Philanthropy is present everywhere, but philanthropic efforts are conducted differently based on where you are and what norms guide philanthropy in that country. This diversity in philanthropic activity also leads to diverging methods in regulating and supporting it. In an increasingly interconnected world, where a natural disaster in one country can rally support worldwide in a matter of hours, understanding how these systems function and interact with each other is vital.
This month, the Indiana University Lilly Family School of Philanthropy released the 2022 Global Philanthropy Environment Index (GPEI). This is the 2nd edition of the report, following the 1st edition published in 2018. The GPEI is the most comprehensive report on the environment for philanthropic activity in the world, and provides a valuable tool for policymakers to understand the role philanthropy plays in society and the barriers it faces. The GPEI assesses the philanthropic environment on a scale from 1.0 (lowest) to 5.0 (highest) in a country using six factors:
- Ease of Operating a Philanthropic Organization;
- Tax Incentives;
- Cross-Border Philanthropic Flows;
- Political Environment;
- Economic Environment; and
- Socio-Cultural Environment.
The 2022 GPEI examines the period from 2018–2020 and the changes that occurred in the philanthropic environment for over 90 countries and economies in that time. This second edition of the report not only includes updates on all the countries and economies included in the 1st edition, but also builds on that by adding an additional 12 countries to the analysis. With these new countries, the GPEI now includes information from countries spanning all levels of economic development. The GPEI includes countries and economies that make up 85 percent of the world’s population and 95 percent of global GDP.
The 2022 GPEI revealed some positive trends in philanthropic environments across the world. The report notes three-fifths of the countries in the GPEI reported an overall favorable environment for philanthropy (above 3.50), with the highest scoring factor being Ease of Operating with a score of 3.97 out of 5. This factor focuses on the legal framework which governs how organizations are created, run, and dissolved. From a policy perspective, this is a valuable finding that indicates that policies governing these organizations are seen positively and as conducive to their operations.
The pandemic also showed how much of a role philanthropy can play in society. From millions of dollars in donations to private funds to new approaches in online giving and volunteering, philanthropic organizations demonstrated how responsive they can be to the needs of those they serve. Philanthropic organizations have also played crucial roles in addressing more systemic issues such as educational, economic, and social inequalities.
However, the GPEI also noted some barriers to effective work by philanthropic organizations. For example, while a majority of countries reported a favorable environment for philanthropy, a third of the countries that were also included in the 2018 GPEI saw declining scores in this edition. Many of these declines were due to issues related to organizations that advocate for human rights and which faced restrictions on their activities, as well as many countries continuing to restrict access and use of foreign donations.
Strict regulations on cross-border donations create a burdensome process to accept philanthropic donations from abroad, even when they were needed. Such restrictions on cross-border giving, according to the 2020 Global Philanthropy Tracker, have gained more relevance as cross-border giving continues to increase due to factors such as growing diaspora communities with more means to donate, technology making cross-donations easier and faster, and challenges like climate change that require cross-border collaboration and solutions. In addition, the COVID-19 pandemic also burdened many countries with bleak economic conditions that directly impacted the ability for philanthropic organizations to access funds and receive support from local donors.
For more information about the GPEI, please visit the Indiana University Lilly School of Philanthropy’s page on the 2022 GPEI. The 2022 Index provides a global report, as well as regional and individual country reports to create a holistic perspective on the state of global philanthropy. If you’re not sure where to start, you can begin with your home country or perhaps the Balkan Countries, which have had some interesting developments in philanthropy over the past few years.
About the author
Edward Vaughan is a current student in the Master of Public Policy program at the Willy Brandt School at the University of Erfurt. He graduated in 2019 from Indiana University-Purdue University Indianapolis with a double major in International Studies and German, along with certificates in Chinese and African Studies. Before joining the Willy Brandt School, Edward received a Fulbright grant to work with a Gymnasium in Braunschweig in their English department for the 2019-2020 school year. He also works with the IU Lilly Family School of Philanthropy’s Global Indices research team on projects related to cross-border philanthropy.
~ The views represented in this blog post do not necessarily represent those of the Brandt School. ~