Doing Good Index 2018: Maximizing Asia’s Potential

The Centre for Asian Philanthropy and Society benchmarked the philanthropic sector in 15 Asian countries. The analysis ranks the countries on their enabling environment for philanthropic giving. Philanthropic organisations could be potential investors for inclusive businesses (IB) since they are looking for investments with a social and/or environmental impact. Social delivery organisations (SDOs), among them, with a high level of transparency can attract philanthropic investment and thereby mobilise capital.

Key recommendations

• Tax and fiscal policies are powerful instruments to spur philanthropic investments, the potential of which is not yet fully exploited
• Philanthropic organisations align their investments with their own governments’ development goals, therefore policymakers should consider providing more enabling framework conditions

Importance of the publication for businesses

• Highlights the opportunity for philanthropic investment in inclusive business models with social impact at scale

Importance of the publication for policymakers

• Benchmarks countries according to their enabling environment in the philanthropic sector
• Provides proposals for adequate policies and regulations to enable investments from the philanthropic sector

The Centre for Asian Philanthropy and Society (CAPS) was established in 2013 as an action-oriented research and advisory organisation committed to improve the quantity and quality of philanthropic giving in Asia. It found that a lack of trust in social delivery organisations (SDOs) following from the perception that many organisations are not transparent and accountable impedes the increase of giving. Therefore, it is crucial to improve confidence in the Asian social sector to achieve a more conducive environment for philanthropic investments.

The purpose of the Doing Good Index is to benchmark the ease of giving and receiving private social investment, covering 15 Asian economies. 35 different indicators show the regulatory and institutional infrastructure enabling or impeding philanthropic giving. The indicators are classified into four sub-indexes: 

• Regulations: To overcome the dearth of trust, regulations should enhance transparency of the organisations’ activities, promote competition and ensure an efficient distribution of charitable resources. Not only should governments pass adequate and efficient regulations and laws, but also communicate those comprehensively since many SDOs have difficulties of understanding relevant laws and policies. A challenge for policymakers is to reduce opportunities for abuse without creating unnecessary frictions for donors and SDOs. Legal reporting requirements and governance rules can provide checks and balances; however, governments need to ensure that requirements do not impede the entry for smaller SDOs. 
• Tax and fiscal policies: Most of the countries focus on regulations and not on tax and fiscal policy. Tax deduction for individual philanthropic and corporate giving are common in the region. However, the different rates of tax deductions vary considerably, ranging from 250% in Singapore to 0% in Myanmar. Furthermore, tax deductions are primarily for NGOs and not for IBs or social enterprises, which impedes philanthropic investments. Studies offer empirical evidence that tax deductions are an effective incentive for unlocking philanthropic capital. 
• Ecosystem: The society is ahead of the government, but people still need to give more; 71% of SDOs feel that people do not give enough. Most of the SDOs are challenged by little assistance for capacity building and difficulties when it comes to recruitment of skilled staff. Universities are increasingly offering courses on social entrepreneurship and philanthropy to tackle this problem. 
• Procurement: SDOs find it difficult to access information about tenders and find little transparency. Moreover, 47% of respondents overall were unaware that a centralized platform for accessing procurement exists in some countries. Countries could offer incentives to SDOs, as for example in Korea, for applying for government procurement opportunities and ease the procurement process.

The Doing Good Index ranks 15 Asian countries according to four clusters: Doing Well (Japan, Singapore, and Taiwan), Doing Better (Hong Kong, Korea, Malaysia, Philippines, Sri Lanka, Thailand and Vietnam), Doing Okay (China, India and Pakistan), and Not Doing Enough (Indonesia and Myanmar). These groupings indicate that while all economies have deployed some of the practices conducive to the environment for philanthropic giving, none has reached the pinnacle, and there areas for improvement in all countries.