OVERVIEW
PHILANTHROPY IN THE MUSLIM TRADITION. Around eighty-five percent of the population in Bangladesh is Muslim and the people’s religious tradition has promoted a culture of giving. For Muslims, giving zakat ul mal, zakat ul fitr is a religious requirement. The word zakat means to purify or justify through alms-giving. According to the practice of zakat ul mal, 2.5 per cent of an individual or a household’s savings and other forms of movable and immovable property is supposed to be given to charity at the end of each year. The Zakat Board regulates zakat related activities of the people. Zakat can be distributed at any time of the year, but normally the bulk of it is distributed during the Eid ul Fitr (the festival following a month-long dawn to dusk fasting). The zakat ul mal distributed each year is estimated to be three billion taka (US$50 million). In addition, during the Eid ul Fitr people distribute zakul ul fitr, a sum of money equivalent to the price of 2.75 kilograms of the staple food for each member of the family.
During the Eid ul Azha (another major Muslim festival celebrating the Prophet Abraham's intended sacrifice for the Almighty) people slaughter animals. One-third of the meat and the hide go to charity. A survey on sadaqua (voluntary giving as an act of righteousness or beneficence) indicates that at least one billion taka is given in this form by the Muslim families. About half of that is the value of hides and skins of sacrificial animals through out the year. A good percentage of the funds of orphanages in the country comes from this source. In addition, the fixed asset of Muslim awqaf property is more than four billion taka- income from which is used for public benefit.
Muslim people also participate in charity through the contribution of chanda. One important item of chanda is festival-based. During the Eid ul Fitr and Eid ul Azha people gather in a mosque or in specially arranged places for prayers. Many people living in urban areas go back to their villages for these congregations in order to, among other things, take part in local charity. The organizers of these congregations and/or rural leaders collect voluntary donations to undertake some emergency projects, such as repair works for roads, schools, madrasha buildings, or expansion projects for mosques or graveyards. The amount of money raised at one congregation within an hour can be as high as 10 per cent of the annual budget of the lowest tier of local government- the union council. There may be around ten congregations within a union, collecting at least the size of a union budget on a day, twice a year.
HISTORY OF PHILANTHROPY
INDIVIDUAL GIVING. In general, the middle income group give comparatively more and mainly to individuals, while the higher income group invest in religious institutions (ie. respective prayer houses, madrasha, orphanages, etc.), in general, in their birth places.
According to the APPC Individual Giving survey ‘Investing in Ourselves’ published in 2001, 87.8% of households in metropolitan areas, 88.7% in urban areas and 64.9% in rural areas give to individuals and/or organisations.
Other than giving for religious reasons, in recent times, a change has become evident in the people's attitude towards philanthropy. In the past, establishment of educational institutions (schools, colleges, madrashas, etc.) and prayer houses (mosques, temples, etc.) used to be established as non-profits by the people either individually or in a group. But in recent times, the rate of establishing nonprofit educational institutions is decreasing while that of for-profit is increasing (kindergarten schools). One of the key reasons for this is that the government now allows the establishment of educational institutions in the for-profit sector. Many schools are now in operation with a trade license.
Also proliferation of NGOs probably has resulted in a decrease in community initiatives in the country. Instead of taking initiatives in establishing a school by their own, the people try to influence the NGOs to establish one.
CORPORATE GIVING. A recent survey shows that private companies do not have a defined policy, but fund charities, sponsor events and donate to third sector organisations as a part of their implicit social responsibility. Multinational organizations and financial institutions give more often than small organizations. Second generation entrepreneurs give more than the first generation. Business houses, according to the current income tax law, do not receive any tax deductions against their givings, thus prefer to donate out of their advertising budget and advertisements in newsletters, bulletins and souvenirs of voluntary organisations have been a conduit for such giving. No estimate for the amount of corporate giving is available. The best estimate is .05% of their total turnover. However a study on cost of doing business indicate that big houses give more to political organisations than to social organisations and small houses give more to community organisations as ‘protection’ money.
POLICY ENVIRONMENT
The government of Bangladesh has no clear cut policy with respect to third sector organisations. The laws that regulate incorporated associations are inherited from colonial days and follow the Common Law traditions. These laws have not been developed or amended over time on the basis of any coherent thought or philosophy but adopted largely from the idea of instituting a regulatory framework. However the government recognizes that not all service activities can be undertaken by the government and in the culture and history of the country there always was a strong presence of societies and associations for providing different kinds of services. The government's support is manifested in the grants that are made to such societies and associations through various ministries/directorates etc.
In recent years there has been a phenomenal growth of NGOs prompted by donor stimulus. In the 1980s the government thought it prudent to oversee the flow of donor fund and advise the NGOs to be less donor dependent. The government thus created the NGO Affairs Bureau to undertake this responsibility and offer the NGOs service for program approval, foreign exchange clearance, etc.
The growth of NGOs has been influenced by the rise of neo-liberalism and activism of civil society organisations. The government pronouncements have opened up opportunities of partnership of Government Organizations with NGOs. This partnership is program-based and donor promoted. Government pronouncements about social responsibility of business have not seen a significant manifestation. There has been no attempt to promote a coherent policy environment for the creation and promotion of truly service oriented community owned grass root organisation.
The government in general is supportive of the third sector and private philanthropy. Existing rules are not rigid enough to control the growth of third sector organisations and their activities. The government provides most running costs of most non-profit educational institutions. Also to finance the micro-credit operations of the NGOs, the establishment of Palli Karma Sahayak Foundtion (PKSF) by the government is an indication of the government's supporting position.
In Bangladesh, like many other Muslim societies, there are Muslim awqaf (plural of waqf- endowment)- or philanthropic foundations- a major institution of Islamic charity. The Mussalman Wakf Act, 1923 is the guiding law for the Muslim awqaf. A waqf is defined as a voluntary donation, by the owner, of the right of disposal of a thing or property and the dedication of the usufruct to some charitable end.
Non-profit organisations can also be incorporated under the provisions of Company Law in the form of a not for profit company limited by guarantee. This form is an inheritance from the English Corporate Law. The non-profit companies are created by fulfilling requirements of the Company Law and registration with the Registrar of Companies. There are also non-profit organizations in Bangladesh, created by specific acts of the Parliament e.g. Palli Karma Sahayak Foundation (PKSF).
GOVERNMENT REGULATION. The government has recently imposed tax on the NGOs' revenue generating ventures, other than the micro-finance program. The government acknowledged that incomes of such ventures of NGOs go to their development fund but on the pressure from the for-profit sector, the government has taken such a measure.
Currently there is no provision of tax exemption for private philanthropy.
The government tries to control flow of funds to NGOs through scrutiny of area of activity, funding project proposal; and government policy in the activity area. However, donors and international NGOs can avoid such a procedure either by taking prior approval of activity or by giving the work on contract. Recently, the government has initiated inquiry against 300 NGOs as to sources and propriety of uses of the funds and also in respect of their 'political activity', individually or collectively.
The government, coming to power in October 2001, is now working on a policy to restrict the NGO activities alleging that some major NGOs have become political agents of the previous government (1996-2001) and campaigned for its political party. The government has also stopped the clearance of funds of these NGOs for the same allegation.
The present government has also become strict in the implementation of the existing policy. For example, there is a provision that every time before starting a new activity, each NGO has to take written permission from the respective deputy commissioner (administrative head of a district). The NGOs used to avoid this because the process was time consuming.
Through a new order, the government may dissolve the governing body of any NGO for some specific reasons. Also the government is delaying the clearance of overseas funds without any reason.
The incorporated and unincorporated third sector organisations have not been brought within the tax network of the government. However, to get tax exempt status, they must apply to the National Board of Revenue under specific provisions of the Income Tax Act. With more and more big NGOs getting into commercial activities, the Chamber of Commerce and trade organizations have raised concerns about nonprofit organisations tax exempt status. Paid workers of the third sector organisations are not exempt from paying income tax and if their employers pay income tax on behalf of the employees, as is done for government employees, specific rules must be followed. The NGO sales outlet are supposed to pay VAT and must have VAT registration. This is however not common, except for some big organisations. Donations to NGO, social and community organisations by individuals or business houses are not tax deductible unless the receiving organisation has tax exemption from the National Board of Revenue.
In May 2005, only one non-profit organization -- Dhaka Ahsania Mission -- has been allowed tax exemption status by the National Board of Revenue(NBR).
Organisations registered with the NGO Affairs Bureau can receive foreign funding with approval from the government.
PHILANTHROPY INTERMEDIARIES
Bangladesh NGO Foundation
The government has set up the Bangladesh NGO Foundation through a Gazette notification of Ministry of Finance on 11 December 2004 to provide financial assistance to small NGO's having not more than 10 programs, Upazillas and annual turnover not more than 50 million taka (including NGO Foundation grants). Finance Minister declared a total of 100 taka for NGO Foundations, of which 500 million has been allocated in the financial year 2004-05. In the first year 20 million taka has been disbursed as start up money of which 90% has been distributed as grants to small NGOs.
Association of Development Agencies in Bangladesh (ADAB):
ADAB is the national apex organization of the local, national and international NGOs who are working in Bangladesh. It was founded in January 1974 and worked in collaboration with some foreign aided NGOs engaged in relief and rehabilitation work and named as Association of Voluntary Agencies in Bangladesh (AVAB).It was renamed as Agricultural Development Agencies in Bangladesh (ADAB) in 1976 as their activities were in the field of agriculture and food production. In 1983 it was again renamed as Association of Development Agencies in Bangladesh and the acronym ADAB remained the same.
The objectives of ADAB are to build up an effective and strong NGO sector; establish NGO solidarity; strengthen NGO coordination; promote congenial government/non-government relations, facilitate and share ideas, expertise and experience among development agencies, strengthen the capacity of NGOs, promote mutual cooperation among them; and help them avoid duplication of programs. As of January 2000 ADAB had a membership of 1071 organizations of which 256 were central members and 815 where chapter members. It has 12 programs which are spread over the whole of Bangladesh under 16 chapter networks situated in Barisal, Bogra, Chittagong, Comilla, Dhaka, Dinajpur, Faridpur, Jessore, Khulna, Kushtia, Manikgonj, Mymensingh, Patuakhali, Rajshahi, Rangpur, Tangail and Sylhet.
ADAB is registered under Societies Registration Act of 1860 and Foreign Donation Regulation Ordinance of 1978.
The Federation of NGOs in Bangladesh (FNB) a new apex body of NGOs was formed in a conference of the district representatives' of the National NGO Coordination Committee (NNCC) on April 19 2003 at BRAC Centre. A total of 205 representatives from 62 districts participated in the conference. A new Memorandum of Association and Constitution of FNB were also approved in the conference. An interim National Executive Board comprising 21 members with Mr. Abdul-Muyeed Chowdhury, Executive Director of BRAC as Chairperson, Ms. Rasheda K Choudhhury and Mr. Kamaluddin FNB working for the pro-government line alleging Association of Development Agencies in Bangladesh (ADAB) for political involvement to the politics of opposition line. Major activities of FNB are to protect interest of NGOs and create a favorable environment, uphold a positive image to the people and government, ensure acceptability and transparency, ensure co-ordination and collaboration between NGOs , keep close contact with different donor and international agencies and capacity building for local or small organisations. Since its inception FNB was mostly involved in advocacy and lobbying with the government for NGO sector. As of December 2004 892 NGOs have been awarded membership of FNB of which 90% are local NGOs.
Contact: House 64/A, Road 15/A, Dhanmondi, Dhaka –1209, Telephone: 8151920-1, Fax: 8151920-1, Ext.107, E-mail: fnb@bdmail.net; Web-site: www.fnbbd.org
FUNDRAISING ORGANIZATIONS
Non-profit organisations involved in fund-raising have not been as many as in other fields of philanthropic activity. This is due largely to the fact that these organisations are heavily dependent on foreign funding sources. Due to a decrease in the level of foreign funding, NGOs have begun to explore other alternatives for financial sustainability. NGOs that are running micro-credit operation generates about 30 percent of their operational funds from the service charges they take from their borrowers. Also a large number of NGOs have economic ventures, through which they generate a large amount of funds for their development pursuits.
Bangladesh Fund Raising group is a network of NGOs, which was established to promote fundraising in the NGO sector in particular. Its activities include development of skills in fundraising and resource persons to transfer skills on fund raising, dissemination of information about fundraising among its members, policy advocacy and building linkages among different sectors. Currently the BFRG has 159 members, but can generate only a little amount of fund through membership fees. Most of its operational expenses is funded by external donor agencies.
Contact: www.bfrg.bangladesh.cf
With due approval from the government, a few organisations generate funds through lottery. For example, Bangladesh Red Crescent Society, Bangladesh Diabetic Society, Bangladesh Heart Foundation, and Bangladesh Krira Unnayan Tohobil arrange lotteries. Funds generated through these lotteries are huge. More then ten million taka is generated each time a lottery is arranged. It is noted that none of these organisations have fundraising as their key activity rather they raise funds to finance their own activities.
Prothom Alo, a national news daily also generates funds to support acid victims. It usually publishes articles on the sufferings of the acid victims and appeal to its readers to donate in a bank account. It also provides information about the total funds raised and how it is used. This venture has so far generated about eight million taka.
Contact: www.prothon-alo.com
VOLUNTEERING
There is no organisation that promotes voluntarism. However, the total number of non-profit organisations that recruit and depend on volunteers are numerous. Most of the newly established NGOs and the growing ones, who are yet to receive foreign donor funding, are heavily dependent on volunteers to run their activities. Total number of such organisations is not available.
Volunteering has been rooted in local level institutions in Bangladesh. Even in 1500 B.C., there existed local bodies called gramsabha or mahasabha formed by volunteers. These bodies made decisions on matters of public interest and were engaged in the administration of justice. The panchayets or village councils composed of five elderly persons of the locality existed in the area now forming Bangladesh in 1000 BC. The important functions of the panchayets were to assess taxes, collect revenues, and deliver judgements on local disputes (Basham, 1954). According to Koutilya’s Aurthasastra, during the Maurya rule (from 322 B.C.) there existed panchayets or village councils consisting of five elderly members of the community who were responsible for the administration and security of the village. These local institution leaders were volunteers. As were the mahattars and gramikas during the guptas (320 to 600 A.D.), the das gramika (head man of ten villages) or the patak during the palas (beginning 600 A.D.), and grampati (village head) during the senas reign. During the Muslim Sultanate period beginning in 1202 A.D., and the Mughal period (1526- 1757 AD), the traditional panchayet system with mahattars, gramikas continued along new posts. All these positions were filled in by volunteers.
GRANTMAKING FOUNDATIONS
Grantmaking foundations in Bangladesh are very few. Palli Karma-Shahayok Foundation has become a major source of fund for the organisations involved in micro-credit operation. Funds are mobilised by the PKSF in the form of grants, loans and contributions from a wide variety of sources which include the Government of Bangladesh (GOB), private individuals and organisations, foreign governments, international donors and lending agencies and capital markets.
Contact: pskf@pksf-bd.org
The Bangladesh Freedom Foundation works principally through providing financial support to programs within the identified areas of its concern. Work of the Bangladesh Freedom Foundation is supported by voluntary contributions and grants from interested funding organizations, bilateral and multilateral donor agencies, regional and international institutions, private corporate sector, and individual donations from within and outside Bangladesh.
Contact: edbff@bdcom.com
Religious grant-making organisations are mainly the waqf estates (registered with Waqf Board) and debottar property (there is no provision of registration). Data is only available up to 1995 which shows that total number of waqf estates were 10,257 (total value of fixed assets worth Tk 4,099 million) while the debottar properties were 1,225 (total value of fixed assets worth Tk 289 million).
DEVELOPMENT ASSISTANCE ASSOCIATIONS
There are a number of NGOs providing social and economic development assistance internationally in the form of consultancy.
Association of Social Advancement (ASA) is providing development assistance in the field of micro credit to nineteen countries in Asia and Africa.
Contact: Shafiqual Haque Choudhury, asa@bangladesh.drik.net
This email address is being protected from spam bots, you need Javascript enabled to view it
, web: http//www.asabd.org
Bangladesh Rural Advancement Committee is also involved in similar activities. The BRAC is also going to open its branch office in Afghanistan soon to undertake activities similar to what it is doing in Bangladesh (a package of activities dealing with different aspects of poverty such as health, education, women empowerment, micro credit, etc.).
The Grameen Trust, a concern of the Grameen Bank, the 2006 Nobel Prize winning micro finance bank, has been providing training and technical assistance to Grameen replications world-wide. It has also been providing seed and scaling-up funds to replication projects working with the poorest, especially women, in different counties. Up to March 2002, the Grameen Trust has provided seed capital to 105 projects and scaling-up funds to 41 projects in 34 countries of Asia and the Pacific, Europe, Africa and Latin America.
Contact: Shafiqual Haque Choudhury, asa@bangladesh.drik.net, web: http//www.asabd.org
Bangladesh Rural Advancement Committee is also involved in similar activities. The BRAC is also going to open its branch office in Afghanistan soon to undertake activities similar to what it is doing in Bangladesh (a package of activities dealing with different aspects of poverty such as health, education, women empowerment, micro credit, etc.).
The Grameen Trust, a concern of the Grameen Bank, the 2006 Nobel Prize winning micro finance bank, has been providing training and technical assistance to Grameen replications world-wide. It has also been providing seed and scaling-up funds to replication projects working with the poorest, especially women, in different counties. Up to March 2002, the Grameen Trust has provided seed capital to 105 projects and scaling-up funds to 41 projects in 34 countries of Asia and the Pacific, Europe, Africa and Latin America.
Contact: g_trust@grameen.com; gt_repli@grameen.com
Last Updated ( Monday, 06 November 2006 )