Between 2005 and 2008, the Arab world generated unprecedented wealth and created a new wave of rich citizens. This wealth creation is driving a new generation of Arabs to commit their resources to the development of the region. According to the 2007 World Wealth report published by Capgemini and Merrill Lynch, 7 per cent of the typical portfolio of a wealthy person in the Middle East is devoted to philanthropy.
A report by the John D. Gerhart Center for Philanthropy and Civic Engagement at the American University in Cairo says charitable giving is particularly high in Gulf Co-operation Council (GCC) countries. It puts annual philanthropic spending at about 1.5 - 2 per cent of gross domestic product. This makes the GCC one of the most generous regions in the world, as most countries give between 0.5 and 1.0 per cent of GDP.
Despite these developments, there are significant challenges facing philanthropists and charitable entities in the Arab world. Among them challenges unique to the region are the dominance of traditional models of giving and the association of philanthropy with terrorism. This has brought excessive scrutiny and caused many philanthropists and companies to avoid taking part in activities via institutionalized or publicized giving.
To pave the way for continued progress, Arab countries will need to continue to revamp regulations and policies governing philanthropy and charitable organizations.