32 The Americas The EconomistNovember 7th 2020
2Bello It’s hard to do good
A
fter thepandemic struck Chile, ten
do-gooding organisations formed
Fondo Respuesta Comunitaria (the Com-
munity Response Fund) to alleviate
hunger and poverty. It provides money
for some 200 projects, mostly ollas co-
munes(soup kitchens). In Colombia the
Fundación Santo Domingo is giving
100bn pesos ($26m) to pay for groceries
and a domestic-abuse hotline, among
other things. The Fundación Carlos Slim,
backed by Mexico’s richest man, ear-
marked 1bn pesos ($47m) to treat co-
vid-19 in that country.
The pandemic has given a boost to
philanthropy in Latin America, but it is
also a threat. Donors have less money to
give or are shifting it to public health
from other good causes. Almost half of
ngos in Chile may not survive, fears
Sylvia Eyzaguirre of the Centro de Estu-
dios Públicos, a think-tank. Prospects are
as gloomy in Colombia, where many
charities depend on events like galas and
bingo nights, which cannot happen in
covid times. In too many countries bu-
reaucracy and politics add to the bur-
dens. For the sake of its political and
social health, Latin America needs more
charitable activity, not less.
Philanthropy is fragile in part because
it is less deeply rooted than elsewhere,
notably the United States and Europe. In
colonial times the Catholic church cured
the sick and helped the poor. Centralis-
ing states took over such responsibil-
ities, though not as effectively as in the
rich world. “Philanthropy and [civil-
society] associations were sort of a minor
tributary and not part of the main story
of development of those nations,” says
Michael Layton of the Johnson Centre for
Philanthropy at Grand Valley State Uni-
versity in Michigan.
They remain weak. The Latin Ameri-can countries with the largest philan-
thropic sectors are Mexico and Colombia,
according to a study published in 2018.
There foundations’ assets are worth 1% of
annual gdp, compared with 4.8% in the
United States. Ordinary folk seem less
altruistic than in other regions, though the
tradition of almsgiving through the
church remains strong. In a global giving
index put together by the Charities Aid
Foundation, the only Latin American
country in the top 20 is Haiti.
The region pays a high price for low
levels of generosity. The population of
non-profit universities, museums, bird-
watching clubs and the like is sparse.
Unlike in the rich world, governments do
not give them much money. Worldwide,
non-profits account for 5.7% of employ-
ment; in Mexico, Colombia and Peru that is
3% or less, according to Lester Salamon of
Johns Hopkins University in Maryland.
Latin America has too few groups that
channel citizens’ grievances into propos-
als that governments might adopt, making
conflict more likely. If the rich, who are
undertaxed, gave away more money, highlevels of inequality might rankle less.
Recently they have become more
open-handed. More than half the re-
gion’s philanthropic groups have been
founded since 2000, according to a study
published by the Universidad del Pacíf-
ico in Peru. But the law, and increasingly
politics, throw up obstacles. In many
countries registering a charity is diffi-
cult. Chile has some 60 laws governing
the tax treatment of donations. Donors
can give tax-free money to cultural in-
stitutions but not to environmental or
human-rights groups.
There is a push to change that in
Chile, made more urgent by last year’s
violent protests against inequality and
poor public services. Left- and right-
leaning think-tanks are lobbying togeth-
er for a law to make giving easier.
Where authoritarians rule, life is
getting harder for groups that benefit
from philanthropy. Jair Bolsonaro, Bra-
zil’s right-wing president, has made
rhetorical war on defenders of the envi-
ronment. Mexico’s left-wing president,
Andrés Manuel López Obrador, has at-
tacked environmental groups that op-
pose pet infrastructure projects, such as
the Maya train across the Yucatán penin-
sula. This month Mexico’s Senate passed
a law to strip tax-exempt status from
groups that get most of their income
from activities not related to their chari-
table goals. That would hurt groups like
universities that make ends meet by, for
example, operating bookshops. The bill
is “a profound attack on the indepen-
dence of non-profits”, says Mr Layton.
Weakening do-gooders may make life
more comfortable for high-handed
presidents like Messrs Bolsonaro and
López Obrador. But a region traumatised
by pandemic and rising poverty needs
more philanthropy, not less.Latin America has too little philanthropyIt invented some tactics to suit the re-
gion. Amazonians who lack savings or
credit cards use zero-interest loans start-
ing at 150 reais ($26) to finance their pur-
chases; a whopping 85% of Bemol’s online
sales are paid for this way. Shoppers who
are uneasy about using the internet can
place orders and lodge complaints with an
attendant’s help at chemists and floating
petrol stations. Bemol allows returns, but
encourages customers to accept vouchers
instead. “The traditional e-commerce
model without a physical presence doesn’t
work in the Amazon,” says Mr Minev.His caboclomodel seems to. Its pilot op-
eration in Autazes, 100km (60 miles) down-
river from Manaus, which started in April
last year, brought in 113 orders and 73,000
reais in its first month. By February this
year Bemol had expanded to dozens of
towns. It booked 2.6m reais in sales that
month. After the pandemic struck, busi-
ness boomed. Bemol’s e-commerce rev-
enues in June reached 10.5m reais. “Ama-
zon lost money for years,” Mr Minev says.
“We’re already profitable.”
The Lion of Judahhas been less lucky. At
the start of the pandemic, it stayed in portfor two weeks while ambulance boats
brought covid-19 patients and the bodies of
those who had died on the journey. The
Lionresumed sailing in April but with half
as many passengers. The captain, Richard
Lacet, who inherited the boat from his fa-
ther, has made up for lost revenue by charg-
ing more for cargo, to squawks from mer-
chants sending chickens upriver and
farmers dispatching manioc flour down it.
But Bemol, which pays a flat rate for its own
compartment, “is starting to change the
business”, he says. E-commerce could keep
the Lionafloat. 7