Doing Good Index plots way forward in post COVID-19 world

The Centre for Asian Philanthropy and Society (CAPS) released the second edition of its Doing Good Index (DGI2020). The study reveals the vital role of the social sector and how Asian countries help or hinder it. It shows not only that governments must do more, but that the private and corporate donations must play their part in meeting people’s needs.

“Right now, with widespread disruption amid the pandemic and its economic repercussions – which have hit the most vulnerable members of our communities hardest – we have to rebuild our society,” CAPS Chairman Ronnie Chan said. “CAPS’ Doing Good Index provides strategies to help the social sector play a more effective role in fostering a better future for all of Asia.”

As the world struggles to cope with the ongoing pandemic, one thing has become clear: there is no going back to the way things were. Faced with stagnating or contracting economies, governments in Asia are finding it difficult to keep pace with the growing needs of their people. In this context, the social sector, backed by funding from businesses and private individuals, has become even more critical in the provision of vital social services.

In the wake of the COVID-19 outbreak, charitable giving has focused on local community response. International support is declining and ‘Asia for Asia’ philanthropy must fill the gap. If Asians donate the equivalent of 2% of their gross domestic product, $587 billion can be made available – 12 times the net foreign aid flowing to Asia and nearly 40% of the additional $1.5 trillion that Asia Pacific needs to spend annually to meet the United Nations Sustainable Development Goals by 2030.

“Asia has amassed one-third of the world’s wealth, but still has two-thirds of the world’s poor,” CAPS CEO Ruth Shapiro said. “There is now a unique opportunity to use this newly created wealth to alleviate poverty, protect the environment and promote societal resilience. DGI2020 makes it clear that governments, private donors and the social sector must work together, now more than ever, to build a stronger, more prosperous and more equitable Asia as we overcome the economic crisis caused by COVID-19.”

DGI2020 is a study of the context in which private capital meets society’s needs. It provides a roadmap of the policies and practices that will incentivise giving and foster a thriving and effective social sector. The index can help philanthropists, policymakers, researchers, social development organisations (SDOs) and engaged citizens understand what levers can best increase philanthropic giving in their countries. It also spotlights how to improve accountability and transparency to address the trust deficit faced by the social sector that can hold potential donors back.

DGI2020 identifies six broad trends across Asia:

1. Government involvement matters. In Asia, institutions prefer to work in tandem with the government, so public policy related to the social sector not only has a direct effect, but also a signaling effect that amplifies its impact.

Governments across the region are seeking increased local philanthropy and corporate social responsibility (CSR). Today, 45% of Asian SDOs receive funding from foreign sources (around 25% of their budget), but more than half of Asian economies are witnessing declining foreign funding. In the six countries and territories that impose restrictions on foreign funding, many SDOs report funding has decreased by 20% or more.

1. Regulatory oversight of the social sector is increasing, with mixed results

More than half (56%) of economies have increased government supervision of the sector.

1. Tax and fiscal policies are a major incentive for charitable giving, but widespread confusion about them frequently holds back donations.

One in four SDOs across Asia are unaware that tax deductions are available for charitable donations. Country experts in 14 out of 18 economies have difficulty in accurately identifying relevant tax policies. Incentives for philanthropic giving upon an individual’s death in the form of charitable bequests are lacking, with only six among the 18 economies surveyed having arrangements for inheritance tax. Of those, only four offered incentives for charitable bequests.

1. Government procurement can be an important source of growth for the social sector, but most economies are underperforming in this area.

The 61% of SDOs with government contracts find it difficult to access procurement information. Most SDOs continue to find procurement processes lacking in transparency.

1. Governments are increasingly consulting SDOs on policy issues.

Three-quarters of the organisations surveyed report being involved in policy consultations, up from half in 2018.

1. CSR and public-private partnerships are playing a growing role in Asia.

The 11 of 18 economies say CSR and public-private partnerships are receiving more attention. On the other hand, 86% of SDOs surveyed work with the corporate sector in some capacity.

The DGI2020 has increased its coverage from the 15 Asian economies covered in the original 2018 index to a total of 18: Bangladesh, Cambodia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Myanmar, Nepal, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam. It examines regulatory regimes, tax incentives, procurement procedures and sociocultural conditions. It is based on original data gathered through comprehensive surveys of 2,189 SDOs and interviews of 145 country experts across all 18 economies.

CAPS’ Doing Good Index 2020 offers a way forward for governments, private and corporate donors to meet the imperatives of building a vibrant social sector for a brighter Asian future. The next edition of the index, planned for 2022, will reveal how these economies have fared following the COVID-19 pandemic.

Re-disseminated by The Wealth and Society