Strengthening philanthropy: Building a path for sustainable social investment

Philanthropy in Pakistan is more than just a tradition that is woven into the social fabric, guided by principles of Zakat (mandatory almsgiving) and Sadaqah (voluntary charity).

Pakistanis contribute an estimated PKR 500 billion (USD 3 billion) annually to charity, placing the nation among the most generous in the world. According to World Giving Index 2024, Pakistan ranks a modest 33rd out of 142 countries.

However, much of this giving is directed toward immediate relief, such as emergency aid, food distribution, and temporary shelter for those in need.

Only a small percentage of these contributions go towards long-term investments in education, healthcare, and poverty alleviation areas where sustained funding could make a lasting impact. As Pakistan deals with social and economic challenges, it’s time to shift from short-term charity to a structured, impactful approach to social investment.

Philanthropy in Pakistan faces several challenges as it works to address the country’s development issues. With a population exceeding 230 million, Pakistan struggles with entrenched poverty, inadequate education, limited climate resilience, gender inequality, and barriers to social innovation. These challenges are intensified by rural-urban disparities, limited access to essential services, and systemic barriers to progress.

The philanthropic sector, particularly through Corporate Social Responsibility (CSR) programs, can play a crucial role in filling gaps in poverty alleviation, education, climate resilience, social innovation, and gender equality. However, issues such as inadequate funding, lack of gender-disaggregated data, weak policy support, and insufficient technical expertise hinder effective philanthropic interventions. Addressing these barriers requires a focused and strategic approach, particularly in regions most vulnerable to these challenges.

While Pakistan’s giving culture is strong, the regulatory environment around philanthropy can present significant challenges. Non-profit organizations in Pakistan operate under longstanding regulations that can complicate charitable activities and international collaborations. Streamlining these frameworks and enhancing incentives for donors could attract more philanthropic capital and strengthen the social sector’s impact.

To build an effective philanthropic ecosystem, Pakistan must first understand who the main players are and how they contribute. Pakistan’s landscape includes a diverse group of stakeholders’ family foundations, corporate CSR initiatives, non-profits, international organizations, and government agencies. Yet, these actors often operate in silos, leading to duplicate efforts and missed opportunities.

Mapping stakeholders would enable the identification of overlapping efforts and the alignment of shared objectives, promoting a more coordinated and strategic approach. In the long term, such an exercise offers significant potential to enhance the sustainability and effectiveness of the philanthropic ecosystem.

By providing a comprehensive understanding of the roles, contributions, and geographical reach of various actors, mapping minimizes redundancies and ensures that critical gaps in service delivery and resource allocation are addressed. This systematic approach facilitates the development of synergistic partnerships, utilizing the distinct strengths of each stakeholder to achieve shared goals.

Furthermore, stakeholder mapping contributes to the establishment of a transparent and accountable framework, enabling evidence-based decision-making and the prioritization of interventions in line with national development objectives.

Over time, this structured coordination can adapt to evolving challenges, support resilient solutions, and promote a sustainable and transformative impact on targeted communities, thereby strengthening the overall capacity of the philanthropic landscape. Family-based charities in cities like Karachi, for instance, already play a significant role in meeting local needs in health, education, and gender equality. Rooted in their communities, these foundations have a strong grasp of local challenges, making them especially effective in supporting underserved populations.

Pakistan’s philanthropic sector holds immense potential, with a strong foundation built on a deeply rooted culture of charity and a young, socially conscious population eager to make a positive impact. While much of the giving has focused on immediate relief, there is a growing opportunity to shift toward more sustainable development initiatives.

This transition can unlock new avenues for progress, particularly by aligning philanthropic efforts with the United Nations Sustainable Development Goals (SDGs) such as quality education, gender equality, and healthcare.

By embracing innovative strategies, overcoming regulatory challenges, and enhancing data tracking mechanisms, the sector can increase its effectiveness, attract new funding sources, and catalyze transformative change to address Pakistan’s most pressing social issues. This presents an exciting opportunity for growth and improvement, ensuring a lasting and meaningful impact on society.

To encourage strategic, long-term contributions, Pakistan needs a clear business case for sustainability philanthropy. Various research from the Pakistan Centre for Philanthropy (PCP) highlights that philanthropy is essential to national stability, supporting healthcare, education, and poverty alleviation. However, without reliable data and impact evaluation of donations, it’s hard for organizations to see the difference their contributions make from their philanthropic activities.

International networks such as AVPN focus on transparency and accountability in philanthropy has set a new standard, showing how data-driven approaches can transform sporadic giving into a reliable engine for sustainable development. Increasing data transparency and accountability in Pakistan’s philanthropic sector would help build donor trust, attracting more consistent support for impactful initiatives.

Philanthropy in Pakistan also faces regulatory and operational challenges that limit its reach and effectiveness. Strict foreign funding restrictions, inconsistent policies, and minimal tax incentives deter potential donors.

Simplifying these processes, increasing tax benefits for individual donors and family foundations, and developing a centralized system for tracking social impact would make philanthropy more accessible and transparent. These steps would allow Pakistan’s philanthropic sector to move beyond fragmented, short-term charity to become a powerful force for sustainable change.

Aligning with the SDGs would also help Pakistan address fundamental social issues rather than simply responding to crises. Targeting goals like quality education, healthcare, and economic empowerment would allow philanthropy to contribute meaningfully to national progress. Impact investing, which combines social returns with financial outcomes, provides an additional avenue, inviting private capital to join philanthropic funding.

AVPN’s projects in vocational training and support for women-led enterprises demonstrate how targeted initiatives can create lasting change by addressing the root causes of social challenges, rather than only treating their symptoms.

To unlock the full potential of philanthropy in Pakistan, we need both policy reform and a coordinated national network to connect the many players in the sector.The aim is to amplify impact through collaboration, connecting Pakistani philanthropists with international donors to address local challenges, particularly in gender equality and economic empowerment.

A national network, could link stakeholders, promote transparency, and encourage joint funding efforts focused on the SDGs. Such a platform would allow stakeholders to share best practices, while policymakers work to simplify registration processes, expand tax incentives, and invest in systems that make tracking impact easier and more transparent.

Together, this coordination and support would make philanthropy a more accessible and appealing option for individuals, families, and corporations alike.

Policy think tanks’ expertise in policy research, advocacy, and capacity building can significantly enhance Pakistan’s philanthropic sector by promoting structured, sustainable approaches to giving. By supporting a national philanthropic network, think tanks can connect stakeholders such as family foundations, corporate CSR initiatives, and NGOs encouraging coordinated action and resource sharing. Through advocacy, training, public awareness, and impact-focused research, think tanks can shift the sector from immediate relief charity to long-term investments in areas like healthcare, education, and poverty alleviation. By integrating best practices in impact measurement and transparency, think tanks can build local capacity and attract more strategic philanthropic contributions, turning Pakistan’s generous culture into a powerful engine for sustainable national development.

That Pakistan’s tradition of giving holds incredible promise for national development is a fact. But to realize its full potential, philanthropy in Pakistan must evolve. By creating a system that values collaboration, accountability, and data-driven decision-making, Pakistan can turn its culture of generosity into a powerful engine for progress.

A dedicated national network, backed by supportive policies and transparent practices, could elevate Pakistan’s philanthropic landscape from isolated acts of kindness to a coordinated force for sustainable change. The question now is whether Pakistan will seize this opportunity to build a legacy of meaningful, lasting social investment.

Copyright Business Recorder, 2024