News overview
Monday
Jun122017

This is why we need to build community philanthropy (in Vietnam and beyond)

Last week, during a workshop on coal energy’s effect on marine life off the coast of Vietnam a common development debate heated up: can social protection and economic development co-exist or does economic development need to come first? There were rational and emotional arguments for the two perspectives but what became painfully obvious is that local people are rarely engaged in debates concerning their own communities. If they are engaged, it is often without full knowledge or understanding of the issues and implications of any decision they may be asked to make.

Vietnam experienced steady economic growth over the past two decades, yet it is now facing a high and increasing rate of inequality, a rapid rise in pollution, and rural to urban migration that has heavily strained the country’s social welfare system. Government efforts to address these issues fall short of the needs of the people, particularly vulnerable groups such as migrant families, ethnic minorities, drug addicts, people with disabilities, and people from low-income households. Vietnam depends on overseas development aid to tackle some of these problems. However, such funds are disbursed to Vietnam institutions and people only after passing through government agencies or foreign aid agencies operating in Vietnam.

Community philanthropy is needed to enable local people to assess and engage in solving their own challenges, that much is clear and obvious to so many, but how can it work in Vietnam? On that, there is less certainty. Despite a long history of philanthropy in Vietnam, historical examples of community members coming together to address local needs, and well-known proverbs touting philanthropy, such as: “the healthy leaf covers the torn”, many people still question the willingness and capacity of Vietnamese people and institutions to contribute to civil society initiatives.  

There were valid reasons for such pessimism and even some research and anecdotes to back up those parties who were reserved about the potential for community philanthropy in Vietnam. For one, Vietnamese people have little knowledge about the work and impact of local nonprofits and volunteer groups as the State and the media rarely speaks publicly about the third sector while nonprofit themselves struggle to spread their own stories. Another concern was whether local organizations could be effective and accountable, which may explain why so many people give directly to individuals or to short-term, time-limited charity projects, which they can easily evaluated. Despite concerns like these, since the turn of the twentieth century, there was a growing number of local people and locally led nonprofit initiatives seeking to make a difference in their own communities and the founders of the LIN Center for Community Development (LIN) wanted to lend them a hand. 

2015 Event for LIN donors

In 2009, LIN obtained a license to help local people in Ho Chi Minh City and the surrounding provinces to solve their own problems. LIN’s founding members felt that only through locally-led, assets-based community development could long-term solutions be found to address real and increasingly complex social and environmental challenges. To achieve its mission, LIN focused on three key challenges. Firstly, civil society organizations were commonly criticized for engaging in projects offering short-term rather than long-term solutions so we could help them to build capacity. Second, while there was an increasing number of individuals and organizations with resources to contribute, most tended to prioritize charity or efficiency when allocating their own resources so we could provide resources and guidance to help them find ways to invest confidently in development outcomes and impacts. Lastly, local people were rarely involved in program planning and implementation, except as beneficiaries, so we could find ways to engage people and give them opportunities to contribute their ideas, their experiences, and their resources.

By building local capacity, unlocking local resources, and bringing people together to address issues they care about, LIN hoped to contribute to a more durable form of development.[1]  But we also recognized the need for research to be able to demonstrate the need, the demand, and the impact of community philanthropy efforts. As such, LIN obtained a license to operate in Vietnam as a science and technology organization, and determined that research would be included as one of our core programs.  The bulk of LIN’s research focused on not-for-profit organizations and volunteer groups (NPOs).  An annual survey was launched to study NPO capacity over time and to ask for feedback on LIN’s programs and services.[2]  LIN also conducted and supported research to understand individual and institutional capacity and motivations for giving in Vietnam; however, it was not until last year that the LIN team sought out donor feedback on LIN’s impact and reasons for contributing to LIN’s work.

Local leaders and LIN donors visit water tower, Long An Province

By 2016, it had become critical for the LIN team to explore opportunities for expanding and enhancing relationships with local donors. Over the previous two years, the value of foreign cash contributions to LIN increased exponentially compared with the value of local contributions, even though the number of donations from local people and local companies greatly exceeded the number of donations from foreign sources. If LIN’s audit reports included the value of in-kind contributions (pro bono contributions to LIN and our partners, contributions of space, food, beverages, raffle prizes, etc.), the value of local contributions would have looked more equal but this was not a practice with which our auditors were familiar. LIN’s increasing dependence on foreign funds raised two concerns. Firstly, it was felt that the allocation of resources to meet the requirements of a small number of large foreign funders, could have a negative impact on how LIN prioritizes its work. Secondly, the bureaucracy required to follow the law on receiving foreign funds was occupying an increasing amount of staff time and energy while presenting a high-risk scenario for management. 

In 2016, with financial support and encouragement from the GFCF, the LIN team surveyed its donors to better understand their experience and perceptions of LIN, including: the reasons they contributed, their level of satisfaction, as well as any challenges and unmet expectations they encountered or observed as a donor to LIN. The purpose of the research was to assess the potential for increasing local support and any requirements or unique propositions for being able to do just that. The research was also intended to serve as a case study on the relationships between one community philanthropy organization and the donors supporting its work to build local capacity, connect local resources and promote trust in local not-for-profit organizations (download the full report here).

Key findings from LIN’s donor research were promising in that it demonstrated a strong willingness and interest to support development work as well as great potential for unlocking additional resources from local sources. It is expected that there will be considerable debate as to whether this finding can be extrapolated to other parts of Vietnam as recent research revealed real differences in attitudes towards giving between people in rural and urban Vietnam and people living in North, South, and Central Vietnam. Nevertheless, there are some revealing similarities across the research. 

First, there is a positive relationship between civil society capacity and civil society acceptance.[3]  Although trust was not the primary reason for donors that contributed to LIN, it was always mentioned as one of the reasons they contributed. It was also a contingency factor – even if a donor likes an organization’s mission, activities, and impact, if there is no audit report or if there are questions about financial accountability, funding decisions will be affected.  And while trust can be lost, it was clear that it can be gained simply by demonstrating transparency and communicating with donors. More than 65% of LIN’s donors were referred to LIN by a friend and 64% said they would be happy to connect LIN to people in their social networks.

Another encouraging finding from LIN’s research was a high level of willingness among LIN’s donors to contribute to an NPO’s operating costs even though ten percent had done so in the past. Half of the donors interviewed said they were never told and therefore unaware that support for operating costs was needed. The other half said they would be willing to contribute to operating costs if the nonprofit could demonstrate transparency, accountability, effectiveness, or a combination of these criteria. 

Local residents evaluate applications for LIN grants

The research also revealed a demand for better donor communications.  The advice received most often from LIN donors was to offer more stories, provide deeper analysis, and contribute more articles about community philanthropy so they could better understand and explain to others about the importance of this approach.  Most of the donors interviewed expressed an interest in reading more stories and case studies that speak to the impacts nonprofits and philanthropists are having on the marginalized groups they are serving.  Others were looking for information about recent trends in community philanthropy and best practices taking place in Ho Chi Minh City and throughout Vietnam.     

Overall, this research by LIN demonstrates that there is the potential for civil society organizations to build their local support.  However, the fact that organizations must demonstrate transparency, capacity and/or impact to build local support, creates a causality dilemma - which comes first: the chicken or the egg?  In LIN’s case, the founding member’s social capital made it possible to attract in-kind support from local sources to fill-in for key roles that are often managed by paid staff (i.e., accounting, auditing, HR and administration).  Its intellectual capital made it possible to receive foreign funds for pilot programs and early staff investments.  The lesson learned from LIN’s experience and key takeaway from this donor research is that early stage NPOs are now, more than before, going to be challenged to think creatively about building their local sources of support.  And, from LIN’s perspective, asset-based community development offers the most promise.  

By: Dana R.H. Doan, Founder & Strategic Advisor, LIN Center for Community Development

Download the report "Building Community Philanthropy in Vietnam: Understanding the experiences and expectations of donors to the LIN Center for Community Development

 


[1] Hodgson and Knight, “The Rise of Community Philanthropy”, Alliance Magazine (December 2016 Issue)

[2] Every year, since 2013, LIN conducts an annual survey of its not-for-profit partner organizations. Reports from those surveys are shared with respondents, posted on the LIN website (since 2015), and included in annual reports and proposals. 

[3] Le Quang Binh, Nguyen Thi Thu Nam, Pham Quynh Phuong & Pham Thanh Tra, Benchmark Assessment of Civil Society Space in Vietnam, Hong Duc Publishing House, 2016 (pages 11 & 119).

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