One Club One Team One Vision One Club One Team One Vision One Club One Team One Vision

Dialogue on Giving with the Worlds 6th Top Private Foundation Presented by Leong Cheung Executive Director, Charities and Community The Hong Kong Jockey Club

Founded in 1884, The Hong Kong Jockey Club is a world-class horse racing operator, as well as one of Asias most prestigious membership clubs and Hong Kongs largest community benefactor, operating as a not-for-profit organisation.

Employment created: 24,409 jobs Tax Contribution: HK$20B (US$2.6B) Charitable Donations: HK$3.9 B (US$499.4M) Charitable contributions touch the lives of 75% of the population

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(* Figures from 2014/15 financial year)

A unique model to channel business surplus to charity

HKJC Charities Trust - Milestones

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1884 Establishment of The Hong Kong Jockey Club

1955 Formally decided to devote surplus to charity each year

2011-2015 Donation increased from HK$1.6 billion to HK$3.9 billion

1915 Club made first charitable donation

1993 Establishment of HKJC Charities Trust

1950s Charitable donations became integral to the Clubs operation during post-war construction

Source: City A.M.'s World Charity Index 2015: http://www.cityam.com/assets/bespoke-files/2015/bc-214/cityam-giving-magazine-2015.pdf

Top 10 donors in 2015, ranked the 6th

Ranked 2nd amongst fundraising private charity donors

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HKJC Charities Trust is amongst the top givers globally

http://www.cityam.com/assets/bespoke-files/2015/bc-214/cityam-giving-magazine-2015.pdf

So your job is to give away money. How difficult can it be?

What exactly do you do?

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Additional resources to proactively address 3 strategic themes (YES):

1) Youth 2) Elderly 3) Sports

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Central Police Station Revitalisation Project

10 principal areas: (1) Arts, Culture & Heritage; (2) Education & Training; (3) Elderly Services; (4) Emergency & Poverty Relief; (5) Environmental Protection;

(6) Family Services; (7) Medical & Health; (8) Rehabilitation Services; (9) Sports & Recreation; (10) Youth Development

Donate to create social impact

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1

1.1

1.4

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1.6

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3.6

3.9

Donation (HK$ billion)

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Donation (HK$ billion)

2005/061

2006/071

2007/081.1

2008/091.4

2009/101.5

2010/111.6

2011/121.7

2012/132

2013/143.6

2014/153.9

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A rigorous process to identify the strategy

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Strategy Framework

International benchmarking / Baseline studies

Macro data Analysis

Expert interviews

Target audience interviews

Ideation workshop

Strategy conclusion

Youth Strategy

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0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

0.55

0.60

0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50 0.55 0.60

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Hong Kongs intergenerational income elasticity and Gini coefficient both rank highly, signifying high inequality and low mobility

Source: Bloomberg News, World Bank development indicators, Great Gatsby Curve, Miles Corak (Great Gatsby Curve, 2004); Source: American Exceptionalism in a New Light: A Comparison of Intergenerational Earnings Mobility in the No.rdic Countries, the United Kingdom and the United States (January 2006), The University of Hong Kong, Special Topic Enquiry on Earnings Mobility , 2010, Economic Mobility of Families Across Generations. (Julia Isaacs, 2008), Intergenerational Income Mobility in Singapore (Ministry of Finance, 2010); Mobility in China (Cowell & Yi Chen, April 2013)

Canada

Italy

Singapore United States

Spain

China Brazil

France

United Kingdom

New Zealand

Gini Coefficient (2015)

Australia

Japan

Denmark

Finland Norway

Hong Kong

Sweden

Germany

Inte

rgen

erat

iona

l inc

ome

elas

ticity

(

2004)

High Inequality Low Inequality

High Mobility

Low M

obility

Average wages for youth have grown at an even slower rate than for the rest of the working population, and have not kept up with soaring property prices

Changes in domestic property prices, real wages & Consumer Price Index (2001-2011) Index 2001 = 100

60

80

100

120

140

160

180

200

220

240

2000 2005 2010 2015

Property price index

Median wage (youth)

Consumer Price Index Median wage (all)

Year

Source: Hong Kong Census & Statistics Department, Glassdoor; 1. Real Salary Index (A) is obtained by deflating the respective nominal indices by the Consumer Price Index (C) and measure changes in the purchasing power of the amount of salaries earned

Youth live in an economy with high levels of inequality and low social mobility; youth wages have stagnated

Source: Dalberg interviews; Economist Intelligence Unit, Driving the skills agenda: Preparing students for the future (2015) http://www.economistinsights.com/analysis/driving-skills-agenda/methodology

The HK education system lacks holistic development, including areas like EQ, teamwork, and social competence

Academic

The education system is not preparing youth for the real world. It is not giving them the necessary life skills.

Government official

Youth today lack practical working experience due to the continual push for more education. Many youth also lack soft skills.

Industry leader

We need to strengthen youths independent thinking, EQ, and ability to help themselves.

Head of youth NGO

Most critical skills required in the workplace today according to surveyed, global business leaders (2015) % of respondents who ranked skill in their top 3

8 out of 11 experts interviewed cited a lack of focus on soft skills as a deficit in the current curriculum

35%

Communication

27%

Creativity

32%

Critical thinking

18%

Problem solving

21%

Team working

50%

Leadership

How can we better equip the next generation?

http://www.economistinsights.com/analysis/driving-skills-agenda/methodology

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I volunteered once before by visiting the elderly and helped changed their light bulbs. Doing volunteer work will make me feel like I have the ability to contribute to society. I would consider doing it more, but just need a push or a clear avenue.

- Kin, 17, Expelled student

I aim to be a positive person around [my friends and family]. I want to try to shine different lights on their paths; if theyre confused or a little scared, I can be their companion.

Alex, 25, Criminology graduate

Rather than buying a house, I want to use my savings to establish a charitable organization or a fund that provides tours and exchange opportunities for low-income youth. I primarily want to target immigrants from SE Asia.

Andrew, 19, Engineering student

I plan to establish an NGO which offers children music lessons at a low fee. Nowadays parents cant afford such high tuition for children to learn music. It wont be profit-making; I will earn money but maybe wont be a wealthy man.

- Max, 24, Marketing manager

Local

Global

YOUTH are concerned with issues beyond themselves, and want to make a change

Engagement

Connectedness

Preparedness

Safety and Stability

Youth self-actualization

Proposed Positive Youth Development Framework

Our prioritized themes of focus will map against a globally recognized positive youth development framework to promote an active, holistic, and strength-based approach for youth

Traditional youth programming by

governments and NGOs have primarily focused

on basic needs and academic preparedness

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Youth: our framework

Elderly Strategy

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13

85% 83%74% 70%

15% 17%26% 30%

Vast Social Cost Gap

2040 2030 2020 2015 0

50

100

150

200

250

300

6.5%

YEAR

~1,800

2038 2026 2022 2018 2012 2014 2016 2042 2024 2040 2020 2032 2028 2034 2036 2030

Almost 1 in 3 people will be elderly by 2040

Forecasted growth of elderly population over next 25 years Number of elderly over 65, 2015-2040

Projected expenditure on public elderly services1 (2012 - 2041) Billion HKD 2012 constant prices

CAGR2

Cumulative gap

Challenges of an Ageing Population

2.9%

1. Elderly services include subvented hospital care, old-age living allowance, subsidized residential care, spending by the department of health, elderly healthcare voucher, transport concession, etc. 2. Compound Annual Growth Rate

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1082

9%

Old-old

580 375

4%

3%

Old

8%

8%

8%

Young-old

2% 10% 4%

21%

8%

14%

8%

18%

Old-old

1011 1067

7%

15 15

To help elderly be healthier in early years, a compressed disability period and more fulfilling life

There is an opportunity for HKJC to invest more in participation and prevention or above the line investments

Note: (1) framework introduced by Kalache-kickbusch. Source: 12) Kalache A, Kickbusch I. A global strategy for healthy ageing. World Health1997; 50: 2.

Age

Functional capacity

Adult life Early life

Disability threshold

Reach a higher peak

Status quo Effect of active ageing

Disability period

Older age

Increased longevity

Compressed disability period

Make people healthier in early years

above the line investments

below the line investments

Sports Strategy

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Prevalence of Adults Meeting World Health Organization Physical Activity Guidelines, 2010

36%

Despite annual government funding of >$4B in sports, only a third of Hong Kongers are getting sufficient physical activity

% of Adult Population (>18) Considered Overweight or Obese by Locally Adopted BMI

Standards**

Overweight Obese

Age

** Note: Locally adopted BMI standards are adapted for the Asian body type and as such are different from WHO standards.

% Population Considered Overweight or Obese by WHO Standards**

Overweight

Obese

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0.759ChinaChina

0.748Western PacificWestern Pacific

0.669SingaporeSingapore

0.666KoreaKorea

0.662JapanJapan

0.358Hong KongHong Kong

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Column2

Column3

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Column1Column2Column3

China76%

Western Pacific75%

Singapore67%

Korea67%

Japan66%

Hong Kong36%

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0.0990.065

0.1390.145

0.180.206

0.250.263

0.2090.302

Overweight

Obese

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OverweightObese

18 - 2410%7%

25 - 3414%15%

35 - 4418%21%

45 - 5425%26%

55 - 6421%30%

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0.230.03

0.20.03

Column 2

Column 3

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Column 2Column 3

Hong Kong23%3%

Asia Region*20%3%

Fitness level for Youth has been declining

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Mean 9 Minute Run Distance (m) by Gender, Age, and School Year

Physical performance, as measured by Hong Kong secondary schools, is declining

School Year Schools and parents focus on academic performance had made them ignore exercise, leading to generally low fitness levels.

-Pressure to study leaving Hong Kong children far more unfit than mainland peers, SCMP, Jan 2015

Chart1

158416411704128413121315

147815361580126612601279

149015431611124412431286

144614861567121212281277

Boys 14

Boys 16

Boys 18

Girls 14

Girls 16

Girls 18

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98/9902/0304/0509/10Column1Column2

Boys 141584147814901446

Boys 161641153615431486

Boys 181704158016111567

Girls 141284126612441212

Girls 161312126012431228

Girls 181315127912861277

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Physical literacy is the foundation for lifelong physical activity

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Sources: Sports Participation as Predictors of Participation in Sports and Physical Fitness Activities in Young Adulthood, Perkins, 2004; Aspen Project Play, 2015; Canada Sports for Life; FSG interviews, 2015

WHY IS IT IMPORTANT?

Children who play sports are 8X more likely to be active at age 24 as those who do not play sports

All Active Adults

Only 3 percent of adults who play sports did not play sports as children

1. Ability: Competency in basic movement skills and an overall level of fitness

2. Confidence: Knowledge that one has the ability to play and enjoy sports, resulting from inclusive and encouraging venues and programmes

3. Desire: Intrinsic enthusiasm for physical activity resulting from early positive experiences in sport

WHAT IS PHYSICAL LITERACY?

Physical activity should be a fun part of the childs daily life, not something they are required to do The focus should be on active play rather than developing sports-specific skills The childs relationship with the teacher / coach should be familiar and trusting, rather than driving

Critical components of enhancing physical literacy

http://yas.sagepub.com/content/35/4/495.abstracthttp://aspenprojectplay.org/the-factshttp://canadiansportforlife.ca/Chart1

97

3

Likelihood to Play Sports as Adults

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Likelihood to Play Sports as Adults

Played as a youth97

Did not play as a youth3

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The international sports landscape is shifting from a model that develops elite athletes to one that enhances sports participation for all

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Learn to Train

Train to Compete

Train to Win

Win to Live

Develop a foundation in the basic physical fitness skills necessary for sports participation

(e.g., PE, recreational sports)

Regular participation in organized sports (e.g., sports clubs, leisure

centers)

Develop specific skills to perform in local or

national competitions

Develop elite

professionals

% of Population

Age

Physical Literacy

The ability, confidence, and desire to be physically active for life, the foundation of which is built before the age of 12

Competitive Sports Structured competition with the goal of training to win

Elite Sports National and international excellence

Recreational Sports Participation for the pure joy or benefits of participation

1

2

3

4

Framework for enhancing sports participation for all Framework for developing elite athletes

How the three strategies fit together

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Youth Elderly

Intergenerational harmony and partnership

Sports

Sports for character and soft skills development

Help all citizens reach higher physical peak

Common themes - Complement governments effort - Orchestrate cross-sectoral platform - Innovate and take risk

A unique cluster of 16 heritage buildings (in three declared monuments) authentically restored, with two new buildings to bring: Site-wide heritage interpretation

programmes Partnering arts groups to stage

contemporary art exhibitions and programmes

Unique leisure offering for all to enjoy

Contemporary art

Heritage

Leisure

Learn more: www.taikwun.hk

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Tai Kwun - Central Police Station Revitalisation Project

http://www.taikwun.hk/

To be held on 22-23 September 2016 www.citiesphilanthropy.com/

Only forum of its kind in the region focusing on metropolitan social issues Themes will cut across social issues in areas such as youth & education, ageing & health,

sustainability & cities resiliency and sports & community inclusion. Aims to attract more than 1,000 participants and over 300 international attendees from across

the world, in Asia-Pacific, particularly Greater China Around 40 speakers top-notched speakers envisioned Online registration starts NOW!

Confirmed speakers:

Michael Porter Harvard Business School

Rip Rapson Kresge Foundation

Bradford Smith Foundation Center

Laurence Lien Asian Philanthropy Circle

Jonathan Woetzel McKinsey Global Institute

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Philanthropy for Better Cities Forum

http://www.citiesphilanthropy.com/

Philanthropy for Better Cities Forum - Hear from the Master

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https://youtu.be/i64OFtavtis

Thank You

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Dialogue on Giving withthe Worlds 6th Top Private FoundationPresented by Leong CheungExecutive Director, Charities and Community The Hong Kong Jockey Club A unique model to channel business surplus to charityHKJC Charities Trust - MilestonesSlide Number 4Slide Number 5Slide Number 6A rigorous process to identify the strategySlide Number 8Slide Number 9Slide Number 10YOUTH are concerned with issues beyond themselves, and want to make a changeSlide Number 12Slide Number 13Slide Number 14Slide Number 15Slide Number 16Slide Number 17Despite annual government funding of >$4B in sports, only a third of Hong Kongers are getting sufficient physical activityFitness level for Youth has been decliningPhysical literacy is the foundation for lifelong physical activityThe international sports landscape is shifting from a model that develops elite athletes to one that enhances sports participation for allHow the three strategies fit togetherSlide Number 23Slide Number 24Philanthropy for Better Cities Forum - Hear from the MasterSlide Number 26