|Our Correspondent||Jul 14, 2007|
As Asia’s self-proclaimed “World City,” Hong Kong has no shortage of wealthy business leaders and entrepreneurs. With several of the world’s top 100 richest people making the city their home, plus gross domestic product per capita in 2005 of US$30,549, it is well entrenched in the ranks of the developed world.
But when it comes to philanthropy and nonprofit organizations, Hong Kong has a lot of catching up to do. In the words of Canadian-born Chinese businessman, Robert Lee, “I know a lot of very rich Chinese people from Hong Kong who don’t give much, if at all in either money or time. But probably it’s because they have not been approached by the right people.”
Lee believes that his wealthy friends in Hong Kong should be giving more back to the community than they do. They could learn from him. Lee has put his experience as a successful property developer to work in an innovative series of philanthropic ventures on behalf of his Canadian alma mater, generating enormous revenues for the school and also demonstrating a unique synergy between his skills as a businessman and his vision as a philanthropist.
According to figures released by Hong Kong’s Inland Revenue Department, in 2004-05, individual philanthropic giving amounted to just HK$3.39 billion while corporate giving netted HK$1.72 billion. The total of HK$5.11 billion represents less than 0.4 percent of Hong Kong 2004 GDP of HK$1.29 trillion. It is also city without a well-developed nonprofit sector and the government relies for many social welfare services on the gaming taxes and mandatory charity contributions of the Hong Kong Jockey Club, which has a monopoly on legal gambling in the territory.
In contrast, Canada, which has a per capita GDP just slightly higher than Hong Kong’s, has the world’s second largest nonprofit and volunteer sector, employing 11.1 percent of the work force. The core nonprofit sector (which excludes hospitals, colleges and universities) accounts for 2.5 percent of the nation’s GDP.
In an interview, Lee, who grew wealthy in Vancouver real estate, talked about his motivation and his strategy for devoting much of his time and money to philanthropy.
When Lee was a child, his father used to teach him, “If ever you are successful in business, you should give back to the community.” Lee senior started out as a humble dishwasher when he immigrated to Victoria, British Columbia, from Guangdong at the age of 17. He then became an active philanthropist and community leader as his trading business flourished. His example had a profound impact on the young Lee, who has been applying the concept of giving back to the community throughout his adult life.
Today, Lee, who owns a real estate company in Vancouver, never forget to tell his children to always try to spend time in helping the underprivileged and needy.
When asked whether he thinks that business people, especially those in Hong Kong, focus too much on profit while neglecting social responsibility, he said, “I think there should always be a balance of values. One should set one’s own goal about one’s level of accomplishment. But once that goal is reached, one should start giving back.
“In Canada, it is very difficult to accumulate wealth because of the tax system, whereas in Hong Kong it is much easier as taxes are relatively much lower. So it makes much more sense for rich Hong Kong people to give more.”
While Lee thinks that donating money is good, he notes that spending both time and money on philanthropic work may be a challenge.
“It is much easier for an expert to contribute or volunteer in his or her that field,” he said. Therefore he thinks people with specific expertise should volunteer in their professional area, simply because they can do it more efficiently.
As far as Lee is concerned, over the years, he has volunteered in numerous nonprofit organizations including the B.C. Paraplegic Foundation, where he has been a member for 20 years and the chairman for 6 years; the Vancouver Foundation and the Rick Hansen Man in Motion Foundation. His community service work has earned him numerous awards, including the Order of British Columbia and the Order of Canada..
Apart from his time, he is equally generous with money. In 2005, Lee donated C$5 million to the University of British Columbia to support graduate education, and he is committed to raising another C$5 million from the private sector. In 1989, Lee helped to raise C$15 million for the university which was the single biggest donation at that time.
Last year, in recognition of his dedication to UBC, the university named the business graduate school the Robert H. Lee Graduate School.
The achievement Lee is proudest of, though, is innovative his contribution to the school’s Property Trust. A 1956 UBC graduate, he helped found the trust 1987, has been on the board for 20 years and is the current chairman. For the last two decades he has spent about 20 percent of his time on the trust and has missed just one meeting. The results are impressive.
“I saw 1,000 acres of UBC-owned woodland lying there and thought I would persuade the board into developing it for the university’s future,” he recalled of the trust’s origins.
As a result of that recommendation, in the last twenty years UBC saw its endowment grow from about C$50 million to over C$1 billion. Currently, 500 acres of UBC land is being developed on the south campus, which is expected to house 30,000 to 40,000 residents and generate C$1 billion in revenue for the endowment over the next 20 years.
“Development of UBC land under the Trust and its subsequent sale is done through a unique arrangement,” said Lee. The property is later sold on a 99-year lease with UBC retaining the freehold title. When the lease expires, UBC will pay the property owners for the improvements (i.e. property minus land) at the prevailing market price to regain possession of the land.
“The arrangement was my idea and has worked really well,” he added.
Not only has Lee’s innovative land-lease concept caused UBC’s land to appreciate in value, now surpassing even downtown Vancouver’s land values according to Lee, it has attracted other land-rich Canadian universities to follow suit.
Even more significant is the fact that Lee’s brainchild has given UBC’s land a “visionary” value over ordinary land value, because more money for the university endowment means more scholarships and more research programs, and these will in turn nurture talent and ensure academic progress. The concept owes much to Lee’s own work experience as a real estate developer, a living demonstration of his belief that one should use professional expertise for good through volunteer work.
Although born and educated in Vancouver and speaking very little Chinese, Lee has always had good Hong Kong business connections. He brokered many property deals for property tycoons seeking a safe refuge for their money as far back as the Cultural Revolution riots in 1967, when Lee was a real estate salesman. The commissions he earned from those early deals provided the seed money that he later used to start his own company, the Prospero Group, in 1979. One of Prospero’s key businesses is managing properties for Hong Kong people.
As such, he says he understands the Hong Kong business mentality very well, and he is not entirely delighted. “When they do give to charity, they often expect something back in return,” he said.
The Asia Pacific Philanthropy Consortium’s website says it another way in describing the Hong Kong philanthropic profile. “There is a high level of ‘guanxi’ (affinity) giving in support of charitable initiatives taken by business associates or friends.” The consortium notes that, “Local Hong Kong companies, many family-owned, are not commonly used as a significant channel for philanthropic giving. There are no strong tax incentives either to channel giving through a company, or to create corporate foundations as vehicles for giving activity.”
It is something Lee has tried quietly to change in discussions with friends but when asked which of the world’s philanthropists he admired most, the examples were Bill Gates and Warren Buffet. “They give without even wanting to be recognized,” Lee said. “And Warren Buffet leads a frugal life, too.”
Indeed, Lee even shares Buffet’s philosophy on raising children. “I believe in only giving my children education and just enough money to start their own business. After that, they should be on their own,” he said. “Too much wealth would create problems for the family. I think I give my share to society. You should balance your values in life.”