Philanthropy in the Arab world. Scenario and evolution

Egyptian by birth, Naila Farouky is CEO and Executive Director of the Arab Foundations Forum, created to answer to the rapid increase in the number of philanthropic organizations in the Arab region. The associations reunites 25 grantmaking foundations with the goal of promoting strategic philanthropy practices and a culture for effective giving.

Struggling between innovation and tradition, philanthropy in the MENA Countries (Mediterranean and North Africa) is played on contrasts – on one side, the strong increase in the number of players in recent years, also following the Arab Spring, and a more decise attention towards modern philanthropic practices, on the other a strong historical attachment that in most cases keeps the culture of giving within a religious dimension and the absence of relevant sector data. 

To introduce the perspective of philanthropy, could you give us a dimension of the phenomenon in the Arab Region?

One of the main challenges of the Arab region vis-à-vis the philanthropic sector is that we lack data and concrete information on the number of foundations and the amounts of grants that are made. One reason for this is that, when it comes to philanthropic giving, there is a higher value placed on the giving when it is anonymous. This stems from the religious tradition around charity and remains one of the most popular channels through which charitable giving is made in the region. Traditionally, the Arab region has had a rich tradition of giving in the areas of education, health, and supporting the economic development of disenfranchised populations. Over the past 10 years, the region has seen a broadened focus in the philanthropic sector in the areas of gender equality, social justice, and social development.

In Europe and especially in Anglo-Saxon countries, philanthropy is encouraged e.g. in terms of tax incentives. How is philanthropy perceived in the MENA region?

Due to the deeply embedded tradition and culture of philanthropic giving within a religious context, the Arab region does not have a developed infrastructure of institutionalized philanthropy in the same way as in Europe and the United States, for example. Apart from some countries where corporations are giving some tax incentives to participate in social responsibility, there aren’t formal tax incentives that encourage the average citizen towards philanthropic giving. However, having said that, the practice of philanthropy in the region is perceived and valued very highly and is deeply embedded in the culture and tradition of the region. Philanthropic giving in the Arab region is prevalent, but the metrics of accountability that are used in Europe or other parts of the world do not apply in the Arab region, therefore making it difficult to quantify the giving in any meaningful way.

Does individual philanthropy play a major role? In your knowledge are there specific motivations behind the act of giving (e.g. sense of duty, generational passage etc.)? Do you perceive any difference in these last years, especially following the Arab Spring?

Individual philanthropy is very prevalent throughout the Arab region and, as mentioned, is a longstanding tradition. In large part, one of the main motivations behind philanthropic giving is a sense of duty from a religious perspective. In Islam, for instance, the practice of giving alms (called zakat) is one of the five pillars of Islam and is considered an obligation for Muslims. However, because of the high value that is placed on humility, publicizing one’s giving and charitable practices is not encouraged. Following the Arab Spring in 2011, there has been a notable surge in the proliferation of foundations, NGOs, and other grant-making entities throughout the region; many of which focus on education, economic development, gender equality (and, more specifically, female empowerment), civil society, and social justice.

However, it is worth mentioning that, in the Arab region, the definition of a “foundation” is not necessarily defined in the same way as it is in Europe or other parts of the world. A “foundation” in the Arab context does not always necessarily have to be a grant-making entity. In fact, many organizations throughout the region that bear the title of a foundation are hybrid entities (meaning the both make and seek grants), or are altogether grant-seeking entities that do not make any grants.

More recently, and particularly in the Gulf countries, we have seen a sudden surge in the publicizing of various high net worth families pledging a major portion, if not all, of their wealth to charitable causes and creating a kind of “legacy philanthropy” that is unprecedented.

Do you see an evolution towards a more strategic approach to philanthropy focused on grantees’ capacity building, evidence-based practices, attention to outcomes and social impact measurement? Are the new philanthropists more incline to this kind of reasoning?

The trend towards creating a more strategic philanthropic sector in the Arab region has certainly taken hold and is very much a top agenda goal for the sector overall. As a support organization and a network of foundations, the Arab Foundations Forum has been prioritizing the issue of social impact measurement, capacity building for the sector, and the documentation of achievements and challenges in the form of case studies or other research modules as key to our mission for how we aim to serve our network and the sector. This region is replete with a philanthropic sector with a rich history of doing good and making measurable change in its societies.

The goal of working towards building a more sustainable and impactful sector is a priority for all of our members and our extended network – of that there is no doubt. It’s not simply a question of old vs. new philanthropists being inclined towards this model – we have seen a shift in the inclination towards strategic philanthropy and “impact investing” throughout the region and across the board. The more challenging aspects of realizing these goals lie more in the fact that, in many cases, the region is not functioning within environments that are necessarily enabling towards those goals.

The solution ultimately lies with finding ways to advocate for meaningful change within the civil societies in the region, finding the right partners and champions with whom to effect such change, and understanding the parameters within which we function and to appreciate that change is achieved over time with perseverance and patience.

What is the role and most common methods adopted by companies and banks in philanthropy/CSR practices in the Arab Region?

In most cases, CSR and other models of corporate philanthropy function very similarly and with the same level of sophistication as in the rest of the world. In the case of corporations and banks in the Arab region, the additional services that are offered evolve mainly around religious occasions such as Ramadan-focused activities, etc. but in large part, CSR in the region follows very similar models as elsewhere.

Is the concept of social investment/impact investing spreading or would you say that social interventions are still more inclined towards a purely charity approach?

There is most certainly an increase in the more targeted, strategically positioned programs and funding models throughout the sector, but overall, the majority of philanthropic giving in the Arab region remains largely driven by a more traditional charity-based approach.