- August 09, 2018
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What is the Doing Good Index (DGI)?
For Asia, where the personal wealth is at an all-time high and with more billionaires relative to other regions, charitable activities is gaining traction for both government and private sector. However, lack of philanthropy studies have failed to have desired positive impact
The “Doing Good Index” is a study based around a set of indicators that taken together show the regulatory and institutional infrastructure enabling or impeding philanthropic giving. For Asia, where the personal wealth is at an all-time high and with more billionaires relative to other regions, charitable activities is gaining traction for both government and private sector. However, lack of philanthropy studies have failed to have desired positive impact. Also, the problem of lack of trust between organisations and donors is the factor hindering the development of philanthropy in Asia. Therefore, Doing Good Index helps with thorough studies of the regulation about tax and delivering in each of the 15 countries involved.
The index examines fiscal, cultural and social incentives to donate; the regulatory environment that can facilitate or hinder systematic investment; factors that affect the establishment and operations of organisations that deliver services or products to address a societal need; and their ability to access funds. Hence, Doing Good Index maps the environment for philanthropic giving by considering factors under four sub-indexes with several indicators below them:
- Can funds flow easily to the social sector? i.e. Flow of funds
- Does the regulatory environment promote transparency and accountability? i.e. accountability
- Are the laws and requirement clear? i.e. communication
- Is it conducive to efficiency? i.e. efficiency
Tax and Fiscal Policy
- Are there incentives enough for individuals and corporations to donate money?
- Are there incentives to make estate donations?
- Do governments offer direct and indirect grants for social organisations?
- Do they communicate such programmes clearly?
- Are philanthropy and volunteerism rewarded and encouraged in the form of awards, events and national programmes? i.e. Institutional recognition
- Is the sector trusted? i.e. public perception
- Does experience flow from the corporate world to the board rooms of social organisations? i.e. good governance
- Is the necessary talent readily available? i.e. talent infrastructure
- Are social organisations eligible, or even incentivised, to participate in government procurement programs? i.e. procurement opportunities
- Is information on these easily available, and the approval process efficient and transparent? i.e. procurement process
Objectives of Doing Good Index
- Addressing the trust deficit
CAPS found that the issue of the lack of trust always comes in almost every philanthropic conference in Asia. Among other impediments to giving, the index identifies those that most contribute to the trust deficit and those most effective to bridge the gap.
- Creating new data
Philanthropic activity has never been considered under the purview of national statistical agencies, nor as a high priority for data collection. The Doing Good Index creates a body of data that can be used to understand the landscape for philanthropic giving and the changes happening within it.
- Pointing the way to a more vibrant social sector
CAPS seek to present the findings as a set of informed views to help philanthropists, policymakers, researchers, SDOs (social delivery organisations) and engaged citizens understand what levers can be pulled to best increase and enhance philanthropic giving in their economies.
How was it constructed?
Inputs for the index were drawn from a survey of 1,579 SDOs and 80 experts in philanthropic policy making across Asia. The sample size allows for robust and reliable findings. The median age of the social organisationsin Asia is 14 years. 75% are younger than 25 years. 25% are younger than six years. The median number of staff in SDOs in Asia is 12 people. 75% have 30 or less staff members. 25% have five or less staff members.
Coverage countries : China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Myanmar, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand, Vietnam
- Policies set down some accountability for social organizations registered as non- profits. There are legacy policies to encourage more accountability in the social sector: 13 out of 15 economies require registered non- profits to report annually, while it is optional in Taiwan and Indonesia.
- Communication of laws and policies is taking place, but not all SDOs are getting the message. Except for Myanmar, all economies have made laws and regulations pertaining to the social sector. However, almost half of the SDOs surveyed had difficulty understanding relevant laws and policies.
- The process of registering SDOs as non-profits is more efficient in some economies. SDOs in Sri Lanka, Malaysia and Singapore have the lightest administrative load, requiring 1–2 clearances and a relatively short processing time for approval. Most economies avoid placing onerous registration requirements on SDOs.
- Singapore, Sri Lanka and Malaysia are the best performers on the Regulations sub-index, sharing common characteristics across administrative efficiency and communication in the social sector.
- The Tax and Fiscal Policy sub-index most closely mirrors each economy’s overall performance on the Doing Good Index. Most economies offer tax deductions:13 out of 15 economies offer them for individual philanthropic giving, and 14 for corporate giving.
- Rates of tax deduction vary considerably across Asia, from Singapore’s 250% to Myanmar’s 0%. 8 economies offer rates of 100% or above, including most Southeast Asian economies.
- Giving upon death in the form of bequests is not encouraged in many economies. Incentives for bequests are only offered by the governments of Taiwan, Japan, Korea and the Philippines.
- SDOs receive tax incentives, too. All economies offer tax exemption for SDOs, with the exception of only Indonesia.
- Singapore, Taiwan and Japan are the top three performers in this sub index. All offer incentives for donors and recipients. Singapore registers an impressive 250% rate of deduction for individuals and corporations, while Taiwan and Japan are bolstered by tax deductions and incentives for incorporating charitable giving into estate planning.
- Society is ahead of government, but people still need to give more. This “soft” support for the social delivery sector has not translated into high levels of individual giving, which nearly 70% of SDOs in Asia perceive to be low.
- Recruiting talent is hard, and finding skilled staff is even harder. 4% said it is difficult to recruit skilled staff.
- Having a board is the new normal. The majority of SDOs (86%) have a board, and in 7out of 15 surveyed economies, nearly all SDOs hold regular board meetings.
- China, Malaysia and the Philippines are the top performers. The ecosystem for the social sector in these economies stands out. All have events and practices that support doing good, such as awards for philanthropy and corporate social responsibility, volunteering programmes, and relevant university and training courses.
- SDOs have mixed views on the procurement process. Only 25% of SDOs that the government had contracted with felt it had been easy to access information about tenders. Only 30% of SDOs felt the process was transparent.
- Taiwan, Vietnam and Thailand are the three top-performing economies in the Procurement sub-index. Taiwan and Vietnam are pulled up by special incentives offered to SDOs to participate in the procurement process, while Thailand does relatively well on the ease of accessing relevant information.
The performance of the economies in the Doing Good Index falls into four clusters, each of which can be thought of in terms of the distance left to travel toward a conducive environment for doing good. The index scale ranges from Not Doing Enough on extreme left to Doing Well on extreme right. The result of the assessment under four clusters for economies in Asai is listed below:
Source: Centre for Philanthropy and Society
Re-disseminated by The Asian Banker from Centre for Asian Philanthropy and Society
Read more about the Doing Good Index
Keywords: Personal Wealth, Doing Good Index