NRC0014 – Individual’s Contributions in Nonprofit Funding: Prospects for Nepali Nonprofits
This commentary explores the prospects of individual fundraising in the context of Nepali nonprofit organizations. It attempts to evaluate individual giving in the U.S., other developed countries and in India, through secondary research. While comprehensive research on individual giving in Nepal does not exist, the article identifies favorable patterns and evidence within the social structure, literature, history, and religion of Nepal. Based on my research, I find that Nepali society is built around a giving culture thereby proving that individual giving is not an alien concept for the country. It is not a philosophical challenge, rather a communication exercise for nonprofit organizations to use it for their benefit.
Individual’s Contributions in Nonprofit Funding: Prospects for Nepali Nonprofits
A couple of months ago, I was discussing fundraising with a group of nonprofit leaders in Nepal, trying to explore their thoughts on raising funds from individuals to be sustainable and “somewhat” independent of grants. As a recent graduate of nonprofit management, it was surprising to me that almost everyone believed that individual fundraising is an “alien” concept surviving only in the U.S. or other developed nations because of their “generous” tax benefits and wealthy status. Intrigued by their response, I explored what literature and data had to say about raising funds from individuals.
Individual Giving in the U.S.
A total of 1.56 million nonprofit organizations registered at the Internal Revenue Service (IRS), contributed an estimated $985.4 billion to the US GDP (5.6 percent) in 2015. In 2016, nearly 12.3 million people worked for nonprofits, accounting for 10.2 percent of the total private-sector employment, as nonprofits became the third-largest sector of US employment that year. The role of nonprofit organizations in the civil society and the US economy is significant. Klein claims that private-sector funding accounts for 13 percent of the total revenue received by nonprofits, while earned income and public funding contribute 55 percent and 32 percent respectively. Analyzing private-sector funding for nonprofit organizations reveal that:
- Individuals in the U.S. give to charities. In 2017, American individuals, bequests, foundations, and corporations gave $410.02 billion as charitable giving, increasing by 5.2 percent from 2016 and reaching the $400-billion mark for the first time. Out of the total private sector giving, 70 percent was contributed by individuals, 16 percent by foundations, 9 percent by bequests, and only 5 percent by corporate foundations.
- The demographic distribution of donors debunks myths about individual donations. In 2013, the wealthiest Americans donated 1.3 percent of their income, while the poorest donated 3.2 percent. Seven out of ten individuals donate, and most people who give to nonprofits give to at least five groups. Every year, about 20 percent of the population on some kind of welfare programs give, and 97 percent of the millionaires donate.
- Religion motivates giving. In Fundraising for Social Change (2016) Kim Klein writes, “the majority of people who give money in describe themselves as religious or spiritual, regardless of their involvement in a formal religious or spiritual community”. In 2014, out of the $358.38 billion contributions made to nonprofit organizations, 32 percent of such donations were made to the religious organizations.
Individual Giving Elsewhere
People give for different reasons like expressing their altruistic self by giving to causes they care, gaining instrumental benefits like tax deductions and network gains, and out of social pressures. The giving trend of the U.S. is replicated in other developed economies around the world. Eight out of ten Canadians give, while in Holland, almost 90 percent of the population donates despite paying high taxes. 64 percent in South Korea and 80 percent in the Philippines give. In the U.K., 60 percent of the population donated in 2017, out of which 25 percent donated monthly and the size of an average donation was £44. In 2016, the Charity Aid Foundation published its findings from a survey on 195,000 people from 153 countries in the form of the Global Giving Index. The index claimed that a fifth of the global population volunteered, a third had given money to charity, while 45 percent helped a stranger.
Although there has not been comprehensive research on individual giving in Nepal, we can withdraw few relatable conclusions from the Everyday Giving in India Report 2019, jointly published by Sattva, Rohini Nilekani Philanthropies and Bill and Melinda Gates Foundation. Defining everyday giver as “individuals (residents, diaspora, global citizens) with an annual income of over INR 2.5 lakhs and a net worth below”, the report valued total everyday giving in India at INR 34,000 crore ($3.1 billion) out of which 90 percent was informal everyday giving and only 10 percent was the formal everyday giving. In the meantime, 10.2 percent of the total charitable giving was made to Social Purpose Organizations (SPOs). India’s everyday givers were motivated by the urgency of cause, the convenience of the process, community influence and impact of giving. 64 percent of the everyday giving was community giving and 26 percent was religious. The report further claims that an increasing propensity to give and an accelerating digital revolution will contribute to larger everyday giving in India in the future. The report accounted for four kinds of giving: money, goods, voice, and time and skills.
Individual Giving in Nepal
The first poet of Nepali literature, Adikavi Bhanubhakta Acharya (1814-1868), wrote a poem to express his guilt of not giving to the society despite his riches as he compared himself with poor grasscutter who had built a well for travelers:
भर् जन्म घाँसतिर मन दिइ धन् कमायो (Bhara Janma Ghastira Mana Diyi Dhana Kamayo)
नाम क्यै रहोस् पछि भनेर कुवा खनायो (Nama Kei Rahos Pachi Bhanera Kuwa Khanayo)
घाँसी दरिद्रि घरको तर बुद्धि कस्तो (Ghansi Daridra Tara Buddhi Kasto)
म भानुभक्त धनि भै कन आज यस्तो ! (Ma Bhanubhakta Bhai Kana Aja Yesto)
मेरो इनार न त सातल पाटि कै छन् (Mero Inaar Na Ta Satala Paati Kai Chhan)
जे धन र चीज हरु छन् घर भित्र नै छन् (Je Dhana Ra Cheej Haru Chan Ghara Bhitrai Chan)
त्यस घासीले आज कसरी दिएछन् अर्थी (Tyas Ghansile Aaja Kasari Diyechan Arthi)
धिक्कार हो मकन बस्नु नराखी कृति ! (Dhikkar Ho Makana Basnu Narakhi Kriti)
Matri summarizes the poem as: “This grasscutter is poor, but his heart is generous…he has planned to do a noble deed like digging a pond with his meager savings. Whereas, I, Bhanubhakta, though a son of a well-to-do family, do not think of any service to others…My thoughts are centered around me…fie on my life which is devoid of any good work.”
Centuries before Bhanubhakta, Nepal developed the “Guthi” System (derived from the Sanskrit “Gosthi” meaning “assembly” or “association”) to preserve the heritage of Kathmandu Valley by generating capital from collective land ownership thereby financing cultural preservation and maintenance communally. The history of Guthi can be traced back to the Lichchavi period; between the 5th and the 9th centuries, and have been used widely in different periods for different purposes. Different types of Guthis serve different missions and their existence is still communal.
Individual giving is also prevalent in the major religions of Nepal. In Hinduism, the Upanishad (religious text) identifies Dana (donation or charity) as one of the three characteristics of a good person. It is also visible in donations during events like Saptaha (week-long worship) or in stone inscriptions outside each temple. The concept of Dana (donation) in Buddhism, Zakat (one of the five principles of Islam asking individuals to donate certain part of their income) and Sadaqa (voluntary donations) in Islam, and charity in Christianity, focus on individual giving.
Nepali Society is built around a giving culture. It is evident in the social structure, literature, folklore, history, religion, and noticeably in the post-disaster relief efforts in recent years. Individual giving is not an alien concept for Nepal. Considering the need for diversifying their revenue sources, Nepali nonprofits have to be courageous. I see it as a marketing and communication challenge rather than a philosophical one.
- Bureau of Labor Statistics, US Department of Labor. (2018). Nonprofits account for 12.3 million jobs, 10.2 percent of private-sector employment in 2016. Retrieved from https://www.bls.gov/opub/ted/2018/nonprofits-account-for-12-3-million-jobs-10-2-percent-of-private-sector-employment-in-2016.htm
- Burke, G. A. (n.d.). Charity and the Three Gunas. Light of the Spirit Monastery. New Mexico. USA.
- Center for Civil Society Studies, John Hopkins University. (2019). The 2019 Nonprofit Employment Report. Retrieved from http://ccss.jhu.edu/wp-content/uploads/downloads/2019/01/2019-NP-Employment-Report_FINAL_1.8.2019.pdf
- Charities Aid Foundation. (2016). World Giving Index 2016
- Giving USA. (2018). Giving USA 2018: Americans gave $410.02 billion to charity in 2017, crossing the $400 billion mark for the first time. Retrieved from https://givingusa.org/giving-usa-2018-americans-gave-410-02-billion-to-charity-in-2017-crossing-the-400-billion-mark-for-the-first-time/
- Klein, K. (2016). Fundraising for Social Change. 7th edition. pp. 3-11. Wiley.
- Maitra, K. S. (1982). The First Poet of Nepali Literature. Indian Literature Vol. 25, No. 5 (September-October 1982). Retrieved from https://www.jstor.org/stable/23331113
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- National Philanthropic Trust. (2019). Charitable Giving Statistics in the U.K. Retrieved from https://www.nptuk.org/philanthropic-resources/uk-charitable-giving-statistics/
- Pradhananga, N., Shrestha, K. K. & Dee, J. (2009). Sustaining Indigenous Heritage: Learning from the Guthi System in Nepal. Retrieved from https://ocoy.org/dharma-for-christians/bhagavad-gita-for-awakening/charity-and-the-three-gunas/
- Salamon, L. M. & Newhouse, C. L. (2019). The 2019 Nonprofit Employment Report. John Hopkins
- Sattva, Rohini Nilekani Philanthropies and Bill & Melinda Gates Foundation. (2019). Everyday Giving in India Report 2019
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- Urban Institute. (2018). The Nonprofit Sector in Brief 2018. National Center for Charitable Statistics. Retrieved from https://nccs.urban.org/publication/nonprofit-sector-brief-2018#the-nonprofit-sector-in-brief-2018-public-charites-giving-and-volunteering
- Weber, E. (2016). Charity of religions with special references to Hinduism, Islam, Christianity: an interreligious perspective. Journal of Religious Culture. No. 213. Retrieved from https://www.researchgate.net/publication/316454842