W

ith limited funding in hand, the government thinks it’s time for philanthropists to assist in the Herculean task of developing a country of more than 250 million people, 11.2 percent of whom still live in poverty with a lack of education and access to a clean environment.

Selamat Pagi Indonesia senior high school in Batu, East Java province, runs its activities without charging its students any tuition.

It has been providing free education and training in entrepreneurial skills — from merchandise-making, restaurant and hotel management and, farming to event organizing — since it began operations in 2007.

As many as 600 children from low-income families across the archipelago have enjoyed the facilities at the school, which was founded by entrepreneur Julianto Eka Putra of the Binar Group.

“We’re taught about becoming entrepreneurs and how to be confident because we come from different and difficult backgrounds,” 16-year-old orphan Ani Cindya said during the first-ever Indonesia Philanthropy Festival in Jakarta, recently.

The success of the Selamat Pagi Indonesia school cements the government’s hope that philanthropic activities can help solve many of the country’s development issues.

There are 17 sustainable development goals (SDGs) as mandated by the UN, including zero hunger and poverty, that must be met by 2030.

The government allocated Rp 416 trillion (US$31.88 billion) and Rp 104 trillion in state funds for education and health, respectively, in 2016, but that was not enough.

“We want philanthropists to be more formally involved, including in SDGs, so that we are not fully dependent on the state budget,” National Development Planning Minister Bambang Brodjonegoro said.

The government plans to issue a presidential regulation to detail its strategy to achieve the SDG, including with the assistance of the philanthropists.

Philanthropy association Filantropi Indonesia estimates that the worth of philanthropic activities can reach up to Rp 600 trillion in a year, consisting of individual and institutional donations and religious alms.

The annual worth is higher than the government’s budgets for education and health. The “robust” social activities have helped rank Indonesia at second place in Gallup’s survey of the World’s Most Generous Countries in 2016.

However, experts argue that it takes more than the philanthropists’ goodwill to help the government realize its ambition. Filantropi Indonesia chairman Timotheus Lesmana said the provision of tax incentives would be beneficial for them.

He emphasized that philanthropy was different from corporate social responsibility (CSR) programs. While money used in CSR is considered a firm’s expense, philanthropic funds come from a firm’s net profits or a person’s income.

At present, only certain philanthropists are eligible for tax deductions, according to Finance Ministerial Regulation No. 76/PMK.3/2011. Only those with charities related to national disasters, research and education, sports development and social infrastructure can benefit from the incentive. The deductions are also limited.

“The implementation of such a limit reflects low trust. It’s time for us to have a philanthropy law that doesn’t fuss over administrative details. The essence is that philanthropy funds in any sector should be supported and protected, not embezzled by both the givers and receivers,” said Center for Indonesia Taxation Analysis executive director Yustinus Prastowo.