Corporate Philanthropy in Vietnam: Promise Among Challenges

December 18, 2013

By William Taylor

Giving in Vietnam is strongly rooted in its culture and tradition. Tax breaks for rich people who helped the poor were implemented as far back as the 15th century. Today, the public discourse is full of references to community spirit and the philanthropic impulses of Vietnamese. In addition to quoting the musketeers line, “One for all and all for one,” in his address earlier this year to the UN General Assembly, Prime Minister Nguyen Tan Dung used one of my favorite phrases, “whole leaves wrap torn leaves.”

However, popular perspectives of corporate philanthropy in modern Vietnam are also tinged by scandal and skepticism. Stories of out-of-date or inappropriate goods dumped on disaster victims, and companies taking the plaudits with spectacular bids at TV charity auctions but then failing to turn up with the cash have hit the headlines in recent years.

Despite this and the economic pressures of Vietnam’s longest growth slowdown since the 1980s, Vietnamese companies do give. Some give large amounts. Tôn Hoa Sen, a large sheet metal manufacturer based near Ho Chi Minh City, for example, reserves 3.5 percent of its annual profit for philanthropic activities. A few even deploy sophisticated strategies and partnerships with the government, educational institutions, and NGOs. FPT, Vietnam’s biggest IT and education company, has its own university, vocational colleges, and an upper-secondary school with over 15,000 students. It also collaborates with the Ministry of Education and Training to run an online math competition, supports a social media network, and works with a range of NGOs and associations to improve the impact of their giving and to deliver programs in their specialist areas.

Building on The Asia Foundation’s groundbreaking 2011 “Philanthropy in Vietnam” report, at the end of 2012, we began research for a follow-up report focused on corporate philanthropy among Vietnamese companies in the major cities. In partnership with the Center for Community Support and Development Studies (CECODES) and the Vietnam Chamber of Commerce and Industry (VCCI), the Foundation sought to establish a baseline of corporate philanthropy in Vietnam, define motivation and giving patterns, and explore attitudes toward and partnerships with Vietnamese NGOs.

The results make for interesting reading. More than 75 percent of the 500 Vietnamese companies we surveyed claimed to have made charitable donations in the last year – with total gifts from companies in our sample reaching 113 billion Vietnamese Dong ($5.4 million) – perhaps a small amount in the grand scheme of financial flows, but a substantial figure that holds potential for developing a domestic base for charitable giving in Vietnam in the future. The biggest businesses gave the most, with 96 percent of companies with over 500 employees making contributions. Those contributions averaged 1,300 million VND ($61,000). But even among those with less than 10 employees almost half of the businesses claimed to have made donations. Giving mainly focused on classic causes – supporting people in need (e.g., war veterans, orphans), disaster relief, and poverty alleviation.

The fact that big companies in Vietnam are leading in giving to fairly traditional beneficiaries will be familiar to those looking at patterns of corporate giving in other parts of the world. However, the survey also identified trends that contrast with western corporate philanthropic culture.

While, in the West, corporate social responsibility (CSR) theory stresses the integration of a firm’s contributions with its business strategy, in the vast majority of cases, Vietnamese firms are keen to stress the lack of business objectives connected to their philanthropy. Only 15 percent of firms were willing to say they gave with the goal of enhancing the company’s reputation and image. Even one of the most high profile events of 2013, the tour of Vietnam by disabled motivational speaker Nick Vujicic, supported by the Hoa Sen Group was “totally unplanned” in terms of business strategy, according to the company. Many interviewees seemed to feel they had to apologize before admitting that the marketing department implemented their philanthropic activities. This may be partly connected to cultural background – Vietnamese generally consider that philanthropy should be detached from any self-interest. It could also be a reaction to the negative media stories where businesses are accused of insincerely engaging in charitable activities in order to “polish their nameplate” (enhance their image).

While there are shining examples of Vietnamese companies conducting strategic philanthropy, linking their giving to long-term business goals, and creating sustainable social benefits while improving corporate reputation, these remain rare. The survey showed a general lack of planning. Business giving is often at the whim of senior executives, lacking consistency and pattern, and often driven by government instruction without a focus on impact. A third of respondents were not able to make any comment on their plans for cash giving in the next year and half could not comment on potential in-kind contributions. Depressingly, only 5 percent of companies said that “best potential for social impact” drove their giving.

Vietnamese NGOs could potentially play an important role in helping companies improve their giving. However, currently the links between business and NGOs are weak. Only 9 percent of businesses said they had every cooperated with NGOs – and most of those were referring to mass organizations such as the Women’s Union or business organizations. NGOs also have hurdles to overcome in convincing businesses that they are credible partners.

Vietnam is at a point in its own development, under increasingly difficult economic conditions, where you would not necessarily expect to see a sophisticated and integrated approach to giving across its companies. Our survey does offer some positive signs that most companies do give. While it remains a developing area, the occasional effort – such as the popular online “Com co Thit” or “Rice with Meat” initiative that raised 10 billion VND ($500,000) to support poor people through small individual donations in less than two years  – offers a glimpse of a positive future for philanthropy in Vietnam.

William Taylor is The Asia Foundation’s acting country representative in Vietnam. He can be reached at [email protected]. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

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