LET’S NOT MIX CHARITY WITH PHILANTHROPY
Philanthropy done right can leave immediate and longer lasting impact on societies
The terms charity and philanthropy are often used interchangeably without much consideration for what they might mean and how each impacts our societies. In the Middle East, charity is deeply ingrained in our culture, religion and traditions, but we often overlook the element of strategic planning and follow through in our generous contributions.
This can make all the difference.
As we commemorate World Philanthropy Day (November 15), it is important to recognise the opportunity we have to evolve and enhance charity and philanthropy in our region. Every year, between $250 billion to $1 trillion is deployed in Zakat and Sadaqah in and from Muslim countries. These amounts are typically given as charity, catering to the immediate needs of society.
By redirecting at least some of our charitable engagement beyond immediate needs to empowering the growth and development of our communities, we can generate a multiplier effect on philanthropic impact, which our region and the world needs today perhaps more than ever. Philanthropy, as against the notion of charity, is more targeted and strategic, and can make a tangible difference to achieving long-term development goals for our societies.
This in turn means people who need support the most can look beyond securing their next meal and start building stable and fruitful futures with confidence.
Wealth transfer
This is of particular significance today, with nearly $68 trillion expected to be passed down to members of the next generation globally over the coming decade, the largest inter¬generational wealth transfer in history.
In growth market regions, which includes Mena, nearly $26 trillion will be transferred across generations within the next 20 years, with three quarters of global GDP consumption expected to evolve from these growth markets. Not surprisingly, we also expect to see a substantial increase in philanthropic capital in the coming decades. A global survey by the Philanthropy Alliance Foundation revealed that 89 per cent of respondents believe Africa and Asia, including the Middle East, will see the highest growth in its philanthropic giving over the next 25 years.
Strategic use of capital
Access to capital is not the main impediment in scaling philanthropic impact in our region — the lack of coordinated and strategic deployment of this capital is. As this already major pool of philanthropic capital grows significantly in the coming years, the availability of strong infrastructure and conducive systems for strategic giving will be especially critical within the Mena region. We have an immense opportunity in front of us to work together to create this.
Many countries across our region suffer from poverty and unemployment, especially among our youth. While there may be several stubborn factors that contribute to this, we need to use all resources available to us to address these threats to our societies, including embracing philanthropy as risk capital deployed to help create solutions that promote sustainable and inclusive financial and social growth.
This approach is a vital pathway to addressing the compounding inequity in our region and beyond. Fortunately, we have the tools, energies, and resources to build the infrastructure needed to empower the next generation in their giving journeys. For instance, technology is enabling the unprecedented gathering, processing, and understanding of data, with AI and digital platforms having the potential to reimagine philanthropy for greater impact.
Better use of regulatory framework
There are also a growing number of initiatives focused on improving philanthropy’s regulatory frameworks, by leveraging data that reflects on-the-ground realities, and embracing stronger governance models to make it easier to pool resources with a long-term, impact-oriented view.
One such entity is the Pearl Initiative, a non-profit, private-sector led organisation founded in 2010 that is committed to promoting a corporate culture of accountability and transparency across the Gulf. In collaboration with the Bill & Melinda Gates Foundation, the Pearl Initiative has developed a program to help strengthen the Gulf’s philanthropic ecosystem by working with leading family business donors to support them in sharing experiences and learning with a view to driving resultsdriven philanthropic activities.
In September 2021, New York University Abu Dhabi launched the Strategic Philanthropy Initiative (SPI), an academic and community-based platform that aims to shape a more vigorous and strategic practice of philanthropy in the Gulf and the broader Mena through three tracks of research, convening, and train¬ing. The SPI also announced plans to launch the region’s very first philan¬thropy accelerator to help nurture inno¬vative philanthropy startups, and pro¬vide their founders with the tools and resources needed to thrive.
Access to capital is not the main impediment in scaling philanthropic impact in our region — the lack of coordinated and strategic deployment of this capital is.
Insist on transparency
While a number of similar initiatives are helping create a more supportive environment for philanthropy, what really stands out is the new generation’s commitment to impactful giving. The Arab Giving Survey, for example, reported that 76 per cent of donors today require transparency in relation to the impact achieved and the effectiveness of a charity in achieving its goals, while 71 per cent said they would increase their donations considerably based on transparent reporting by the charity organisations on how and where funds are spent.
It is our collective responsibility to steer our societies toward a better and more equitable future for all. We must expand philanthropy’s role in our mainstream capital system, and utilise every opportunity to dis¬mantle key barriers to strategic giving. It is crucial that we take practical steps to maximise the efficiency — and effectiveness of strategic philanthropy — for the good of our region and the world, both now and in the future.