Report Overview: The Global Philanthropy Environment Index 2022

ByIon Ilasco

Report Overview: The Global Philanthropy Environment Index 2022

Philanthropy refers to selfless acts of kindness that are intended to help others in need. It plays an important role in supporting global development efforts to alleviate the consequences of ongoing socio-economic challenges. The latest data on private philanthropy compiled by the OECD highlights that for the 2016 – 2019 period, the world’s largest 200 foundations channeled US$42.5 billion towards development efforts, an amount equal to the combined aid budgets of France and Germany in 2020. A recent report on the state of the global philanthropic ecosystem for the 2018-2020 period found that about 62% of all the economies analyzed have a favorable philanthropic environment compared to 60% for the previous three-year period. In this context, Northern Europe, North America, and Western Europe are the regions with the highest GPEI scores.

What is the Global Philanthropy Environment Index?

The Global Philanthropy Environment Index (GPEI) is a comprehensive report on the state of the global philanthropic ecosystem that is intended to assist those stakeholders operating in the niche by providing up-to-date information and to motivate their strategic philanthropic activity. The Hudson Institute published the first version of the Global Philanthropy Index in 2006. In 2017, the publication was formally transferred to the Indiana University Lilly Family School of Philanthropy. The GPEI analyzes the enabling environment for philanthropy in various countries and regions based on a three-year reference period (e.g., 2014–2017, 2018–2020) by measuring regulatory, political, economic, and socio-cultural aspects together with the relevant barriers to philanthropy.

How is the GPEI measured?

The 2022 GPEI reveals the state of the global philanthropic ecosystem from 91 countries or 14 regions for the 2018-2020 period. The measurement focuses on six factors including the economic, political, and socio-cultural elements. It is important to note that these factors were evaluated through qualitative questionnaires built around eleven indicator questions (p.58). The assessment was completed by country-based experts from the 91 countries analyzed using a score on a scale of 1 (least favorable) to 5 (most favorable). The review process, on the other hand, was conducted by regional and global reviewers representing the advisory council.

Fig.1. Factors measured in the 2022 GPEI

Source: The Global Philanthropy Environment Index 2022 – Factors Measured in the 2022 GPEI (p.6)

GPEI global findings

The 2022 GPEI results show that 56 countries, or about 62% of all the economies analyzed, report a favorable philanthropic environment with a score of ≥3.50. In this context, more than a quarter (24 countries or 26%) show a highly favorable (13%) or favorable (13%) philanthropic environment (scored 4.0 or above) while about 38% (35 countries) scored below 3.50 which indicates a more restrictive environment. Country-wise, Belgium, Denmark, and Finland are some of the economies with a highly favorable philanthropic environment whereas Iran and Venezuela manifest the opposite (the most restrictive environment). Within this frame of reference, restrictive environments signal hostile conditions for philanthropic activity that are characterized by strict regulations, barriers to registration, prohibitions for cross-border donations, and the lack of tax incentives for individual and corporate donors.

Fig.2. GPEI scores by range (%)

Source: The Global Philanthropy Environment Index 2022 – Factors Measured in the 2022 GPEI (p.10)

Here are some of the most important findings from the 2022 GPEI:

  • The average score of the global philanthropic environment for the 2018-2020 period is 3.63 where 5 is the highest score and 1 is the lowest. The GPEI global average for the previous period (2014-2017) was 3.64.
  • Northern Europe, North America, and Western Europe are the regions with the highest GPEI scores with 4.72, 4.60, and 4.59 respectively. These scores represent a significant improvement for Northern and Western Europe (4.53) which grew by almost 0.20 points and a slight improvement for North America (4.58) which increased by 0.02 points.
  • On the other hand, the Middle East and Northern Africa, Latin America and Central Asia, and South Caucasus are the regions with the lowest GPEI scores, specifically 3.05, 3.17, and 3.28.
  • The non-profit sector has been significantly affected by the COVID-19 pandemic, particularly those economies with a restrictive philanthropic environment. Non-profit organizations were forced to use their resources to alleviate the effects of the pandemic, leaving the structural causes of poverty and inequality in their own countries unattended to. Moreover, the expected decline in international funding may lead to a shrinking of the global philanthropic sector and thus make development efforts more challenging.
  • The prolonged national lockdowns have also pushed non-profits toward online operations which has contributed to their digitalization.

See also: Private philanthropy in international development, between praise and criticism

Fig.3. GPEI scores by region, 2018-2020

Source: The Global Philanthropy Environment Index 2022 – Factors Measured in the 2022 GPEI (p.20)

Philanthropy plays an important role in supporting global development efforts. While the global philanthropic environment is relatively favorable, there are still several countries and regions that are characterized by restrictive and hostile conditions for philanthropic activity. The COVID-19 pandemic has been a difficult time for non-profits, forcing them to put their primary philanthropic goals aside and focus instead on alleviating the effects of the crisis. Nonetheless, these challenges have also pushed non-profits towards digitalization.

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