4th APPC Regional Conference

Event APPC's 4th Regional Conference
Date 21-23 May
Venue Hanoi, Vietnam
Organizer Asia Pacific Philanthropy Consortium
Theme Diaspora Giving: An Agent of Change in Asia Pacific Communities?

Is diaspora giving an agent of change in Asia Pacific communities? Can it be? Is disparate charitable giving by diaspora communities to their countries of origin shifting to more strategic giving directed to achieving social change? These were some of the questions posed to the 120 participants at the Asia Pacific Philanthropy Consortium’s fourth regional conference, held in May.

Why focus on the diaspora?

Migrants comprise 3 per cent of the world’s population, 200 million people, while, globally, remittances are worth $300 billion – much greater than either official development assistance (ODA) or foreign direct investment (FDI). In 38 countries remittances accounted for over 10 per cent of GDP; in some they accounted for as much as 35-50 per cent. Asia has three out of the world’s four countries with the largest migrant populations: China (144 million), India (20 million) and Philippines (8.2 million), according to 2005 World Bank figures. To date research has focused mostly on these three countries, said Mark Sidel of Iowa University, author of an overview paper on diaspora philanthropy commissioned by APPC prior to the conference. Hence the significance of APPC’s decision to commission country papers on Vietnam, Indonesia, Pakistan and Bangladesh as well as China, India and the Philippines. The top sending countries are the US, Saudi Arabia and Switzerland.

The key question for the conference was whether some part of this money can be directed towards addressing poverty and inequity in the Asia Pacific region. In order to answer this question, a better understanding of why migrants give is needed and whether remittances themselves contribute to development.

Why do migrants give?

While it seems to be generally agreed that family and community ties, religion, and a wish to reduce poverty and inequity are among the key drivers of diaspora giving, our understanding both of the givers’ motives and of its impact on communities in the countries of origin are limited. Even less is known about the transition from ad hoc giving to strategic philanthropy or the effects on social development in receiving countries.

As with the research on receiving countries, the research on sending countries is highly skewed. Much more is known about giving from the US than from any other country – though substantial research has been done on both sending and receiving communities in the case of the Philippines.

Remittances and development

One assumption made in most discussion of diaspora philanthropy is that giving to institutions is more effective than giving to individuals – hence the desirability of converting at least some of the existing flow of remittances to more ‘strategic’ giving. But is it really so, asked Adil Najam (Boston University) in a session entitled ‘Development and the Role of the Diaspora Communities’. If individual giving shifted to institutional, he said, it would cause massive problems for huge numbers of very poor people who are dependent on it. As Barnett Baron (Asia Foundation) reminded us, foundation giving isn’t necessarily very strategic either. Remittances are more sustainable over time than giving to institutions, he argued, and NGOs are only one mechanism for development. The purpose of supporting diaspora philanthropy is social benefit not to support NGOs.

Remittances have a profound impact on development, said Manjula Luthria (World Bank), despite the fact that they tend to address symptoms not causes. In fact, she said, migration is development: a way to change the circumstances of migrants and their families, with both remittances and ideas transmitted back to the sending countries. She cited research in the Pacific showing a significant impact on lifting households out of poverty. Could remittances delay domestic reform if countries become dependent on them? This, she said, was the ‘multi-million-dollar question’. But what are the alternatives, she asked. To leave countries until they blow up?

The Vietnamese diaspora

Vietnam, the host country for the APPC conference, has its own diaspora of around 3 million, many of whom left when the Vietnam War ended in 1975. This diaspora has been playing an essential part in Vietnam's development. They provide $5.5 billion in remittances, and they represent a vast reservoir of brainpower and experience. At present, as elsewhere, remittances go mostly to migrants’ families, but special programmes to harness the diaspora contribution are now emerging. For example, it is now much easier for overseas Vietnamese to return to the country, which is important given Vietnam’s lack of highly skilled manpower.

Dr Doan Phung, a conference keynote speaker, provided an inspiring example of a Vietnamese diaspora philanthropist. He has spent 47 years in the US and 31 in Vietnam. The dream to which he has devoted much of his life is to see Vietnam have the same material things and civil rights that he found in the US.

But the needs of his family came first. Working in the US, he was able to put his nine brothers and sisters through college. He then had two daughters to educate. Only when their education was completed did he establish a Vietnamese American scholarship fund, providing endowments in five US colleges – though this programme had to be stopped when it raised the suspicions of the Vietnamese Government. He then established what he called the ‘Fund for self reliance’, through which 12,000 families receive microloans of $100 to $500, and he has since helped other organizations to do the same.

His most recent gift was announced during the APPC conference: a matching grant of $3 million to VANGO, a Vietnamese American NGOs network, to support capacity-building work with grassroots NGOs in Vietnam.

He referred to his wife as the inspiration of his life so why hadn’t she come with him, one participant asked. So as to save money, he said. The shirt he was wearing was 11 years old, his shoes 6 years old. It turns out that he wasn’t staying at the conference hotel, preferring a modest $40 a night establishment to the more comfortable $150 a night conference hotel.

How to support diaspora philanthropy

The first step is clearly to understand both the motivations for giving and the barriers that stand in its way, both in sending and receiving countries.

Identifying credible NGOs
The greatest barrier to giving to organizations is distrust, said Adil Najam – a view that was echoed by a number of speakers. In Pakistan a lack of credible NGOs to support is being addressed to some extent through the NGO certification process operated by the Pakistan Centre for Philanathropy. Several speakers talked of a need for research to identify opportunities and best practices in receiving countries. Showcasing the work of good NGOs and engaging the media more effectively could also help. Around 230 Filipino diaspora groups are listed on a Philippine diaspora website.

An enabling environment
Another area to consider is the fiscal environment. In the US, for example, the tax system is very favourable for people with US taxable assets wanting to give internationally, though post 9/11 it has become much more difficult because of regulations preventing money being given to anyone ‘associated with a terrorist organization’. But giving to India is made more difficult because people of Indian origin but without an Indian passport can give only to NGOs approved by the Foreign Contributions Regulation Act – which is unlikely to be relaxed because of fears of political or terrorist funding coming into the country. However, while many spoke of the need for a more ‘enabling’ environment, all were wary of the potentially crushing effects of government ‘regulation’.

Creating awareness
In some countries, such as Indonesia, the concept of diaspora philanthropy is not well known, so creating greater awareness is important. In China the focus will be on engaging diaspora assistance following the recent earthquake.

Creating partnerships between diaspora communities and communities of origin
Ayala Foundation USA has created a bridge between Filipino communities in the US and the Philippines, while intermediaries such as Give2Asia and the American India Foundation in the US can help too.

Creating new financial arrangements
One question raised by Jeremiah Opiniano (Institute for Migration and Development Issues) is whether new mechanisms could link the different uses of remittances – for consumption, for saving, and for philanthropy. One possibility is to persuade remittance-sending companies such as Western Union to channel a tiny percentage to receiving countries. Giving by Mexican hometown associations is now matched three times by the Mexican Government and once by Western Union. A Philippines microfinance bank is now offering investment products for migrants which give a good rate of interest while the money goes to the MFI organization.

More generally, said APPC Chief Executive Rory Tolentino, ‘people need to begin thinking of ways to encourage diaspora communities to give more sustainably and more strategically’. She talked of ‘innovative mechanisms that are being tested or discussed now’ such as Diaspora Bonds or the idea of channelling diaspora philanthropy funds through Social Stock Exchanges, which could enable diaspora communities to buy stocks from social enterprises and in the process to help bring families or communities closer to economic-self sufficiency.

A field in its infancy

While the phenomenon of migrants sending remittances is well established, the study of it is not. This was well illustrated by a session at Resource Alliance’s International Workshop for Resource Mobilization, held in Kuala Lumpur just after the APPC conference. Two sessions on diaspora philanthropy attracted a mere seven participants each, but those who attended, at least at the session I went to, left inspired to introduce diaspora fundraising in their organizations.

For more information
Visit www.asiapacificphilanthropy.org to download the conference background papers and to http://asiapacificphilanthropy.org/conference-programme for presentations