Nonprofits and transparency in a digital era

In a newly digital world, nonprofit organisations in the Arab world are facing fresh demands for transparency and accountability. They must answer, writes Heba Abou Shnief

Philanthropy in the Arab region is evolving. Capitalising on the digital window of opportunity, nonprofits and aid agencies are increasingly engaging with donors and supporters through websites, social platforms, apps, videos, photos and more. In a 2014 survey on Arab social media trends, co-published by Dubai’s Mohammed bin Rashid School of Government, 79 per cent of the 3,373 respondents felt the internet had made them more responsive to the community.

Giving through mobile apps is also on the rise. MegaKheir, among the first Egyptian apps for charitable giving, defied the country’s economic slump to raise EGP25.5m ($1.41m) in 2016, up from EGP24.3m the previous year. According to Maissera Allaithy, product manager at MegaKheir, charitable agencies of all sizes and subsectors have embraced the platform. 

Regional unrest has led to the emergence of numerous online, Arab-centered initiatives focused on humanitarian aid and volunteering. Molham, a youth-led volunteering hub that focuses on Syrian refugees, Attahub in Kuwait and the Algeria-based Ness Khir, are all examples of digital platforms mobilising ordinary citizens, activists and agencies around a cause.

The primary driver behind this shift to digital philanthropy is rising mobile and internet penetration in the Arab world. While internet penetration in the region lags the world average, it boasts one of the fastest annual growth rates at 20 per cent.

Mobile penetration rates are at 110 per cent. An equally important force for digital philanthropic engagement is demographics: more than 60 per cent of the Arab region’s population are youth, of which the majority are frustrated by the lack of participatory political processes and institutions. Digital channels offer far more freedoms and space for voicing the concerns and aspirations of Arab youth. This growing online civic engagement is one manifestation of this movement.

Yet while this new, digital pathway for giving is gaining momentum in the region, it also brings to the fore important questions on how – indeed if at all – it is influencing the practices of philanthropic organisations themselves.

"Nothing short of a culture shift towards transparency is needed by philanthropic organisations to operate and thrive in a digital era"One issue that nonprofits must respond to is the growing demand for transparency, which is visibly becoming a determinant of philanthropic giving both in the region and globally. Digital philanthropic engagement places more pressure on nonprofits to be proactive in publicising data about their work and impact.

This is an even more pressing issue for those that rely on crowdsourcing and public donations. The 2015 Arab Giving Survey, published by Philanthropy Age and market research company YouGov, polled 1,008 respondents (64 per cent were aged 25 to 39) in the six GCC countries. This study found that the overwhelming majority of those surveyed believe that a charity’s transparency and the visibility of its effectiveness are both key determinants that influence their donation decisions.

Responding to shifting donor expectations on transparency has regulatory dimensions. To date, there are no government-imposed regulations or mandatory codes in the region that require philanthropic organisations to share data. According to Dima Jweihan, executive director of the International Center for Nonprofit Law’s MENA office: “While regulatory frameworks in the region include provisions for basic transparency of civil society organisations [CSOs], it is mainly linked to requirements by government supervisory authorities. The concept of transparency of CSOs to the public is missing at large in the region.”  

The recent CSO law in Egypt that requires philanthropic organisations and nonprofits to publish their financial accounts online is one step in this direction, but it is not enough to catalyse widespread change.

Equally important is a shift within the industry towards transparency. Publishing annual reports, financial statements and information about operations, grantmaking processes and investment policies online is still the purview of only a few foundations and nonprofits, and mainly those that fall under the umbrella of corporate philanthropy. Nothing short of a culture shift towards transparency – where transparency permeates behaviour and operations, with digital accessibility at its heart – is needed by philanthropic organisations to operate and thrive in a digital era. Simply sharing basic details about roles, programmes and targets will no longer cut it with donors.

In an expanding digital landscape, the discussion around transparency in the Arab philanthropic sector is critical. Those organisations that retain a ‘business as usual’ approach risk losing donor support or, in the worst scenario, fostering public distrust. A broader conversation, which takes in philanthropic actors, governments and stakeholders on the best means of sharing data for social change, is warranted.

About the writer

Heba Abou Shnief is a 2014 senior international fellow of the City University of New York’s Center on Philanthropy and Civil Society. In addition to authoring and co-authoring publications on philanthropy and development policy, she has advised academic institutions, intergovernmental bodies, international organisations, grantmaking foundations and the private sector.