Pakistan gives more than one per cent of its GDP to charity

ISLAMABAD: When it comes to charitable giving, Pakistan is a generous country, and it contributes more than one per cent of its GDP to charity, the Stanford Social Innovation Review reported.

The contributions push it into the ranks of far wealthier countries like the United Kingdom (1.3 per cent GDP to charity) and Canada (1.2 per cent GDP to charity), and stand around twice of what India gives to those in need as a percentage of its GDP.

A study conducted by Pakistan Centre for Philanthropy showed that Pakistanis give around Rs 240 billion (more than $2 billion) annually to charity.

According to the report, about 98 per cent of people in the country give in one form or another – if not with cash, then with in-kind donations or by volunteering for needy causes.

Fueling this culture of generosity is the Islamic emphasis on giving – in the form of Zakat, Sadaqa, and Fitrana – as well as other moral and social factors and a deeply rooted sense of compassion toward community members.

But despite this tradition of giving, most donations go directly to individuals, thus bypassing charitable organisations.

While supporting needy individuals plays an integral role in Pakistan’s social safety net, to realise the full impact of philanthropy for more sustained development efforts, Pakistan must do more, the authors of the report said.

In order for Pakistan to become a more integral player in the sustainable development agenda, it needs to make efforts to institutionalise the individual tendency of giving and redirect it toward more-structured efforts, the report recommended.

In trying to understand why Pakistanis prefer giving to individuals instead of organisations, the research was conducted via household surveys and focus group discussions.

It measured philanthropy in three ways: monetary giving, in-kind giving, and time volunteered. The results found that when accounting for all forms of philanthropy, 67 per cent of survey respondents said they give to individuals while 33 per cent of respondents preferred giving to organisations.

Data was also collected in Sindh in 2013 and also in Punjab, Balochistan, and Khyber Pakhtunkhwa (KP) in 2014.

In the case of in-cash philanthropy, Balochistan stands out with 90 per cent of respondents preferring individuals as recipients for their giving. One reason for this could be that Balochistan is the least developed province of the ones that were studied, and thus charitable organisations in Balochistan are less established and have gained less public trust than the ones in the more developed provinces.

Similar to cash donations, donors also prefer individuals for in-kind giving and time spent volunteering, albeit to a lesser extent, said the researchers.

Punjab and Balochistan give in-kind donations to individuals at almost equal rates, and both provinces give slightly more than KP does, the report highlighted.

Organisations seem to fare much better, however, when it comes to time spent volunteering: In KP, close to half of the respondents volunteered their time for organisations, followed by Balochistan, with more than one-third of the respondents volunteering their time for organisations.

According to the research, there are four major reasons why Pakistanis prefer giving to individuals over socially minded organisations.

Cash donations are most frequently made in small amounts and on a regular basis. Needy individuals are the prime beneficiaries of this type of donation, as they inspire spontaneous giving driven by compassion in the moment. These individuals are also easily accessible, while organisations require more planning on the part of the donor. In addition, many organisations have not yet developed the requisite infrastructure to collect small donations.

Religious institutions such as mosques and madrassahs are likely get the bulk of the giving that goes to organisations. These institutions also have infrastructure in place geared toward collecting small donations, in the form of door-to-door campaigns, donation boxes placed at counters of shopping outlets, and so on. Through such efforts, they are highly visible to potential donors.

Fear of misuse, wastefulness, and lack of impact play an important role in discouraging people from donating to organisations. Proximity and reputation are the two main factors that encourage people to donate to any one organisation. Mosques and madrassahs are more trusted than civil society organisations and they receive the lion’s share of donations that flow to organisations.

While wealth does not seem to influence giving exclusively to organisations, the report found that wealth positively influenced the giving priorities of people who responded as giving to both individuals and organisations.

In other words, the higher the level of wealth, the more inclination toward giving to both individuals and organisations and vice versa.

One reason for this could be that people in lower income groups have closer ties with needy individuals, while they may have less familiarity with charitable organisations. People with high incomes often have direct connections with foundations and other charitable organisations.

In Balochistan, where more people fall in low and middle income groups as compared to KP and Punjab, around 90 per cent of philanthropy goes to individuals.

There is no doubt that Pakistanis are a generous people, as the practice of giving is nearly universal.

However, this charitable impulse needs to target more impact-oriented philanthropy. In this way, individual donations can play a more-effective role in inclusive development than simply assuaging the symptoms of poverty, the report said.

According to the researchers, it is evident that a lack of trust for civil society organisations is hampering their fundraising efforts.

To encourage more institutional giving, organisations have to ensure transparency and accountability, thereby mitigating the trust deficit of givers, the report added.

While civil society organisations need to expand their fundraising networks among the general public, efforts should also be made to inform people that giving to organisations may have greater impact than giving to individuals, the report concluded.