The economic downturn in North America and Europe has caused some International Non-Government Organisations to look further afield for philanthropic support. Australian and New Zealand universities recruit substantial numbers of students from Asia and some of these universities are also active in seeking funds from Asia.
This study identifies nine country-specific factors that affect the propensity of people to give funds off-shore and also looks at their likelihood to give to international aid or to education. By using the nine general indicators and adding the aid or education indicator, organisations working in either sector can assess the background factors that affect their ability to raise philanthropic gifts in a particular country.
This first article in the series introduces the indicators.
Subsequent articles will describe the performance against these criteria of ten Asian Countries:
The general indicators of international philanthropy used in this study are explained below:
Political & Economic Security
Modern philanthropy and organised charity has fared best since the late nineteenth century where there has been economic progress, political stability, freedom of individuals to allocate their resources together with social reinforcement and the power of example to stimulate action Bremner, Robert H. 1994. Giving: Charity and Philanthropy in History. New Brunswick, NJ: Transaction Publishers. The source used here, Euromoneycountryrisk, provides commentary on political, economic and structural performance for each country. Sustained levels of philanthropy requires the passage of time and confidence in one’s political and economic security.
The overall wealth of a country that is in private hands clearly affects the ability of individuals to make philanthropic contributions.
This refers to tax deductibility of contributions and (in some places) to government matching gifts or other incentives to philanthropy. The indicators provided here are based on country of residence but this is not the only consideration for individuals. Wealthy people tend to diversify their assets and in the case of very wealthy people (ultra high net worth individuals) almost half their assets are located away from their home country or region. According to the latest Capgemini study Capgemini and Merrill Lynch. 2011. Asia-Pacific Wealth Report, only 57 per cent of the assets of very wealthy Asians are maintained locally with a full 25 per cent (in 2010) being held in the USA. People with such diversified portfolios are able to give in the most-tax effective jurisdiction, and this usually is not in places such as Singapore or Hong Kong.
Governments rarely apply matching gifts to funds being transferred overseas but the existence of a matching gifts program does lift the profile of philanthropy and does encourage large gifts, particularly if it is a time-limited matching offer O’Halloran, K, M McGregor-Lowndes and KW Simon. 2008. “Charity Law and Social Policy: National and International Perspectives on the Functions of the Law Relating to Charities.”: 333.
Trust in NGOs
While trust in non-government organisations doesn’t raise funds, absence of trust reduces the potential to raise funds. This assessment measure, not the variations in trust between NGOs, nor external perceptions of trustworthiness of a particularly country’s NGOs, but the extent to which donors trust NGOs in their country.
Priority of Human Development
This measure indicates the philanthropic priority given to provision of basic human needs to other people, as distinct from other philanthropic endeavours such as the arts, higher education, advanced health care, environment, and animals.
Propensity to Give Internationally
There are national variations in the priority given to assisting people in other countries, as opposed to domestic assistance. This indicator measures propensity to give internationally.
Overall Level of Philanthropy
Many factors affect the overall level of philanthropy in a country and it is this overall level rather than particular factors which is used here in the assessment of fundraising potential.
Philanthropy is not driven just by philanthropists, appropriate fiscal settings and good example. The level of philanthropy is also determined by the extent to which philanthropists are engaged as volunteers in seeking funds for causes, and the level of systematic fundraising practice, which usually means the availability of professional fundraising staff or counsel.
Development of Giving Foundations
Much philanthropy in the modern era (the last 150 years) has been led by philanthropic foundations. While structured this way for tax, investment, inter-generational or other reasons, these entities have both contributed substantially and provided commentary that has stimulated further philanthropy. In Asia, where individual wealth, business interests and philanthropic foundations are closely associated it is particularly true that the presence of giving foundations should be a reliable indicator of the potential for major gifts.
Financial openness measures the ability to move money in and out of a country unobstructed. This indicator is based on the Chinn-Ito (KAOPEN) index which measures openness of capital account and cross-border financial transactions between countries.
Giving to Education
There are clear national differences in the philanthropic priority afforded to education, social service, the arts, international aid and other causes. Giving to education rates highly in many of the countries in this study.
The sector-specific indicators are:
10A Giving to Education
10B Giving to International Development
Compilation and Use of Indexes
For each country, each indicator is scored one (very low) to five (very high). This sums up to an overall score for the country which permits some comparisons between countries. In fact it provides two scores for each country:
Index of International philanthropy for aid from Asia
Index of international philanthropy for education from Asia
Organisations using this information can tailor the results to suit their distinctive mission by assigning different weighting to indicators they believe affect giving to the cause or organization. For example, if a university business school believes the level of overall prosperity in a country has a greater than normal influence on giving, it might give that indicator a multiple of two or three, i.e. a rating out of 10 or 15.
The final article in the series will compare the indicators assigned to all countries in the study, and show the full ranking for each index. This comparison of countries will be of assistance to organisations that are developing their fundraising strategy across the Asian region.
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References [ + ]
|1.||↑||Bremner, Robert H. 1994. Giving: Charity and Philanthropy in History. New Brunswick, NJ: Transaction Publishers|
|2.||↑||Capgemini and Merrill Lynch. 2011. Asia-Pacific Wealth Report|
|3.||↑||O’Halloran, K, M McGregor-Lowndes and KW Simon. 2008. “Charity Law and Social Policy: National and International Perspectives on the Functions of the Law Relating to Charities.”: 333|