Republic of Korea (South Korea) – Indicators of International Philanthropy from Asia

Republic of Korea (South Korea) – Indicators of International Philanthropy from Asia

This is the sixth 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 South Korea

Political & Economic Security

Rating: 3.5

Comments: South Korea is a steady growth economy with efficient tax regulation and law. Some political and economic instability as the country is considered to have high levels of corruption and low levels of labour freedom. [1]Euromoney Country Risk

Capital Accumulation

Rating: 3

Comments: 1,400 ultra high net worth individuals with collective wealth of $275 billion. [2]Wealth-X. 2011. World Ultra Wealth Report 2011: Uncovering Pockets of Opportunities

Incentives

Rating: 2

Comments: Low level of incentives available for charitable giving. Tax laws in South Korea provide deductions for individuals making gifts to nonprofit organizations and foundations. Individual donors may deduct up to 5 per cent of their gross income for contributions to non-profit corporations if they only have wages, salaries or foreign income, but no business, real estate or timber income. Corporate donors and individual donors with business, real estate or timber income may deduct at least 7 per cent of gross income. Deductions are limited to nonprofit organisations with a scope of activity deemed eligible by the government. Contributions for other activities not stipulated by tax law may not be deductible for corporate or individual income tax. [3]Wang, Lili, Elizabeth Graddy and Donald Morgan. 2011. “The Development of Community Based Foundations in East-Asia.” Public Management Review

Trust in NGOs

Rating: 2.5

Comments: The political system in South Korea significantly impacts the role NGOs play and level of trust from society. While there is long history of NGO work, the state-centred society means that the non-profit sector is relatively invisible in the institutional landscape although they play a key role in service delivery. The government has also maintained a high-level of control over the not-for-profit sector, impacting the community’s level of trust in charity organisations. [4]Wang, Lili, Elizabeth Graddy and Donald Morgan. 2011. “The Development of Community Based Foundations in East-Asia.” Public Management Review

Priority of Human Development

Rating: 3.5

Comments: Philanthropy in South Korea has traditionally focused on helping socially disadvantaged. [5]Wang, Lili, Elizabeth Graddy and Donald Morgan. 2011. “The Development of Community Based Foundations in East-Asia.” Public Management Review

Propensity to Give Internationally

Rating: 1

Comments: On the back of its economic rise to become the world’s 14 largest economy, South Korea’s government has become a significant international aid donor. There is little evidence about the level of international giving from private sources in South Korea, but it is expected to be low at present. [6]Kongdan, Oh. 2011. “Korea’s Path from Poverty to Philanthropy” The Korea Times, December 13

Overall Level of Philanthropy

Rating: 3

Comments: Moderate overall level of philanthropy, with high level of giving to religious causes. Research conducted by the Beautiful Foundation in 2008 on giving in South Korea suggests that individuals report they would be willing to give 2.13% of their income on average to charitable causes. Korea ranked 81 out of 153 in the World Giving Index for 2010, with 27% of the population donating to charity. [7]The Beautiful Foundation. 2008. Giving Korea [8]Charities Aid Foundation. 2010. The World Giving Index: 2010.

Fundraising Practice

Rating: 1

Comments: There is no organisation of professional fundraisers in South Korea.

Development of Giving Foundations

Rating: 3.5

Comments: There are a high number of foundations in South Korea. These foundations play an important role in service delivery and helping to address social inequalities. Many of these are however, corporate foundations whose philanthropic activities are determined by business interests. Research suggests that 80 percent of the total number of foundations in South Korea are corporate-linked. [9]Wang, Lili, Elizabeth Graddy and Donald Morgan. 2011. “The Development of Community Based Foundations in East-Asia.” Public Management Review

Financial Openness

Rating: 3.5

Comments: Korea received a score of +0.27 in in the Chinn-Ito (KAOPEN) index for financial openness, indicating a moderate level of capital account openness and controls for cross-border transfers. The lowest score in the index is -1.83 and the highest is +2.50. [10]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. [11]Chinn, Menzie D and Hiro Ito. 2010. “Notes on the Chinn-Ito Financial Openness Index 2008 Update.

Giving to Education

Rating: 2.5

Comments: There is a low to moderate level of giving to education in Korea. A study by the Beautiful Foundation, found that the top charitable causes in Korea for donations were social issues, religious causes, giving to acquaintances, overseas relief and political organisations. Education ranked 8 out of 12 for donations. [12]The Beautiful Foundation. 2008. Giving Korea

 

The total scores for South Korea are:

  • Index of International philanthropy for aid from Asia 26.5

  • Index of international philanthropy for education from Asia 25.5

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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