The Center for Global Prosperity at the Hudson Institute recently released its annual Index of Global Philanthropy and Remittances for 2016 (this report’s data go up to 2014). Published each year since 2006, the Index “details the sources and magnitude of private giving to the developing world.” The report seeks to, “reframe the discussion about the roles of public and private sectors in foreign aid by showing that the full scale of a country’s generosity is measured not just by government aid, but by private giving as well.”
The findings paint a rosy picture of recent global philanthropic trends. Amplifying patterns that’ve been building since the early 1990s, international private giving reached roughly $801 billion in 2014. That’s distinct from and in comparison to roughly $147 billion worth of official government investment in developing countries in the same year. For a sense of just how dramatic this increase has been, consider that even as recently as 2010, total private giving sat just below $400 billion and official investment at just over $100 billion. Even before the 2008 financial crisis, the total private giving only reached $500 billion.
So private global philanthropy is very much on the rise. Interestingly, the Hudson Index shows that remittances are the second-highest source of investment from donor countries. “In 2014, migrants sent a worldwide total of $580 billion back to their countries of origin.” Some $427 billion of this went to developing countries, where it can often account for a “sizable source” of the GDP in that country.
The U.S. comes out as the global leader in philanthropic donations and official government investment. American giving—especially private giving—far outstrips every other country on the Index, and as such constitutes a unique strategic advantage in our “soft power” toolbox. However, President Trump’s proposed budget would inflict massive cuts to foreign investment, in particular by eliminating the Overseas Private Investment Corporation, an independent government agency that raises billions each year in private funds. Already, conservative members of the House of Representatives have expressed their reservations with the proposed cuts. And of course if Trump continues to stem the flow of migrants into the U.S., we should expect remittances to fall dramatically in coming years (by far most global remittances come from America).
Hudson’s Indices will take a few years to catch up to the current numbers, but some slowdown in giving is already expected. There’s good reason to think that Trump’s agenda could compound such a slowdown, and that this same report may not be so encouraging in four years’ time.
Photo via Visualhunt.