Govt encouragement for philanthropy needed

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.