Philanthropy’s Growth Constrained by Restrictions in 40% of Countries, Study Finds

A new report about the environment for global philanthropy shows that barriers to giving hinder the flow of charitable dollars in about 40 percent of countries, often due to political considerations.

The report, which examined 79 countries and economies, showed modest overall improvement in the global philanthropic landscape since the study was last conducted in 2015.

The report details the findings of the Global Philanthropy Environment Index, which is designed to give policy makers and philanthropic leaders a broad picture of the conditions for giving worldwide. It was conducted by the Indiana University Lilly Family School of Philanthropy and is based on a study the Hudson Institute designed and published for more than a decade.

The index evaluates countries on five measures: ease of operating a philanthropic organization, tax incentives, laws governing donations made across borders, the political environment, and the sociocultural environment (including cultural philanthropic traditions).

Economic Measures Matter Most

The most favorable settings for philanthropy are countries and regions like the United States and Western Europe that have a higher per-capita gross domestic product, a measure of economic strength.

The study found that nearly every country scored well on the sociocultural measure; those that had lower scores overall were often hampered by regulations or political decisions that inhibit giving. Roughly a quarter of the 79 economies introduced more-restrictive regulations after January 2014.

“Every county we looked at has an inherent commitment to generosity, and the rise of technology is making it easier for donors to give,” said Una Osili, a professor of economics and associate dean for international programs at the Lilly Family School. “But the political environment can be a significant threat to donors.”

Concerns About Terrorism and Politics

Some political leaders restrict giving out of fear that the receiving organization may work against the policies and practices of the ruling party or support protest movements.

Other restrictions date to the aftermath of the Sept. 11, 2001, terror attacks and are designed to prevent cross-border donations from falling into the hands of terrorists.

“Now there are efforts to put in place regulations that aren’t so broad — to do it on a case by case, and to separate out the organizations that are trying to advance the public good,” Osili said.

She said the index is important because it will prompt countries to try to keep pace with high-scoring peers in their region, perhaps leading to fewer restrictions and political impediments over time.

“Even in countries with more restrictive environments, policy makers do have an interest in improving opportunities for individuals to give and to volunteer,” she said.

The study was sponsored by the Bill & Melinda Gates Foundation, Canada’s International Development Research Centre, the Mott Foundation, and the Carnegie Endowment for International Peace.