Philanthropy in the Arab Region — Motivations and tension points

This post originally appeared on the CEP Blog on 19 November 2015. View the original here.

kuttab_250By Atallah Kuttab

Arab philanthropy is not a unified ecosystem of coordinated parts; it is a diverse and complex combination of sources of funding, intermediaries, and beneficiaries, which varies greatly depending on which part of the Arab world we are talking about — the Gulf Cooperation Council (GCC), North Africa (Maghreb), or the eastern Mediterranean (Levant or Mashreq). However, in all the countries of the region, broadly speaking, there is a longstanding tradition of social giving in a variety of forms. This tradition of giving is inclusive of all faiths, including waqf — a form of endowment that is the oldest and most common form of religiously-motivated social giving in the Arab world. (In the 1800s, more than a quarter of Egypt’s agricultural land was waqf land, and revenue from the land was spent on social services for the poor in education, healthcare, and other areas of inequity.)

Like in other parts of the globe, though, the strong tradition of giving in the Arab world spanning several hundreds, if not thousands, of years has periodically been disrupted by governments that considered the welfare of their citizens to be their responsibility only —and took control of the philanthropic resources that existed, including endowments, lands, and property, accordingly. But during the last 25 years, we have witnessed a renewal and surge in philanthropic organizations across the world. And while this renewal shows many similarities across different countries, there are also many important differences. It is this diversity that makes global philanthropy rich, and that makes philanthropy in the Arab world — where a new surge in philanthropy by a new generation is challenging views on wealth and approaches to impact — unique.

When it comes to philanthropy in the Arab region, there are three main motivations for giving: giving as religious duty, giving to solve a specific social problem, and, though much less prevalent in Arab philanthropy, giving to affect social transformation — driving a change of norms and values, rules, policies, or socioeconomic and cultural dynamics. In the cases of problem-solving and social transformation, objectives are more complex and less directly achieved than in religiously-driven giving. In these cases, giving has to take more risk, be more strategic, and build partnerships — none of which is without challenges.

In this context, there are several key tension points as foundations and individual philanthropists in the Arab world seek to use their private wealth for social good in their communities.

Navigating close ties between family and philanthropy. In most family or corporate foundations, there are close ties between family business and family philanthropy. Families often work through the company to exert influence and use media to get certain messages across. There is an ongoing debate in Arab philanthropy about whether or not independent family philanthropy should be detached from the family business, or even the family itself.

For-profit or nonprofit? When it comes to problem-solving and investing strategies, there is tension between processes and approaches of the for-profit and nonprofit sectors, and how the two can relate or influence one another. Philanthropists whose money originated from the for-profit sector can make special contributions to philanthropy and often bring significant expertise to the table. But the idea that the application of a business mindset can extend leverage, achieve “impact at scale,” and lead to sustainable structural change in economic and social development is not always applicable — especially when dealing with root causes of societal problems to achieve sustainable solutions.

Additionally, there has been increasing attention paid to social investment in the Arab world. It is important to not be misled into thinking of a definitive dichotomy between for-profit and not-for-profit activities when it comes to investing, as we are seeing more and more examples in which the two are combined. Social investment is an emerging field whose shape cannot yet be clearly discerned, and which requires more time and exploration before judgments about its effectiveness and impact can safely be made.

Safe and edgy causes & philanthropy’s relationship to government. Philanthropists or foundations are often seen by governments in the Arab world as auxiliaries, both morally (in that they are in some senses both representatives and guarantors of the existing order), and materially (in that they can supplement state welfare provision). If foundations stick to straightforward service provision, they are likely to have the government’s support and approval.

However, if foundations and philanthropists involve themselves in more contentious issues, like human rights, they are likely to incur government hostility. These foundations and philanthropists working on edgier issues operate in a general climate of state suspicion, but have evolved tactics in response. This could involve sanitizing potentially inflammatory terms and presenting an edgy issue in a different, more practical guise. (In Saudi Arabia, for example, it is more acceptable for foundations working on poverty to refer to a “sufficiency line” for decent living rather than a poverty line.)

In the Arab world, a focus on policies can often mean the concerns of citizens are forgotten. The private sector and philanthropy can help to bring this focus back. These organizations and individuals are closer to the ground and can, with their own money, create positive results. The challenges, though, are of such a scale that without cooperation and conversion, they cannot be met. Thus, foundations need to find their place at the center and not the periphery.

In this way, foundations face important decisions about their approaches to alleviating and solving problems. Should philanthropy only be involved in providing services, or also in changing policies? Should we deal with only the symptoms of problems, or also their roots?

Operating programs versus grantmaking. Most Arab foundations are operating foundations. There is a growing appetite for more direct involvement in philanthropy, especially with the younger generation, which has meant a growing tendency for foundations to operate their own programs, as opposed to making grants to others. Few foundations in the Arab world, though, seek to both make grants and operate their own programs. Those that do often began life as pure grantmakers and developed an operational arm.

One of the factors driving this shift is a mistrust of NGOs — not necessarily because of the ethics or honesty of their practices, but because of donors’ doubts about their capacity to carry out the work that donors want to achieve. Conversely, others argue that direct programming is limiting in its reach. This line of thinking contends that not working through NGOs on the ground is a missed opportunity for philanthropists to better and more efficiently leverage their wealth and directly affect the return on investment for social change.

As such, when it comes to how foundations in the Arab world structure themselves, there are healthy conflicting discussions about the most effective way for a foundation to use its funds to achieve its goals. It is this discourse that will guide the development of Arab foundations in the future.

This post is part of an occasional series on the CEP Blog providing international perspectives on philanthropy and foundation effectiveness.

Atallah Kuttab is founder and chairman of SAANED for Philanthropy Advisory, founder of Arab Human Rights Fund, chairman of the Executive Committee of Arab Reform Initiative, and chairman of WINGS.

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