CAF’s 2012 World Giving Index outlined a number of recommendations for governments, companies, individuals and civil society organisations. As I mentioned in my previous blog, we are planning to undertake a programme of work to investigate what governments can do to improve the conditions for philanthropy. We will use this body of work to strengthen our recommendations and, in consultation with our networks, create a framework for lobbying governments for improvements.
That is our plan, but lets not get ahead of ourselves! First I want to take a look at some of the recommendations in the World Giving Index and see how they relate to global trends in philanthropy.
For donors, giving is often a very personal and emotionally driven matter. There is a bewildering array of research showing what factors affect peoples giving behaviours; whilst charitable cause is paramount for most, there are many other drivers for giving. Several of these drivers could quite easily be covered by one sentence: People feel that they need to be able to trust recipients of giving. This explains why transparency is deemed to be so important by philanthropists. CAF’s India Giving report for example shows that 52% of Indian feel that lack of transparency hinders donations to NGOs. As such, the fact that according to the Edelman Trust barometer global trust in NGOs has fallen by 3% in the past year should be seen as a significant and worrying development.
Given that seven of the top ten countries in the World Giving Index are ranked in the top 20 least corrupt nations in Transparency Internationals Corruption Perceptions Index – countries should aim to challenge negative public perceptions by introducing accountability and transparency measures. The World Giving Index recommends that governments should:
- Maximise the effectiveness of civil society organisations by ensuring that minimum standards of governance and oversight are in place, through such measures as appointing independent regulators.
- Collect and publish, in a transparent manner, robust data that allow the measurement, understanding and promotion of trends in charitable giving, volunteering and wellbeing.
- Support civil society organisations to develop social impact measurement tools to enable them to communicate their effectiveness to donors and funders more efficiently.
The third point here is key, as organisations that are able to demonstrate they are using donors’ time and money efficiently and effectively will be in a better position to build sustainable relationships based on trust. As such, the report recommends that civil society organisations should seek to:
- Develop appropriate and effective ways of measuring and communicating the impact of their work, therefore building public trust and give people confidence when making donations.
The link between philanthropy and the independence of civil society organisations is multilayered. Countries where the state plays, or has in the past played a dominant role in delivering services appear to be lagging behind in terms of giving. Clearly, countries where governments repress civil liberties are unlikely to sustain a mature, diverse or vibrant civil society – it is no coincidence that 14 of the top 20 countries in the World Giving Index gained seven out of seven for civil liberties in the 2012 Legatum Prosperity Index. But even countries that guarantee civil liberties can fail to leave space for an independent voluntary and community sector to thrive. Former communist countries such as Croatia, which is ranked 48th in terms of GDP but 99th in the World Giving Index seem to be experiencing a lag in terms of the role the public expect the government to play in delivering services.
Governments can help to build an independent civil society by raising the profile of the important role that civil society organisations can and should play in society and by highlighting the merits of philanthropy both to the community and to the donor. To this extent, the World Giving Index report recommends that governments should:
- Champion the independent and diverse role of civil society organisations.
- Ensure there is a named government representative responsible for supporting civil society, with these individuals being mandated to promote greater and more effective giving and social action.
- Engender a widespread social norm for giving, through such steps as celebrating the work of civil society organisations, and individuals who generously commit their own time and money for charitable reasons, and encourage others to follow their example.
- Work with private companies and civil society organisations to ensure that giving and volunteering are promoted in the workplace.
But independence also relates to the capacity of organisations to be self-sufficient. Allowing charitable organisations to maintain healthy financial reserves, for example, ensures that organisations can grow sustainably. The report recommends that governments should:
- Support the sustainability of civil society organisations, by ensuring that policy facilitates long-term financial planning and promoting regular giving as a vital source of funding.
Most of the world’s most generous countries legislate to remove administrative barriers to charitable giving, and many even offer incentives to donors, often in the form of tax breaks. The significance of these incentives for philanthropy was highlighted by a recent joint campaign between CAF and the National Council for Voluntary Organisations (NCVO) to reverse a proposed cap on charitable tax deductions in the UK. The Give it Back George: Drop the Charity Tax campaign estimated that such a cap would result in a $800 million (£500 million) reduction in giving and successfully lobbied to change government policy. We believe that tax reliefs are a powerful tool to incentivise giving, and the World Giving Index report recommends that governments:
- Ensure that donors can give easily and tax-effectively, without an undue level of administration – including giving across international borders.
Part of the reason that more economically developed countries see higher rates of regular giving, (aside from the obvious difference in levels of personal wealth) is that it giving is more convenient. However, with global mobile phone penetration estimated (by the International Telecommunications Union) at 87%, governments and businesses should be promoting innovative electronic giving solutions. In addition, providing more choice in how people can give should be seen as a priority for the more developed philanthropic markets, to facilitate the individual needs of both donor and recipient. The report recommends that governments:
- Facilitate and promote investment in new technologies that make giving easier.
- Work with private companies to ensure that financial products and services, which promote and support charitable giving, are widely available.
- Promote alternative sources of finance for civil society organisations, such as social investment, venture philanthropy and microfinance.
As stated above we hope to develop this thinking in the coming months. Do get in touch if you have and thoughts.