Thailand – Indicators of International Philanthropy from Asia

Thailand – Indicators of International Philanthropy from Asia

This is the nineth 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 Thailand

Political & Economic Security

Rating: 2

Comments: Thailand is a free-enterprise economy which is heavily dependent on exports. The countries main exports include textiles, rice, rubber, tungsten and tin. Other main industries include tourism, gems, jewellery, footwear, textiles, clothing and mobiles. Thailand has experienced high levels of political instability over recent years, which has significantly impacted the country’s economic growth. The country has experienced 18 military coups since 1932, with the most recent in 2006. A survey conducted by Fundraisers in Thailand, however, suggested that NGOs have not felt these coups have impacted their business activities or fundraising. The country is a constitutional monarchy. A democratic government returned to power in Thailand in 2007.

The country is led by a Prime Minister, but the King of Thailand is the head of state and has significant government control. Thailand is also considered to have a high level of corruption. There is a growing middle class in Thailand due to a strengthening economy. [1]Euromoney Country Risk [2]Fundraisers in Thailand. 2010. Giving in Thailand: Fundraising Opportunities in 2010

Capital Accumulation

Rating: 2

Comments: Ranked 10th in Asia Pacific for wealth accumulation. There are 600 ultra-high net worth Individuals in Thailand with a cumulative fortune of $95 billion. [3]Wealth-X. 2011. World Ultra Wealth Report 2011: Uncovering Pockets of Opportunities

Incentives

Rating: 2

Comments: There are some tax incentives available in Thailand for individuals and corporations who donate to eligible tax-exempt charitable organisations. Donations given by corporations to tax-exempt charity organisations are tax deductible up to two percent of the corporation’s profits before taxes. Individuals are able to deduct up to 10 percent of their taxable income for contributions to eligible tax exempt charitable organisations. While these incentives are available, the Centre for Philanthropy and Civil Society states that it is extremely difficult for charities to obtain tax exempt status. According to this organisation, The Ministry of Finance grants tax exemption to third sector organisations that qualify for tax exempt status and organisations must be registered with the appropriate government department for at least three years to achieve this. It must also show that part of its proceeds went towards expenditure for a public cause. According to the Centre for Philanthropy and Civil Society, only 300 organisations have full tax exemption in Thailand.

Research from the Centre also suggests that because the status of tax exemption is so rare, donors in Thailand do not focus on this as a major criterion for donating. [4]Fundraisers in Thailand. 2010. Giving in Thailand: Fundraising Opportunities in 2010 [5]The National Institute of Development Administration. 2002. Investing in Ourselves: Giving and Fundraising in Thailand.

Trust in NGOs

Rating: 2

Comments: Fundraisers in Thailand state that there is a level of distrust among Thai people of the term ‘NGO’, particularly in rural areas. The term can carry connotations of corruption and political association. [6]Fundraisers in Thailand. 2010. Giving in Thailand: Fundraising Opportunities in 2010

Priority of Human Development

Rating: 3

Comments: There is a moderate level of giving to human development and poverty in Thailand. Buddhism is the predominant faith in Thailand and it places a strong emphasis on giving to individuals in need as part of merit making. Accordingly, giving to individuals is the lead philanthropic cause, followed by religion. However, research has suggested that giving is usually reserved to family members or associates in distress rather than general population. [7]The National Institute of Development Administration. 2002. Investing in Ourselves: Giving and Fundraising in Thailand.

Propensity to Give Internationally

Rating: 1

Comments: Research suggests a very low level of giving to international causes in Thailand with only 5% of giving for 2010 going to non-domestic causes.[8]UBS Insead. 2011. Study on Family Philanthropy in Asia

Overall Level of Philanthropy

Rating: 4

Comments: There is a strong culture of giving and philanthropy in Thailand. Making merit through good deeds, including donation, is a strong part of the Buddhist religion, the predominant faith in Thailand. The monarch and its relationship with the people have also been suggested to have encouraged philanthropy in the country, with many citizens donating to royal projects.

Market research into philanthropic giving in Thailand, suggests that the top concerns for charitable giving are children, the elderly and education. Research conducted by the Centre for Philanthropy and Civil Society found that philanthropy by indigenous Thai people was high and represented an untapped market for organisations.

Thailand ranked 25 out of 153 in the World Giving Index for 2010, with 73% of the population donating money to charity.[9]Fundraisers in Thailand. 2010. Giving in Thailand: Fundraising Opportunities in 2010 [10]The National Institute of Development Administration. 2002. Investing in Ourselves: Giving and Fundraising in Thailand. [11]Charities Aid Foundation. 2010. The World Giving Index: 2010.

Fundraising Practice

Rating: 4

Comments: The first professional body for fundraising was established in Thailand in 2008, called Fundraisers in Thailand (FIT). According to FIT, There is a lack of fundraising investment in the region, and many organisations rely solely on one or two donors to support projects, lacking the fundraising knowledge to expand this. FIT also states that business owners regularly undertake charitable activities as a way of ‘making merit’ in keeping with religious beliefs. Non-profit organisations seeking donations can be highly successful if donations are sought through personal connections or by obtaining royal patronage. Areas for potential growth in fundraising in Thailand, according to FIT, are face-to-face, direct mail and major donor fundraising. Established methods with low growth potential are trusts and foundations, corporate fundraising, expatriate fundraising, events and cash. FIT lists the increasing wealth among the Thai middle class, the strong giving culture and the low cost of reaching donors, as the key areas of opportunity for fundraising in Thailand. The Centre for Philanthropy and Civil Society states that family plays an important role in fundraising in Thailand.

Family plays a central role in Thai culture. When Thai people, partake in the religious act of ‘merit making’, his/her family are invited to participate as co-merit makers. Consequently, to be successful charitable causes need to have the support of the whole family. [12]Fundraisers in Thailand. 2010. Giving in Thailand: Fundraising Opportunities in 2010 [13]The National Institute of Development Administration. 2002. Investing in Ourselves: Giving and Fundraising in Thailand.

Development of Giving Foundations

Rating: 4

Comments: Fundraisers in Thailand state that there are over 900 independent grant making trusts in Asia which fund activities in the region, but only 38 that specifically fund projects in Thailand. The Centre for Philanthropy and Civil Society highlights that there are many unregistered Foundations in Thailand due to a restrictive registration process and cumbersome laws. Newly formed foundations are required by law to have an endowment of 500,000 baht to register and the process can take from a month to a year to complete. Foundations with public welfare objectives are allowed lower initial endowment of 200, 000 baht. [14]Fundraisers in Thailand. 2010. Giving in Thailand: Fundraising Opportunities in 2010 [15]The National Institute of Development Administration. 2002. Investing in Ourselves: Giving and Fundraising in Thailand.

Financial Openness

Rating: 2.5

Comments: Thailand received a score of -0.09 in the Chinn-Ito (KAOPEN) index for financial openness, indicating that it has a low level of capital account openness and a high level of control for cross-border transactions. The highest score in the index is +2.5 and the lowest is -1.83. [16]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. [17]Chinn, Menzie D and Hiro Ito. 2010. “Notes on the Chinn-Ito Financial Openness Index 2008 Update.

Giving to Education

Rating: 2

Comments: There is a low level of giving to education in Thailand compared to other Asian countries. A study by UBS-Insead showed that only 19% of giving from family philanthropies was directed towards education. [18]UBS Insead. 2011. Study on Family Philanthropy in Asia

 

 

The total scores for Thailand 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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