INCREASING THE FLOW OF CAPITAL FOR GOOD - INVESTING AND GIVING
Few of the world’s regions are as intimately connected to the wider world as the Middle East.
Since the Ottomans ruled over much of Eurasia there has been an increasing exchange of people, capital and information with the Middle East. This is true historically, where the region has long acted as a crossroads of trade, culture and ideas, as well as in more contemporary contexts where, for example, the recent Arab protest movements have inspired similar actions around the globe such as Occupy Wall Street. This trend is only a resumption of a centuries-old interdependence: the Silk Route is being re-established rather than invented. Accordingly, the flow and nature of philanthropy is no longer uni-directional from West to East but transcends borders.
One of the enduring legacies of the colonial period is the term Middle East, which belies a region of great diversity. Historically trade and religion were some of the most important factors through which people were exposed to the region, bringing insight and awareness to the existence of Arab, Persian and Berber cultures. However in spite of the region’s distinct and disparate landscape, there is some unity. Bound by a common identity grounded in language and history, one theme underlines the close ties to philanthropy: the religion of Islam and poor-relief systems inspired by the pious to build a more compassionate society.
It is beyond the scope of this article to undertake a comprehensive interdisciplinary analysis across theology, sociology, and economics (nor would we purport to be academics!) but we hope to shed some light on a complex and compelling history and to place Middle East and Islamic charity into a more global conversation.
The Hidden Hand
Many religions and faith-based communities have at their core philanthropic components be it Buddhism, Hinduism, Judaism, Christianity or Islam in which charitable acts are of both an obligatory and voluntary nature. However the conception of poverty and definition of charity varies widely, even if they all shared the same underlying assumptions, for example, to provide relief to the poor.
In connection with Islam, which informs many aspects of a Muslim’s life and underscores the dominant religion across the Middle East and North Africa region, religious ideology is the hidden hand behind many benefactors. In other words, there exists a strong relationship between ideology and practice.
According to the Qur’an, there are several kinds of voluntary and involuntary philanthropy, respectively, “sadaqa” and “zakat”:
- Zakat - means the share of wealth, which is obligatory in today’s Islamic tradition and law upon a Muslim to give to fixed categories of beneficiaries if the value of his/her assets is more than a specified limit. The root meaning of zakat is purification, of sin, and its giving also enables the benefactor to retain his/her residual wealth, creating a virtuous circle. The beneficiaries in accordance with the Qur’an are the poor, and the needy. Today, modern Islamic states collect and administer Zakat through the government.
- Zakat-ul-fitr or fitrana - means the charity which every Muslim, who is of certain wealth, pays at the end of the Ramadan.
- Sadaqa - means charity in the form of money or food, but includes every act of goodness.
- Waqf - means permanent dedication to any purpose recognised by Islam as religious, or charitable.
Enshrined in the Qur’an, philanthropy forms a necessary part of being a Muslim and obliges the individual on multiple levels to meaningfully consider others. It is predicated on the notion that all things, including wealth, are provided by God and need to be used to care for the community.
Practice versus ideology
The relationship between philanthropy and Islam therefore has had a very long tradition and begs a number of questions:
- Is modern secular philanthropy simply continuing a long-standing tradition or indicative of a new value set?
- Is the impulse to aid one’s fellow being a categorical imperative to which both secular and religious values align?
- What is the relationship between ideology and practice?
Distinct across religions is the conception of poor and conversely charity. Definitions of who is worthy of charity, who is obligated to give, and what form does charity take vary.
The custom of charitable bequests prior to death for charitable causes is a case in point. Wealthy Arabs tended to favour private charitable foundations over public spheres. Handpicked executors were charged with responsibility for investing the capital and distributing the income on an annual basis in perpetuity. This was also true of Judaism, however, contrasted with practices under Christianity in which public distributions were predominant.
Historically funds for Muslim endowments were often connected with the construction and maintenance of buildings or related places and activities whose dominant function supported the solidarity of communities and religions. Examples include soup kitchens, healthcare centers, mosques, schools, monuments and art. One doesn’t have to look for long to discover manifold examples of philanthropy across the Middle East including: the twelfth-century endowment of a hospital in Damascus, Bimariston al-Nuri, courtesy of Nur al-Din al-Zangi; Muzaffar al-Din, governor under Saladin (d. 1193) who established two Sufi convents as well as public works geared toward giving to the poor; Haseki Hurrem Sultan, wife to Sultan Suleyman (d.1520-1566) who established charitable foundations in Istanbul amongst other places; Mehmed Aga, chief imperial architect to Sultan Ahmed I (d.1603-1617), who not only constructed great monuments for others, like the Blue Mosque in Istanbul, but whose home operated in many ways like a soup kitchen. Across the Middle East, these names are equal in their legacy to the likes of Andrew Carnegie, Andrew Mellon, and Henry Ford.
The secular debate
Reconciling the contemporary challenge of balancing traditional elements of philanthropic culture (orthodoxy, conservatism, tradition, continuity) with the processes of secularisation and modernisation towards a shared objective is fraught with challenges. Understanding this dynamic - local cultures, traditions, customs and patronage of faith-based communities across the Middle East - to create a practical framework through which combined resources can be channelled is fundamental to building sustainable success at an institutional-level, businesses-level and an individual-level.
Analogous to striking the right balance is the concept of Islamic Finance. In recent times, scholars and practitioners alike sought to reconcile such differences to facilitate the free flow of financial capital. Huge success has since derived from the advent of structures or special purpose vehicles which has given rise to the now booming Islamic Finance sector. Framed in the secular context, it has enabled capacity building and social justice rather than echoing the vitality of a religious tradition.
Further to the religion of Islam and poor-relief systems inspired by the pious, economic realities are equally important in creating a culture of and influencing attitudes towards philanthropy.
Gulf States have some of the highest densities of $ millionaires in the world, with 2012 Global Wealth Report by BCG placing the UAE 6th, Bahrain 10th and Oman 13th among the world’s top 15 countries for the greatest concentration of millionaires per capita. However there are huge inequalities across the Middle East and an unequal distribution of wealth amongst oil exporting countries and non-oil countries. This is compounded by large youthful populations with high levels of unemployment, which account for the daily hardship of large parts of the Middle East.
The development of social philanthropy across the Middle East has arguably been enhanced by the Arab diaspora which has facilitated the transfer of ideas, capital and people to their countries of origin.
One such endeavour is the Arab Foundations Forum (“AFF”). The AFF was established “out of the need for a networking structure for foundations in the Arab region to strengthen the capacity and infrastructure of strategic philanthropy.” It serves as an advocate for more effective principles, practices, programs and policies and whose initiatives include bringing philanthropists together to share information, learn from, and support one another to reinforce social development through mobilizing private capital for public benefit.
Removing the veneer
Philanthropy as a practice is embedded in religious ideology, social culture and economic reality across the Middle East and has a longstanding and large-scale history. While the wealth of many of today’s major philanthropists derive from sources rather different to their predecessors, their projects reflect partial continuity. Reconciling the contemporary challenge of balancing traditional elements of orthodoxy, conservatism, tradition and continuity with the processes of secularisation and modernisation is fundamental to building lasting success. Philanthropy across the Middle East is at the same time identifiably local and emphatically global.
The Middle East Bureau is a UK-based consultancy specialising in helping companies grow into the Middle East & Africa region, from Greenfield investment to regional expansion across sectors. It advises on business planning, legal and regulatory compliance, finding local partners, human resource strategy, sales & marketing, training & acclimatisation.