affinity.” China is the number one source of international students in the United States. Students from China and Hong Kong made up 25 percent of the entire foreign-student population of U.S. universities between 2008 and 2012.
From the data collected from a study conducted by the Wall Street Journal in 2014, it is clear that people from China and Hong Kong do give generously to U.S. universities. Billionaire and Hong Kong resident Gordon Wu donated $100 million to Princeton in 1995. Ronnie Chan (Gerald Chan’s brother) pledged $20 million to the University of Southern California in September of this year. This trend holds true in the rest of China as well. In 2010, Zhang Lei of Hillhouse Capital Group gave $8,888,888 in cash to the Yale School of Management, and gave an additional $3.9 million to Yale in 2013. More recently, SOHO China’s founders Zhang Xin and Pan Shiyi gave a $15 million gift to Harvard in July of this year. And these cases are not anomalies. Hong Kong residents account for a total of 163 disclosed gifts during the 2007-13 period, with an average donation of $1.1 million.
As a result of these generous donations from international alumni, “schools are dedicating more staff to international fundraising,” according to Amir Pasic, the vice president of the Council for Advancement and Support of Education. In a self-perpetuating cycle, the more international students come to U.S. universities to receive their education, the more inclined they are to donate to the school. And the more international alumni donate to elite U.S. universities, the more those universities reach out to and engage with international alumni, encouraging them to continue giving or at least to continue sending their children abroad for their education.
Still the recent surge in donations from Hong Kong and China is cultural, as well. For a while, Chinese alumni have been reluctant to give back to U.S. universities because of the “negative publicity,” according to Rupert Hoogewerf, author of the Hurun China Rich List. Wealthy Chinese people who donate to American universities may be seen as unpatriotic. As Hoogewerf puts it, “people are asking, ‘if you are going to help people, why don’t you help the people at home?’”
Another reason is that many Chinese alumni do not see the point in donating to these universities. Many Chinese parents give to these top universities in hopes of boosting their children’s odds of acceptance, and then are less inclined to donate once their children have actually gotten accepted. This is reflected in the sentiments of Zuo Zhen, founder of Zuo Voyage, as reported in the Wall Street Journal: “When I look at the donation list from my daughters’ schools, I see fewer Chinese names than some other ethnic groups…Some Chinese parents ask, ‘We are already paying so much tuition, why do we need to give more?’” The culture of alumni giving is still relatively new in China and Hong Kong.
Furthermore, the rise of an economic elite capable of such large donations is a relatively new phenomenon. For a while, wealthy individuals in China and Hong Kong were reluctant to give their recently earned money away at all.
Now, however, the wealthy are more motivated to donate. According to the Wall Street Journal, their motivation stems largely from the “benefits from having their names associated with the world’s top education brands, especially as they expand their business empires outside China.” According to William Vanbergen, founder of BE Education, “those high-profile donations are very good advertisements for the Chinese being internationally generous.”