Is Asian charity different than Western charity?

By Mitchell Hinz
On September 22, 2011 At 2:00 pm

Category : acquisition, individuals, strategy

Responses : 18 Comments

If you are just learning that the economic world is shifting focus from the West to the East, well, then you probably shouldn’t even be reading this blog. (You’re a *fund* raiser!) But as you know, it is. And the shift is enourmous.

The swing to the East is centered, of course, on Asia’s two biggest countries, China and India, but as countless Economist articles point out, many countries with LESS than a billion people (!) have a lot going on as well. For example, most people don’t know that Singapore, where I now live, boasts one of the world’s highest GDP-per-capitas: almost US$ 60,000 per person (one in six households has a net worth of MORE than US$ 1 million). However, Indonesia is still the region’s *largest* economy, despite having far higher poverty rates. The GDP-per-capita in Indonesia is only a bit over US$ 4,600 per person (almost 1,500% lower!). Conclusion: Singapore has LOTS of rich people. Indonesia has LOTS of poor people, but a fair number of RICH people, too.

So, if you were a fundraiser (which is a fair assumption, since you’re still reading) the question is — where should you be fundraising? 

Well, if Asian charity is like Western charity, I would argue that you need to go where the numbers are: Indonesia. It’s the world’s fourth most populus country, with over 238 million people. Jakarta alone, from where I’m writing this, has almost 13 million people, and the island of Java, where it sits, is the world’s most populated, with 142 million. Across the street from my hotel is Plaza Indonesia, and the anchor store, taking up three stories, is Louis Vuitton, the high-high-high end French luxury leather goods and fashion house. They seem to have plenty of customers.

Singapore, on the other hand, is teeming with wealth. Singapore’s economy grew (depending on which index you use) somewhere close to 15% last year, and job creation is stready. It boasts one of the fastest growing financial sectors, the world’s richest casino per square foot (the Marina Bay Sands, which paid off the debt on its jaw-dropping three-tower building within a year and a half!), and has more luxury cars per capita than anywhere else in the world. My wife recent volunteered at a charity, helping them sort their direct mail responses, and came across several S$10,000 checks (that’s $8,000 US dollars, still not anything to sneeze at). Those are COLD acquisition responses!

So, perhaps, to a seasoned fundraiser like yourself, the answer is obvious: do INDIVIDUAL fundraising in Indonesia, and MAJOR DONOR fundraising in Singapore. Good guess. Now let’s see what else is at play.

First, you’re right about one thing: going with the numbers. Anyone who has been in this industry for more than a year knows that the world of NGO/charity fundraising is more about small numbers than big ones. When Bill Gates and Warren Buffet combined their incomes to create the world’s richest foundation, their combined gifts totalled US$ 75 billion dollars. But each year in the US, individuals donate over US $300 billion in small-sized gifts. (The Gates Foundation “makes a difference” is because all that money is moving in ONE direction, programmatically.) I’m NOT saying major donor giving should be ignored (the Indian diaspora, especially in the US, is giving hundreds of millions per year to help build their mother country, as all that money “goes home to help”). But global charity giving is a river of small gifts, not a search for the Hope Diamond.

So let’s get back to our decision of Indonesia vs. Singapore: is there anything we missed? Yes. How about “propensity to give”?

In 2010, Charities Aid Foundation (CAF), a nonprofit formed and dedicated to helping nonprofits (mostly in fundraising) produced The World Giving Report, an “index” of giving based on Gallup Poles done each year around the globe. It ranks countries protensity to give (both monetarily and voluntarily). So, how did our big, Asian economic drivers, India and China, fair in this ranking? Not so well, actually.

China pulled a ranking of 147, out of 153 countries. India didn’t fair much better, scoring 134. Indonesia, on the other hand, ranked 50th, higher than any other country in its group besides Thailand. Singapore got a 91 (makes you think, right?) For comparison, the UK is ranked 8th, Netherlands 7th, and the largest charity market in the world, the US, is only ranked 5th. Top is Australia and New Zealand, since you asked.

Does this mean anything? Well, yes, of course. But the propensity to give and share is only relevant to a fundraiser if there is a large enough demographic group that is ready to make a large enough gift (like 4 pounds a month, or an annual gift of US $35). Can you get those kinds of gifts out of Indonesia? Or how about Malaysia, with a much higher GDP/capita than Indonesia, and a regional leader in mid-manufacturing? Does it also have a sizable enough rising middle class to make fundraising profitable?

I’m not going to tell you that, not yet. You have to tune in for future installments to learn what I know. What I will share with you is some statistics that will keep you reading about Asia. Guess how much money was raised in the Asia Pacific countries by 7 leading international NGO’s in 2004? Answer: less than US$ 200 million. And in 2009, 5 years later? Double that, just over US$ 420 million.

That’s a 100% increase in 6 years. Show me what other markets are doing that.

I’ll talk more about the role of charity in Asia next time. Until then, happy fishing.

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Mitchell Hinz (7 blogs on 101fundraising)

Mitchell has more than 25+ years of fundraising and communications experience at NGOs, the first 20 in the USA and the last 5 globally in Europe, East and Southeast Asia and South America. Currently, Mitch is based in Singapore. Experience in all forms of private sector fundraising including Individual, Corporate, Major Donor, Special Event and Legacy. Specialist in individual and membership programs, public direct marketing of all types.


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Comments

  1. Nice article Mitch.

    Regarding your point about major donors, the World Wealth Report 2011 shows that the Asia-Pacific region now has more High Net Worth individuals than Europe (3.3 million vs 3.1 million). The total HNWI wealth in APAC has now reached US$10.8 trillion!

    China has 535,000 HNWI (ranked 4th in the world now) and India is now ranked 12th globally with 153,000.

    Also whereas 68% of HNWI in the US and 80% in Japan are over 55, 41% are 45 and younger in APAC (ex Japan).

    You can download the HNWI report here (needs a free registration): http://tinyurl.com/6y2xarj

    The future for fund raising in APAC is very bright indeed!

     — Reply
    • Thanks, Alex. Yes, we’re aware of the net worth growth! One of our first targets will be HNWI’s who are living outside of their “home” countries (and we know where they shop!)

      thanks for the stats!

       — Reply
  2. Does it really differ? In the basics definitely no, people still give to people. In the detail, of course there are differences but it is dependent on the country, the person and their interest and that is what makes fundraising fun and always a challenge!

     — Reply
    • I agree Ralph: people do give to people. But people also give FOR people.

      And as they say, “the devil is *in* the details”, so that’s what I’m trying to get out into the open. How people network, how they view the role of charity in their lives, in their society, and in their family, is really the key to unlocking the use of wealth for good.

      And I agree: fundraising is always fun!

       — Reply
  3. a fine summary of our fundraising future young sir.

    good fundraising knows no boundaries

     — Reply
    • I look forward to pushing those boundaries with your (and DTV’s) help, Peter.

      Thanks!

      – M

      p.s and thanks for the “young”. Us Over-50’s need a bit of help now and then!

       — Reply
  4. Nice!
    An aspect of Asian charity v/s Western charity is the motivation. Just to take animal rights / companion animals as an example: if one takes a Judeo-Christian point of view ( which most of the Western fundraising communication draws from ) ‘Man ( humans) are made in the image of God’. This differs widely from how multicultural and religious Asia looks at it. Hindus, Buddhists, Taoists ( which make up a major proportion of the population in Asia ) have a different world view on these matter.

    So communicating with a potential donor in Asia using concepts that they don’t derive their motivations from, make fundraising responses by Asians, just a scratch on the surface of the potential (despite the US$8,000/- checks that some still give DM appeals).

    As for how do the Asian see it …. I think I should blog about it, soon.

     — Reply
    • Ladies and Gentlemen,

      This is why Usha Menon is a better major donor fundraiser than I!

      Read her comments again and take to heart. Thanks, Usha!

      See you at the IWRM Fundraising Conference in Bangkok.

      Mitch

       — Reply
  5. Very interesting site and would like to discuss directly .

     — Reply
    • Rejendra,

      As above, please come to the IWRM Fundraising Conference in Bangkok on Oct. 23/25.

      All this (and more) discussed there!

      Mitch

       — Reply
  6. Making comparisons between countries in dollars makes no sense. The share of wallet, although difficult to measure, offers a better insight. In the time I lived in Indonesia (1969-1975) it was difficult to raise funds because the incomes (wallets) were low. Banking system was very limited. Mail was difficult.
    Since then the opportunities for fundraising improved. There is a large community of prosperous people, the awareness for good causes among this people is rising, the banking and communication systems improved. Last but not least: You can still do more good with one thousand rupiah in Indonesia than with one thousand euro in Europe. I still wonder why so many fundraising organisations put more efforts to raise money in Europe for countries like Indonesia than to raise the money locally.

     — Reply
    • Thanks Maarten. I agree with almost all of what you said, and especially
      you conclusion: that countries like Indonesia (where I helped start our fr program)
      are where we need to be working.

      Comparisons of markets in dollars actually does make sense, however, because
      it lets you measure exactly what you referred to: not share of wallet, but SIZE of
      wallet (not GDP, but giving wallet). The success of other NGOs like UNICEF
      and UNHCR, who have large investment budgets (and hence invest in BOTH
      Europe and developing markets) can always give us a good indication of
      the value of the charity market in a given developing country.

      As for rupiah vs euro, according to your own logic, the best thing to do, then,
      is to RAISE 1,000 euro in europe, convert it to 10 million rupiah, and spend it
      in Indonesia! We do that, too!

       — Reply
  7. Great blog Mitchell! At the AFP/CASE Wealth X talk on UHNW individuals yesterday, we had a great conversation about fundraising in Asia in the next 100 years. The growth trajectory is astounding. I completely agree with your opening comments that many in the West will be (and are) heading to Asia as markets and incomes shrink there. The US universities are already agressively pushing into the markets here and it’s only time until we see mid-sized charities follow suit. Large NGO’s like WWF and Habitat, who keep their core mission, have been and will continue to be driving forces for the professionalization of fundraising and ethical practices.

    Can’t wait for your next article–and do encourage Usha to write, I’d love to read her thoughts as well!

     — Reply
    • Glad you enjoyed the comments, Liza. And don’t be nervous, but the mid-sized charities are ALREADY here – they are simply Asian, and national or local, so they probably don’t hit the radar screen of AFP or CASE. Multiple millions are already being raised in markets like Singapore and Indonesia (my continued case-study comparison) for national initiatives like heart disease, cancer, poverty alleviation and HIV/AIDS prevention, and millions more for more localized charities like river clean ups, educational development, and the like. From what I can see, the market *players* are almost all already in place, and it is charity wallet size, as I said to Marteen, that is still (yet) small, but growing rapidly.

      I would be curious what you all concluded about the next 100 years of charity giving! (I have a hard enough time getting my boss to accept a 5-year projection). Please feel free to submit and start a new blog on this site on it! It would be a welcome dialogue. Keep up the good work!

      – Mitch

       — Reply
      • Thanks Mitch. In fact, the majority of our participants in AFP local events come from very small local NGO and non-profits: temples, mosques, environmental groups, international and local schools. It’s been a very eclectic mix at most meetings.

        Wanted to share some thoughts from my boss (and Comms guru) here at SingHealth:

        * Yes, there are lots of opportunities in Asia but fundraising is rather uncreative in Singapore and dominated by the same few causes and donors. Possibly not enough stimuli to help the rich think about giving and move in that direction.
        * It will take Singapore ( public sector) at least another ten years for fundraising to be professionalised .
        * Singaporeans possibly suffer from lack of motivation to give because , the question will always be why can’t the government pay for it.

        Hope to see you at one of our local SG AFP events soon!

         — Reply
  8. Hi Mitch

    I read your blog with interest and this is very timely for us. We’re currently doing some research on a number of markets in Asia and Latin America, particularly with regards to individual giving and the potential that lies there. We’ve spoken to many fundraisers in countries like Malaysia, Brazil, India, Thailand, Singapore, Hong Kong, Mexico and Peru and combined this with our own market analysis to draw our own conclusions.

    Indonesia is an interesting one for us and I’d be interested to hear your thoughts on individual giving in the country in more detail. We know there is DM fundraising going on both from INGOs and national orgs, but it’s not massively visible (apart from maybe WWF and UNICEF). We’re also looking at the potential to sell the HIV/AIDS proposition in Muslim countries like Indonesia, where many feel this would be a hard sell.

    Look forward to the next installment and if you fancy having a chat about Indonesia, I’d be grateful to hear your thoughts!

    Matt

     — Reply
  9. Dear Mitchell, please if you could send me an email address to contact you. I am at a critical step in a think tank project and really need to build a relationship with your community. You can find my profile on LinkedIn. Owen

     — Reply
  10. Hi Mitchell,

    I am a Master’s student at the Danish School of Journalism in Aarhus. I am writing an analytical feature on the World Happiness Report in which I argue, among other things, that the criteria that the World Happiness Report uses to assess happiness levels are mostly based on Western values. One of the criteria is charitable giving. I am hoping you might be interested in telling me more about the differences between Western and Asian countries when it comes to charity?

    Thank you in advance,

    Irene

     — Reply