Opinion | How trust is redefining philanthropy in Asia
As Asian philanthropic organisations adopt trust-based practices, focusing on three key areas can help them provide a road map for others
According to Altrata’s latest report, philanthropic giving by ultra-high-net-worth individuals in Asia is set to reach US$33 billion, highlighting the region’s potential to become a global philanthropic powerhouse.
However, the rise of Asian philanthropy must be understood in the context of a rapidly evolving global philanthropy landscape, with new paradigms shaping how donors and organisations approach social change.
A significant development is growing interest in trust-based philanthropy, which emphasises transferring decision-making power from funders to grantees, reducing administrative burdens and allowing for grantee-defined impact assessments. This model contrasts with measurement-focused approaches that prioritise achieving measurable outcomes and ensuring accountability through strict reporting mechanisms.
Adopting trust-based philanthropy poses challenges. Critics might argue that without rigorous measurement, it is difficult to ensure accountability and assess the effectiveness of funded initiatives. This concern is particularly relevant in Asia, where the philanthropic sector is still developing, and there is a strong emphasis on showing tangible results to gain the trust of stakeholders, including governments and the public.
Should Asian philanthropic organisations pursue a trust-based approach or prioritise measurement-focused approaches? A joint publication by the Institute of Philanthropy and McKinsey & Company delves into this issue. Based on an analysis of global philanthropic practices and interviews with 57 leaders from 36 pre-eminent philanthropic institutions, the report suggests that Asian philanthropic foundations can harness trust-based philanthropy principles while embracing rigorous social impact measurement, providing a road map for other regions.
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