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What Stands in the Way of Globalising Transnational Giving?

This article by Dr. Rupert Graf Strachwitz, Managing Director of the Maecenata Institute for Philanthropy and Civil Society, Berlin, gives an insight into the obstacles that stand in the way of globalizing transnational giving.

Europe People

Dr. Strachwitz argues, that philanthropy has become more significant over the past thirty years for several reasons. First of all, people don’t see the welfare state as protective as it used to be, secondly, civil society organisations are constantly in need for funding opportunities and thirdly, generosity and charity entered mentalities more than ever before.

Likewise, the growing importance of cross-border philanthropy is a direct consequence of the current globalized world we live in. Our compassion is not restricted only to our local community anymore. People tend to travel more and live abroad which increases their motivation to give to foreign causes. Moreover, there is a disenchantment of the welfare state which seems not to live up to its commitments anymore. Hence, people are more willing to give directly to causes.

However, in practice, there are obstacles to cross-border giving. Countries have diverse legal frameworks regarding the legality of cross-border donations and their tax deductibility. Very few national governments grant “full philanthropic freedom”. The reason is “based on the dated notion that charitable giving when carrying a tax benefit to the donor and a loss of tax income to the state should benefit his or her national compatriots exclusively, they look askance at any donation to a charity abroad” explains Dr. Strachwitz.

In order to overcome this, some charities have set up subsidiaries abroad, but this also comes with difficulties since they need to adapt to a different legal, administrative and cultural framework.

Finally, all this interferes with cross-border philanthropy. Civil society has lobbied in favour of a pan-European regulation but without success. So far, only the Transnational Giving Europe Network (TGE) has facilitated cross-border donations in Europe. 

Read the full article here