A report by the Harvard Kennedy School brought attention to inequalities in, even, one of the key areas of tackling inequalities, philanthropy. The Global Philanthropy Report is significant not only because it highlights the trends related to global philanthropic institutions but also the underlying inequalities in the institution of philanthropy instead. Aayushi Sharma explains.
As the data of the Global Philanthropic Report shows, the economic growth since the beginning of the 21st century led to the increase in the private income of the people which has ultimately resulted in the establishment of these philanthropic institutions. In this context, it is all the more fitting that the results of the report put a spotlight on the institutions of Europe and North America while attributing the data gaps from the global south to the lack of relevant data altogether. To put it simply, just because more information about the philanthropic initiatives of the global north are available, the more representation accorded to the countries of Europe and North America as a result and the lesser the visibility of the global south. Pointing out this strong limitation that already exists in the study, the results of the study also point to other stark inequalities that persist in the global philanthropic industry.
Accumulation of private wealth, increase in private enterprises and also the increase in generational wealth have been found to be the most significant factors contributing to the rise of the philanthropic sector. The global net worth has increased to about $60 trillion in the last 20 years as per this report and the number of millionaires that form the majority of the philanthropic initiatives is 15 million. However, these factors are also skewed in the favour of the higher income countries, thereby resulting in the increased presence of private sector philanthropic engagements in these countries.
As per the report, there are about 260,358 philanthropic foundations across 38 countries that were studied for the data. Out of these, 91,850 are in North America and 154,271 are spread across Europe. As against this, only 47 were reported to be in Africa, 161 in the Middle East and 13,170 in Asia (China, Australia, Hong Kong and India). 583 philanthropic organisations were recorded to be in India.
It is important to dissect this data further.
Consider this map, taken directly from the original text of the report. This map shows the number of countries that were studied for the data collection and the corresponding results of the analysis. If we consider Africa, the Middle East, Asia and Latin America, the countries studied in these regions put together (14) are still lesser than the number of countries studied within Europe (23). This points to a major information gap that exists between the global north and the global south. A significant region of the world remains out of the scope of the study altogether.
Additionally, the higher numbers of the philanthropic institutions existing in the countries of Europe and North America have the maximum hold on the share of global assets and financial resources.
The World Bank’s classification of economies has been used as a base information for this report and according to this classification the, 90 per cent of the world’s philanthropic foundations are situated in the 25 highest income countries of the world. This itself suggests that the foundations in the high income countries would also have an immense control on the flow of economic resources and subsequent necessary assets for social impact. The report in question here identifies that the financial assets of the philanthropic organisations considered for the study amount to about $1.5 trillion. Needless to say, about 60 per cent of the share of these assets belong to the organisations in the United States and 37 per cent in the countries of Europe. This together makes up a total share of 97 per cent in the hands of the foundations in the global north.
It is important here to note also that this gapping divide exists in the source of financial assets as well. In case of the organisations in the United States or Europe, majority of the funds are attributed to the permanent endowments for these foundations. In these countries, nearly 100 per cent of the government linked philanthropic foundations are endowed. This suggests that they have a bank of permanent funds for their work and this points to another significant factor- majority of the organisations in the countries outside of Europe or North America have to depend on independent grants or donations to fund their activities. This is an important point of difference between the organisations of the global north and the global south and thus also highlights the need for generating financial resources for philanthropic foundations in the regions of Latin America, the Middle East, Africa and Asia.
So what can be done?
There is a very detailed and complex history underlying these trends and this majorly relates to the exploitation of the global south to shift the centre of the global economic growth eventually. This long and painful history has rendered the countries of Asia, Africa, Middle East and even Latin America in the grips of perpetual conflicts, poverty and social as well as humanitarian crises of varying degrees. The important question to ask at this point is - who is in need of philanthropic interventions the most? The answer is simple, the people of the global south.
Therefore, this report can be taken as a strong empirical analysis of the need to look at the philanthropic work happening in the global south and especially the countries riddled with conflicts and social injustices in order to develop action driven policies to support these organisations. The power imbalance directly impacts the social impact sector in the countries that are in need of such endeavours the most.
As far as the current gaps are concerned, avenues can be made to transfer necessary assets to the funders and organisations in the global south. There is a need to also reduce the information gap that exists and consider the countries that have been left from the study to understand the presence and the struggles of the foundations in those countries. Focus can also be made to the local leaders and foundations working at the grassroots in the countries that do not have high asset philanthropic foundations. For the foundations that exist in the global north, a separate chapter or individual missions for the global south countries can also be a practical step forward thereby also distributing the assets for the benefit of the people most in need.
The need therefore is to first acknowledge the gaps that exist and then work towards reducing the same. The centre of the global economy is also shifting now towards the countries in Asia, primarily India and China. India is considered to be dealing with the current economic slowdown in the most efficient and resilient way possible and showing consistent economic growth in the face of global challenges. This new reality can be reflected in the philanthropic sector as well.