Category: Corporate Control

Philanthropy’s global footprint creates new opportunities

Sarat Pratapchandran1 Comment

An American concept is growing rapidly in different parts of the world, innovating itself and finding new meaning in new markets. The art and science of philanthropy is now growing faster in regions outside the United States.  According to Penelope Cagney, international fundraising consultant and president of  The Cagney Company, a few trends that are shaping global philanthropy include:

  1. An affluent middle class in emerging markets is now greatly involved in philanthropic giving.  According to monthly giving data tracked by the Big Mac Philanthropy Index, the top three countries engaged in giving the most were Singapore, Hong Kong and India. The Charities Aid Foundation (CAF) World Giving Index 2012 now ranks Australia as the #1 country in giving, including both monetary gifts and volunteer hours.
  2. The surge in philanthropy in foreign markets is creating a new wave of innovation in method and practice.  A newly published book on Indian philanthropy “Revealing Indian Philanthropy,”  describes how the new Indian rich are taking sophisticated approaches to giving. Planned giving is hot in Japan, Chile raises more than 10% of it’s donations through door to door giving and direct mail is doing well in Australia. Microfinance and telefacing(telephone call and face to face meeting) are widely used in India, while social impact bonds in the UK and fair trade networks in Africa are enriching philanthropic practice in foreign markets.
  3. Alongside, huge NGOs are growing in emerging markets and some like the Bangladesh Rehabilitation Assistance Committee (BRAC) are more creative than counterparts in Western societies.

As the world adapts to more advanced fundraising  here are a few things to watch for:

  1. India’s Companies Bill of 2011 expected to be passed later this year will make India the first country  in the world to introduce a 2% Corporate Social Responsibility (CSR) policy. A major proposal seeks to have businesses spend 2 percent of their net profits in CSR initiatives. This will have a profound impact on corporate giving and will also affect the bottom line of multinational companies doing business in India.
  2. More and more emerging markets are now collecting data on philanthropy.
  3. A formal culture of philanthropy is yet to evolve, but giving is taking different forms and shapes in outside countries. These innovations could enrich the practice of philanthropy.
  4. Tactics like the “Giving Pledge” might work in Western markets, but in emerging markets, the super rich may not easily part with their wealth. They will seek newer ways of parting with their wealth.

As newer markets expand their philanthropic initiatives, thought leaders like Cagney have provided their perspectives in books like Global Fundraising: How the World is Changing the Rules of Fundraising. Overall, there is no better time for philanthropy to emerge as an important topic of discussion in international markets.

 

Global Corporate Gifts Get a Definition

Sarat PratapchandranLeave a comment

If you are a recipient of  a corporate gift from a Fortune 2000 company at the global level, read the Committee Encouraging Corporate Philanthropy (CECP) guidelines.  CECP’s “The Global Guide to What Counts,” for the first time defines eligible charitable donations across borders. International tax professionals at Deloitte rigorously examined tax laws and related conventions of 17 countries to find out what makes up a charitable gift.

They concluded that any recipient of a corporate charitable gift must meet the following criteria:

  1. The recipient must be formally organized, meaning it should be recognized as a legal entity in the country where it is headquartered. Individuals and ad hoc groups that lack structure are ineligible.
  2. The recipient must exist for a charitable purpose, meaning charity should be its primary purpose. The Guide excludes political parties, business and professional associations, unions and religious entities, except those that fund charitable activities that fall under CECP guidelines.
  3. The recipient must never distribute profits, meaning it should reinvest in achieving the organization’s mission.

The Guide addresses a uniform definition of what constitutes a corporate charitable gift. The yardsticks are similar to those proposed by large Foundations in the United States. However, a standardized check list for charitable entities seeking global corporate gifts is very useful. It creates a level playing field, sort of United Nations for recipients seeking charitable corporate gifts across borders.

The Global Guide tactically avoids religion, politics, labor unions, associations and chambers of commerce. Some of these indulge in corrupt practices, especially in developing countries. However, it offers broad flexibility in defining a recipient of a charitable gift and gives a larger degree of latitude for charitable entities to compete for corporate gifts. Religious organizations that have far-reaching impact on grassroots philanthropy are given some opportunities to seek charitable gifts.  The complete guidelines are available here.