The numbers point to a sizable charity gap. Mexico has the lowest taxes and second-highest income inequality among the 34 member nations of the Organization for Economic Cooperation and Development, which gathers data on the world’s leading economies, and yet it also has had some of the weakest levels of charitable giving.
According to Mexico’s Center for Philanthropy, the percentage of the country’s gross domestic product dedicated to charity was 0.04 in a 2003 study, nearly 40 times lower than the United States. Colombia, Brazil, Argentina and other developing nations also ranked much higher. Mexican philanthropy has improved significantly in recent years, researchers say, but it remains anemic, despite high levels of need created by the government’s poor record of tax collection and social investment.
The number of charities in the country that can accept tax-deductible donations has increased from 1,500 in 1995 to around 5,300 today, Mexican tax reports show. By comparison, the United States — with a population nearly three times Mexico’s — has more than 1.2 million 501(c)(3) charitable organizations, according to IRS statistics.
“The long-term trend is for corporations to step up and do more,” said Michael Layton, director of the Philanthropy and Civil Society Project at the Instituto Tecnologico Autonomo de Mexico university. Layton calculates that charitable giving as a portion of GDP in Mexico increased to 0.18 percent in 2009, a more than fourfold rise, but still low for a country with the world’s 13th-largest economy.
“A lot of the giving remains informal, and many philanthropists don’t want to talk about it or take public credit,” Layton said. “That may be good for your business, but not for the problems Mexico faces.”
Mistrust and wariness
One reason for that reluctance is a pervasive fear of extortion and kidnapping among the country’s wealthy and middle class. Nonprofit agencies say that while Mexico’s criminal violence has made more people eager to donate and volunteer in recent years, it has also made them increasingly wary of attracting attention to themselves. Rampant corruption among public officials further erodes already-low levels of trust in Mexican institutions, leaving potential donors with heightened suspicions of charities.
“Mistrust permeates the whole philanthropy world,” said Alicia Lebrija, director of the Televisa Foundation, which donates $20 million to $30 million a year, mostly raising money through televised pledge drives.
Donations in Mexico tend to be spontaneous, in response to a crisis or natural disaster, research shows, but there are relatively few grantmaking institutions that underwrite smaller, localized nonprofits in a sustained fashion. Despite improvement, especially in corporate philanthropy, wariness remains, and criminality can be a drag on donations in some areas where need is greatest.