Philanthropy of Newcomers – Remittance, Diaspora Philanthropy, and Diaspora Development Aid

Par Catherine Pearl , Chercheure
Par Reza H. Chowdhury
Par Linda Symmes
Par Tashfeen Hussain
08 novembre 2022

Individuals’ attitudes toward philanthropy for domestic or international causes are influenced by cultural, ethnic, and social attributes. Immigrants or newcomers are not necessarily a homogeneous group, even within ethnic enclaves, but share similarities in beliefs, attitudes, and prosocial behaviors that shape their charitable giving (e.g., Chowdhury & Das, 2016).

Newcomers that arrive with a more defensive/collectivist social-bonding strategy typically center their lives around the ethnic enclave and religious center, often directing charitable giving within that group as well as to family and relatives from their country of origin (COO) (e.g., Khan, 2016; Couton, 2014). However, newcomers that adopt a more outward-looking/individualistic and social-bridging approach often minimize their ethnic identity to assimilate into the mainstream to access better jobs (e.g., Khan, 2016; Couton, 2014). As newcomers gain more experience in host countries, they tend to give more to domestic causes (Devlin & Zhao, 2017; Metha & Johnston, 2011), and as they gain economic success, they move from values of tradition and survival to values of secularism, rationality, and self-expression (Inglehart & Welzel, 2005). This transition in value system results in a shift away from traditional informal types of giving to family and friend networks, driven mainly by first-generation immigrants, to more formal giving to organized charities and local communities by the second-generation diaspora in host countries (Einolf, 2017; Devlin & Zhao, 2017).

In this short article, we highlight three types of international philanthropy by immigrants and newcomers to Canada – remittance to family, friends, and relatives in COO; diaspora philanthropy to the local community in COO; and diaspora development aid. In doing so, we recognize the powerful impact of newcomers’ generous financial contributions that may trigger economic activities in their COOs – ranging from individual families to the broader community – all aiming to alleviate economic inequalities between countries.

 

Homme blessé avec une pancarte écrit :"AIDE"

Remittance to Immigrant’s Country of Origin (COO)

Remittance is the flow of personal money sent by immigrants to relatives or friends residing in their COO (Dimbuene & Turcotte, 2019). Remittances provide a stable source of foreign currency—more so than foreign aid and foreign direct or portfolio investments for many countries (Loxley et al., 2015). In 2017, Canadian residents remitted $5.2 billion to Official Development Assistance (ODA) eligible countries. The Philippines received the lion’s share in the amount of $1.2 billion, followed by India ($794 million), the United States ($390 million) who are not ODA-eligible, China ($292 million), and Pakistan ($236 million) (Ibid). Most remittances received by families are allocated first towards human capital development such as food, education, and health investments, and second to physical capital investments such as building houses, acquiring farm equipment, purchasing land, and investing in the family business (Loxley, Sackey, & Khan, 2015; Dimbuene & Turcotte, 2019). Several studies (e.g., Burchardi, Chaney & Hassan, 2019; Chowdhury & Das, 2016; Dimbuene & Turcotte, 2019; Loxley, Sackey, & Khan, 2015) have shown that an immigrant’s decision to remit and the amount remitted is also affected by an individual’s social ties to their COO, and macroeconomic variables such as geography, fluctuations in exchange rate, and inherent cultural and institutional differences. Immigrants also remit to protect families back home from unexpected income shocks (Dimbuene & Turcotte, 2019), cultural influences, and to sponsor and support family members (Loxley et al., 2015). Immigrants remit for altruistic reasons, such as insurance against—or in response to—natural disasters or conflict; self-interested reasons such as the prospect of inheritance; repayment of debts incurred due to the migration process or costs associated with education (Espinosa, 2016); and investment in  assets such as a house or land in the COO (Loxley et al., 2015). Furthermore, immigrants who invest in their country of residence remit less, and those who invest more in their COO also remit more (Akbar, 2019).

Diaspora Philanthropy and Development Aid

While remittances are personal funds sent to relatives or friends, diaspora philanthropy is a more expansive phenomenon, involving « money, goods, volunteer labor, knowledge and skills, and other assets donated for the social benefit of a community broader than one’s family member, in a country or region where donors have ancestral ties » (Flanigan, 2017, p.494). For example, diaspora invest in local businesses in their COO and fund manufacturing units, healthcare centers, schools, training facilities, and sports centers to contribute to the development of their home villages and communities (Chacko, 2020). This type of diaspora development has existed for a long time but is gaining new importance as a revenue source in COOs, according to the Canadian International Development Platform (CIDP). As official development aid (ODA) in some regions has declined over time, diaspora philanthropy and development aid have ballooned and, in many cases, exceeded ODA (2022). CIDP reports that Canadian spending on foreign aid has shifted over the past 20 years, from a low of $4.9 billion in 2014 to $8.4 billion in 2021. Global events such as wars, environmental disasters, poverty, and economic crises contribute to mass migration, and diaspora philanthropy is one response to urgent humanitarian needs. Part of the motivation for this form of philanthropy emanates from a combination of migrant willingness to give to the communities of relatives and friends left behind in a weak or war-torn economy, and COO governments’ ability to leverage and capitalize on sentiments of belonging, family connection and community need (Chacko, 2020; Espinosa, 2016).

 

Un jeune sans abri dans la rue

 

On the other hand, diaspora development aid (remittances channeled to the COO government) is very lucrative. It partially explains why country of origin governments do not actively recruit migrated people to return to their COO. For example, the Indian and Israeli governments issue ‘diaspora bonds’ to raise long-term hard currency (Mehta & Johnston, 2011). Likewise, the Jamaican government created the Jamaican Diaspora Foundation in 2004, with satellite locations established in Canada, the United Kingdom, and the United States. This initiative engages second-generation immigrant youth as agents of social change both ‘at home’ and ‘back home’, specifically strengthening the link and systems to support Jamaica’s development (Pinnock, 2013). Similarly, the Punjab government in India created the Department of Non-Resident Indian Affairs to provide one-to-one matching grants for diaspora remittances that channel capital for infrastructure improvements and social services (Chacko, 2020). Additionally, the national Ministry of Overseas Indian Affairs established the « Know India Programme » to persuade diaspora youth to reconnect with their cultural heritage and invest in a country they might never have visited (Chacko, 2020.). It is primarily first-generation immigrants who engage in diaspora philanthropy establishing groups around affinities and belonging. Such groups may be in the form of hometown, professional or alumni associations, religious groups that preserve ethnic and linguistic identities, or groups that engage in leisurely activities (Espinosa, 2016).

To conclude, many newcomers arrive with a more defensive, collectivist, socially-bonding strategy to establish their families and businesses within ethnic enclaves, where they find a community with similar values, beliefs, and experiences. Other newcomers choose a more externally focused and outward-looking, social-bridging approach to integration which tends to downplay ethnicity and lean more towards assimilation. For more information on the complex and contextual nature of philanthropic giving, see the full literature review that outlines the ethnocultural perspectives and practices in philanthropy and entrepreneurship engagement of Canadian immigrants.

What are the antecedent factors that influence immigrant and newcomer philanthropic practices and understandings in Canada?

Philanthropy Newcomers