New directions in philanthropy – report from the Bellagio Summit

November 15, 2011

     By Duncan Green     

Rockefeller Foundation’s legendary lakeside conference centre at Bellagio, on Italy’s Lake Como, you’d be crazy to say no – it’s every bit as exquisite as everyone says (see pic).bellagioview The Summit in question is on ‘The Future of Philanthropy and Development in the Pursuit of Human Wellbeing’ (catchy, eh?), hosted by Rockefeller, the UK Institute for Development Studies and the Resource Alliance and bringing together philanthropic foundations, ‘impact investors’, NGOs and academics, with a decent geographical spread of people. Here are some impressions, thoughts and half-hearted attempts to spin the conclusions after day one, drawing on the conversation and the pile of background papers available on the Bellagio Initiative website. First, some numbers. According to a paper by Michael Edwards, foundations provided between $7bn-$9.5bn to ‘international’ or ‘development’-related activities in 2009. Big money, but only 7% of total aid. The Bill and Melinda Gates Foundation  account for a third of the total – a whopping $2.5bn in 2009. The US is by far the biggest source (total of $6.7bn in 2009). European foundations only mustered a measly $0.5bn in 2007. And how do philanthropists see development and their role? Some impressions from a rapid series of plenaries and panels: What’s Hot:

  1. The Arab Spring has had a massive impact in highlighting the importance of dignity, well-being, empowerment, citizenship, voice etc etc , along with youth as a crucial change agent (often ignored by the development industry).
  2. Networks, systems, complexity etc
What’s Not
  1. The State. Philanthropic types may grudgingly acknowledge the need for partnership with the state, but they basically see government officials as a bunch of corrupt parasites, definitely more problem than solution, intent on thwarting the efforts of heroic entrepreneurs to improve the lives of their countrymen and women.
  2. Political and historical analysis: I don’t attend many discussions where I find myself wishing for fewer stories, and more analysis, but this was one of them – more NGO than the NGOs when it comes to substituting heart-warming anecdotes for academic rigour.
Perhaps the most interesting theme for me was the rise of the national. The role of domestic philanthropists in developing countries is growing both in volume and recognition, with a rich variety of traditions of giving from the zakat tradition of Islam (see excellent background paper on Islamic philanthropy) to southern Africa’s Ubuntu philosophy. Add to that the rise of middle classes in emerging economies with money to spare. Much of this giving is religiously-inspired, personal, private (it is often seen as very poor behaviour to blow your own philanthropic trumpet) and fragmented, which offers real grounds for improving quality and impact. Beyond raising money directly for philanthropy, there is a wider area of new money stemming from improved tax systems and natural resource revenues. As official international aid declines, financing for development is likely to become increasingly domestic and ‘southern philanthropy’ is likely to play a significant role.  So what future directions for philanthropy emerged from all the bla  bla bla? Two big ones Innovation: Philanthropists spend their own money so in the words of philanthropist James Chen of the Hong Kong- based Chen Yet-Sen Family Foundation, they can take risks and fail: ‘Governments find it hard to pilot and fail – there’s career risk for them –  but we can be an James Chenincubator at the pointy end of the stick, and then take our successes and persuade government to adopt them and scale them up.’ But the appetite for risk doesn’t always extend to issues of power and social change. Could that thirst for innovation be applied more often to empowerment and accountability as well as business models and mobile phones or, in the case of the totally charming James (pictured), adjustable glasses? Advocacy: this is an altogether trickier one, but just thinking about the impact of Bill Gates at the recent G20 summit, or of George Soros’ Open Society Foundations, there is no doubt that the philanthropic community could exert far more influence than it currently does if it made a more concerted entry into advocacy (it could do so and easily remain impartial, in terms of party politics, as Oxfam does). For example, it could more actively support active citizenship and accountability. I decided to pitch advocacy on something that seemed a bit uncomfortable (at least for some of the people in the room – philanthropists are of course all different and it’s perilous to generalise), namely what philanthropists could do in leveraging new forms of finance for development. Think about it. Faced with a likely decline in global aid levels, they could: At Domestic level:  work with religious givers and institutions; push for better corporate giving; advocate for more and more progressive tax systems and closing down loopholes and tax evasion. At International level: advocate against tax havens and capital flight, work to increase the volume and impact of remittances and giving from diaspora communities, support innovative ways to raise more cash such as the Financial Transaction Tax or carbon taxes. So will the philanthropy sector come to the same conclusion as the NGOs, who realized some time ago that it was necessary to tackle the structural causes of poverty with advocacy as well as programming? There are signs that this is happening, but judging by yesterday’s conversations, it will mean confronting the deep ambivalence to the state shown by some philanthropists. Let’s see if any of these ideas survives today’s discussions.]]>

November 15, 2011
Duncan Green