Malaysia – Indicators of International Philanthropy from Asia

Malaysia – Indicators of International Philanthropy from Asia

This is the tenth in a series of twelve articles looking at factors influencing international philanthropy across ten Asian countries, paying particular attention to giving in the areas of international aid and education.

The study identifies nine country specific factors affecting the propensity of people to give offshore funds to these two causes. By using nine general indicators and adding the aid or education indicator, organisations working in either sector can assess background issues determining their ability to raise philanthropic gifts in a particular country. For a full explanation of indicators used, please refer to Article 1: Introduction to the series.

 

Assessment of international philanthropy from Malaysia

Political & Economic Security

Rating: 3

Comments: Malaysia has a steady economy which is highly dependent on services and exports. The main products exported from Malaysia are semi-conductors, electronics and solar products. Malaysia’s political structure is a monarchy with a parliamentary democratic system of government. The monarchy is elected by the government and is the supreme commander of the nation’s armed forces. The country is considered to have moderate levels of corruption, but freedom of information in Malaysia is low and all media is heavily censored by the government. [1]Euromoney Country Risk.

Capital Accumulation

Rating: 3

Comments: Ranked 8th in Asia Pacific for wealth accumulation. There are 750 ultra-high net worth individuals in Malaysia with a collective fortune of $100 billion. [2]Wealth-X. 2011. World Ultra Wealth Report 2011: Uncovering Pockets of Opportunities

Incentives

Rating: 3

Comments: Tax incentives are available for donations to certain causes in Malaysia. One area where tax incentives are given is religious donations. The government offers tax incentives to individuals who give according to Islamic law. Donations to the construction of religious buildings are also tax-deductible.
Similarly, some tax exemptions are also available to corporate organisations who donate to charitable causes. Tax incentives are not seen to be a major driver for corporate giving in Malaysia. Finally, tax incentives are available for foreign educational institutions. A key priority for the Malaysia government is the development of the education and technology sector. To entice foreign educational institutions to invest in the region, the Malaysian government currently offers a 10 year tax exempt status to those willing to establish campuses in designated education zones. [3]UBS Insead. 2011. Study on Family Philanthropy in Asia

Trust in NGOs

Rating: 3

Comments: No specific information available on the trust in NGOs in Malaysia, but general information suggests that charity organisations are accepted and form an important part of Malay society.[4]UBS Insead. 2011. Study on Family Philanthropy in Asia [5]Jung, Ky-Hyun. 1994. Evolving Patterns of Asia Pacific Philanthropy. Institute of East and West Studies. Korea. Seoul Press

Priority of Human Development

Rating: Unable to confirm

Comments: NA

Propensity to Give Internationally

Rating: 2.5

Comments: A study by UBS-Insead on family philanthropy in Asia, suggests low to moderate level of giving to international causes, with 16% of total giving for 2010 going to non-domestic causes. [6]UBS Insead. 2011. Study on Family Philanthropy in Asia

Overall Level of Philanthropy

Rating: 3

Comments: There is a moderate level of overall philanthropy in Malaysia. In the 2010 World Giving Index report, Malaysia was ranked 76 out of 153, with 32% of the population donating to charity. Research suggests that giving in Malaysia is strongly focused on religious causes and poverty alleviation.
The predominant faith in Malaysia is Muslim, and the Islamic giving practice of Zakat is well established. Zakat requires Muslim’s to contribute 2.5% of their incomes to charitable causes. Causes such as arts and culture receive very low levels of donations in Malaysia. Research on philanthropy in Malaysia has also suggested that it is strongly influenced by the plural nature of the society and division of ethnic groups. Individual giving is often focused on the community of origin.[7]Charities Aid Foundation. 2010. The World Giving Index: 2010. [8]UBS Insead. 2011. Study on Family Philanthropy in Asia [9]Jung, Ky-Hyun. 1994. Evolving Patterns of Asia Pacific Philanthropy. Institute of East and West Studies. Korea. Seoul Press

Fundraising Practice

Rating: 2

Comments: There is limited fundraising practice in Malaysia. Research into philanthropy in Malaysia has suggested that many non-profit organisations suffer from insufficient publicity, and that the range of their activities is not well known, hampering efforts to raise funds. Many organisations in the country are run by volunteers, with limited professional fundraising assistance.[10]Jung, Ky-Hyun. 1994. Evolving Patterns of Asia Pacific Philanthropy. Institute of East and West Studies. Korea. Seoul Press

Development of Giving Foundations

Rating: 2.5

Comments: There is a low to moderate level of giving foundations in Malaysia. While there are only a small number of foundations, several of the major foundations have diversified funding sources and now attract contributions from other individuals, families and companies. [11]Chapel & York. 2007. Directory of Asia Pacific Grantmakers [12]UBS Insead. 2011. Study on Family Philanthropy in Asia

Financial Openness

Rating: 4.5

Comments: Malaysia received a score of +1.17 in the Chinn-Ito (KAOPEN) index for financial openness, indicating a relatively high degree of capital account openness and low level of controls on cross-border transfers. The highest score in the index is 2.5 and the lowest is -1.83. [13]Chinn, Menzie D and Hiro Ito. 2008. “A New Measure of Financial Openness.” Journal of Comparative Policy Analysis: Research and Practice 10 (3): 309-322. [14]Chinn, Menzie D and Hiro Ito. 2010. “Notes on the Chinn-Ito Financial Openness Index 2008 Update.

Giving to Education

Rating: 4

Comments: There is a high level of giving to education in Malaysia. Research has shown that 42% of giving by Malaysians in 2010 was directed towards the education sector. A study by UBS-Insead also showed that 38% of giving by family philanthropies in Malaysia in 2010 was directed towards education.[15]UBS Insead. 2011. Study on Family Philanthropy in Asia

 

The total scores for Malaysia are:

  • Index of International philanthropy for aid from Asia 26.5

  • Index of international philanthropy for education from Asia 30.5

Jacqueline Cameron

Jacqueline Cameron

Consultant & Research Manager at AskRIGHT
Jacqueline is a dedicated, motivated and results oriented fundraising professional. She enjoys the variety in fundraising, and brings broad experience to clients on all aspects: from identifying prospects to liaising with donors, advising on collateral, writing case statements and bequest brochures, data mining and analytics, and developing fundraising strategies.

To find out how Jacqueline can help your organisation, email j.cameron@AskRIGHT.com.
Jacqueline Cameron
Dr Daniel McDiarmid

Dr Daniel McDiarmid

Principal Consultant at AskRIGHT
Daniel is a highly experienced and innovative fundraising professional with more than 30 years of success raising funds for higher education, research, religious and other organisations in Australia and New Zealand.

To find out how Daniel can help your organisation, contact d.mcdiarmid@AskRIGHT.com.
Dr Daniel McDiarmid

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