Daily Times

The philanthropic giving trend in Pakistan has been increased manifold in recent years but the impact of this giving is yet to be observed thoroughly. Being a developing nation, Government of Pakistan prime focus remain socio economic initiatives however the most significance resource were ignored repeatedly which is enormous potential of individual and corporate philanthropy, hence government remain unable to develop the effective mechanism of systematic giving. Thus in conclusion most of the giving is being wasted away or have limited social development impact.

The national government could promote indigenous philanthropic contribution in terms of both volume and impact through effective legislation, flexible tax policies and promoting effective mechanism of transparency and accountability to ensure that the amount contributed by grant makers effectively addresses the societal need. Although, the total wealth in Pakistan declined considerably due to changes in asset prices and exchange rates but on the positive side philanthropic giving by stock exchange listed companies increased 40 times in 2018. However, a huge discrepancies has been visible in Pakistan lower and above income groups such as the high net worth individual’s income is two times higher than national health and education budget (the budget in 2017 – 18 is US$ 7,593 million).

Nevertheless, Pakistan could achieve the United Nations Sustainable Development Goals (SDGs) by effectively channelizing indigenous philanthropy. It could generate an additional US$ 80 million from the single source of giving which is corporate, if the national government made it mandatory to all companies just like in India to spend 2 percent of their profits towards CSR activity. Looking into the annual country GDP which stands around US$ 283 billion, donating 2 percent of Pakistan GDP just like Americans, an additional US$ 6 billion could be potentially unlock for socio economic development. This amount is two times higher than the foreign aid directed towards Pakistan.

Philanthropy in Pakistan is largely based on corporate philanthropy, diaspora giving and individual giving. Giving through all of these dimensions are tremendously increased over the years. Some of the thought-provoking charitable numbers has been reported numerous time which are jotted down below;

Corporate philanthropy is the most prevalent in Pakistan so as to maintain its stature in the international market, following international rules, regulations and guidelines. In 2018, around US$ 84 million were disbursed for social development activities by the publicly listed companies along with the amount reported by the smaller sample of public unlisted and private limited companies. The amount increased 40 times from approximately US$ 1 million in the year 2000 to US$ 59 million in 2018. Although, publicly stock exchange listed companies have less than 1 percent share in the total corporate sector composition but have gigantic volume of giving but having lesser impact, around 70 percent of total corporate giving comes from this domain. It is also important to note that 53 percent of stock exchange listed companies reported giving while other remains dormant in philanthropic activities. Many other main findings of corporate philanthropy were highlighted in my other articles, could be viewed at any time.

The second most prevalent dimension of giving in Pakistan is Diaspora Philanthropy. Pakistan has the 6th largest diaspora in the world and the second largest community in the United Kingdom (UK) reported by UN department of Economics and Social Affairs. According to the State Bank of Pakistan, remittances reached to whopping level of US$ 21 billion approximately by the end of 2019. British Council recent publication on Pakistani Diaspora Philanthropy in the UK: Trends and Variations reported annual philanthropic giving to causes based in Pakistan and UK amounts to a combined total of £1.25 billion (approx. US$ 1.6 billion). Monetary giving accounts for the highest share of total giving £ 742 million (approx. US$ 958 million), followed by in-kind assistance £346 million (approx. US$ 446 million) and time volunteered £ 165 million (approx. US$ 213 million). The most popular way for individuals to give in both Pakistan and the UK is through monetary giving following Zakat obligations.

The report furthering its finding by highlighting the main motivation of giving is helping people/women in needs followed by fulfilling religious duty showing that giving is predominantly influenced by religion.

The recent PM Imran Khan Relief Fund for COVID – 19 and other Imran Khan initiatives like fundraising campaign of Shaukat Khanum shows massive diaspora giving phenomenon.

The final most prevalent form of giving in Pakistan is Individual Philanthropy. Although, this might not called as philanthropy in general because occasionally, this type of giving does not bring sustainable changes among the lives of underprivileged individuals as considerable volume is channelize by giving to beggars. However, a 2016 report “The State of Individual Philanthropy in Pakistan” obtained the household level data from all over the country which concluded that individual philanthropy is a universal practice among Pakistanis around 98 percent of Pakistanis are involved in some form of giving while the magnitude of individual giving stands around US$ 1.5 billion however, this is also pertinent to note here that the percentage of giving were not reported accurately as 25 percent of population are living below the national poverty line, firstly, secondly, most of the reported giving were mostly giving to beggar which has no significance or impact. However, around half of this giving were reported from Punjab, Pakistan’s largest province in terms of population while lowest reported from Baluchistan. The largest contributing indicator is monetary giving (zakat and non-zakat) stands around 41 percent. The major recipients were individuals as compared to organizations, the preference among them were needy, disabled and beggars while Muslims mosques and Islamic institutions were given preference in the category of organizations. The findings of preference also shows the low level of philanthropic impact and emphasize the significance of effective utilization and channelization of philanthropic giving.

Pakistan’s annual volume of philanthropic giving has been huge while impact is always questionable which should be a primary focus

Among all the above mentioned findings, the tendency of philanthropic giving in Pakistan is deeply rooted towards religion, The Prophet Muhammad said, “The upper hand is better than the lower hand (i.e. he who gives in charity is better than him who takes it).” Hence, it is a religion and a culture that gives profound importance on helping or taking care of those who are less fortunate. Most of the individual giving stems from religious reasons followed by compassion and other reasons.

In Pakistan, millions are still in poverty and continuing facing economic hardship, perplexing economic inequality deepening the gap among rich and poor. The overall country economic stagnation challenges everyone around the corner. Therefore, it is significantly important to effectively utilize and enhance the volume and impact of indigenous giving so as to address the local socio economic developmental challenges. The mentioned giving number highlighted the generosity of Pakistani nation, seemingly contributing around one percent of its GDP to charity thus standing with some of the developed countries having significantly larger charitable volume. It is also pertinent to note here that the number shows above are individual, diaspora and corporate giving however it does not inculcate the other arena of philanthropic giving such as official development assistance, donor funding to civil society organizations and government resource mobilizations against development indicators. Hence, a systematic approach could bring prolific results.

As a result, some policy recommendations for enhancing the volume and effectiveness of indigenous philanthropy could be improving legislative system, provision of maximum tax benefits to the givers, institutionalization of philanthropy sector, encourage impactful giving mechanism, bridging the trust deficit among stakeholders, and enhancing the philanthropy infrastructure along with many other optimal recommendations which needed to be highlighted in the context of Pakistan.

In the midst of COVID – 19, effective philanthropic channelization that has significant impact could boost Pakistan philanthropic giving multiple times thus government could easily handle the socio economic crisis emerging due to this pandemic. This may be another supportive mechanism for government to handle the crisis more effectively.

a freelance contributor writes mainly on socio political economic policy issues