Report on global philanthropy launched
December 2014 | Insights | Prolegis Lawyers
This report is the first of its kind and evaluates the regulatory and tax regimes associated with philanthropic giving in 193 nations, and the impact of these structures on giving. It is the result of thousands of hours of pro bono work around the globe.
The report’s key findings include that tax incentives for philanthropy are the norm, rather than the exception, and that tax incentives for individuals appear effective in creating a culture of giving in all economic development contexts. It also finds that while there is a global consensus on providing tax exemptions to not-for-profit organisations, legacy gifts to charities are not universally incentivised.
The Rules to Give By Index contains a wealth of information about the conditions for giving in all 193 nations that are recognised by the United Nations. In addition, by comparing this information with the World Giving Index we have been able to gain a better understanding of the relationship between the availability of tax incentives and the proportion of people who give money to charitable causes.
The Rules to Give By Index shows that there is a clear link between tax incentives and the likelihood that people will give to charity. The report has found that the percentage of people donating money to charity is 12 percentage points higher in nations offering tax incentives to individuals (33 per cent) than in those that do not (21 per cent). It also finds that this relationship is equally as strong in countries that are defined by the World Bank as Low Income as it is in High Income countries.
The report finds that encouragingly, that there is a growing global consensus around the need for tax incentives for giving with 77 percent of government offering tax incentives for corporations and 66 percent offering tax incentives for individual donors. However, less than half of governments that impose estate taxes allow people to make tax exempt charitable gifts when they pass.
The report also focuses on the operating environment for charities and finds that encouragingly, 94% of countries have a legal form for organisations that provide a public benefit that is exempt from taxation. Furthermore, 80% of governments require some form of reporting from charities thus ensuring certain governance standards and helping to build public trust.