This article by was originally published on the Latest from Alliance blog on 9 April 2013. The original article can be found here. For more information about Alliance magazine, please visit www.alliancemagazine.org.
By Paula Jancso Fabiani
Brazil has experienced significant wealth growth in the last two decades, and has now reached the status of the 7th largest economy in the world, with the 11th largest number of millionaires (according to the World Wealth Report).
A similar trend has also been observed in other BRICS countries. Brazilian philanthropy, however, has not followed this increase in wealth. The World Giving Index published by CAF in 2012 reveals that when it comes to donating money Brazil ranks only 68th among the 146 countries surveyed. Compared to other countries, Brazil has a long way to go in order to exploit its philanthropic potential to the fullest. Countries such as Australia, Canada and Chile occupy respectively the 2nd, 10th and 25th positions in the World Giving Index.
One aspect that inhibits the development of philanthropy in Brazil is the poor legal environment for donations. Brazil lacks a specific legislation for the institution of endowments and trusts. In that matter, some BRICS countries seem to be ahead: Indian laws allow the institution of endowments; Russia passed legislation in 2006 to regulate the establishment of endowments; in South Africa, the National Treasury is analyzing a proposal to create legislation that will incentivize donating to endowments. In Brazil, money donated to non-profit organizations gets taxed in the same way as money inherited by individuals. There are very few incentives in place to promote long-term philanthropy, which has led civil society to start debating the subject and demanding more.
Over recent months some important initiatives have spiced up this scenario: for example, a multidisciplinary study group, bringing together non-profit organizations with government representatives, academics, lawyers and donors, was formed to discuss and propose a specific legislation for establishing endowments in Brazil. Proposals built and discussed within the group have already been presented at a workshop promoted by the government. The event intended to map out and discuss concrete measures to foster philanthropy in the country. Besides that, two important publications—also aimed at promoting strategic philanthropy – were issued last year—one contains meaningful reflections about governance, while the other provides a thorough guide on how to create and manage an endowment in Brazil.
In this context, it is vital that the existing Brazilian philanthropic community realizes the importance of advocating for an enabling environment for philanthropy. How could Brazil learn from countries with a longer history of philanthropy? How could the experiences of other BRICS countries help Brazil in advancing and improving its legal system for philanthropy?
Paula Jancso Fabiani is executive director of IDIS (Institute for the Development of Social Investment) in Brazil, a member of CAF Global Alliance. This article is part of a series by Charities Aid Foundation (CAF).