Regulatory and institutional setup make it easier to give, and tax breaks for charitable donations are high: report
TAKING HEART: Singapore ranks among places in Asia where it’s easiest to do good
KOH EN LIN
SINGAPORE is one of the easiest places in Asia to be philanthropic, says a report by the Centre for Asian Philanthropy and Society (CAPS), a Hong Kong-based philanthropy think-tank.
Along with Japan and Taiwan, the island-state outperformed 12 other Asian economies in regulatory and institutional infrastructure enabling philanthropic giving.
The report also notes that Singapore may be the only economy in the world to offer a 250 per cent tax deduction for charitable donations.
“This is more than double that of any other economy in Asia in our sample.”
“Even better, there is no limit on the income eligible for individual or corporate tax deductions. It is encouraging that from 2014 to 2015, when the higher rate of tax deduction was instituted, tax deductible donations jumped by almost 25 per cent.”
The report, titled “Doing Good Index 2018”, was written by Ruth A. Shapiro and Mehvesh Mumtaz Ahmed, respectively the chief executive and director of research in CAPS.
Fifteen Asian economies are analysed, among them China, Hong Kong, Malaysia, Thailand and Myanmar. The report uses the findings from a 2017 survey of 80 experts in philanthropy policy across Asia and also 1,516 social delivery organisations (SDOs), which are organisations engaged in delivering a product or service that engages a societal need.
Nearly nine in 10 (88 per cent) of SDOs in Singapore agree that it is relatively easy to claim a tax reduction.
Singapore may offer a 250 per cent tax reduction rate, but seven other markets offer a 100 per cent deduction rate.
The report puts Singapore in second place in the number of clearances required to register an SDO – two.
The republic is in third place in the area of the number of people who find relevant laws difficult to understand, at 23 per cent; it is also one of six markets where it takes less than a month to register an SDO.
However, the report says that nearly three-quarters of all respondents (74 per cent) find it difficult to recruit skilled staff. This figure is even higher in Asia’s most developed economies such as Japan and Singapore, “possibly because the opportunity cost of a relatively lower-paid job in the non-profit sector is higher for skilled workers in these economies”.
“A preference for stable, socially respected jobs in professional services is another possible explanation.”
The economies on the index range from those with still-developing infrastructure to those with infrastructure that is better than the Asian average. The overall performance of each economy falls into one of four categories:
- “Not doing enough”: Examples are Indonesia and Myanmar;
- “Doing okay”: China, India and Pakistan;
- “Doing better”: Hong Kong, Malaysia;
- “Doing well”: Singapore, Taiwan, Japan.
But the report says all have room for improvement. Only Korea, Taiwan, Japan and the Philippines have tax incentives for giving upon death through bequests.
Recruitment of skilled talent in the social sector in Singapore is perceived to be challenging. Dr Shapiro says: “There is unprecedented space and opportunity for Asia to leapfrog ahead and be on par with donors in the West, but for this to happen, Asian governments need to lay the right regulatory, institutional and even cultural and social foundations for private social investments to thrive.”
The report says: “Our conversations with donors and our prior study of high-performing SDOs in the region lead us to this observation: Asian philanthropists have tended to support projects and initiatives aligned with their own government’s development goals. If we accept this premise, there is a strong case for policymakers to make local giving as easy as possible.”
- Taking Heart is a weekly series highlighting meaningful corporate social responsibility (CSR) initiatives.
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