PHILANTHROPY IN INDONESIA A working paper Caroline Hartnell Philanthropy for Social Justice and Peace in association with Alliance, Filantropi Indonesia, Indonesia for Humanity and WINGS About the author Caroline Hartnell was the editor of Alliance magazine from 1998 to 2015. She is now an editorial consultant, working with Philanthropy for Social Justice and Peace and ‘Rethinking Poverty’, a legacy project of the Webb Memorial Trust, among others. Cover photo The picture depicts a project in an indigenous community in the island of Flores, East Nusa Tenggara. The aim of the project is to open dialogue on an incident of past violence that led to a traditional ritual for reconciliation. It is a collaboration of Indonesia for Humanity with a network advocating for truth and justice for past human rights violations. Photo credit: Indonesia for Humanity/ © Ramjaneo Pasopati This work is licensed under a Creative Commons Attribution- NonCommercial-ShareAlike 4.0 International License. www.creativecommons.org 1 CONTENTS INTRODUCTION .................................................................................................................... 3 THE NEW ORDER ..................................................................................................................... 3 THE REFORMASI PERIOD: NEW FORMS OF PHILANTHROPY .................................................... 4 TWENTY YEARS ON SINCE THE END OF THE NEW ORDER ........................................................ 6 ABOUT THIS REPORT ............................................................................................................... 7 WHAT CURRENTLY EXISTS IN TERMS OF PHILANTHROPY IN INDONESIA? .............................. 8 SECULAR INSTITUTIONAL PHILANTHROPY .............................................................................. 8 Corporate philanthropy ...................................................................................................... 8 Media philanthropy ............................................................................................................ 9 Family philanthropy .......................................................................................................... 10 What causes do foundations support? ............................................................................. 11 Do Indonesian foundations support social justice and rights-based causes? ................... 12 Collaboration with government/other foundations/others .............................................. 13 How widespread is grantmaking? .................................................................................... 16 International funders ........................................................................................................ 18 FAITH-BASED PHILANTHROPY ............................................................................................... 20 Traditional Islamic philanthropy ....................................................................................... 20 Modernization of faith-based philanthropy ...................................................................... 21 State-based zakat management agencies ........................................................................ 22 Non-state zakat management agencies (LAZs) ................................................................. 23 Non-zakat Islamic charitable institutions ......................................................................... 25 What causes does faith-based philanthropy support? ..................................................... 25 What aBout more progressive philanthropy? ................................................................... 27 SOCIAL JUSTICE PHILANTHROPY ............................................................................................ 28 Is Indonesian philanthropy moving towards social justice? .............................................. 29 SOCIAL ENTERPRISE AND IMPACT INVESTING ....................................................................... 32 Social enterprise ............................................................................................................... 32 How are social enterprises funded? .................................................................................. 36 Impact investing ............................................................................................................... 36 INDIVIDUAL GIVING ............................................................................................................... 39 Crowdfunding and online giving ....................................................................................... 40 Fundraising from the puBlic .............................................................................................. 41 Do individuals support social justice causes? .................................................................... 42 Giving By the younger generation .................................................................................... 45 Giving By wealthy individuals ........................................................................................... 45 PHILANTHROPY INFRASTRUCTURE ....................................................................................... 46 Infrastructure organizations ............................................................................................. 46 Legal and fiscal framework ............................................................................................... 47 WHAT IS DRIVING THE GROWTH OF PHILANTHROPY IN INDONESIA? .................................. 50 THE SDGS ............................................................................................................................... 51 RESPONDING TO NATURAL DISASTERS ................................................................................. 52 Philanthropy in Indonesia | February 2020 2 ATTITUDES OF MILLENNIALS ................................................................................................. 52 TECHNOLOGY ........................................................................................................................ 53 WHAT IS HOLDING BACK PHILANTHROPY IN INDONESIA? ................................................... 55 INADEQUATE LEGAL FRAMEWORK ....................................................................................... 56 LACK OF ORGANIZATIONAL CAPACITY .................................................................................. 57 PROBLEMS FOR IMPACT INVESTING ..................................................................................... 58 THE POTENTIAL OF PHILANTHROPY IN INDONESIA ............................................................. 59 FAMILY AND CORPORATE PHILANTHROPY ............................................................................ 59 Using resources effectively ............................................................................................... 60 What would Be needed for institutional philanthropy to realize its potential? ................ 61 FAITH-BASED PHILANTHROPY ............................................................................................... 63 SOCIAL ENTERPRISE AND IMPACT INVESTING ....................................................................... 64 INDIVIDUAL GIVING ............................................................................................................... 65 Giving to social justice causes ........................................................................................... 66 CONTRIBUTORS TO THIS REPORT ........................................................................................ 67 Philanthropy in Indonesia | February 2020 3 INTRODUCTION Indonesia is the fourth most populated country in the world and the largest nation of Muslims. Its philanthropy is closely linked with the social, cultural and political journey of the country, says Suzanty Sitorus of Filantropi Indonesia, the national philanthropy association. For centuries the 729 ethnic and sub- ethnic groups that inhabit Indonesia’s archipelago of over 17,504 islands have practised giving in various ways. Giving has always been driven primarily by religion – Islam, Christianity, Hinduism, Buddhism and Confucianism – and traditional faith. Islamic philanthropy is based on the concept of zakat (Islamic alms giving), with most giving/support going to religious causes (eg places of worship) or social welfare (eg orphanages, widows, the elderly and health). The same is true of Indonesia’s other religions. THE NEW ORDER Philanthropy in Indonesia today is probably best understood in terms of its recent history. What’s particular to Indonesia, says human rights activist Kamala Chandrakirana, is 32 years of Suharto’s authoritarian regime, the New Order, which lasted from 1966 to 1998. In this period, everything was highly controlled, with only three political parties allowed and very limited democratic space. During that period, it was almost impossible for philanthropy for social justice, democracy and human rights to grow from within Indonesia as it would have been politically risky for the donors. In this report we use the term ‘social justice philanthropy’ to mean philanthropy focused on human rights and the root causes of social, racial, economic and environmental injustices. In the late 1980s and early 1990s, when the country enjoyed economic growth, says Sitorus, a more modern philanthropy with professional management began to flourish.