Wealthy Countries Tend to Be More Charitable Than Others. How Does Singapore Stack Up?


You’ve probably donated to your favorite charity or helped a stranger with directions at some point in your life. While most of us consider ourselves to be charitable, on a national level, countries like the United States, New Zealand, and Australia are recognized as some of the most “giving” nations. This is unsurprising, considering that it would be expected that wealthy countries would have more resources available for charitable endeavors. However, do all wealthy nations give as much as we’d expect them to? And do nations that quickly gain wealth (like certain APAC nations) end up proportionally improving their charitable giving? By examining the Charities Aid Foundation’s World Giving Index and the economic health of 128 nations, we found out which nations are most helpful relative to what they can offer.

Study Highlights

  • There is a moderate positive correlation of 40% when it comes to the wealth of a nation and how charitable they are.
  • While charity work has increased in most nations over time, poorer countries in Asia improved more than wealthier Asian countries.
  • Singapore improved in ranking the most compared to other wealthy APAC nations. However, they are still less charitable than nations with similar economic conditions.

Wealthier Countries Lead the Pack in Charitable Behaviour

It’s no surprise that people who have more money will be able to give more to those in need than those with less money. When comparing country rankings from the CAF World Giving Index to their GDPs per capita, we found a moderate, negative correlation of 40% (meaning wealthier countries were more charitable on average). In fact, nations that were in the top decile for GDP per capita had an average ranking of 16.4, with several of these nations like the USA, Ireland, and the Netherlands ranking in the top 10 for several categories like “volunteering time” and “helping a stranger.”

While wealthy nations on average scored better across the board, we found that they typically scored highest for donations. For example, the United States donated $449.64 billion in 2019 alone. This is in comparison to other large but poorer nations like China, who donated close to 30 billion in 2019.

Top 10 Countries By Overall Score for Charitableness

Country GDP Per Capita^ (in USD) CAF Ranking
United States $62,530.39 1
Myanmar $5,142.15 2
New Zealand $43,695.15 3
Australia $49,611.86 4
Ireland $86,696.24 5
Canada $48,886.76 6
The United Kingdom $46,704.32 7
Netherlands $56,849.38 8
Sri Lanka $13,078.10 9
Indonesia $11,812.20 10

Poorer Countries Give With Time, Not Money

However, while wealthy countries ranked better for their overall charitableness and donating money, poorer nations received notably high rankings for helping a stranger and volunteering. In fact, the 50 poorest nations had an average ranking of 53.98—compared to the median, which was 63.5. In this category, two of the poorest nations in the world, Liberia and Sierra Leone, ranked 1st and 2nd, respectively. Furthermore, the Philippines—which has a GDP per Capita of $8,908—ranked 9th in the “volunteering” category, outranking the top 10 wealthiest nations except for the USA.

This disparity has a few potential explanations. First, people in poorer nations with little to no existing social support programs may rely on their communities to get help rather than donate their limited funds. Thus, there is a stronger network of community involvement and volunteering compared to wealthier nations, especially in countries whose religious and cultural practices are focused on expressing compassion and humanity. On the other hand, high-income nations whose citizens have expendable income prefer donations because it is easy to do and could give them quick satisfaction compared to volunteering.

In Asia, Countries With a Larger Increase in Wealth Saw a Bigger Increase on the Charity Index

APAC nations saw the largest growth in GDP per capita in the past 10 years. Due to this large increase in wealth, APAC’s overall charitable giving ranking improved by an average of 30.45 places, compared to the worldwide average change in ranking, which improved by 9.27 places. However, it was the poorer APAC nations that led the region in charitableness in 2019 (with the exception of Australia and New Zealand), exhibiting the greatest improvement in their CAF ranks.

APAC’s Rankings and GDP Change from 2009 to 2019

Country Difference in CAF Ranking from 2010-2019 GDP Per Capita % Change from 2009-2019
China 21 167.77%
Bangladesh 65 164.25%
Mongolia 30 153.15%
Nepal 47 123.99%
Vietnam 54 123.06%
Cambodia 40 122.63%
Myanmar 20 91.68%
India 52 90.53%
Thailand 4 85.30%
Sri Lanka -1 84.32%
Indonesia 40 82.89%
Philippines 17 82.86%
Singapore 45 67.58%
South Korea 24 66.35%
Malaysia 46 56.52%
New Zealand -1 49.20%
Pakistan 73 34.10%
Australia -3 28.73%
Japan 12 -1.49%

For example, Indonesia’s GDP per capita increased by 82.89% in the last 10 years—45.27% more than the global average. This, coupled with their religious custom of Zakat, which requires Muslims to donate 2.5% of their wealth once a year, seems to be in line with Indonesia’s jump from 50th place in 2010 to 10th in 2019.

Similarly, Myanmar, which has one of the lowest GDP per capita ($5,142.15) but whose GDP per capita grew 78.9% from 2009 to 2019, improved its CAF rank from 22nd place to 2nd place. However, it’s worth pointing out that Myanmar’s religious practice of Theravada Buddhism is part of the reason why their CAF score might be so high compared to westernised, wealthier nations. Similarly, Vietnam and Bangladesh have become much more charitable in the past 10 years, following a GDP per capita increase of 123.06% and 164.25% respectively.

Wealthy APAC Nations Are Less Charitable Than Other Wealthy Nations

Based on our findings, we initially expected that wealthy APAC nations would be as charitable as their economic peers in other parts of the world. However, we discovered that wealthy countries like Singapore, Japan, and Korea, were not as charitable as those with a similar annual GDP per capita. For example, Japan, Korea, and Taiwan ranked 107, 57, and 48, respectively on CAF, compared to their economic peers from western nations that ranked mostly from 1st to 29th place. One possible explanation for the lower score in wealthier APAC nations is the inherent lack of trust in how charities spend the donations and lack of tax and monetary incentives.

Comparison of Countries With a High GDP but Low Charity Score

Country Overall Ranking in 2019 GDP per capita (in PPP)
Singapore 46 $97,341
Taiwan 48 $50,500
Korea 57 $42,879
Japan 107 $41,667
Wealthy Nation Average^ 32.5 $55,533.21

The story with Singapore is similar, although there are some key differences. Firstly, while Singapore’s rank of 46th place is below the average similarly wealthy peers like Ireland, it actually had one of the most dramatic improvements in its charitable giving score in the past 10 years—up 45 spots from 91 to 46. Secondly, Singapore has a better donation score compared to its wealthy APAC peers due to higher tax benefits and instead ranked lower in comparison for volunteering or helping others. While the improvement in how charitable Singaporeans have become is substantial, it is still important to understand why Singapore ranks poorly compared to other wealthy nations.

Firstly, like South Koreans, Singaporeans are wary of transparency and don’t trust that their money will end up in the right hands. Second, similar to Japan, there is an “incentivisation” problem. While there are tax deductions for donations, Singaporeans want more prizes or awards for giving to charity. Furthermore, tax deductions for charity aren’t nearly as prevalent as they are in some of the most charitable countries like the United States.This trend runs in stark contrast to religious nations like Indonesia where charity work is a purely altruistic act, regardless of the wealth of its citizens. Lastly, Singapore has a comprehensive social service system that requires people to save for their future and offers a variety of schemes to help its citizens buy a house, save for education, and more. This means it’s less likely that citizens feel the need to help one another since the government will step in.

Comparison of Tax Benefits for Donating Money in Wealthy Nations

Country Standard Tax Benefit for an Individual
Singapore 250% deduction for qualifying donations until December 31st, 2023
Japan Deduction is the amount equal to the donation minus JPY 2,000, up to 40% of gross income
Korea 15% deduction for donations up to KRW 10 million, and 30% deduction for any amount after that
United States 60-100% deduction your adjusted gross income
Australia Up to AUD $1,500 for political donations
Tax deduction depends on the type of gift
New Zealand Deduction of 33.3 cents to every dollar

APAC Nations Have Come Far in Charity Work, but Still Have a Way To Go

Thus, it seems that there is a clear dichotomy between capitalistic, wealthy APAC countries and nations that are growing in wealth while maintaining strict religious and cultural customs. The wealth of these nations doesn’t necessarily correlate to people’s willingness to share their time or wealth with the less fortunate, unless it is directly dictated in their culture or is incentivized by tax breaks or rewards. Furthermore, citizens of wealthy and consumerist nations may be more hesitant to relinquish their hard-earned money to charitable organizations, especially if they can’t confirm a transparent process. In a world where helping others is more important than ever, one should hope that the very charitable, but quickly growing APAC countries will not follow a similar suit to their wealthy neighbors where the proof of donations is more important than the donation itself.

Methodology

To research our findings, we sourced data from the CAF World Giving Index of 2010 and 2019. We then compared it to the World Bank’s data on income inequality index, GDP (in PPP) per capita, and the Gini Coefficients for 128 countries. To see if there were any correlations that could explain why certain countries were more charitable than others, we tested different variables against one another. For instance, we found a modest correlation between wealth and overall CAF rankings from 2010 to 2019, as well as GDP growth between 2010and 2019 and the change in CAF rank.

There are some limitations in our research that are worth noting. For instance, we did not compare each country’s religious status with their score, although religion and culture plays an important role in how charitable people are. That said, we did our best to acknowledge instances when culture and religion played a significant role in how charitable a nation was. Lastly, the CAF score was based on a survey, which means that we had the same limitations of a potential survey bias. To limit any repercussions from this, the CAF dispersed their questionnaire among thousands of survey participants in each country- totalling 1.3 million people and representing 95% of the world’s population.





Source link