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The View | How Xiaomi founder Lei Jun’s US$956m could be better spent – China’s richest should take charity to the next level, like Bill Gates
- Chinese billionaires like Xiaomi founder Lei Jun are donating, but not yet venturing into philanthropy. They should apply business techniques to giving, like Bill Gates, so their donations can go further and transform the world we live in
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Lei Jun, the founder and chairman of Chinese smartphone maker Xiaomi, made the headlines last week when it was revealed that he had received a compensation package nearly equal to the company’s profit. For 2018, he took compensation of shares valued at US$956 million. Xiaomi’s adjusted net profit for the year was US$1.3 billion.
Admirably, Lei has promised to devote all of these shares, after tax, to charitable purposes. But charity is not the same as philanthropy, and Lei’s remarkable donation would go much further with a dedicated philanthropic approach.
Only last month, Azim Premji, the billionaire chairman of Indian tech company Wipro gave shares worth US$7.5 billion to his philanthropic foundation, in what may be the biggest single donation in India. He has donated a total of US$21 billion to the Azim Premji Foundation.
There is a major difference between Premji and Lei’s donations, and approaches. Charity is arguably less strategic. Philanthropy uses loss-absorbing capital, expertise and a deep understanding of issues to bring long-term change. Philanthropists get their hands dirty on their mission to inspire change.
Like the Bill & Melinda Gates Foundation, the Azim Premji Foundation – which supports education – represents an investment of its founder’s time and money to gain understanding of a field, build expertise and develop long-term, forward-thinking solutions. Philanthropists can glean insights from failures and successes, and figure out a nimble way to fund and execute even the ideas perceived as high risk. Lei’s US$956 million donation will change lives, but without a focused approach, it will never realise its full potential to create enduring – even revolutionary – change.
Lei is following in a centuries-long Confucian tradition which mandates a strict hierarchy in society, as in families. In this tradition, those who are financially successful have a social obligation to give to charity, but those who bring about social change are frowned upon. China’s wealthy are generous, but they are not making the same impact as American billionaires.
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