The Hong Kong Jockey Club is admired the world over for the quality of its racing product, its commitment to creating the best possible experience for its customers at their facilities and for its insistence on upholding the highest standards as it relates to its stance on issues regarding medication and the like. But behind the scenes, fewer people realize the importance of the HKJC to the greater Hong Kong community through the Hong Kong Jockey Club Charities Trust.
Over the last century, the Charities Trust has overseen and facilitated the flow of donations and grants to countless projects within the community. In 2014-2015 alone, the Trust dispersed HK$3.87 billion (about US$500 million) in donations in support of 189 charities and community projects, a 7.3% increase over the previous season.
In August 2014, Leong Cheung was appointed to the position of Executive Director, Charities and Community, for the Hong Kong Jockey Club. Born in Mainland China, Cheung and his family moved to Hong Kong when he was seven years old and later attended the Chinese University of Hong Kong, from which he received a Bachelor of Business Administration. He holds an MBA from Harvard Business School. Cheung started his professional career with the US consulting firm BTG and later joined Bain Capital as their operating partner. Prior to that, he was Managing Director of Global Sourcing & Supply Chain at Esquel Group, the founder and CEO of an education related Internet venture, CampusAll, in Mainland China, and a senior consultant at the Boston Consulting Group.
Cheung took time out of his busy schedule last week to speak to the TDN Managing Editor Alan Carasso about the Club's considerable charitable efforts.
TDN: Many people have this view of the HKJC as a well-oiled machine, but few have the understanding of what it does in terms of its charitable outreach. Can you address and quantify that?
LC: It is indeed a very unique organisation, the Hong Kong Jockey Club. You can think of the Club as three key pillars: 1) the racing and wagering side of the business. Most people–globally–have a sense that it is a world-class operation; 2) we have one of Asia's most prestigious memberships. We have about 14,000 members, all influential people in Hong Kong in a way, so that is the membership side; and 3) the philanthropic side through the vehicle of the Hong Kong Jockey Club Charities Trust. If you think about the scale of this philanthropic effort, we donated almost US$500 million last year and the year before. Globally, we rank, among non-government foundations in terms of annual giving, number six. That is the scale of things of what we do in Hong Kong. We are very focused in Hong Kong on city issues. If you look beyond the philanthropic donations through the Charities Trust, the racing business and wagering side of the business–combined we paid up to US$2.5 billion in tax last year. We are the largest single taxpayer in Hong Kong, accounting for roughly 6.5% of the total government revenue. We are a not-for-profit institution. We were set up 131 years ago and we have never had shareholders. So all the value created is not for shareholders, but for social value creation. It's been in the Club's ethos since day one that we are here for the community, we are here for the society. On the one hand, in the form of tax contributions or in the form of charity donations we give back basically everything to the community.
TDN: How important is the Jockey Club and the Charitable Trust to the social fabric in Hong Kong?
LC: We are the largest community benefactor in Hong Kong. We support most of the NGO's in Hong Kong and universities. If you walk around Hong Kong, you can't miss the contributions of the Jockey Club to the community. The Ocean Park in Hong Kong was donated by the Club, the University of Science and Technology, the Academy of Performing Arts, etc. In the 1960s, there was a big influx of immigrants from the mainland and our medical facilities were not catching up at the time. So a lot of the community clinic and even hospitals were donated by the Jockey Club at the time. In the question of social fabric, I think we have always wanted to come in when the community need it.
TDN: So quite a large cross-section of the public must therefore be touched by the contributions to the community of the HKJC.
LC: Absolutely. We donate to and categorize internally 10 areas: arts, culture, heritage, education, elderly services, endowments, emergency relief, family services, medical and health services, sports and recreation and youth. So, as you can imagine, it crosses all age ranges and across all social levels.
TDN: Is it possible to estimate what percentage of the public is touched by the Club's charitable outreach?
LC: Sure. Of course, this is all an estimate. It's a little hard to count every beneficiary, because we are a foundation. But we estimate that, through all that we do, we are able to touch at least 75% of the population.
TDN: What are the criteria involved in determining what projects get funded? How does the Club decide which programs get supported and to what extent?
LC: As I said earlier, we donate to those 10 areas, and I think the ultimate goal through these donations is to create social impact. Generally, we do two types of projects, if you will. Say an NGO comes in for an application with a particular set of issues that they'd like to solve or like to help. Our team then works closely with those organisations to assess the goals and the objectives. We want to make sure, for example, that there is no overlap, so we work with them to refine the ideas. To summarize, it's a one-on-one relationship, the NGO comes in, we look at the execution and the details, feasability, we vet them and then we support them with funding. The other set of projects are generally much larger-scale. In 2014, Dr Simon Ip became our chairman and he was very visionary and he and the trustees of the HKJC really pushed the Trust to more proactively think through strategic philanthropy. Through that process, we arrived at three main strategies: in youth, in elderly services and in sports. In addition to the 10 categories we always supported and that we continue to support, we have done our own strategic studies and we go out into the community and put together and encourage projects. We call these 'trust initiated' projects and we partner with multiple parties and try to come up with a solution for a particular social issue.
TDN: How is the Club positioning itself globally relative to charities?
LC: To be honest, we are quite focused in Hong Kong on Hong Kong. So we don't really donate our money to Africa, we don't really donate our money elsewhere. We are very focused on city issues, which I think has a lot of resonation around the world. I was speaking with Brad Smith, president of the Foundation Center (the leading authority on organised philanthropy in the US), and what he told me was that there was a lot of talk about the US philanthropic dollar going to developing countries. But if you really look at the money flow, 80% of the overall US philanthropic dollar remains in the country and most of it goes into cities, because we all see city issues. For us, if you look at the development of Asia, particularly China, urbanization is the major driving force in the last 30 years and probably ongoing in the next 20 years. As we look into our 100 years of donation history in Hong Kong, we feel like there are a lot of experiences we can take from places like the US and Europe and advanced countries, but I also think there are a lot of experiences we can share as an Asian city. How our policies and systems may be different. This coming September, we will be hosting the first international forum called “Philanthropy for Better Cities” forum and we will invite people from all over the world so that global and Asian voices can be heard so a discussion on city issues can be facilitated. We will have an interesting mix of global, Asian and China experts.
TDN: Racing is what makes everything tick in Hong Kong. Obviously the racing product is much-envied and has grown in popularity and quality over the years. Just how important is the racing component of the HKJC to what you are trying to achieve?
LC: It's absolutely critical. The Jockey Club Charities Trust relies every year on donations from our business side and racing and wagering side. So, for example, last year, the Club donated 71% of the net surplus to the Charities Trust and the Charities Trust was then able to donate back to the community. So, from a financial perspective it is absolutely critical. Without the business side, we cannot make these donations. But to me, I think even more important is culturally–the way we are organising our racing. Racing in Hong Kong is part of life. It's a very accessible form of entertainment for a lot of people. Every year we entertain up to 2 million people at our racecourses. It is a very accessible form of entertainment at a very affordable price and a way to spend an evening or an afternoon. The unique feature of the Jockey Club being a not-for-profit, I've heard many times of people coming to bet and even if they lose, they say, “Ah that's fine, it's just for charity.” It's a very integrated ethos in the entire operating model. We work as one.
The annual report for the Hong Kong Jockey Club for the 2014-2015 season may be downloaded here. On pages 176-186 is a detailed listing of the projects funded by the Hong Kong Jockey Club Charities Trust.
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