World Giving Index Reveals Bad News & More Bad News

Between 2010 and 2011, the world witnessed a sharp fall in generosity as global economic growth slowed. The number of people who have donated money, volunteered time and helped a stranger has fallen significantly.

For the United States, there is even more bad news. The US lost the distinction of being the world’s most “generous country,” falling back to fifth place.

This bad news comes from The World Giving Index 2012The Charities Aid Foundation,  an international charity based in the United Kingdom, published the findings recently. The report, compiled from survey data provided by Gallup, ranks charitable behavior in 148 nations. CAF bases the rankings on three measures:

Have you done any of the following in the past month?:

  • Donated money to a charity?
  • Volunteered your time to an organisation?
  • Helped a stranger, or someone you didn’t know who needed help?”

The CAF report reveals, “In 2010, 65 percent of Americans said that they had donated money to charity in the previous month. That figure fell by eight percentage points to 57 percent in 2011.” This helps explain the American drop in the rankings.

The news for Australia is much better as that nation reclaimed the number one spot. “In a typical month, more than two-thirds of Australians donate money to charity and help a stranger. More than a third volunteer,” according to the report.

 

World Giving Index 2012 Map

World Giving Index 2012 — Map with Country Rank

 

In 2011, the top ten most giving countries were:

Australia

Ireland

Canada

New Zealand

United States of America

Netherlands

Indonesia

United Kingdom

Paraguay

Denmark

In 2011, Sri Lanka, Thailand, and the Lao People’s Democratic Republic lost their spots in the top 10 list that they had held the previous year. They were replaced by Indonesia, Paraguay, and Denmark.

Unfortunately, while the news for some individual countries is good, the report reveals that the overall world picture is not when one looks at the percentage of the population engaging in the various giving behaviors:

In the case of donating money the net decline, between 2007 and 2011, was almost two percentage points (falling from 29.8% to 28.0%). In the case of helping a stranger, it was also almost two percentage points (falling from 47.0% to 45.1%), and in the case of volunteering time it fell by three percentage points (falling from 21.4% to 18.4%).”

While participation had begun to recover in 2010 following the Great Recession of 2009, 2011 saw global Gross Domestic Product growth slow. The report cites the weakening of the world economy as one reason for the decline in giving behaviors.

However, the CAF speculates that there could also be an additional reason: “Most strikingly, the World Disaster Report 2012 shows that the two years when giving declined sharply – 2009 and 2011 – were also the only years since 2002 to witness fewer than 600 disasters globally.” It seems that a drop in GDP growth and the number of disasters could both have contributed to the decline in giving.

For the complete results of the study including recommendations from the authors for what policies can encourage greater giving, you can download the complete World Giving Index 2012 here.

The report also contains a description of the methodology that CAF used. One can quibble with that methodology. However, CAF has consistently used the same approach while engaging the same highly reputable research agency. Therefore, the report does give us a valid look at trends. While perhaps not providing the most complete and accurate examination of global giving that might be possible, the World Giving Index 2012 is nevertheless the most comprehensive report available.

I thank CAF for furthering our understanding of world philanthropic behavior.

I invite you to share your thoughts here about the study and the state of giving in your own country. If you want to comment on Twitter about the World Giving Index 2012, CAF encourages you to use the following hashtag: #WorldGivingIndex.

That’s what Michael Rosen says… What do you say?

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11 Comments to “World Giving Index Reveals Bad News & More Bad News”

  1. Great report. I think I bring a unique view to this data. I worked in the sector for a decade while earning 2 degrees in Non-Profit Management. After a short stint in the Army Reserve I returned to the sector in 2011 and it had changed drastically in just 2 years.

    Most boards I’ve dealt with since simply do not want to fund raise. They feel the job can be done through online social networking, staff driven events and government grants. The requirements of the government grants often make it harder to recruit volunteers. I think this is the result.

    While I agree with the report which states public leaders need to encourage involvement I think they also need to recognize that more taxes and a new program are not the answer. Economic freedom and empowering local citizens to help each other will improve the overall outlook of charity.

    • Nick, thank you for your comments. You made a number of interesting points. I’d like to address some of them.

      Many boards are indeed reluctant raise money. Many board members are also reluctant to give money. How can this be the case in 2013? It amazes me. But, as a sector, we have only ourselves to blame. If nonprofit organizations create a written job description for board members that includes fundraising responsibility and a requirement to give, board members will know from the start what is expected of them. People tend to adjust their behavior to the expectations that others have of them. Also, for board members that are very uncomfortable with asking for money, we need to show them how else they can be engaged in the development process. For example, they can identify prospects, go on visits to share their passion while the development professional advances the actual ask, etc.

      Boards need to understand that development activity can not simply be delegated to the development committee, the director of development, or a consultant. They also need to understand that, in today’s economic/budget environment, governments will have less money to make grants. It’s up to professional staff to effectively train board members.

      As you mentioned, the report urges public leaders to encourage philanthropic behaviors. While I agree that this should be done with caution, there is certainly a role for government. Unfortunately, in the US, government has been somewhat antagonistic to the nonprofit sector. For example, the Obama Administration had wanted to cap the tax deduction for charitable giving at 28 percent. Many state and local governments are imposing fees in lieu of taxes on nonprofit organizations. By contrast, the government of Australia is actively seeking to develop ways to encourage philanthropic behavior, according to the report. Interestingly, that country holds the top position as most generous nation in the world.

      Finally, I just want to take a quick moment to thank you for your service as a member of the Army Reserve.

  2. The United States is still an enormously generous society and 5th place is more than respectable. However, this proves that there is no room for complacency.

    At CAF we have started thinking about how we would like governments to respond to the performance of their nation in the World Giving Index. We are embarking on a project called Future World Giving which will create a framework of recommendations which are split into stages depending on the level of philanthropic development in each country. If you are interested in the development of philanthropy in emerging economies then I encourage you to get involved with the project as it develops.

    Find out more at https://www.cafonline.org/publications/2013-publications/future-world-giving.aspx

    • Adam, thank you for sharing the link so folks can learn more.

      As part of the work that CAF is doing to promote philanthropy-friendly government policy, it would be helpful if you would share success stories that can inspire other governments. Sometimes, what works might involve incentives for charitable giving. In other cases, it might simply involve government getting out of the way. Either way, it will be valuable to learn from others.

      While I’m disappointed that the USA has fallen back to fifth place, I agree that it is still a respectable showing. And, in terms of philanthropy as a percentage of GDP, I believe the USA still would rank number one. Unfortunately, the World Giving Index does not look at that figure though it would probably be interesting to track.

      Finally, I must address another point when it comes to looking at national generosity. Sweeden ranked below the USA in generosity. However, the Sweedish government spends a significant amount of money on services that are funded by the private sector in the USA. Does that make the Sweeden really less generous than the USA? To gain a true understanding of national generosity would require an examination of government and private spending on the arts, social services, etc. While the World Giving Index measures voluntary giving rather than government spending, I would argue that, in a democracy at least, government spending is voluntary in a way. If one were to combine government spending with voluntary spending, we might have a more clear picture of national generosity.

      • You raise some very interesting points, Michael. I will be looking for examples of government interventions and their impact on giving. I am particularly interested in the idea of unintended consequences. For example, do tax incentives on domestic giving constitute an effective disincentive to cross border giving? I also think that it might be interesting to see whether less developed countries might be able to teach developed philanthropic markets something. For example, many sub Saharan African nations are streets ahead in terms of accessing financial services through mobile technology. This may turn out to be an extremely effective vehicle for giving.

        In terms of giving as a proportion of GDP the USA comes first, by quite a wide margin. Without getting into debates around whether giving to church collections is a duty or charity, its fair to say that religious giving has a big impact. But even without religious giving, the USA would still be near, or at the top of the list. But giving is about more than just the value of donations. The engagement of society in philanthropic activity has far reaching benefits. There is a much vaunted link between engagement in philanthropy and wellbeing and charitable giving can be important for community cohesion. To this extent the World Giving Index focus on involvement in giving provides a useful perspective.

        Your point about large scale state spending on social services is one that comes up a lot. Whilst it may be true that nations with a small state model may see a higher rate of giving to support services not provided by the state, I think the link is far from being a direct one. Social protection in the UK is relatively comprehensive and yet levels of giving are amongst the highest globally. A long standing culture of giving and generous tax incentives may explain this to some extent.

        The shifting pole of global wealth to the East is both an opportunity and a challenge. We want emerging economies to have policies in place that promote giving. Because if countries like Brazil, Russia, India and China are giving like the USA in 20 years time, the world will be a better place.

      • Adam, thank you once again for sharing your interesting thoughts about this important subject. I was particularly interested in your mention of Brazil. I wrote an article several years ago about the spirit of philanthropy in Brazil and the impact it has had on democracy and the impact democracy has had on philanthropy. It very much ties into what you were saying about philanthropic engagement being a force for community cohesion. You can find the article here: http://mlinnovations.com/yahoo_site_admin/assets/docs/World_View-Brazil.3003203.pdf.

        The best thing a government can do to encourage robust philanthropic activity is to allow it. I know this sounds simplistic. However, philanthropic activity in Brazil took a leap forward only after the government got out of the way. Strong economic growth is also helpful, but consider China. The philanthropic spirit in China is not nearly as strong as Brazil despite the fact that the Chinese economy is healthy relative to most of the rest of the world. China’s ranking in the World Giving Index is also significantly lower than Hong Kong. Both are culturally and economically similar; the major difference is the relative restrictiveness v. openness of the societies.

        To promote philanthropy, it’s not always about what government can do. Sometimes, it’s about what government will stop doing.

  3. The World Giving Index is not based on actual giving data. It is just a Gallup opinion poll which amounts to little more than asking someone if they are a nice person.

    This should not be confused with real giving data which is based on the actual amounts of money given to charity as tracked by financials and tax filing. Blackbaud publishes data every year based on actual donations. These are far more instructive than this nonsense. When comparing between countries it is important to account for the difference in average income and the overall GDP of each country. It can be a complex picture.

    All fundraising professionals should know the difference between “qualitative” and “quantitative” data. This is qualitative data of a questionable nature. Asking someone if they give is not the same as tracking actual donations.

    If we compared the World Giving Index to actual giving in the countries it ranks, we would have a very interesting study indeed. A comparison of who says they give and who actually gives.

    Do I think CAF is “furthering our understanding of world philanthropic behavior”? No, I do not. Because they continually present this opinion poll as giving data, when the actual giving statistics of the various countries are very different than the picture they present. To muddy the waters with bad data is a service to no one.

    • Denisa, thank you for commenting and sharing your concerns about The World Giving Index. You are correct when you say that The Index is based on survey data rather than actual giving data. Neither the Charities Aid Foundation nor I made any attempt at all to hide that fact. In my post, I stated:

      “One can quibble with that methodology. However, CAF has consistently used the same approach while engaging the same highly reputable research agency. Therefore, the report does give us a valid look at trends. While perhaps not providing the most complete and accurate examination of global giving that might be possible, The World Giving Index 2012 is nevertheless the most comprehensive report available.”

      CAF does not track actual money given. Instead, its report seeks to measure behaviors that reflect generosity. If it were a one-time analysis, I’d be more inclined to agree with your position. However, CAF has been doing this study for a number of years. So, we have an opportunity to see a trend line. The bottom-line is that The World Giving Index is the most comprehensive report of global philanthropic generosity. It’s not perfect. But, it is nevertheless informative and useful.

      The Blackbaud report you cited as well as Giving USA, look at philanthropy a bit differently. These reports look at the amount of money given. However, these reports only look at philanthropy in the United States. Furthermore, your assertion that the Blackbaud report is based “on actual donations” is simply incorrect. Both Blackbaud and The Giving Institute rely on concrete data from tax filings. However, they also rely on estimates in order to provide a more complete picture.

      While there is a difference between quantitative and qualitative research, both can have value if well done and properly used.

      Finally, philanthropy is not necessarily about how much money one gives. It’s not necessarily even about giving money. While The World Giving Index does look at the giving of money, it also looks at helping a stranger and volunteerism. By taking a broader view of philanthropy, CAF gives us a deeper understanding of philanthropic generosity around the world. The study does not intend to tell us how much money the citizens of a given country donate. Instead, the study seeks to help us understand how engaged in philanthropic behaviors the population of a given country are. In my humble opinion, CAF does a pretty good job of that.

  4. I agree that both qualitative and quantitative data are important. But the problem with the World Giving Index is that their “qualitative” data wildly diverges from all other giving data. I work in Ireland and the reality on the ground is so far from the picture painted by The World Giving Index it’s laughable. CAF also puts another piece of “research” out in the UK. They use the same questionable data gathering. Their report on the state of giving in the UK is so far off the mark that the Heads of Fundraising at major charities place bets on how far off it will be from official figures.

    The real problem lies in the all out media blitz to the general public which does not explain the difference between an actual donation of money or time, and someone saying they donated money or time. In small countries where we are just beginning to gather proper data about the sector, we are undermined by the outrageous claims of the World Giving Index. It is very hard to communicate accurate figures when the public has been subjected to a number of years of hyped up giving figures. Getting real data accepted and used as a baseline is very difficult when there is a flood of media coverage with innacurate data.

    This innacurate data permeats the press thanks to CAF’s hardworking promotion. It’s obvious that these reports are their primary way of promoting themselves. I disagree completely that they are helpful for analysis. If they were corroborated by other research I would not feel so strongly about it.

    There is one thing I find useful. I think the amount people claim to give & volunteer is an indication that giving is a strong value in that country. The large gap in some countries between what they say and what they actually do is an interesting cultural phenomenon which fundraisers would be wise to note.

    • Denisa, thank you for your follow-up comment. While I’m intrigued by the points you’re making, your arguments would have been much stronger if you had furnished any evidence. For example, you state that there is a “large gap in some countries between what they say and what they actually do.” Where’s your evidence that some populations are more likely to lie in a big way?

      You work in Ireland. So, tell me, what percentage of the Irish adult population do you believe donates? What study are you using? What percentage of the Irish population volunteers? What study are you using? The World Giving Index 2012 states that 79 percent donate while 34 percent volunteer.

      I don’t mind you trying to refute the CAF report. However, I must request that you provide some facts to back-up your opinions.

  5. The World Giving Index is not a measure of actual donations and does not attempt to compare the actual amounts given in different countries. Rather, it is a measure of engagement in charitable activity around the world and a litmus test for peoples perceptions of giving.

    Denisia, I wholeheartedly agree with you when you say that a comparative study between actual giving data and World Giving Index data would be extremely valuable. Were such data to be made available in a comparative form then we would of course be eager to contrast that against our data. However, I disagree with your labelling of a study that interviews 155,000 people in 146 countries as “questionable.”

    The idea that only data rendered from financial transactions is worthwhile in a sector that relies on the good will of people is troubling to me. If people in a study this large are telling us that they are giving less than they did last year then it is surely significant, either because it mirrors actual giving, or because it tells us about peoples perceptions of giving. You don’t have financial traders questioning the importance of market confidence. It is crucial.

    To wrap up my contributions here I want to strike a harmonising chord. The World Giving Index is not perfect and we recognise that different contexts and understandings will inevitably effect how people answer our questions from one country to the next. But no one source of data can ever give the whole story – and that includes hard data on receipts. It is therefore healthy to scrutinise data of all different forms and hues to create the clearest possible picture.

    Adam Pickering
    CAF

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