Every afternoon, the roadside adjacent to a posh F-11 market in Islamabad is thronged by crowds of the poor and needy: daily wage earners, labourers, security guards, street children, beggars, and the homeless. The attraction? A free hot meal served on plastic mats hurriedly rolled out on the pavement — a scene that is replicated across dozens of Pakistani neighbourhoods all year, but especially during the holy month of Ramazan.

The culture of giving is strangely pervasive in Pakistan, a developing country with poor socioeconomic indicators but perhaps one of the most charitable nations in the world.

Despite the lack of systematic and reliable data to quantify the magnitude of philanthropic giving in Pakistan, anecdotal evidence and limited empirical research on individual, corporate, and diaspora suggest that philanthropy is substantial in terms of outreach. Giving is a personal activity, and Pakistanis, whether privileged or not, donate according to their financial status and capacity; however, tracking day-to-day giving at an individual level is challenging.

A 2016 study, ‘The State of Individual Philanthropy in Pakistan’ by the Pakistan Centre for Philanthropy (PCP), found that 98 per cent of Pakistanis contributed an estimated Rs240 billion in a year for philanthropic purposes, amounting to more than 1 per cent of the country’s GDP, which is surprisingly similar to giving trends in developed countries.

Philanthropy by Pakistani-Americans is approximately $1bn a year, including $250m in cash, in-kind contributions and volunteered time

Religion and compassion emerged as strong motivating factors of giving, with a majority of Pakistanis preferring to donate primarily to needy individuals and to mosques or madrassas. This volume of giving marked a three-fold increase since the first-ever National Survey of Individual Giving in 1998, which projected the magnitude of aggregate individual giving and volunteering in Pakistan at Rs70bn.

More recently, PCP’s ‘Pakistan Giving Index 2021’ (PGI) report examined philanthropic trends and practices amongst Pakistanis. A perception survey of 2,000 individual respondents revealed that despite Covid-19-related socioeconomic challenges (income-based disparities, unemployment and rising poverty), 84pc Pakistanis still gave in one form or the other during 2021, irrespective of gender, employment status or income levels.

The study also found that monetary donation was the commonest and most convenient mode of giving and that Pakistanis were more inclined to offer assistance to people they knew personally or to street beggars.

In the case of corporate philanthropy, an upward trend is observed in the volume of giving and a gradual shaping of Corporate Social Responsibility (CSR) in Pakistan. Data collected by PCP for 2020 demonstrates that the total volume of CSR donations in Pakistan is approximately Rs13.32bn.

Of this, public listed companies have contributed the largest share, amounting to Rs9.64bn, indicating a progressive increase in donations over the last two decades as against their contribution of Rs0.23bn in the base year 2000. This suggests that the business sector and private social investments have tremendous potential to bolster philanthropy and its impact on Pakistan’s social development.

Moreover, diaspora philanthropy has gained prominence in recent years. Although, there is limited research on diaspora philanthropy in the Pakistani context, PCP’s report titled ‘Pakistani Diaspora Philanthropy in the UK: Trends and Variations’ (2019) showed that the total annual volume of philanthropic giving was around £1.25bn, representing nearly 1.3 million British Pakistanis residing in the UK.

An earlier study, ‘Philanthropy by Pakistani diaspora in the USA (2005) revealed that total giving by Pakistani-Americans was approximately $1bn a year, including $250m in cash and in-kind contributions as well as an estimated 43.5m hours of volunteered time. This implies that diaspora philanthropy is a high-potential funding stream to support various social and economic causes in Pakistan.

Despite Pakistan’s strong philanthropic traditions, Arif (2018) observes that philanthropic gains have not been particularly long-term or sustainable, given the fact that most donations are directed to individuals, bypassing charitable or social welfare organisations.

Generally, people harbour misgivings about the government’s ability to ensure effective regulation, transparency, and accountability of social development organisations (SDOs) or non-governmental organisations, especially in preventing the misappropriation of donor funds and creating mechanisms for the effective utilisation of philanthropic resources.

If Pakistan is to achieve its sustainable development goals, a strategic shift from informal individual giving towards more institutionalised forms of philanthropy needs to be encouraged. Effective government regulation of philanthropic transactions and collection and disbursement by social welfare organisations may ensure that private charity is instead routed towards more formal and structured social philanthropy.

This would help build the public’s trust in social service delivery organisations, support the government’s social welfare efforts, and enable higher socioeconomic returns. Moreover, SDOs must have clear structures and transparent reporting systems to ensure factual reporting to philanthropists about the utilisation and impact of their donations.

Government support to donors through fiscal incentives can help boost philanthropy in Pakistan. Tax exemptions may facilitate donors in saving more for charitable purposes, thereby advancing both individual and corporate-level philanthropy.

With the return of public trust in the social service sector, the government and SDOs, donors, and public representatives can work to formulate a social policy that focuses on philanthropy as a social safety net for marginalised segments of society. This would be particularly useful where the state cannot fulfil its fundamental responsibility of providing its citizens with basic social services.

The writer is an education researcher and specialist, serving as Senior Programme Officer — Research at the Pakistan Centre for Philanthropy, Islamabad

Published in Dawn, The Business and Finance Weekly, January 30th, 2023