Govt encouragement for philanthropy needed

Kurniawan Hari, The Jakarta Post, Jakarta

Traditionally, Indonesians are quite familiar with charitable activities in their everyday life. They often give alms to the needy or help their neighbors in times of need.

The enthusiasm of people to give charity can be seen from the numerous donations given by Indonesians for survivors of disasters.

In a short period between Feb. 6 to Feb. 28, 2002, for example, Dompet Dhuafa Republika collected Rp 754 million (US$77,000) from the public to help survivors of floods across the country.

Meanwhile, within only 10 days from Jan. 31 to Feb. 10, 2002 Pundi Amal SCTV managed to collect Rp 3 billion in funds for flood victims -- the biggest amount ever raised in that period.

A survey by the Public Interest Research Advocacy Center (PIRAC) in 11 cities in 2004 indicates that most Indonesians are not reluctant to donate some of their wealth to help those in need. Of the 2,500 respondents in the survey, 99.8 percent said they had given a donation at least once that year.

Donations not only come from individuals, but also from the corporate sector. In 2001, PIRAC records 180 companies in Indonesia, either foreign or locally owned, that gave donations totaling Rp 115 billion. This means that on average these 180 companies donated over Rp 600 million each that year.

Most of the donations are given as a response to crises, therefore they are not categorized as "philanthropy".

"We have a big potency for donations, but they are mostly given as charity not philanthropy," PIRAC researcher Yuni Kusumastuti told The Jakarta Post.

According to her, although the words "charity" and "philanthropy" are often used interchangeable, they have different meanings.

While charity is a donation for short-term goals like helping survivors of disasters, philanthropy is aimed at community empowerment or for long-term programs.

According to Yuni, most of the donations are given directly to the needy or channeled through religious organizations.

Many people donate their money as part of their religious obligations and a sense of social responsibility.

At the same time, the amount of donations channeled through local charity organizations is limited because people generally distrust such organizations.

Many companies also have little trust for local charity organizations. Thus, rather than channeling donations through them, several companies have set up units in their offices to disburse donations as part of their corporate social responsibility.

The lack of professional management, transparency and accountability among political organizations deters individuals or corporate sectors to channel their donations through these organizations.

Tom Malik, executive director of Koalisi untuk Indonesia Sehat, a non-governmental organization specializing in health, acknowledged the big potential of local funds to finance charity and philanthropic activities.

"The amount of funds donated by the public to finance charitable activities is much higher than the figures reported in the mass media," Tom told the Post.

In an attempt to improve the credibility of Indonesian charity organizations and to lure donors, several nongovernmental organizations (NGOs) have launched a program called the Philanthropy Strengthening Initiative (PSI).

PSI Program Coordinator Rika Anggraini said that relations between donors (individuals and corporate) and charity organizations as set out above was only one factor.

"The other factor is the lack of (government) policies that encourage philanthropic activities," she said.

For donors, especially in the corporate sector, a donation is considered as just a cost in the company's budget. Therefore, they expect that the government will give compensation in the form of tax exemption.

In other countries, like the United States, donors get tax exemptions of up to 100 percent. This condition has encouraged people in corporate sectors to make donations.

According to Rika, the corporate sector often raises this issue during informal meetings or discussions.

With or without tax incentives, the individuals and the corporate sector will continue their donations. However, public donations would be much bigger if the government gave tax incentives for philanthropy.

It rests with the government whether more public funds for philanthropic activities will be raised or not.