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This issue of Suggested Readings on Emerging Trends is produced jointly by the DRP’s Policy Planning Unit and PFP’s Global Philanthropy.

Philanthropic giving continues to surge, with a record 200,000 foundations in existence around the world. The massive explosion in global wealth over the past 30 years has seen a corresponding increase in mega-foundations with endowments over $1 billion. Traditional large foundations, like Rockefeller and Ford, have been joined by a new generation that includes Gates, Alibaba and Chan-Zuckerberg. While the majority are concentrated in the US and Europe, influential philanthropists also have emerged across the global South.

At the same time, ‘big philanthropy’ is reshaping global development policy. Due to the scale of their grant-making, networking with governments and private sector, and advocacy at the United Nations, foundations are playing an increasingly important role in agenda setting and policy-making in international development. Rather than simply serving as donors, they are now positioning themselves as development partners.

This influence is mostly seen as a positive: helping to close funding gaps, fostering partnerships, and contributing new approaches to development. UNICEF has been a prime beneficiary of the emergence of mega-foundations, and has been able to work with the new generation of philanthropists to achieve change.

However, there are concerns that philanthropy’s influence is not matched by accountability, and that foundations’ strategies may not translate directly to more effective development. Some of the strongest pushback against foundations has come from developing country governments seeking to curtail the growing power of civil society organizations, often funded by foreign foundations. At the same time, the backlash against globalization and inequality raises questions as to whether ‘big philanthropy’ can continue along the same path. In the future, what stakes does UNICEF and foundations have in creating and sustaining a diverse philanthropic sector?
 

Rise and fall of philanthrocapitalism
 

In recent years the most influential foundations, most notably the Bill and Melinda Gates Foundation, have brought large sums of money to the table together with a strong vision of transformative change, and an equally strong belief that methods drawn from the business sector will enable tangible progress on intractable issues such as global health and poverty. These philanthrocapitalists have tended to view grants as investments, pursued tightly defined problems with technical solutions, and placed a premium on quantitative metrics to determine the effectiveness of programs. The focus on measureable results and impact has been hugely influential, but critics ask if it hasn’t come at the cost of investing in initiatives that are not easily measured – or where benefits may only be visible in the longer-term,  for example, investing in vaccines instead of primary health care systems.

There are also concerns that such an approach entails shying away from structural and political obstacles to development. A marked preference for implementing technical top-down solutions through elites means that ‘strategic philanthropy’ can fail to engage with the communities and people their programs intend to help. In the US, a number of high profile education reforms, backed by the Gates and Broad Foundation, were widely rejected at the grassroots by schools and parents. The foundations acknowledge learning from these experiences, and Gates has indicated a new recognition of “the democratic element”.  This could herald a shift away from a narrow focus on results and business-style strategies towards a more balanced approach that is more participatory and addresses underlying causes.  

At Ford, where much of this learning went on in previous decades, a strategic refocus on inequality keeps the same ‘big bets’ and results focus as strategic philanthropy, but reinforces a tradition of working with community-based organizations and pursuing complex social programs. The aim is longer-term systematic change achieved through social movements, politics and government.  These two pathways to achieving social change are evident not only among philanthropists but within UNICEF, where a results-focus coexists with a commitment to the longer-term realization of child rights.  Over recent years, the drive for measurable results has received more attention. Can the learning process underway among the new generation of philanthropists lead to a rebalance - and to new ideas and conversations about how to plan for and monitor long-term change and work with the grassroots more effectively?
 

How political can philanthropy be?

 

Philanthropy, which can be defined as private action and influence on the public space, is inherently political. However, there has been considerable pushback in a number of countries against civil society organizations engaging in advocacy with the government. In the UK, the vibrant and vocal charity sector has come under scrutiny, with efforts to limit campaigning and have charities stick to “their knitting”. This is despite overwhelming popular opinion that they are the best placed to speak up on behalf of disadvantaged people, and a long history of British charities pioneering social change movements, from the abolition of slavery to ending child labor.

Over 60 countries in the past several years have moved to curb the ability of civil society organizations to use overseas funds. These countries include Russia, China, Ethiopia, Kenya, Nigeria, Cambodia and Pakistan among others. In India last year, the Ford Foundation was among a group of charities and advocacy groups labeled as ‘anti-national’ and placed on a government watch-list. The governments’ justifications for these restrictions range from national security to improved aid effectiveness. Others believe the restrictions have more to do with governments’ fear of the influence of civil society organizations (CSO) on public opinion; a threat magnified by the penetration of social media and digital devices.

The nature of UNICEF’s work, with country programs developed in partnership with governments, means that these restrictions do not necessarily apply directly to our partnerships, and could even provide an opportunity to form tri-partite arrangements with global philanthropists and local CSOs.  But increased restrictions on civil society partners could undermine joint advocacy on behalf of disadvantaged children and weaken the foundations of human rights.  And it raises questions about how country offices handle the risks and opportunities presented by domestic and global philanthropists.

On the other hand, the concerns raised by governments about foreign philanthropy echo similar questions that have been raised on the foundation’s home turf. The vast endowments enjoyed by philanthropies are often not necessarily subject to public scrutiny or oversight.  In the US, efforts are underway to make philanthropic giving more transparent through GlassPockets, an open-source, real-time database of foundations’ grant-making. However, there are still concerns of a trend towards non-transparency, particularly through the use of Limited Liability Companies to manage social investments, as is the case with the Chan-Zuckerberg Initiative.  In some cases, it can be argued that cumbersome accountability frameworks could reduce foundation’s ability to provide ‘risk capital’ and flexibly invest in new ideas and approaches. On the other hand, large foundations are able to dominate public policy discussions and shape agendas, including for the United Nations, in way that can crowd out other voices and perspectives.  It is argued that influence on this scale should be matched by transparency and accountability to the people and institutions that foundations aim to support.
 

What does the future of philanthropy look like?


Over recent years there has been a rapid growth in philanthropy in countries around the world matching the rise in concentrated wealth.  In China, following liberalization, the number of private foundations has grown from less than 10 in 2004 to more than 2,000 today.  Similarly in India, which has a long tradition of philanthropy and well-developed philanthropic sector, private charity has risen to 0.4 percent of GDP. Much of the rise in global philanthropy can be directly linked to rapid rise of wealth in these countries, along with rising expectations that the wealthiest be seen to give back. At the same there has been active evangelization by US philanthropists, most notably Bill Gates and Warren Buffet, to encourage philanthropy, through their Giving Pledge.

While the trend towards large foundations emerging in the global South is likely to continue, and even accelerate, there are reasons to expect that the model of philanthropy will be different from the US, UK and other well-established philanthropic markets. In most countries, there are pre-existing cultures of giving. Donations generally go to immediate local needs, such as hospitals and emergency relief, with incentives and accountability measures often designed to protect traditional local channels for giving. Moreover, not all countries are willing to tolerate on a longer-term basis the levels of economic inequality that enable massive, private wealth and ‘big philanthropy’. Redistribution through taxation instead of charitable giving is the norm in most high-income countries, and many emerging economies will likely follow this model.

The rise in populism and backlash against globalism leaves open a number of different options for the role and influence of philanthropy. ‘Big philanthropy’ that is seen to be too close to ‘big government’ or ‘big business’ will generate reputational risks. However, should countries turn away from multilateralism, or from providing traditional foreign aid, then foundations may become even more critical as development partners. Looking forward, UNICEF will need to sustain valuable partnerships with foundations – while also encouraging more transparency and “listening” in their approaches.

At the same time, there are different approaches to philanthropy already blooming in countries around the world. From Islamic finance to impact investing, the approaches to philanthropy are increasingly diverse.  Community philanthropy, which mobilizes resources from donors large and small and responds to local needs, is another model. Excellent examples abound from the Kenya Community Development Foundation to Instituto Rio in Brazil.  At the same time, the technologies that have fueled the large technology fortunes are also enabling a new approach to philanthropy. As noted by the Institute for the Future, social innovators are choosing to bypass foundations, which are sometimes perceived as too slow moving and bureaucratic, choosing instead to use new, online and mobile platforms to mobilize large masses of people to deliver resources when and where they are needed.

For UNICEF, these different types of philanthropy provide a rich portfolio of partnership options for advancing child well-being. Already National Committees are activating the Next Generation of young leaders by involving them more actively in fundraising, education and advocacy, and using crowdfunding methods and platforms to support the cause rather than the organization. UNICEF has a long tradition of engaging with all types of individual donors and foundations, small and large, and it is a legacy to draw upon as philanthropy changes and evolves. Moving forward, UNICEF and the large philanthropies have an opportunity to work together in fostering a diverse philanthropic sector and creating coalitions for shared impact for children.

 
Prepared by Samantha Cocco-Klein (Policy Planning Unit/DRP) with inputs from David Evans (Global Philanthropy/PFP), Isabel Garcia (US Fund for UNICEF), Nima Hassan Kanyare and Yulia Oleinik (Policy Planning Unit/DRP)

Want to know more? Join us on 1 November 2016 (12.30-1.30pm, Danny Kaye Center) for the Conversations with Thought Leaders event with Darren Walker, President of the Ford Foundation.




 
Copyright © 2016 UNICEF
Policy Planning Unit
Data, Research and Policy Division 

All rights reserved.


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