How to measure the freedom to give

A charity box. Photo by: Steven Depolo / CC BY

While Washington players argue over alleged government overreach into civil society organizations, the U.S. State Department is looking for ways to expand “philanthropic freedom” in the developing world.

A pilot study published by the Hudson Institute’s Center for Global Prosperity ranks 13 countries according to their “philanthropic freedom,” a measure of the “barriers and incentives” that civil society organizations and philanthropists face.

The Netherlands leads the pack, and China is at the bottom, notes the study, which comes — according to the authors — during a “window of opportunity” when rising wealth in emerging economies could either contribute to a vibrant civil society or remain ensconced in the hands of a wealthy few.

“If we can get the ecosystem right, if we can get the tax and the regulatory variables set correctly, then we are going to see a portion of the resources that are emerging in these nations utilized to support the social good,” State Department Senior Advisor Tomicah Tillemann said in response to questions from Devex at The Hudson Institute on Thursday.

Tilleman added: “If we don’t, then that money is going to support the purchase of real estate in London and Paris.”

To compile their index, the authors sent questionnaires to one expert in each of the 13 countries they included in this first round of the study. Questions focused on “civil society regulation,” “domestic tax regulation” and “cross-border flows regulation” as the three most important variables in determining whether or not philanthropists feel encouraged by their governments to support civil society and whether CSOs are able to operate without being unduly harassed. The index ranks each country according to its relative score on the three indicators.

There is a strong correlation between high-earning countries and high “philanthropic freedom,” with countries like Japan, the Netherlands, Sweden and the United States near the top of each indicator, while China, Egypt and Russia consistently bring up the rear.

New wealth doesn’t always spark more giving

The authors are quick to caution though, that this correlation does not mean that when countries get richer they automatically become more generous or more focused on civil society contributions.

“We should not consider it a given that the rise of new wealth in these nations will lead to the rise of a new class of philanthropists,” said Tillemann, who also commented that “it’s critical for us to recognize at the outset that this could go either way and we don’t know what’s going to happen.”

Eventually, the index is meant to serve as a comprehensive baseline and roadmap for increasing the flow of philanthropic contributions to civil society organizations around the world and suggesting how to pave the way for smoother philanthropic giving. The report also comes at a time when dwindling foreign aid budgets make private philanthropy even more critical for achieving development goals.

The authors also singled out several nations that are cracking down on civil society organizations by limiting the amount and type of funding that they can receive from private citizens and organizations, with an extreme example in Russia, where organizations that receive international funding are now required by law to register as “foreign agents.”

“I think the most valuable thing we can do is build constituencies around these issues in the countries where they’re in play,” said Tillemann, citing efforts by the U.S. State Department’s Global Philanthropy Working Group, launched by former top diplomat Hillary Clinton last summer. That group worked with U.S. tax regulators last year to ease the tax burden on cross-border philanthropic giving in the United States.

The author’s hope their “philanthropic freedom” index will help spark more progress towards less regulation of CSOs and potential contributors, as it gives countries a better sense of where they stand.

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About the author

  • Igoe michael 1

    Michael Igoe

    Michael Igoe is a Senior Reporter with Devex, based in Washington, D.C. He covers U.S. foreign aid, global health, climate change, and development finance. Prior to joining Devex, Michael researched water management and climate change adaptation in post-Soviet Central Asia, where he also wrote for EurasiaNet. Michael earned his bachelor's degree from Bowdoin College, where he majored in Russian, and his master’s degree from the University of Montana, where he studied international conservation and development.