As Vietnam graduates from official development assistance, diasporic business leaders and their firms are filling the humanitarian assistance gap.
Over the last generation, Vietnam has become Asia’s latest export-oriented manufacturing development success. Vietnam’s large diaspora, overseas and returning, played a key role in this success. The country’s consequent rise to the middle-income rank, however, has led to a decline in official development assistance and a rise in income inequality. Vietnam’s tiger economy wealth is far from evenly distributed, especially in rural areas where near poverty conditions persist.
Fortunately, today’s more prosperous and economically integrated Vietnam is a successful example of another associated Asian development phenomenon. Asia’s rapid economic growth has led to an expansion of philanthropic activity across the region. In Vietnam, alongside long-standing traditions of “từ thiện” or charitable giving especially to religious groups providing support to the poor, emerging philanthropic patterns are being determined by successful Vietnamese and permanent diasporic returnees who have relocated their personal and business operations to Vietnam. Non-governmental organisations (NGOs) report that many prosperous Vietnamese in Vietnam and the diaspora, as well as diasporic returnees who have resettled in Vietnam, are directing some of their newfound wealth to support humanitarian projects in the country. Many of these private philanthropists hark from across Vietnam’s globally dispersed diaspora.
Many diasporic philanthropists express that “giving back” is personally fulfilling, reminding them that their motivations for homeland return were never solely about accumulating profit in an emerging market.
Since Politburo Resolution 36 in 2004, the Vietnamese state has actively encouraged the diaspora to return and contribute to homeland development. According to the State Committee for Overseas Vietnamese, in 2019 there were about 3,000 overseas Vietnamese-led enterprises, with cumulative registered capital of US$4 billion. The Peoples Aid Coordinating Committee (PACCOM) has also worked with NGOs led by overseas Vietnamese to facilitate aid flows from the diaspora to communities across Vietnam, although it does not classify them separately from other international NGOs (INGOs).
In response, some philanthropists and business leaders have set up personal humanitarian initiatives and challenge grants, encouraging NGOs and community-based organisations working on issues ranging from human trafficking to educational assistance to disaster relief, that are vying for their money to match it through additional fundraising. Across Vietnam, a new philanthropic culture often connected to individual and corporate reputational branding is emerging. This phenomenon is especially prominent in Ho Chi Minh City, Vietnam’s largest city and a key engine of the country’s economic growth. Many diasporic philanthropists express that “giving back” is personally fulfilling, reminding them that their motivations for homeland return were never solely about accumulating profit in an emerging market.
The most significant philanthropic development that mirrors Vietnam’s economic growth is the expansion of corporate social responsibility as a major source of funding for humanitarian and development projects. While the majority of the INGOs in Vietnam are based in the capital Hanoi, and a significant proportion of community-based organisations in the north are dependent on or an indirect outgrowth of these, in Ho Chi Minh City many civil society organisations have fewer government mass organisation connections and support. With several companies looking to polish their image in Vietnam and attract a growing base of ethically and environmentally conscious consumers, there is a move towards corporate social responsibility (CSR) and corporate citizenship. Following the 2008 Corporate Income Tax Law, there are some allowances for charity deductions.
Concurrent with the formalisation of Vietnam’s legal and taxation systems, CSR initiatives rely on funding the activities of officially registered nonprofit organisations. There is a growing realisation that with the right combination of corporate financial support, government connections and official registration, charity and aid groups can mobilise more resources and recognition for their work. Many organisations that operated informally without official registration are being encouraged to officially establish their presence in order to leverage CSR donations and grants. To this end, groups like the Lin Center for Community Development in Ho Chi Minh City are leading capacity building workshops to help nonprofit groups develop strategies for high impact cross-sector partnerships.
These philanthropic as well as grey matter contributions qualify as types of collective remittances that are not always counted, yet are growing. We can expect to see many of these philanthropic initiatives will become more visible in the years to come. Community-based organisations that wish to tap these resources will need to adapt in order to position and publicise their services effectively as they tackle the inequalities and exclusions accompanying Vietnam’s dramatic economic transformation.