The Evolving Landscape of Gulf Philanthropy
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The Evolving Landscape of Gulf Philanthropy
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By Naam Chakravorty, Gulf Lead, Botho Emerging Markets Group
February 23, 2023
Philanthropy has always been at the heart of the Gulf's socioeconomic framework, with the practice of giving having deep religious roots. Philanthropists in the region — whether family businesses or individuals — deepen their religious convictions through the traditional Islamic obligations and voluntary practices of "Zakat" (mandatory almsgiving), "Sadaqah" (voluntary charity), and "Waqf" (charitable endowments). These practices are intended to bring the community together while serving humanitarian causes and needs. Yet, despite the importance of giving in communal rituals, research and studies on Gulf philanthropy have been sparse, leading to the question — what is the impact of Gulf philanthropy?
Recent global crises, such as the COVID-19 pandemic, naturally occurring calamities brought on by climate change, the rise in the number of refugees, etc., have highlighted the need for strategic giving to effectively address the underlying causes of such upheavals. Because the Gulf accounts for nearly 10% (or $210 billion) of global philanthropic contributions, analyzing philanthropic practices in the region will help to define how donors might optimize the value of their efforts both locally and internationally. The region's philanthropic landscape has recently started to shift from a traditional and historically siloed strategy to one that is more entrepreneurial in nature. As a result, contributors are increasingly striving towards data-driven philanthropy, to coordinate more strategically with the government's goals for socioeconomic development, and digitizing practices.
The Gulf region is experiencing structural shifts in philanthropic practice, becoming increasingly focused on evidence-based giving and shifting away from the cultural practice of discretion.
Islam encourages “discretion in philanthropy, emphasizing that such activities are done for self and God, rather than for public acclaim or personal gain.” Consequently, a big part of Gulf philanthropy involves discretionary contributions to institutions with whom corporations or individuals have a close connection. Younger philanthropists, however, are moving toward social entrepreneurial models. The fundamental impetus for this transition is the benefactors' desire to enhance their contributions to society through a more sustainable and long-term impact. Additionally, data-driven or evidence-based philanthropy will ultimately aid the Gulf in enhancing its influence on the global front.
Currently, data scarcity is an obstacle in the region, particularly as it relates to introducing innovation and long-term planning. The absence of data also represents a missed opportunity to pinpoint areas for collaboration, evaluate impact, measure outcomes, and communicate lessons learned. This was acknowledged at the "Private Philanthropy for Development in the MENA" event held in late 2022 by the UAE-based Al Qasimi Foundation, where there was a lively discussion on the topic of data scarcity and how it might be addressed by a collaboration between the non-profit and for-profit sectors.
Gulf philanthropists have recently begun to coordinate their contributions with the government's objectives for socioeconomic development.
Even though historically the public and private sectors in the Gulf have worked together on humanitarian projects, this cooperation has been straightforward in nature, with businesses and individuals choosing credible government charitable initiatives rather than those that are relatively unknown. However, Gulf nations like Saudi Arabia and the UAE have recently made room for strategic collaboration with individuals and businesses. For instance, Saudi Arabia encouraged businesses to take part in its growth and address development challenges through its Vision 2030 initiative, particularly in fields such as healthcare, education, housing, and cultural and social programs. In a similar vein, the UAE has started a number of initiatives, one of which was to proclaim 2017 as the "Year of Giving" to encourage the culture of giving back to the community. This led to 1,400 collaborative initiatives between the government and private organizations throughout the UAE. Such collaborative programs are giving regional contributors the ability to participate more strategically in national and regional development goals.
Digitalization is being used as a tool to provide more accessible and inclusive solutions in the philanthropy or social impact sector.
Digitalization also aids in building a more transparent data trail into the results of philanthropic contributions. For instance, the recently established Dubai-based digital platform, Dal Global, focuses on social impact, and its primary activities include registering NGOs, linking them to corporations, and assisting the latter in effectively managing their contributions. The platform also offers value-added impact-focused services like monitoring and evaluation (M&E), measurement, and reporting. Organizations like Dal Global are paving the way for the private sector and individuals to think about their philanthropic channel and consistently gauge impact. In addition, the information they manage to gather in a few years will highlight the gaps in the social entrepreneurship model and the solutions to address them.
Although it goes against some conventional norms, philanthropy in the Gulf has purposefully begun to shift toward a strategic approach. This has benefits in terms of long-term impact as well as promoting national economic growth and development. The evolving nature of philanthropy in the region has great potential to address both local and global crises, but for the sector to reach its full potential, internal capacity must be built and capabilities improved via increased investment, collaboration, and intentionality.
Naam Chakravorty is the Gulf Lead at Botho Emerging Markets Group