Managing Our Philanthropy Sector
Do not let sincere people be victimized by their own “sincerity” by opting for anonymity, which could contribute to the flawed application of the principles of good and clean management in our philanthropic activities.
The recent finding of a case involving a community fundraiser that implicates humanitarian organization Aksi Cepat Tanggap (ACT) has stirred public awareness over the weak implementation of the principles of good and clean management in philanthropic activities.
If this remains unchecked, maladministration and financial irregularities like that found in the case involving ACT could erode public trust in philanthropic organizations. Public distrust will grow even more if this type of case involves a religious charity.
As we all know, ACT is one of the largest philanthropic nongovernmental organization in Indonesia, reportedly raising Rp 500 billion from the public between 2018 and 2020.
In comparison, the media reported that other community fundraising organizations, such as Dompet Dhuafa and Rumah Zakat, were “only” able to raise Rp 375 billion and Rp 224 billion, respectively. Supported by huge donations from the public, ACT has become the frontline organization for distributing humanitarian aid during natural disasters in this republic.
It must be admitted that channeling social aid through philanthropic organizations is a relatively new practice in our society. Raising, administering, and managing funds for social causes has so far been the domain of independent, individual, and private (nongovernmental) community movements. The recent emergence of various philanthropic organizations has raised prospects about more transparent and accountable management of charity donations.
In several Western countries, institutionalized philanthropic activities are a long-established tradition. One of the most established philanthropic organizations in the Western world is The Salvation Army (Salvos), which reportedly has assets of more than US$1.94 million.
Since its establishment in London in 1865, the charitable organization has been intensively and extensively collecting and distributing humanitarian aid from communities around the world to help victims of natural disasters, build and rebuild facilities due to war, and so on.
Tradition of giving
Philanthropic activities in any society begin with a tradition of giving, donating and sharing, which are mostly inspired by religious teachings. Islam, for example, encourages the practice of giving and sharing for those in need as a form of social empathy and humanitarian deeds.
Islam emphasizes the importance of giving rather than taking, as prescribed in a well-known prophetic phrase, which says: "The hand above is better and more honorable than the hand below (al-yadal-'ulya khayr min al-yadal-sufla)”.
This teaching promotes the importance of being charitable through alms, zakat, and waqf, in which Muslims are reminded to stick to jihad fisabilillah (doing good deeds for the sake of Allah).
Also read:
> Winding Road of Religious Tolerance
> Exporting Religious Moderation
In Indonesia, the practice of giving through charitable and philanthropic activities has been institutionalized in Law No. 23/2011 on zakat management, Law No. 9/1961 on raising money or goods from the public, and Government Regulation No. 29/1980 on collecting and distributing donations.
These regulations provide the legal provisions on raising funds from the public, as well as their management and distribution. However, enforcement of the law against various violations is still believed to be weak.
Socioculturally, Indonesian society is considered a charitable one that likes to share. According to the World Giving Index (WGI), Indonesia ranked first in 2021 as the most generous country in the world, with a score of 69. The annual WGI is published by the Charities Aid Foundation (CAF), using data from Gallup, and ranks more than 140 countries around the world based on their level of generosity through donations.
In 2021, the majority of Western countries that were traditionally in the top 10 significantly dropped in the WGI rankings. The United States, for example, ranked just 19th in the world, far below fifth, a ranking it had maintained rather consistently.
Ireland and the United Kingdom fell from respectively fifth and seventh to 22nd and 26th. Their drop in the rankings has been blamed on the Covid-19 pandemic.
The findings of the CAF WGI 2021 has been confirmed by the Philanthropy Outlook 2022, which found that social philanthropy in the form of distributing charitable funds in Indonesia has continued to increase over the past few years. In 2020, the amount of philanthropic funds disbursed in the country was Rp 15.4 trillion, an increase of 23.05 percent compared to the previous year.
The distribution of philanthropic funds in 2019 totaled Rp 12.52 trillion, an increase of 6.46 percent from 2018. We distributed an estimated Rp 38.9 trillion in philanthropic fund in 2018-2020. In the context of the Covid-19 pandemic, that huge amount of social assistance funds would have been a significant source of mitigation.
Public accountability
Apart from the improving economic conditions and the increasing role of philanthropic organizations, religion has played a dominant role in contributing to Indonesia's status as a benevolent nation.
It is said that 80 percent of people who join philanthropic fundraising activities were motivated by an obligation to comply with religious teachings on alms, zakat, and waqf, while the rest (20 percent) were driven solely by altruistic motives.
However, implementing good and clean management in our philanthropy does not appear to be as easy as turning over our hands. This is because some people in our society hold on to the religious tradition of anonymity when giving donations. Explicitly listing their names as a donor is believed to degrade the virtue of benevolence.
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> Intervention of the State in Religion
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The recommendation to be an anonymous donor derives from a prophetic saying: "Seven people will be shaded by Allah under His shade on the day when there is no shade except His. Among them is the person who practices charity so secretly that his left hand does not know what his right hand has given” (Al-Bukhari and Muslim).
In the philanthropic context, religious teachings on charity do not necessarily clash with transparency and public accountability as principles of good and clean management.
These management principles applied to philanthropy should not weigh on whether or not the donors are sincere. While a preference for anonymity does not automatically guarantee sincerity, philanthropic activities require open and objective administration and reports that are based on the principles of transparency and public accountability.
As part of public accountability, philanthropic organizations must be responsible to their donor communities regarding the flow of incoming and outgoing funds. This is crucial to reforming our philanthropy sector in order to ensure the transparent and accountable channeling of social funds through various philanthropic organizations. Do not let sincere people be victimized by their own “sincerity” by opting for anonymity, which could contribute to the flawed application of the principles of good and clean management in our philanthropic activities. Let us hope!
MASDAR HILMY
Masdar Hilmy, Professor and postgraduate program director at Sunan Ampel State Islamic University (UIN), Surabaya
This article was translated by Musthofid.
