Shazia Amjad – PCP’s new report on “The State of Individual Philanthropy in Pakistan”

A strong civil society depends, along with other things, on a strong culture of giving. In fact, developing a strong culture of giving is one of the most important agendas for organizations supporting philanthropy. According to the most recent study from WINGS about the global philanthropy infrastructure, 74% of survey respondents give high priority to this issue.

In February, Pakistan Center for Philanthropy (PCP), a WINGS member, launched a new study on the State of Individual Philanthropy in Pakistan which brings to light not only the volume of individual giving in different forms but also the patterns and motivations of household giving behaviour across four provinces. WINGS interviews Shazia Maqsood Amjad, Executive Director at PCP about the study.

 

  1. One of the key findings from the study is that people in Pakistan are generous. The research uncovered that about 98 percent of households reported giving in cash, in-kind, or time-volunteered. In your opinion, what are the reasons for this high engagement with individual giving in Pakistan?

I think there are two key reasons of this overwhelming engagement;

Firstly, religion and faith play a vital role in encouraging philanthropic activity in Pakistan and that has also been reflected in the fact that religion was cited as a top motivator in the research. Islam preaches that charity is one of the highest virtues and a means of cleansing oneself spiritually and materially and thus many consider philanthropy a religious obligation.

Secondly, the citizens of Pakistan are a compassionate people and 87% of the respondents in our survey cited compassion as one of the reasons for their contribution. There is a deep sense of community and people take upon the responsibility of helping others in need in whatever capacity they can afford.

  1. How does this religious motivation influence the patterns of giving in Pakistan?

Religion is the main motivator behind individual giving in the country with 95 percent of the respondents stating religion as a motivating factor. This has deeply influenced the trends of giving in Pakistan. Firstly, the mandatory zakat collection forms a significant proportion of the total volume of donations and sets aside a fixed percentage that individuals feel compelled to contribute. Secondly, religion also influences the universality of this practice in Pakistan as the pervasiveness of giving can greatly be attributed to the encouragement of helping others and compassion promoted in Islam. Lastly, religion also influences the choice of recipients. At the individual level, giving to the ultra poor, needy and relatives is encouraged and these groups form the bulk of the recipients in reality as well. At the organizational level, we see that mosques and madrassahs form the largest percentage of organizational recipients and it seems clear that their affiliation with religion encourages givers to trust them more.

  1. What are the differences in the preferences related to giving to institutions and to individuals?

There is a strong bias towards selecting individual recipients; 67% of individuals in Pakistan give to individuals exclusively, while 29% give to both individuals and organizations and only 3% give exclusively to organizations. The preference given to individuals is rooted in the widespread poverty in the country. People encounter others in distress, destitution and hunger in everyday life and contribute in the hopes of alleviating their immediate suffering. In the absence of well established social protection policies at the national level, individual giving fills the gap and acts as a recognized social safety net.

One of the key factors affecting the decision of the recipient is the element of trust. In the case of individuals, people can directly observe the need and feel more comfortable that their money is being put to its intended use. When donating to organizations, this knowledge is less certain. Thus when donating to organizations, proximity and reputation become significant motivating factors. People prefer to give to organizations that are known for the work they do as they are perceived as more reliable. They also prefer donating to local organizations and this may be because people are more aware of their operations but also because people want to help their immediate community.

  1. According to the study, individuals in Pakistan donated an estimated Rs. 240 billion (About US$ 2.3 billion) in 2014, amounting to approximately 0.9% of the nation’s GDP. From your knowledge about donation in the region and other countries, what makes Pakistan different from them? 

Pakistan’s individual giving appears to be significantly more pervasive than estimates for other similar countries. A study done by Charities Aid Foundation for example cites that India donates 0.37% of their GDP through individual giving while this number is a mere 0.03% for China. In fact, when compared to international trends Pakistani giving ranks extremely high not only within the region but globally as it surpasses the estimates given for developed economies such as the UK, Canada and New Zealand as well. As alluded to earlier, one of the distinguishing factors behind this popular practice is the close link philanthropy has developed with religion and culture within Pakistan.

  1. What are the challenges identified by the research for the growth of individual giving in the country?

The research identifies the following challenges;

  • Trust on institutions: People are not always confident that their donation will reach the needy when giving to an institution. As a result, only well known organizations with strong reputations and local presence are successful in raising funds through individual philanthropy. Largely, lack of credibility is a result of the underlying lack of transparency and publicly available information on philanthropic investments – improving visibility of their impact and transparency will be the key challenge for redirecting individual giving
  • Lack of awareness about potential recipients: People are not always aware about the presence of credible institutions in their vicinities whom they should donate to. Another facet of this problem is that even when individuals do know of organizations doing good work, they have a misconception that the organizations are well funded and do not need their charity
  • Lack of structured philanthropy: While individual giving is extremely prevalent and acts as a strong safety net, the magnitude of this practice suggests that it can be leveraged for long-term sustainable change. However with the resistance to giving to organizations using this resource at a collective platform will be challenging
  • Better education about tax benefits: Most of our respondents in the study were unaware of tax benefits for their contributions and of which organizations are trustworthy tax exempt recipients. Increased public education campaigns about effective use of philanthropy can multiply choices for giving and its impact on improving living conditions in Pakistan
  1. Given the findings from the study, how do you foresee the development of individual giving in the next 10 years?

The study suggests that the quantum of individual giving will continue rising in the next ten years as individual philanthropy is very closely linked with affordability and observed need. Thus as people are alerted to more and more worthwhile causes, and as information regarding the philanthropic sector and its benefits becomes more visible, individual giving is likely to increase. The role that individual charity plays as a social safety net will only be solidified but there is also a burgeoning trend that may turn individual philanthropy into a strong social sector developmental presence in the next decade. There is recognition of the importance of generating research in this sector and as credible sources continue to recommend streamlining this practice, individual giving may play an instrumental role in achieving Sustainable Development Goals in Pakistan. In response to this trend, I foresee a marked increase in accountability of organizations as well as they will have to respond with transparency to become a part of the movement. Overall, the next decade should witness an improved network between the different stakeholders and players in this field, with improved marketing and communication on the behalf of the recipients, and more studied choices on the part of the givers.

  1. What was something you learned that was different from what was expected?

An important lesson that we learnt was that capturing total giving was much harder than we had expected. Particularly in the context of Pakistan where giving is greatly motivated by religion which also advises that charity should not be flaunted, individuals are hesitant when disclosing amounts that they donated. This was a significant challenge when trying to capture philanthropy of High Net-Worth Individuals (HNIs) whose contributions add significantly to the sector. However they do not like to advertise their charity and so we were unable to capture much of this category; as a result we believe that this estimate of PKR 240 billion is an extremely conservative one. This resistance poses a significant challenge to research in this field.

  1. What motivated this study and what were the lessons learned by the Pakistan Centre for Philanthropy by undertaking it?

The study was motivated by PCP’s core values and mission – to enhance the volume and effectiveness of indigenous philanthropy for social development in Pakistan. We recognized the near universality of the practice and the massive potential it has for contributing to sustainable social development. However, there is a significant dearth of reliable information in this sector. The only other exercise of a similar nature was conducted by Aga Khan Development Network (AKDN) in 1998. PCP identified this gap and undertook the study in the hopes of creating information that would be relevant to policy makers, academia and practitioners alike.

There was a lot that we learnt from this study – ranging from best practices for conducting such a large scale evaluation to quantifying the sheer volume. However the most important lessons learnt were in identifying the trends and motivations behind individual giving. Answers to questions such as who gives, in what forms, how much, and to whom are instrumental in determining our approach going forward. Understanding on these matters will enable PCP and the Pakistani philanthropic community at large in engaging communities more deeply and structuring this quantum into an institutional presence more strongly in the future.

 

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