Commentaries

Is the American Model of Philanthropy Exportable?

The United States has long been lauded for its generous philanthropists and expert fundraisers. More recently, its model of philanthropy is gaining interest with the international community, particularly from countries that have traditionally relied on significant levels of government financing for a range of social services, and which are now seeing this support shrink.

But how exportable is American philanthropy to other countries?

The giving culture of a nation is indisputably shaped by forces including historical events, economic wealth, government policies, and religion. Philanthropy in America was forged in the absence of government, with the pioneers meeting the challenges of a new frontier far from the support of European States. Along with the massive amounts of individual wealth generated through entrepreneurism came a “noblesse oblige”, or an implicit social contract to return wealth to society. This nexus of entrepreneurship and philanthropy, combined with a view that government is best which governs least, is unique to the U.S and firmly entrenched in the American psyche.

Given the distinctiveness of American philanthropy, can it be applied to other countries? Will it adapt to the Netherlands, France, Sweden, where citizens believe strongly that governments, not charities, should provide for social needs? How about in an egalitarian Australia, where the middle and upper middle classes are taxed more severely for redistribution? Consider Britain, where the philanthropy is typically private and low key support through small unplanned donations, in contrast to America, where giving is public, planned, and unapologetically connected with personal identity”?

Failure to recognize cultural and structural differences will lead to poor fundraising results for the countries looking to adopt the American way. One example is tax law. Tax incentives are not considered to be a primary motivator for American philanthropists. Many of the large museums, hospitals, and universities were established before tax benefit legislation.

However, in other countries, residents pay higher taxes than their American counterparts. Further, complex tax exemption procedures are barriers to establishing foundations.

A recent example of the impact of changing tax legislation can be seen in Australia. In the mid-1990s, the Australian government overhauled tax legislation to provide incentives for wealthy individuals to establish foundations. “Private ancillary funds” were created allowing for deductions of charitable gifts. Ten years later, 768 new private ancillary funds had been established with a total endowment of $1.2 billion. Grants totaling $117 million had been made. The value that other cultures place on tax benefits accruing from philanthropy cannot be underestimated.

The other major piece of U.S. philanthropy other countries are curious to learn more about are the methods of fundraising. Development teams with U.S. non-profits have specialized professionals responsible for annual and capital campaigns, major and institutional gifts, and events. The cycle of prospect research, planning, cultivation, solicitation, stewardship, and evaluation is purely a function of the U.S. environment and rarely seen in other countries.

How exportable are these techniques, particularly to countries where fundraising is a fledgling profession? There are many cultural considerations – in some countries prospect research is considered “impolite”, while in others it is “unethical”. Direct mail in some countries is outright illegal. In many Asian countries, donors prefer to be solicited in indirect ways as a direct ask is viewed with potential for conflict and losing face. In Australia, people are cynical of individuals who make large donations. Many countries view the American way of fundraising as pushy and vulgar.

While the American model of philanthropy is undoubtedly an international success story, it will not be successfully exported unless it is, first recognized for being particular to the United States, and second, modified for export. And of course, while the American philanthropic model is unique, philanthropy is not unique to America. As in all international matters, deference to cultural differences and sensitivities will elevate fundraising to a truly international science, ensuring its success well into the future.

Katherine Crawford-Gray has worked as a grantmaker in Australia and as a fundraiser in New York. Her grantmaking interests include international and corporate philanthropy. Katherine is currently a full time Masters Candidate in New York University’s Heyman Center for Philanthropy and Fundraising.

 

References

Charities Aid Foundation (CAF). 2006. International Comparisons of Charitable Giving [online] Available at: http://www.cafonline.org/Default.aspx?page=12183

Hall, H. (2009). Red, White, and Green. The Chronicle of Philanthropy, 21 no16 1 Je, Available through: OmniFile FT Wilson database

McGregor-Lowndes, M. Newton, C. and Marsden, S. (2006). Australian Journal of Social Issues, [online] Available at: http://eprints.qut.edu.au/6394/

Onishi, T. (2007). Japanese Fundraising: A comparative Study of the United States and Japan. International Journal of Educational Advancement, Available through: ProQuest database

 




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