Charities Tap the World’s Fast-Growing Economies to Raise Money for Expanding Social Needs

Charities around the world are stepping up their search for private donations, producing a growing need for professional fund raisers with global sensibilities.

Many nonprofit groups are now trying to tap into the fast-growing economies of China, India, and elsewhere. Not only are rich people there accumulating wealth but also the number of middle-class people who can give has also grown rapidly.

“The number of family offices and offices of private banks is enormous here,” says Brett Rierson, an American in Hong Kong who has worked to raise money for charitable causes throughout Asia over the last two decades. “My impression is that there will be an absolute surge in high-net-worth giving to nonprofit organizations. There are a lot of people looking to give money.”

Even as private wealth has grown in many parts of the world, government coffers have been stretched thin, so many nonprofit organizations in Africa, Europe, the countries of the former Soviet Union, and elsewhere are increasingly seeking private money to fill the gap.

“Governments are reducing funding worldwide for all kinds of services that government has traditionally funded, like education, health care, culture, parks, everything,” says James Abruzzo, a managing director with DHL International, a Chicago recruiting company that helps nonprofit groups fill fund-raising and other senior positions overseas.

Tax Breaks

Several countries have recently expanded or are considering new tax incentives as a way to encourage their residents to give more. In France, for example, a new law took effect last year to increase tax breaks for contributions to charities.

It expanded the percentage of a donation that is exempt from taxes to 66 percent, and allows donors to take the exemption on charitable gifts worth up to 20 percent of their income.

Hungary, Poland, and other countries in Central Europe now allow their residents to earmark 1 to 2 percent of the amount they pay in taxes to local charities.

While nonprofit groups of all kinds are expanding around the world, higher education is the focus of some of the most ambitious efforts to raise private money. To compete in the global economy, political leaders in Africa, Asia, Europe, the Middle East, and elsewhere have realized the critical need to better educate their residents.

Philanthropy is increasingly viewed as a way to supplement government aid, providing money to pay for extras that will give their educational institutions a global competitive edge. To spur giving to colleges, some governments have recently adopted plans to match private donations made to higher education.

The British government is in the first year of a three-year plan to match by 33 percent each pound contributed from a private source to a college. And the Finnish government has announced that this year and next it will provide 2.5 euros for every euro donated to a college endowment.