The Globalization of Philanthropy
The Globalization of Philanthropy

Bill Gates and Warren Buffet recently launched a campaign to convince America’s wealthiest to donate half of their money to philanthropic causes. More than 57 people, collectively worth $250 billion,1 took the Giving Pledge, including Facebook founder Mark Zuckerberg, former AOL chief Carl Icahn, CNN founder Ted Turner, and New York Mayor and entrepreneur Michael Bloomberg. Gates and Buffett are planning to take the campaign worldwide, and have already visited China, which has the second largest number of billionaires worldwide.2

While charitable giving has been around since recorded history, referenced and required in many of the world’s religious doctrines, scholars believe that the modern day field of philanthropy has its roots in the early 1900s in the United States, with the formation of foundations by industrialists Andrew Carnegie, Henry Ford, and John D. Rockefeller.3

The existence of a formal philanthropic sector in countries around the world is dependent on numerous factors, including history, culture, and law. Some countries/regions focus more on giving of time (volunteering), while others have a more informal sector that operates discreetly and without government involvement. The importation of one country’s model (such as the U.S) to other countries is often viewed as cultural imperialism.

This case study will provide a glimpse of the worldwide state of philanthropy and will examine the contributing factors to the existence of a formal philanthropic sector within different countries and regions.

Global Snapshot

Barclays Wealth issued a report in 2010 entitled Global Giving: The Culture of Philanthropy,4 which documented worldwide charitable giving. Their key findings were:
1) Almost a quarter of high net worth individuals (HNWIs) globally say charity is a top spending priority;
2) US, Ireland, South Africa and India lead the way in terms of donating both money and time;
3) UK and Qatar emerge as ‘Volunteer’ donors, donating time rather than money;
4) Philanthropy has a bright future, with 44 percent of respondents more likely to make charity a spending priority when they retire;
5) Men are more active philanthropists in developed countries, but in emerging countries, women take the lead; and,
6) After North America, developing countries are the second most likely group to give money to charity.

The report also provides some explanations behind their findings. Ireland is considered a “big village” in which the most of the wealthy are relatively new to wealth and still have ties to their working class upbringing, leading to giving within the local community. While philanthropy in the United States is credited to the culture of individualism and optimistic outlook on individual’s ability to make a difference. The U.S. also has a very public philanthropic sector that publicly recognizes individual giving, which has lead to a culture of peer pressure and desire to be viewed favorably by the public.

The report notes that in India, poverty is ever-present and many Indians do not trust the government to provide adequate solutions, so people feel the need to do something on their own to address the multitude of problems. Similarly in South Africa, wide rich/poor divide is considered a driver for wealthy individuals to give, in addition to the resurgence of the Ubuntuism. (Ubuntuism means to care about one’s fellow human beings and is based on generosity and altruism.)


India’s philanthropic sector (foundations, grassroots nonprofits and charity operations) is relatively small. Philanthropic donations account for .6 percent of India’s GDP (in comparison the U.S. gives 2.2 percent, the UK 1.3 percent, Canada 1.2 percent, Brazil .3 percent and China .1 percent). Individuals and corporations comprise only ten percent of charitable giving in India, while the balance is given by foreign corporations and the government (in comparison 75 percent of philanthropy in the U.S. is given by individuals).5

Research shows that Indians are capable of giving more to charity. The top five percent of Indian households have 40 percent of India’s wealth.6 There are 52 billionaire and 125,000 millionaires in India, many of whom gained their wealth in the past decade.7 The number of high net worth individuals is growing 11 percent annually.8 In fact, India is celebrating the largest philanthropic gesture ever by an Indian industrialist, Azim Premji, who gave $2 billion to a philanthropic trust to fund rural education and development programs.9

Arpan Sheth, a Mumbai-based partner of Bain & Company, highlights the reasons behind this giving pattern. First, the newly wealthy rarely give away funds (most of India’s rich gained their wealth in the last decade). Second, there is a lack of lack of trust in Indian institutions to spend grant funds properly, partially due to unprofessional support networks. Third, there is a blurring of corporate and personal giving, which may lead to decreased personal giving. Seventy percent of India’s top corporations are owned by families.10

India’s legal framework is also a factor. There is no inheritance tax, which spurs the wealthy to give to charity. There is a year-long wait for organizations to get documents to accept foreign contributions. Also there is no tax benefit for donations of material goods, a tax deduction structure that discourages donations, and a cumbersome bureaucratic process to obtain tax exemptions.11

Similar to India, China’s upper class is growing. There are 33 percent more renminbi billionaires in 2010 than in 2009.12 China’s wealthy are relatively young, with an average age of 39. Unfortunately much of their money is dirty.13 The China Reform Foundation notes that $870 billion in corrupt money was being hidden by the wealthiest ten percent of China’s population. Chinese gave $8 billion to philanthropy in 2009, compared to $308 billion in the U.S.14

The philanthropic sector is relatively small because most charities must find government sponsors. One challenge for potential philanthropists is the lack of organizations/charities in which to donate funds. There are 643 non-governmental foundations and 300,000 grass-roots organizations, many of which register as a business enterprise.15 In 2011, China is planning on releasing its first charity law, which defines what a charity is and how it must operate.16

Kevin Lee, Chief Operating Officer of China Youthology, a research and consulting firm focused on China youth culture, notes that there is no religious, cultural, or historical precedent in China for giving to philanthropy. The prevalence of atheism negates a religious precedent for giving. While, the prevalence of subsistence farmers (or one generation removed) in China has lead to a hoarding mentality and a focus on the family, rather than on the community. Additionally, corporate giving is nearly non-existent as there is little public demand and most Chinese companies are reinvesting their capital instead.

Lee recommends a different philanthropic model for China: for-profit social enterprises. This model would energize a growing generation of young, socially conscious workers/participants, address the funding issues (lack of individual wealthy estates and corporate giving), and provide locally-driven solutions to social problems.17


Sub-Saharan Africa
Most foundations in Africa are funded through outside wealth, including the Africa Philanthropy Initiative, the East Africa Grantmakers Association, Allavida, the Centre for the Promotion of Philanthropy and Social Responsibility (Ufadhili) and Resource Alliance.

There are few foundations in Sub-Saharan Africa funded solely by indigenous wealth, including the TY Danjuma Foundation in Nigeria, which opened in January 2010 to support Nigerian education and health initiative, and the Mo Ibrahim Foundation, founded in 2006 to support African leadership. The Mo Ibrahim Foundation awards an annual prize to democratically-elected, former heads of state who demonstrated leadership in improving the prospects for Africans. It also publishes the Ibrahim Index that assesses governance and civil society across the continent.18

Latin America

Mexico’s philanthropic sector is small, but growing. There are about 10,000 philanthropies in Mexico; about 25 percent of those are involved in health and education.19

There are three distinct period of Mexican history that influenced the development of civil society and philanthropic giving. The first period (1521-1860) was characterized by a strong presence from the Catholic Church, which funded health, education and poverty programs. The second period (1861-1960), was characterized by a strong state presence, which used government agencies to fund health care, education, welfare and housing initiatives. The cumulative effect was a weak civil society, paternalistic culture, and little citizen participation, despite an indigenous culture of assistance, community solidarity and volunteering. The third period (1960- onward) is marked by greater citizen participation to resolve social problems.20

Michael Layton, Philanthropy and Civil Society Project (PCSP), ITAM ascribes six factors that contribute to Mexico’s poor philanthropic sector:

1) Mexico’s legal framework imposes unnecessary burdens on the incorporation of organizations;

2) Mexico’s fiscal framework has more costs than benefits and is a disincentive for formalizing activities. There are unreasonable burdens and requirements, such as five percent cap on administrative fees, for organizations that register, making informality a better option;

3) Organizations only have a vertical accounting system to the donor and/or government regulator and not horizontal to society at large, which decreases confidence in these organizations;

4) Contextual factors (financial uncertainty, limited use of networks, and inadequate training opportunities) limit institutional capacity for high impact events;

5) A lack of donors (family or individual founded foundations) limits the availability of resources, although there are corporate donors that work informally;

6) Most Mexicans rather give directly to the needy than to an organization.

Layton argues that organizations must strengthen their relationship to key stakeholders to have an impact on Mexico’s most pressing problems.21

Brazil is the richest and largest country in Latin America. Similar to other emerging economies, there is a vastly unequal distribution of wealth, with the top ten percent possessing 50 percent of the countries revenue and the poorest 50 percent owning less than ten percent of the revenue. Brazil’s philanthropic sector emerged in the mid-1980s.

Similar to Mexico, philanthropy was linked to the Catholic Church and then to the government. Gross human rights violations by the military dictatorship in the 1960’s prompted the church to create a network of support services, which served as the basis of the modern day philanthropic sector. The 1992 UN Rio Conference on sustainable development brought together civil society for the first time. The opening of Brazil’s market led to the emergence of strong culture of corporate social responsibility. When inflation was brought under control, the non-profit sector began to flourish as well.

Brazil’s philanthropic sector is centered on corporate giving. Few organizations have endowments or make grants. There are few fiscal incentives to encourage individual/family/community philanthropy. New organizational structures should be developed to encourage grant-making.22


The government is trying to make the UK the first country in the world in which ordinary people to leave ten percent of their legacy to charity.23 The government is shrinking its own budget through the austerity plan and is launching a £80m arts match fund. Art institutions, such as museums, have traditionally been funded by the government.

In 2009, the arts received only three percent of all charitable giving in the UK. While the level of giving has remained stable in the UK, the amount is significantly lower than the U.S. Most of those who donate in the UK are from the middle class.24

Recommendations to encourage giving include increased publicity for big donors and developing a culture of asking.25 Others recommend the development of charitable remainder trusts, which exist in the U.S., to allow donors to receive income from the trust during their lifetime. Additional recommendations include the inheritance tax relief and breaks for those who give cultural objects during their lifetime.26

Most articles note that lower taxes in general allow Americans to be more generous in their charitable contributions than their British counterparts. The UK Treasury is reviewing tax laws concerning financial donations, gifts and legacies.27 In the UK, tax benefits are given to charities instead of donors. The current Gift Aid scheme though is extremely bureaucratic and makes refund incredibly difficult to be claimed.


While a unique set of factors (historical and cultural) influence the state of philanthropy in countries around the world, there are a number of structural elements that can help set the stage for growing the sector. A legal and fiscal environment that rewards giving and reduces the red tape for both donors and recipients are crucial. Efforts need to be made to harness and encourage indigenous forms of giving and volunteering, which are usually happening below the radar.

Western models of philanthropy should not be forced on cultures and should not be viewed as the yardstick for success. This does not mean that wealthy individuals worldwide should not be encouraged to give back. Debate and deliberation is needed to increase philanthropy in a local context. Nonetheless, as globalization brings the world together, local problems often have global impacts, so communication and collaboration across the philanthropic world is needed to maximize the impact worldwide.

1 Jack, Andrew and Rappeport, Alan. “US billionaires make charity pledge.” Financial Times. December 9, 2010.
2 Chang, Gordon. “Why Are Chinese Millionaires So Stingy?” The New Republic. September 29, 2010.
3 Lee, Kevin. “Turning down Gates & Buffett: Philanthropy in China requires For-Profit Social Enterprises.” Forbes. October 4, 2010.
4 “Global Giving: The Culture of Philanthropy.” Barclays Wealth. November 2010.
5 Sheth, Arpan. “An Overview of Philanthropy in India.” Bain. March 19, 2010.
6 Ibid.
7 Pasricha, Anjana. “Philanthropy Grows Slowly Among India’s Wealthy.” Voice of America New. December 3, 2010.
8 Sheth, Arpan. “An Overview of Philanthropy in India.” Bain. March 19, 2010.
9 Pasricha, Anjana. “Philanthropy Grows Slowly Among India’s Wealthy.” Voice of America New. December 3, 2010.
10 Sheth, Arpan. “An Overview of Philanthropy in India.” Bain. March 19, 2010.
11 Ibid.
12 Waldmeir, Patti. “China rich list loses billionaires to philanthropy.” Financial Times. October 12, 2010.
13 Chang, Gordon. “Why Are Chinese Millionaires So Stingy?” The New Republic. September 29, 2010.
14 Wines, Michael. “Chinese Attitudes on Generosity Are Tested.” New York Times. September 23, 2010.
15 Chang, Gordon. “Why Are Chinese Millionaires So Stingy?” The New Republic. September 29, 2010.
16 Wines, Michael. “Chinese Attitudes on Generosity Are Tested.” New York Times. September 23, 2010.
17 Lee, Kevin. “Turning down Gates & Buffett: Philanthropy in China requires For-Profit Social Enterprises.” Forbes. October 4, 2010.
18 Manji, Firoze. “Philanthropy in East Africa.” Book Review. March 29, 2006.
19 De Levy, Anthea Stein. “Philanthropy in Mexico.” The International Journal of Volunteer Administration. Volume XXIV, Number 3. January 2007.
20 Aranga, Manuel. “Philanthropy in Mexico.” Revista: Harvard Review of Latin America. Spring 2002.
21 Layton, Michael D. “Philanthropy and the Third Sector in Mexico: The Enabling Environment and Its Limitations.” NORTEAMÉRICA. Year 4, number 1, January-June 2009.
22 Lessa, Candace A. and Fernando Rossetti. “The Future of Philanthropy in Brazil: Creating a More Diverse Sector.” Alliance. December 2005.
23 Hudson, Sophie. “Hunt unveils £80m arts match fund.” Third Sector. December 8, 2010.
24 Aspden, Peter. “Rich should give more to culture, says minister.” Financial Times. December 8, 2010.
25 “A bid to save culture from the bonfire of the budget cuts.” The Economist. December 9, 2010.
26 Aspden, Peter. “Rich should give more to culture, says minister.” Financial Times. December 8, 2010.
27 “A bid to save culture from the bonfire of the budget cuts.” The Economist. December 9, 2010.

Leave a Reply

four × = 28