Findings from the Digital for Good: A Global Study on Emerging Ways of Giving research series
By Kinga Horvath
China and India account for more than a third of the global population and are still growing, accompanied by a strong digital climb and a dynamically growing middle class. Both China and India are among the top 10 countries that have seen the biggest overall increase in giving activity in the last five years, according to Charities Aid Foundation’s CAF World Giving Index 2021.
This giving trend and the fact that both countries have a long tradition of philanthropy strongly embedded in their cultures have generated several opportunities for future growth in their philanthropic sectors. The Digital for Good country reports – as well as the 2022 Global Philanthropy Environment Index – found that the use of online giving and crowdfunding are increasing in both countries; while informal philanthropy is flourishing, current regulations are likely to create a more cumbersome environment for formal philanthropy.
Findings from the 2022 Global Philanthropy Environment Index (GPEI) show that both China (with an overall score of 2.96)[1] and India (with an overall score of 3.28)[2] have a less favorable philanthropic environment due to restrictive regulations on philanthropy. The 2016 Charity Law and its amendments have made both local and cross-border philanthropic operations difficult in China[3]. Simultaneously, the moderate philanthropic environment in India is also threatened by strict regulations that affect both domestic and cross-border giving, such as the Foreign Contribution Regulation Act (FCRA) and its recent amendments[4].
During the COVID-19 pandemic, some positive changes were observed when philanthropic collaborations and frontline partnerships emerged to tackle various social challenges that surfaced with the onset of the pandemic. However, many philanthropic organizations in both countries faced the risk of shutdown due to a lack of funding and reported being negatively affected by the pandemic in other ways. Therefore, it is crucial for potential donors and practitioners to better understand the opportunities and challenges of the emerging ways of giving in China and India.
Both the adoption and use of online giving have been accelerated in China and India
Online giving has been increasing in both countries and the COVID-19 pandemic further accelerated this growth. However, while digital giving in India emerged as one of the leading charitable vehicles, crowdfunding platforms gained more popularity in China.
According to the India country report, while cash donations remained the regular form of giving in India in 2022, digital giving was the preferred method of giving during and after the COVID-19 pandemic for 70 percent of survey respondents. However, less than 50 percent of survey respondents had not used any crowdfunding platforms in India in 2022. Our research partner in India, CAF India, highlighted that “the use of crowdfunding platforms for donating is quickly catching up. Just the top three platforms have raised INR 36 billion (equivalent to approximately USD 506 million) since their inceptions in the mid-2000s until 2021.
On the other hand, China has witnessed an increasing use of charitable crowdfunding, despite a strict regulatory environment for online crowdfunding. The 2020 China Charitable Giving Report reported that CNY 8.2 billion (equivalent to approximately USD 1.3 billion) was given in 2020 through the 20 approved internet fundraising platforms, which constitutes a 52 percent increase from the previous year[5]. Today, China has 22 officially approved crowdfunding platforms. While statistics show that the amount and total value of online donations via crowdfunding platforms are rapidly increasing, comprehensive data on charitable crowdfunding is still limited. The China country report is based on an online experiment conducted in October 2021 in mainland China to examine the separate effects of three factors—social information, message framing, and nonprofit overhead ratio—on individual donations to an online crowdfunding campaign.
Online advertisements and social information expanded the reach of charitable giving
The effectiveness of framing effect and the display of online advertisements that solicit charitable contributions are important to encourage everyday donors to give online.
In India, online advertisements emerged as a new way to encourage giving. Seventy percent of survey respondents who donated in 2022 shared that they donated at least once after seeing an online ad, while approximately 50 percent donated more than once. Interestingly, social media platforms and online game sites were the most impactful for advertisements displayed to motivate people to donate.
In China, the online experiment found that messages that highlighted the donor’s own benefit did not raise more donations than messages that highlighted the benefit to the beneficiaries. However, the majority (86 percent) of the participants reported that one of the main reasons for their charitable giving is their concern for people who are less fortunate than themselves.
Looking forward: Better data quality and improved data availability are crucial for further improvements to the philanthropic environment
Both reports convey that data around philanthropic activity is still limited and scarce in both China and India. With the increased use of online giving, there now exists an improved chance to collect attested data on giving and to provide a more accurate picture of online giving. CAF India notes that, “while India has a long history of philanthropic giving, most of these donations are religious and informal. Thus, they are not formally measured or accounted for.” Researchers at CAF India further noted that the rise of digital giving has made the measurement of donations easier, but the availability of secondary data on philanthropic giving in India remains an obstacle. Thus, it is essential that advanced data collection and further research on charitable giving are supported to understand the true potential of various online giving vehicles worldwide.
About the Global Study
The Digital for Good: A Global Study on Emerging Ways of Giving report explores the most recent development of philanthropy in partnership with organizations and experts in eight countries: Brazil, China, India, Kenya, Singapore, South Africa, South Korea, and the United Kingdom. By exploring the emerging vehicles for philanthropy, this global study offers new insights for civil society leaders, philanthropists, and the public to better understand and shape the ever-evolving state of philanthropy.
Such a global study has the ability to develop the global network of philanthropy researchers and to build capacity in countries where philanthropy seems to have the potential to grow rapidly in the following years. It also provides a better understanding of global trends in philanthropy while putting a spotlight on local developments as well.
“In digital era, philanthropy experiences a fast growth pace. This international collaboration is valuable in uncovering a multifaceted nature of philanthropy in different specific cultural contexts.” – Yuan Tian, Associate Professor at Shanghai Jiao Tong University in China.
Charities Aid Foundation (CAF) India
Charities Aid Foundation India (CAF) India is a leading not-for-profit organization that promotes and supports strategic giving in India. It is part of the global network of CAF organizations in 11 countries. CAF India was set up in 1998 as an independent charitable trust with distinct governance. Since then, CAF India has been providing strategic and management support to corporates, individuals, and NGOs with an aim to ensure greater impact of their philanthropic and CSR investments. CAF India, with its dedicated team of experts, brings development sector knowledge and experience to take ‘Giving’ further.
Yuan Tian, PhD, Shanghai Jiao Tong University
Yuan Tian serves as an Associate Professor at Shanghai Jiao Tong University in China. She earned her master’s degree and Ph.D. degree in Philanthropic Studies from the Indiana University Lilly Family School of Philanthropy. She was also awarded as the 2017 Doctoral Summer Fellow by the Center for Social Impact Strategy at the University of Pennsylvania. She has specialized in experimental research of behavioral science.
Kinga Horvath, Indiana University Lilly Family School of Philanthropy
Kinga Horvath is a Visiting Research Associate at the Indiana University Lilly Family School of Philanthropy. She co-leads international research projects on global philanthropy and cross-border giving, including the Digital for Good: A Global Study on Emerging Ways of Giving, the 2022 Global Philanthropy Environment Index, and the upcoming 2023 Global Philanthropy Tracker.
[1] On the scale of 1 (indicating the least favorable philanthropic environment) to 5 (indicating the most favorable philanthropic environment). The global philanthropic environment was moderately favorable (with an average overall score of 3.63) in 2018-2020; and Eastern Asia also had a moderately favorable philanthropic environment with an average 3.90 overall score. China received the lowest overall score among the five countries and economies of this region included in the 2022 Global Philanthropy Environment Index Eastern Asia report.
[2] On the scale of 1 (indicating the least favorable philanthropic environment) to 5 (indicating the most favorable philanthropic environment). The global philanthropic environment was moderately favorable (with an average overall score of 3.63) in 2018-2020; but Southern and Southeastern Asia had a less favorable environment for philanthropy with an average 3.43 overall score. India received the fourth highest overall score among the nine countries and economies of this region included in the 2022 Global Philanthropy Environment Index Southern and Southeastern Asia report.
[3] Wang, Q. (2022). Global Philanthropy Environment Index 2022: China Country Report. Indiana University Lilly Family School of Philanthropy. https://scholarworks.iupui.edu/bitstream/handle/1805/28190/2022GPEIChina.pdf
[4] Chopra, D., & Srinath, I. (2022). Global Philanthropy Environment Index 2022: India Country Report. Indiana University Lilly Family School of Philanthropy. https://scholarworks.iupui.edu/bitstream/handle/1805/28275/2022GPEIIndia.pdf
[5] China Charity Alliance. (2021). 2020年度中国慈善捐赠报告（精简版） [2020 China Charitable Donation Report (Compact Version)]. http://www.charityalliance.org.cn/news/14364.jhtml
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