Giving Thoughts

The state of philanthropy in the Arab region

By Dima Jamali, Professor of Management, Olayan School of Business, American University of Beirut

As U.S. companies seek to expand their giving programs globally, the Arab region will play an important role. But to navigate philanthropy in the Middle East, international organizations need to understand the existing philanthropic landscape, and the particular social issues facing this region.

Three Arabic phrases explain the importance of philanthropy and giving to the religious and cultural traditions of the Arab world:

• Zakat, which means mandatory giving, is one of the five pillars of the Islamic faith. The Qur’an mandates that Muslims are obliged to pay 2.5 percent of their wealth to specific segments in society, particularly the poor and destitute.
• Waqf, which means Islamic endowment, revolves around giving donations of property or other assets such as cash for religious or charitable purposes. A charitable trust or organization holds the donated assets.
• Takaful Insani, which means humanitarian solidarity and giving. Takaful originates from the Islamic insurance concept, which is grounded in Islamic banking as per the rules and regulations of the Islamic Law. Insani denotes humanitarian.

Growing trends out of civil uprisings

The Arab Spring, which lasted between 2010 and 2013, entailed civil uprisings across the region. It was, for many, a response to the social ills that plague the region, ills such as economic underdevelopment, poverty, and environmental degradation. Growing out of the movement is a renewed interest in Islamic philanthropy and a young corporate social responsibility (CSR) movement.

Philanthropy in the Arab region typically comes in two forms:

1. Individual (or private) philanthropy Wealthy individuals and their foundations or nonprofit organizations delivering social services. Zakat and Waqf are both relevant to this category of giving and deeply rooted in the region’s tradition.

2. Corporate philanthropy Through both private or public companies, the corporate sector is increasingly involved in providing social services through philanthropy and CSR initiatives. Such philanthropy is often delivered through company-run nonprofit organizations or foundations.

It can be difficult to disentangle these two forms of philanthropy because individual philanthropists so often influence the giving programs of companies they own or run, to the extent even that religious traditions relating to Zakat and Waqf sometimes guide corporate, as well as individual, philanthropy. For example, the Zakat committee of Qatar Islamic Bank (QIB) has donated more than 25 million riyals (approximately $6.8 million) to the community in the past five years.

CSR is not widespread in the Middle East

While the Arab region has started to experiment with CSR as an extension of philanthropy, very few organizations have developed robust strategic CSR programs that are fully institutionalized and that utilize the breadth of corporate resources (human, technical, managerial and financial).

One example is the Kuwait telecommunications company Zain, whose CSR program addresses education, healthcare and the environment. In Sudan, the company launched an initiative with the Women Initiatives Group NGO to jointly work on eradicating breast cancer. In Jordan, Zain contributed to the rehabilitation of eight public schools through the Madrasati (My School) initiative. But while Zain may be more advanced than other companies in this area, the lines between CSR and philanthropy for the company remain blurred.

Foreign companies seeking to make a social contribution typically partner with nonprofits familiar with the region. For example, in 2013, the Citi Foundation launched the third phase of the Arab Women’s Entrepreneurship Project (AWEP) in partnership with America-Mideast Educational and Training Services (AMIDEAST), a nonprofit engaged in international education, training and development activities in the Middle East and North Africa. The Project is designed to empower women entrepreneurs in Egypt, Jordan, Lebanon, and Morocco by equipping them with the skills and techniques that will help them to succeed in business.

Impact measurement is crucial

As companies in the region attempt to make their philanthropic and CSR initiatives more strategic, improving impact measurement processes is crucial. Impact measurement remains in its infancy in the Arab region, although the use of international standards such as the Global Reporting Initiative (GRI) or the UN Global Compact (UNGC) is on the rise.

But while these instruments can help companies to organize and standardize their CSR reporting, they do not offer solutions on how to precisely quantify impacts. The focus needs to gradually shift away from an account of inputs and money invested in philanthropy and CSR to a more systematic measurement of specific outcomes and beneficiaries.

The transferability of frameworks developed in the West to do this is increasingly called into question throughout the Middle East, because these frameworks don’t cater for the unique social issues with which the region is grappling. International organizations need to move beyond a one-size-fits-all mindset to a more nuanced understanding of what philanthropy and development means in the eyes of Arab stakeholders and constituencies.

About the author:

Dima Jamali is Professor of Management at the Olayan School of Business, American University of Beirut. Her research interests focus on responsible leadership and corporate social responsibility in developing countries in general and the Middle East in particular. Her articles have appeared in journals such as British Journal of Management, Business Ethics Quarterly, Corporate Governance: An International Review, and Journal of Business Ethics, among others. Her recent book on CSR in the Middle East has been published by Palgrave in 2012. Jamali has a PhD from the University of Kent at Canterbury, United Kingdom.