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Shaping the Future: A New Paradigm in Philanthropy and Social Finance

On January 25, 2024, the Asian Financial Forum (AFF) Thematic Workshops, hosted by UBS in Hong Kong, included a compelling session titled “Philanthropy as Catalytic Capital to Enable Further Investments in Impact: The Why and How.” Founder and Chairman of Li Foundation, Mr. Lionel Li, along with a panel of thought leaders, delved into the innovative integration of philanthropy with private investments to reshape capital markets for enhanced impact through social finance.

The session shed light on the considerable funding challenges highlighted by the Organization for Economic Cooperation and Development (OECD), noting a yearly shortfall of USD 3.9 trillion needed to meet the Sustainable Development Goals (SDGs) by 2030. The discussion underscored that while philanthropy alone cannot cover this vast need, private market funding often fails to reach the most vulnerable sectors.

Moderated by Ms. Ming Geng, Head of Social Impact and Philanthropy at UBS Hong Kong and Greater China, the workshop drew attention to recent findings: As of 2020, Asia has eclipsed Europe to become the world’s second-richest region, home to approximately 169,889 UHNW individuals and representing 28% of the global UHNW population. This growth in wealth has paralleled an increase in philanthropic and impact investment activities in the region. Lionel and Mr. Mark Cheng, Founder and Managing Partner of Social Innovation Circle, thoroughly explored these dynamics.

The discussion emphasized the essential role of social innovation and the reimagining of capital markets to channel more effective capital flows into social finance initiatives. Speakers shared insights from their experiences, highlighting the transformative potential of social and blended finance strategies to not only yield financial returns but also generate significant social and environmental impacts.

A key topic was the concept of philanthropic capital as “patient” capital, crucial for de-risking projects and attracting larger private investments. This type of capital is instrumental in supporting innovative social finance endeavours, which often see gradual returns but can lead to significant societal benefits.

Additionally, the workshop explored the rising trend of collaborative and collective giving. This approach was discussed as a powerful method for philanthropists, impact investors, and purpose-driven companies to amplify their impact by pooling resources. Such collaboration is particularly effective in addressing complex social and environmental challenges.

The AFF Thematic Workshops serve as a vital platform for global leaders to exchange ideas and forge partnerships that leverage strategic philanthropy and innovative financial solutions to address global challenges. Li Foundation plays the role as a bridge that introduces new concepts and catalyses innovative thinking, actively participating to foster a broader understanding and adoption of impactful philanthropic strategies.

Asian Financial Forum (AFF)

The Asian Financial Forum (AFF) is a premier global platform that convenes leaders from the financial and business sectors to discuss economic trends and opportunities within Asia and beyond. Hosted annually in Hong Kong, the AFF facilitates critical dialogue on the evolving dynamics of the global market, with a particular focus on innovation, growth, and sustainability. AFF provides actionable insights into the financial and business landscape, aiming to foster development and collaboration across regions.

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