Australia Rates High in Philanthropic Freedom

Australia has been ranked fifth in a world pilot study measuring philanthropic freedom.

The US Hudson Institute’s Center for Global Prosperity (CGP) study is described as the first analysis of philanthropic freedom across the world and rates Australia with a score of 4.8 describing its overall policy environment as ‘relatively conducive’ to philanthropic activity.

The 13 country pilot study examines barriers and incentives for individuals and organisations to donate resources to social causes.

The study scored and compared countries on their ease of giving by collecting detailed information on three main indicators: the ease of registering and operating civil society organizations (CSOs); domestic tax policies for deductions, credits, and exemptions; and, the ease of sending and receiving cash and in-kind goods across borders.

The research is intended to help governments remove barriers and create incentives for growing philanthropy.

Myles McGregor-Lowndes from the Australian Centre for Philanthropy and Nonprofit Studies at QUT was the country expert for Australia and assisted in the Australian brief. Australia is fifth in the overall score behind the Netherlands, United States, Sweden and Japan. 

“A recent reform agenda has been driven by the desire to cut red tape and provide greater transparency (rather than as a reaction to a scandal) and promises to improve the amount of accessible information for charities (57,000 of the 600,000 CSOs). This will include an organisation’s governing documents, annual financial statement and annual information return,” McGregor Lowndes said.

“The complete absence of an estate tax since 1976 with philanthropic exemptions, a limited range of tax deductible gifts and recipient organisations (particularly the absence of religious causes from deductibility) and modest tax expenditures in relation to encouraging gifts are contributing fiscal issues.

“The recent tax incentives since 2000 have contributed to a more generous attitude towards philanthropic contributions, but are not the only influence."

“This research is a major step in helping countries identify policy changes that will en-
courage philanthropy, the goal of this study," Senior Fellow and Director Center for Global Prosperity, Hudson Institute, Dr Carol Adelman said.

This study shows that key indicators of philanthropic freedom can be identified, measured and compared across nations, providing invaluable guidance in improving the environment for giving and improving the state of civil society.

“By identifying the barriers and incentives for philanthropy and civil society, our research provides a practical roadmap for changing policies and thus growing philanthropy.

“Our pilot study shows a more positive picture for philanthropy in emerging economies than was expected. India, South Africa, and Mexico have tax incentives that fall in the
high to medium range, and their barriers to CSO operations and cross-border flows fall in the low to medium range.

“Our research also showed that countries with excellent philanthropy-related laws on the books may be hindered by cumbersome procedures and corruption. In some countries where the philanthropic sector is newly emerging, there is a reported lack of public trust in CSOs and philanthropy in general. Thus, laws and public policy will need to be accompanied by transparency and good governance in order to gain trust in private philanthropic organizations.

The countries included in the pilot study are the following: Australia, Brazil, China, Egypt, India, Japan, Mexico, Netherlands, Russia, South Africa, Sweden, Turkey, and the United States.

The study found high-income countries (Australia, Japan, Netherlands, Sweden,
and the U.S.) vary in geography, culture, and level of philanthropy. While these countries may take a some-what similar approach to civil society regulation, they all vary in their domestic tax policies and in the regulation of cross-border flows.

The pilot study and each of the detailed country reports can be downloaded from www.hudson.org/philanthropicfreedom