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VIEW: The promise of philanthropy —Saleem H Ali

The responsibility on private philanthropy for development is even greater in the context of developing countries where we do not have such huge government sources of funds

As millionaires continue their ascent in a world of rampant inequality, much attention is being paid to private philanthropy and its impact on development. In Pakistan we have two cadres of wealth — the old feudal and merchant families with tell-tale names like Daultana and Lakhani, and then the more interesting generation of expatriate Pakistani millionaires in Europe, North America and Dubai. However, philanthropy is not only an upper class phenomenon and clearly incremental giving by the middle-class can make a difference in poverty alleviation. This is specially true of the growing cadre of affluent Pakistani professionals in North America.

A recent study of charitable giving from the Pakistani diaspora in the United States, authored by Professor Adil Najam under the auspices of the Global Equity project at Harvard University, concludes that Pakistani-Americans are a “generous, giving and active community”. Using a detailed survey of over 400 individuals across America and a series of focus group sessions, Dr. Najam and his colleagues have assembled a useful research product. While the sample may not be statistically large enough to establish clear causality across the entire diaspora, it is representative of the overall texture of the community and can provide some useful directions for further inquiry.

In addition to lucid graphs and analyses of underlying motivation for philanthropy, the book also provides a rare historical profile of the South Asian community in America, which can be traced back to 1790 when William Bentley recorded an unnamed “Man from Madras” on the streets of Salem, Massachusetts. The rapid influx of Pakistanis in the middle of twentieth century is, however, most consequential for current philanthropic trends. One of the key findings of the study is that 62% of the respondents reported that religious obligation was of “high or “very high” importance in their reason for charity. A slightly higher percentage gave motivational importance to “helping others in need” (79%) and “helping family and friends” (69%).

The report also has some sobering news for the Pakistani government. About half of the respondents stated clearly that their contribution would be higher if they had more trust in institutional support across Pakistan that assured them that their contributions were being put to good use. One of the sponsors of this project, The Pakistan Center for Philanthropy, has undertaken the task of certifying charities through a detailed audit and review process, which can perhaps help in building this trust. However, the actual amount of individual philanthropy versus major gifts by tycoons is not adequately covered in this report.

Unfortunately, the concentration of wealth among the hyper-wealthy elite is a phenomenon that pervades the Pakistani diaspora in the United States just as much as it does the mainstream American population. For example, the upper-middle-class professional organisations such as the Human Development Foundation (which largely comprises doctors of Pakistani origin) raises on the order of two million dollars annually. However, one major gift of two million dollars by a wealthy medical professional to the University of Southern Colorado was enough to establish the Malik and Seeme Hasan School of Business.

By far the most significant individual charity in Pakistan for development is the Aga Khan network of foundations, which have a collective asset base of almost half a billion dollars. Indeed, the Pakistan Centre for Philanthropy itself had its genesis with the Aga Khan Foundation. Such centralised sources of wealth deserve greater attention in research and must be applauded for their commitment.

There are, however, far more individual philanthropists out there who need to be recruited and given assurance to invest in Pakistan. Let us consider for a moment the largest single donation to an academic institution ever — surprisingly to many this was not to the usual suspects in the United States such as Yale or Stanford; nor was the money coming from Bill Gates or Warren Buffett. Rather, the largest single gift to a university of a staggering one-billion dollars is credited to the Indian mining tycoon Anil Agarwal (CEO of Vedanta Resources) who endowed the amount in 2005 to establish Vedanta University in his home state of Orissa, India. While Pakistani expatriates at present may not have the same level of wealth, there are clearly some notable CEOs who are approaching such Olympian heights of prosperity and should be contributing to development in their homeland where it is likely to be of most relevance and impact.

Let us take the example of the CEO of pharmaceutical giant Schering-Plough Corporation Farid (Fred) Hassan, whose annual compensation exceeds $10 million according to Forbes magazine and whose net worth could easily be in excess of $100 million. Yet the only major donation he has made to Pakistani causes has been the establishment of an auditorium in his mother’s name at a college in Lahore.

Lack of trust in Pakistan’s philanthropic system might be to blame for such scant investment by well-intentioned CEOs such as Hassan. Other luminary CEOs such as Safi Qureshy and Zia Chishti have made modest contributions to particular projects but not to a concerted philanthropic agenda for development.

It is also important to remember that government foundations are not possible in Pakistan at the same level as in the United States and other developed countries which have a far greater tax base. Thus while Bill and Melinda Gates foundation has assets in excess of $30 billion (making it the largest private foundation), this is about the same amount as the annual grants of only one US government research foundation — The National Institutes of Health. The responsibility on private philanthropy for development is thus even greater in the context of developing countries where we do not have such huge government sources of funds.

Within Pakistan, Syed Babar Ali has been the most efficacious philanthropist for educational causes but his fortune is relatively small compared to numerous other local tycoons, landlords and celebrities. Yet with commitment, good networking and leveraging of other resources, he has managed to achieve what many years of government investment in education had failed to accomplish — a world class graduate school of management that we affectionately call LUMS. Imran Khan’s Shaukat Khanum Trust is also noteworthy for galvanizing multiple sources of funds both in the country and abroad for a very noble cause inspired by a family tragedy. However, such examples are far too few considering the growing ranks of affluent landed-elite, media moguls, sportsmen, musicians, and tech-tycoons in Pakistan.

Research efforts such as Professor Najam’s book should provide further impetus to philanthropists in Pakistan and abroad to consider sharing their fortune. At the same time, the government must reach out to those of means with care and sensitivity — providing them assurance and building trust so charity may flourish across the land.

Dr Saleem H Ali is associate professor of environmental planning and conflict resolution at the University of Vermont and a senior fellow at the United Nations mandated University for Peace. He can be reached at saleem@alum.mit.edu

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