The global environment for philanthropy has improved slightly since 2018, according to a report released Thursday by Indiana University’s Lilly Family School of Philanthropy, although researchers noted that the invasion of Ukraine has the potential to sharply change the outlook for global philanthropy in the years ahead, especially throughout Europe.
Amir Pasic, dean of the Lilly School, said one of the biggest opportunities to improve the climate for global philanthropy is to chip away at restrictions that some countries have placed on the cross-border flow of money to nonprofits.
“Ease in sending money across borders is key,” Pasic said. “Those regulations are important.”
However, he added that he’s been impressed by the innovation that’s going on in philanthropic activity to get around government restrictions, a trend that he expects to continue. He cited as an example people who are booking rentals in Ukraine through Airbnb that they don’t intend to use as a way of getting money into the country.
“The humanitarian need will be there, and people will continue to innovate,” Pasic said.
The new report, the 2022 Global Philanthropy Environment Index, is designed to give policy makers and philanthropic leaders a broad picture of the conditions for giving worldwide.
The report found that 57 of the 91 countries studied had a favorable environment for philanthropy in 2018 through 2020, the years studied. Meanwhile, one-third reported a restrictive environment for donors who wish to give money in countries other than their own.
The report is based on questionnaires filled out by country-based experts. The index scores countries and regions on a five-point scale in six areas: ease of operating a philanthropic organization, tax incentives, laws governing donations made across borders, the political environment, the economic environment, and the socio-cultural environment (including cultural philanthropic traditions).
The Balkan countries, northern Europe, southern and southeastern Asia, and sub-Saharan Africa experienced improvements in their environment for philanthropy, while slight declines were observed in Canada, the United States, Latin America, the Middle East and Northern Africa, Oceania, and southern Europe.
The United States ranked near the top of the list, with an overall score of 4.76, down slightly from 4.77 in the previous report. Pasic noted that changes to U.S. law enacted in 2017 reduced the share of people who itemize their taxes, creating a less favorable giving environment.
The global average was 3.63.
Ukraine and Russia
Experts in global philanthropy said the findings suggest that many countries worldwide, and European nations in particular, are well-positioned to help with the global humanitarian crisis unfolding as a result of Russia’s invasion of Ukraine. The researchers also noted that the global environment for philanthropy will likely be much different in a few years as a result of the invasion, although it is far too early to predict what those changes might be and whether they will make the philanthropic environment better or worse.
Nick Deychakiwsky, a senior program officer at the Charles Stewart Mott Foundation, which helped fund the report, said that if Russia manages to capture Ukraine, the philanthropic environment in both countries could take a significant turn for the worse.
Even if Ukraine manages to repel the invasion, it will need significant assistance for years in many ways, Deychakiwsky noted. Russia may open up for global philanthropic assistance as well if a defeat in Ukraine leads to a change in Russia’s power structure, he said.
Either way, Deychakiwsky said, countries throughout Europe are showing a tremendous capacity for philanthropy to assist in the humanitarian crisis, a response that may significantly boost the region’s showing in the next iteration of the report.
He added: “The report indicates the value of having as few barriers as possible to cross-border philanthropy.”
Deychakiwsky has a lengthy record working in philanthropy in Ukraine and other countries in the region. His parents emigrated to the United States from Ukraine, his spouse is from Kyiv, and he has numerous friends and relatives who are still in Ukraine or have fled the country.
Latin America
Deychakiwsky said he’s concerned about limitations being placed on philanthropy, in Latin America in particular. That concern was echoed by Nadya Hernández, program director at Wings, a philanthropy development and support organization headquartered in Brazil, with 193 member organizations in 58 countries.
In an interview from Colombia, Hernández said some of those limitations include heightened surveillance of nonprofit activity, along with added bureaucracy and paperwork.
Hernández, who was an adviser on the report, said the findings are “a call to action.”
“We could do better,” she said.
Factors in Scoring
The new report covers all of the 79 countries that were included in the previous report, released in 2018, as well as 12 additional countries. Comparing the 79 economies included in both reports, the global philanthropic environment showed a small improvement from 3.64 to 3.67.
Among the key points:
- One-third of the 79 countries in both reports saw a decline in their political environment due to factors such as political instability, restrictions on foreign funding, state harassment, and negative campaigns, especially against human rights and watchdog organizations.
- Among the six factors explored, ease of operating a philanthropic organization scored the highest (3.97), and the economic environment scored the lowest (3.46). Researchers noted that the onset of the pandemic was likely responsible for the relatively weak showing for the economy.
- The political environment showed the largest score increase worldwide, while the environment for cross-border giving experienced a slight decrease.