Nonprofit Leaders in Middle East Seek to Make Philanthropy More Strategic

As the global financial crisis continues, nonprofit leaders in the Middle East are worried it may hamstring burgeoning efforts to make Arab philanthropy more effective.

While philanthropists and foundations here and in other parts of the Arab world are considered to be generous, few of them measure the results of their giving, and charities often lack the professional skills needed to evaluate their work, said McKinsey & Company, the international consulting business.

A report the company produced in January said that some estimate that 20 cents out of every dollar donated by Saudi Arabian philanthropists and foundations makes an “impact” or improvement on society.

In recent years, a handful of organizations have started to try and fix this problem.

“There is a shift going on here from check writing to more sustainable and strategic forms of philanthropy,” said Natasha M. Matic, strategy and program consultant at the King Khalid Foundation, in Saudi Arabia.

The foundation, in Riyadh, provides free training to nonprofit leaders in the Saudi kingdom to improve their administrative and management skills.

“If we were able to improve the effectiveness of giving to something like 80 cents of every dollar, we would quadruple the impact, without spending anything more,” Ms. Matic said.

‘Zakat’ Tradition

To be sure, there is a long tradition of philanthropy in the Middle East.

In a region dense with wealthy people, especially in the oil-rich countries of the Persian Gulf, most people observe the Muslim obligation of zakat, which requires Muslims to donate at least 2.5 percent of their assets to the needy every year.

But zakat is rarely given in a coordinated or systematic way; it is usually informal handouts to needy people or local mosques.

For example, McKinsey said that people in six Arab countries of the Persian Gulf — Bahrain, Kuwait, Oman. Qatar, Saudi Arabia, and the United Arab Emirates — are estimated to give $15-billion to $20-billion to charity each year. But less than $2-billion of that amount supports formal nonprofit efforts to fight poverty, improve education, or other charitable cause.

What’s more, philanthropy experts say charitable efforts in the region are often unfocused and poorly coordinated.

Most of the work revolves around the particular aspirations and the personal support of one donor or wealthy family. And rather than coordinating their efforts, the organizations in the Arab world often end up competing with each other.

“There are so many organizations in Saudi Arabia devoted to orphans,” Ms. Matic said, by way of example. “And it’s incredible, they’re all doing the same thing. When one organization sees that another is helping orphans, rather than saying, ‘Let’s focus somewhere else,’ they say, ‘Let’s help orphans, too.’ ”

‘Focused Execution’

The report by McKinsey recommended increased cooperation among organizations.

“Coordination, co-investments, or even consolidation of sub-scale foundations helps to minimize the duplication of efforts and resources and enable more focused execution,” said the report.

Rather than a full study, the report is a memorandum about Saudi Arabian philanthropy commissioned by several large foundations in the country. McKinsey, along with the Bill & Melinda Gates Foundation, talked with Saudi grant makers and philanthropists to develop the anecdotal findings.

Much of the work that charities perform in the Arab world is “small things in small places, rather than strategic change,” said Barbara Ibrahim, director of the John D. Gerhart Center for Philanthropy and Civic Engagement at the American University in Cairo.

She said nonprofit organizations most often focus on alleviating poverty by feeding the hungry and providing direct social services, rather than with long-term economic-development projects.

Ms. Ibrahim and the Gerhart Center are conducting research to provide better data about giving in the region. Without such information, she said, it is difficult to know what kind of philanthropic work is already being done and, perhaps more important, to define the region’s social needs.

For those few foundations in the Arab world that have a focused approach, their efforts require more hands-on work, said Ms. Matic.

“As a foundation, we realized that we ended up being an implementing agency as well as a funding agency because the nonprofits aren’t strong enough to manage grants,” Ms. Matic said. “What is needed the most is to strengthen the nonprofit sector.”

Structural Issues

Nonprofit leaders in other Middle East countries echo her concerns.

“Our biggest problems in the Arab world are structural,” said Princess Dina Mired, director general of the King Hussein Cancer Foundation, in Jordan. “There just isn’t an understanding that you need to have things like a communications-and-marketing team to do publicity, or somebody to compile statistics.”

In Jordan most charities are run by a single person providing the charitable service, fund raising, marketing, and fulfilling the other duties.

Ms. Mired said that boards of directors often balk at hiring more people because they consider it a waste of money. “But the same person who provides the service can’t be the one who raises money,” she said.

For charities and grant makers that are seeking new employees, the region lacks a deep pool of nonprofit professionals.

What’s more, nonprofit organizations in the region have struggled to lure workers from the United States or other parts of the world because of the lack of competitive salaries and limited possible career advancement, McKinsey said.

The Gerhart Center has stepped up its efforts and will be holding a series of workshops about giving in economic hard times, said the center’s Ms. Ibrahim.

“Institutionalized giving is relatively new here,” she said. “It’s fragile. We don’t want to let the psychology of an economic crisis have an impact.”