Future World GivingRecognising the potential of middle class giving

27 May 2014

Adam Pickering, International Policy Manager

Demonstrate the potential growth of middle class

giving

Highlight the importance of mass engagement in

giving

Highlight some of the barriers for future growth

Aims

MIDDLE CLASS GROWTH OPPORTUNITY

The polarity of wealth is changing

Explosion of wealth

The rise of the global middle classes

165% growth

US$55 trillion

US$223 billion

0.4%

US$1.2 trillion

US$4.9 billion

0.4%

And Brazil?

Mass market By 2030 spending of middle class Brazilians, adjusted for

purchasing power parity, will have almost doubled to $1.2 trillion. If middle class Brazilians were to give at the same rate as seen

in the UK (0.4%) this could generate $4.9 billion in charitable donations annually.

Brazil is becoming a more equal society with a broad tax revenue base. 27% of government revenue comes from individuals suggesting that incentives could be effective (World Bank).

High Net Worth In 2013 Brazil had 222,000 $millionaires. By 2018 this number

will have grown by 84% to 407,000 according to Credit Suisse Research

Civil society about more than services to beneficiaries

Combats “the tyranny of the majority”

Can act as a pressure gauge

Crucial for governance

Concerns about leeching of sovereignty assume power is

finite

Without an appropriate means to voice their dissent, disenfranchised citizens will eventually make their grievances known, and it may be in radical and destructive ways"

Jimmy Carter

Why middle class giving?

BARRIERS

World Giving Index: 5 year trends

1 2 3 4 50

10

20

30

40

50

60

-1.00

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

5.20

-0.03

7.50

2.70 3.00

2325 26

24 23

15 15 1412 13

5149 48

4442

GDP growth Donating moneyVolunteering time Helping a stranger

Brazil: 5 year trend

 Year Overall rank   Donating money Volunteering time Helping a stranger  Rank % Rank % Rank %

2008 68   63 23 83 15 40 51

2009 54   52 25 64 15 46 49

2010 69   59 26 80 14 50 48

2011 83   68 24 93 12 71 44

2012 91   72 23 90 13 90 42

Brazil: 5 year trend

Creating an enabling environment for giving

• Global giving climate is complex

• National context key to understanding

• But there are global trends

-40

-30

-20

-10

0

10

20

30

Changes in giving money] (%) from 2008 to 2012

Country2012 data %

2008 data %

Change in percentage points from 2008-12

Uruguay 40 17 23

Cambodia 45 23 22

Indonesia 63 43 20

Latvia 31 15 16

Paraguay 49 34 15

India 28 14 14

Uganda 25 11 14

Norway 56 43 13

Portugal 27 15 12

Chile 54 42 12

Country2012 data %

2008 data %

Change in percentage points from 2008-12

Benin 8 19 -11

Malta 72 83 -11

France 24 36 -12

Denmark 54 67 -13

Laos 47 64 -17

Austria 52 69 -17

Guatemala 29 46 -17

Nepal 25 46 -21

Honduras 23 46 -23

Vietnam 13 43 -30

Changes in giving money since 2008

10 largest increases 10 largest decreases

30 countries have tax incentives for corporate giving but not for individuals

Others have very limited incentives for individuals Still more follow the US model of tax credits ruling

out those who do not file tax returns In many developing countries such a framework is

understandable seems logical but is short sighted

Favouring corporations and HNWIs in tax incentive regimes

No

ince

ntiv

es

Ince

ntiv

es

No

ince

ntiv

es

Ince

ntiv

es

No

ince

ntiv

es

Ince

ntiv

es

No

ince

ntiv

es

Ince

ntiv

es

Low income countries Lower middleincoem countries

Upper middle income High Income countries

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

WG

I G

ivin

g m

on

ey (

%)

THE POWER OF INCENTIVES

Recent restrictions on advocacy & foreign funding

•Recent/proposed laws restricting advocacy

•Recent/proposed laws restricting foreign funding

•Lack of clarity or implementation of laws causing friction

Globalisation of values challenging state sovereignty

Delivering social services

Working with companies to solve issues

Communicating activities/commitments

Publicaly criticising governments/companies

Raising money to support activities

Publicaly protesting

Influencing government policies

0 10 20 30 40 50 60 70 80 90 100

85

83

78

73

71

70

67

86

83

78

70

69

67

63

Support for Environmental and Social Groups’ Actions 2008-2012*Support (strongly + somewhat), * average of 15 countries

2008

2012

*Includes: Australia, Brazil, Canada, China, Germany, India, Indonesia, Kenya, Mexico, Nigeria, Pakistan, Spain, Turkey, UK and USA

Data from GlobeScan RADAR 2012 Wave 2: Issues and Reputation

Publically criticizing governments/companies

Influencing government policies

Delivering social services

Working with companies

Using public protests to raise awareness

Support for Environmental and Social Groups’ Actions in Brazil

Data from GlobeScan RADAR 2012 Wave 2: Issues and Reputation

0 10 20 30 40 50 60 70 80 90 100

75

66

91

89

75

18

26

6

7

19

Oppose

Support

Global Trust in NGOs

Brazilian trust in NGOs

Giving grows

Benefits are felt

Expectations rise

Market develops to meet

expectations

Market tends

towards complexity

The need for continuous policy development

Big year for CSR

Privatization has placed greater expectations on corporations to address public problems

Companies Act in India seen as an experiment

Corporate leaders increasingly see philanthropy and CSR programmes as opportunities for differentiation:

In the market for customers. 88% of Indian and 86% of Chinese consumers say they buy products with a social or environmental benefit (67 per cent globally).

In the market to attract and retain talent – An Ipsos MORI survey of 18,150 Indian people found that 51% considered social impact to be important in their career choice with 58% looking to work for a company with “values like my own”.

Payroll giving becoming attractive to employers

• Media references to individual philanthropists in emerging markets are rapidly increasing, with 385 references over the last year in India alone

• Warren Buffet’s “Giving Pledge” is signed by billionaires in 10 countries, including Russia, Ukraine, Taiwan, India & South Africa

• Some concern that there is too much focus on individuals

• Recent media stories naming and shaming those who don’t give publicly

UHNWI and “celebrity philanthropy” culture spreading

HNW philanthropy part of the solution

• Globally, income inequality continues to increase

• Attitudes to wealth are worsening in many nations

• Warnings from IMF and World bank

• Should focus on inclusion in civil societyImpact

investment

Improve perceptions of

wealth

Risk capital philanthropy

Potentially transformative

Support social justice

causes

Combat sense of reciprocity

About Future World Giving

Concept paper 3 thematic reports:

Building Trust in Charitable Giving

Enabling an independent Not-for-profit Sector

Encouraging people to give

Recommendations framework

Future World Giving Framework

Website

www.futureworldgiving .org

QUESTIONS?

apickering@cafonline.org@A_L_Pickering

www.futureworldgiving .org