The Global Landscape of WINGS Global Philanthropy Report About WINGS About WINGS

Worldwide initiatives for Grantmaker Support (WINGS) is a network of about 100 philanthropy associations and support organizations in 40 countries around the world whose purpose is to strengthen, promote and provide leadership on the development of philanthropy and social investment.

Supervision: Benjamin Bellegy Coordination: Muriel Asseraf Publication Author: Andrew Milner Editing: Caroline Hartnell Design: Heather Knight

Published in January 2018 by Worldwide Initiatives for Grantmaker Support (WINGS). WINGS Global Philanthropy Report Contents Contents

2 Sources and acknowledgements 38 6. Collaboration 3 Foreword 39 Collaboration among foundations 4 One-minute version 40 Collaboration between philanthropy 4 Five-minute version and government 42 The Sustainable Development Goals 6 1. Introduction 7 The meaning of philanthropy 46 7. Philanthropy, government 8 External challenges faced by philanthropy and civil society 47 Ambivalent attitudes on the part of government 10 2. Individual giving 49 Government control through regulation and the 11 Giving by ordinary individuals lack of it 13 New forms of giving 50 The future of civil society 15 Giving by high net worth individuals (HNWIs) 52 Tax exemptions and incentives 16 Remittances and diaspora giving 54 8. Infrastructure organisations 18 3. Institutional giving 55 Uneven distribution of philanthropy 19 Foundations – a growing sector infrastructure 21 What causes do foundations support? 60 Roles of philanthropy infrastructure 23 Grantmaking or operating? organisations 24 Strategic philanthropy 61 What could infrastructure organisations do better? 24 Risk: appetite or aversion? 60 Is the model viable? 26 Future roles of foundations 26 Future trends 62 9. Some ways forward 27 Perceptions of institutional philanthropy 63 Helping civil society organisations to survive 64 Conflict and migration 28 4. Community philanthropy 64 Digital technology 29 Community foundations the world over 65 Needed: an overarching role for philanthropy 29 Roles of community philanthropy globally 30 How donors in the global north can reach recipients in the global south 66 References 67 Annex A 32 5. Beyond grants: different uses 68 Annex B of philanthropic 33 Venture philanthropy 33 Impact investing 34 Socially responsible investing (SRI) 35 The growth of /social business 37 The blurring of boundaries WINGS Global Philanthropy Report Sources and acknowledgements Sources and acknowledgements

The research for this The source that the report draws Thanks are principally due report is based on three on most heavily is the interviews, to three sets of people: because of the insights and immediacy main sources: they offer. The selection of themes • The interviewees (listed in Annex A) • Twenty interviews with either has been guided partly by what the who generously contributed their practitioners or close observers of interviewees said. The information time and their wisdom. the philanthropy scene in different thus gained is mainly qualitative. As • The working group who designed parts of the world. These are quoted a result, the meat of the report lies in and oversaw the research, and directly throughout the text. the discussion of developments rather than the presentation of facts. helped shaped the final product: • Themed workshops held at events in Benjamin Bellegy, Pamela Ribeiro Johannesburg, Mexico City While there was a basic template for and Muriel Asseraf, (WINGS); and Amman. the interviews, they varied depending Larry McGill and Lauren Bradford • Desk research into published on the expertise of the person (Foundation Center, USA); and Barry reports, articles and websites interviewed. Knight (CENTRIS, UK). bearing on the general themes. Also, thanks to Julia Catani who The ideas and arguments of the set up the interviews and generally interviewees range widely. To restrict smoothed the process. them to neat geographical or thematic packages would have lessened their • Finally, and too many to mention by . In an era where problems name, the participants in the three appear increasingly interrelated regional workshops (listed in Annex and increasingly complex, slicing up B) that fed into this report. Even information into themes seems an where the views expressed by them arbitrary exercise. are not directly attributed, they have informed many of the ideas that For the sake of structure, however, feature in it. the material has been organised into broad themes, but there are many loose ends. In a sense, this reflects the state of global philanthropy. While some developments can be fairly readily summarised, there are many trends – the progress of online giving, the future of impact investing, the effects of digital data, to name only three – whose evolution in general, let alone in detail, is impossible to predict for even the most sapient observer.

02 WINGS Global Philanthropy Report The one-minute version Foreword

Giving voice to the diversity Based on more than 20 interviews In the midst of growing challenges of philanthropy practices, with some of philanthropy’s foremost – some external and some internal, actors and thinkers and on three some manageable and some out of recognizing and identifying workshops with professionals and our control – the report also gives the trends and cultural practitioners from civil society some indication of how to move aspects that affect giving in networks, foundations, infrastructure forward, showing specifically how different parts of the globe, organizations or research centers, the technology can become a strength report builds and expands on the work and an asset for non-profits, how highlighting the challenges previously done on the WINGS Global civil society organizations ought to that still stand in the way of Institutional Philanthropy Report 2010, protect themselves against shrinking a more efficient and more and presents a qualitative view of the civic space, how infrastructure field, based on the following 7 aspects: organizations can and must rethink sustainable philanthropy, and their scope and responsibilities, and offering ways to build a more • Individual giving; how philanthropy in general needs to interconnected and more • Institutional giving; tackle the question of inequality and coherent field – are among distribution. • Community philanthropy; some of WINGS’ strategic We are very grateful to all of those objectives, and they are • Beyond grants: different uses of who have contributed to the making philanthropic money; embodied in this report. of this report. It is our hope that it • Collaboration; will help foster a new way of thinking about philanthropy’s role and purpose, • Philanthropy government and one in which WINGS plays and will civil society; continue to play a leading role. • Infrastructure organizations.

Maria Chertok Barbara Ibrahim Benjamin Bellegy CAF Russia American Univeristy in Cairo WINGS Executive Director WINGS Board Chair Chair of WINGS Programme Committee

03 WINGS Global Philanthropy Report The one-minute version

THE ONE-MINUTE VERSION

The current report is an effort to put diversity back at the heart of philanthropy by drawing a comprehensive and provocative picture of current trends and challenges the world over – from individual forms of giving to community philanthropy and structured, institutional giving. It also raises some of the questions and issues most critical and central to the development of philanthropy – from the impact of new technology and shrinking civic space to power dynamics within philanthropy practice and concepts, and the evolving role and form of philanthropy infrastructure. Last but not least, the report demonstrates that the predominant North American and European models – often used as a reference point, to be opposed, customised or assimilated by others – are in fact just one part of the picture. Through the voices of some of its wisest and most prominent advocates, the field of philanthropy emerges from the pages of this report in all its complexity and multi-faceted reality.

catastrophic event, it has potential to risks, in practice most foundations THE FIVE-MINUTE VERSION create solidarity and mutual support. are conservative, giving to ‘safe’ areas such as education, healthcare Individual giving Giving by the very wealthy is and social services. Relatively few increasingly influenced by the are willing to support advocacy Almost everywhere, giving is younger generation, who are more or social justice issues. Corporate increasing, both by the wealthy and inclined to explore non-traditional giving is often more risk-averse by people of more modest means. ways of giving. Giving by the wealthy than private foundation giving. Individual giving is greater than could be spurred on if donors talked It tends to be based on what is institutional giving in terms of amount more about their giving, but media expected of rather than given almost everywhere, though and public hostility in some places what is needed. Generally speaking, much of it is unseen. discourages them from doing so. foundations are more risk-averse than they say they are. Most giving by ordinary individuals remains traditional in form and in Institutional giving Though grantmaking is slowly gaining destination, with religious giving The number of foundations is ground, it accounts for a relatively remaining strong in many countries, generally increasing, especially in small proportion of foundations, even more secular ones. Giving to Europe and in some countries of the except in the English-speaking world. organisations is often constrained global south. Two key reasons for this Strategic philanthropy is also on the by mistrust. are growing wealth and government rise, bringing with it an increased emphasis on measuring impact, which New methods of giving opened up by encouragement of philanthropy some view as potentially harmful. technological advance – online giving, to help supplement their budgets. At the same time, there is a trend for giving by SMS and crowdfunding – Four key roles for foundations – are growing in importance but they the wealthy to give without setting up a traditional foundation. innovation, filling gaps, supporting are still of limited significance in civil society and acting for the long most places. Although online giving Though in theory the position of term – all depend to some degree on is often a spontaneous response to a foundations enables them to take foundations’ willingness to take risks.

04 WINGS Global Philanthropy Report The five-minute version

Community philanthropy needed for success, and lack of staff Infrastructure organisations resources at philanthropic institutions. Community foundations are found Collaboration between government Philanthropy infrastructure almost everywhere, though they and philanthropy tends to be limited organisations are very unevenly have adapted to local requirements by suspicion of motives and lack of distributed, with 80% of the funding and circumstances. They are very comprehension on both sides about for infrastructure concentrated in unevenly distributed. They are what the other can offer. North America. Infrastructure is playing a wide variety of roles, from frequently lacking in countries with creating community to offering donor The notion of collaboration emerging philanthropy sectors, where services. There is also a great deal is explicitly contained in the it is most needed. of community-based philanthropy Sustainable Development Goals, happening informally. but intention rather than activity Key roles for infrastructure tends to characterise philanthropy’s organisations range from response so far. While the SDGs representation and advocacy to Beyond grants: different uses offer a template to organisations research and collection of data, of philanthropic money seeking to align their work with a sharing of best practice, and training larger development agenda, many and convening. They can also Foundations are increasingly exploring funders remain ambivalent. In introduce new ideas to the sector, new ways of using their assets, in some cases, they are waiting for raise difficult questions, and foster the form of venture philanthropy, a clear lead on a national strategy collaboration. In representing the impact investing and socially towards the SDGs, either from the sector they face a difficult balance, responsible investing, and/or by government or from a representative having to present, rather than set, using non-monetary assets such as body from their own sector. the agenda. The lack of reliable data expertise, reputation and convening on the sector is widely seen as a power. These trends should not big problem. be exaggerated. Impact investing, Philanthropy, government for example, though clearly on the and civil society There is a real issue as to whether horizons of many institutions, is still the ‘business model’ that many While governments are keen not widely practised. Alongside this infrastructure organisations adopt – to encourage civil society and we see the growth of social enterprise/ provision of technical or information philanthropy when they are doing social business, which services in exchange for an annual work they approve of, they are is viewed as highly significant in membership fee – is going to be increasingly taking steps to curtail many countries. viable for much longer, especially NGO activities in more politically as members’ expectations grow. There is an increasing blurring of sensitive areas, either by formal The basic challenge for infrastructure the line between the for- and restriction or by informal harassment. organisations is to demonstrate their non-profit sectors. Increasingly, a This affects philanthropy as it limits value to the sector. hallmark of organisations working the ways in which it can support for social good is hybridity, with those NGOs that are subject to organisations with different legal official disapproval. forms adopting a variety of means of working. Consequently, notions NGOs are coming under increasing of what constitutes ‘philanthropy’ pressure in other ways, too. Failure and ‘philanthropists’ are broadening. to replace lost international funding Potentially this could bring more with local sources; being out of to bear on the solution of step with new philanthropy; direct increasingly complex problems. implementation of programmes by operating foundations; and social business competing for attention and Collaboration support – these are just some of the Collaboration, both within the factors contributing to this. sector and between philanthropy Most countries have some form of and other sectors, is increasingly tax exemption for donors, recipient accepted in principle as a way organisations or both. While it is for philanthropy to maximise its widely believed that tax incentives are impact. Despite this, it is not yet not a primary motive for individual widespread. Restraining factors donors, they may encourage people include the cherishing of foundation to give more. independence, the investment of time

05 1 Introduction

This chapter looks at the term ‘philanthropy’, which has different meanings and different connotations in different parts of the world. It tends to reflect ‘western’ ideas, often at odds with local traditions of giving. It also looks at some of the external challenges facing philanthropy and philanthropy infrastructure organisations – and indeed the human race as a whole.

06 WINGS Global Philanthropy Report Introduction

For Grupo de Institutos, Fundações In the Arab region, while giving is THE MEANING OF e Empresas (GIFE) in Brazil, it is generally practised, and large-scale PHILANTHROPY ‘the voluntary transfer of private giving from an endowment, through funding in a planned, monitored the waqf idea, is widely known, the Most of the terminology of and systematic way for social, term philanthropy is used mainly by philanthropy is imported from environmental and cultural projects people who are exposed to the West, Anglo-Saxon traditions irrespective of public interest.' For Grupo de says Atallah Kuttab of SAANED for of whether it fits local circumstances Fundaciones y Empresas (GDFE) Philanthropy Advisory in the Arab or not. There is an ambivalence in in Argentina it is ‘the responsible, Region. the term philanthropy itself even proactive and strategic use of in places where it appears to be private resources in which the Philanthropy in Turkey is mainly well understood. Where it involves expected return is the well-being of understood as charity and generally translating a word or a concept, this the community and development has traditional and religious ambivalence is more pronounced. over the long-term.' In Mexico connotations, says Basak Ersen. According to a recent study by the Beyond how it translates in different people do use the term philanthropy Third Sector Foundation of Turkey countries, literally and figuratively, and emphasise its emotional and (TUSEV),2 most Turks see it as some it’s possible that the overtones of moral aspect: ‘It is the expression form of assistance to individuals: 40% the term philanthropy will change of a generous impulse.’ see it as ‘helping the poor and those in considerably even in the global Outside the sector itself, the term need’ and 28.5% describe it as ‘helping north and that the change will be a philanthropy has little currency others, doing good.' Interestingly, generational one. Writing in Alliance in China, thinks Yanni Peng of while many regard particular actions earlier this year, Hilary Pearson Narada Foundation. The charity law as philanthropic – giving scholarships, of Philanthropic Foundations of promulgated in 2016 uses what is building schools, etc – they don’t see Canada and Jean-Marc Fontan literally translated as charity, but ‘education’ generally as a category of of the University of Quebec in there’s another Chinese term in use philanthropic activity. This is changing Montreal assert that ‘philanthropy is that means public good. but, as elsewhere, a more ‘western’ no longer only about benevolence. understanding of the term is mainly It’s about having impact on the limited to philanthropy professionals. complex problems that face the next generation.’

How widely is it used? ‘The term philanthropy is mostly associated with charity, and in general it has a negative sense,’ says Andre Degenszajn of Instituto Ibirapitanga, Philanthropy is former Secretary General of the Grupo de Institutos, Fundaçoes e Empresas no longer about (GIFE). This is partly because of past corruption scandals involving philanthropic institutions as a result benevolence. of which the term philanthropy has come to signify in the public mind ‘a mix of poor efficiency and lack of It’s about having trust. In general, it’s not a term people identify with.’ As a result, the term private social investment is generally impact on the preferred. He notes another reason for this preference: philanthropy has been complex problems closely associated in Brazil with the corporate sector, and ‘the language of investment and return is closer to the that face the mindset of those institutions.' It’s interesting to note that in a report next generation” across a number of Latin American countries,1 participants from Brazil and Argentina use the term private social investment and stress its transactional character. 07 WINGS Global Philanthropy Report Introduction

‘Philanthropy’ and local In fact, the use of the term EXTERNAL CHALLENGES traditions of giving in Africa philanthropy often marks a borderline between rational, emotionally FACING PHILANTHROPY Halima Mahomed, independent disinterested, professional notions Interviewees for this research were philanthropy consultant, notes that of giving and a more spontaneous, asked what they see as the big in South Africa use of the word compassionate response to those in external challenges that philanthropy philanthropy is mostly confined to need which might be expressed either and philanthropy infrastructure professionals. Even when it is used, by gifts of money or by other forms organisations will have to respond it has connotations of paternalism, of generosity. to in the immediate and near future. so ‘we’ve been trying to change this This section is based on their answers. terminology and saying to people: These are challenges that face all of if you’re going to use the term Philanthropy and power us, depending on what part of the philanthropy, you need to be specific Jenny Hodgson of the Global Fund world we live in. As Carol Mack of the about what you’re talking about. It’s for Community Foundations calls it ‘a Association of Charitable Foundations not just rich institutions giving to poor critical question for this report and for notes, the challenges for philanthropy people; it happens every day among WINGS. The word “philanthropy” is so are the challenges facing society. ordinary people and they just don’t divisive. It has so many connotations call it that.’ People call it charity, they of power, inequality and privilege.’ call it help, ‘they use giving and they The mistrust formal philanthropy also use indigenous terms like ubuntu tends to feel for civil society is often and inequality or the terms for specific practices like mutual because ‘the people who are stokvels.3 They use what they know setting up foundations are coming The two most obvious and most and is familiar.’ from exactly those institutions that critical challenges are global and are causing the problems. So while were mentioned by all interviewees: One participant in the Johannesburg we’re talking about philanthropy being climate change and rising inequality. workshop echoes this: there is still a private resources for public good, The ramifications of both of these gap between what institutional donors voluntary giving, empathy, etc, we problems are tremendous and they refer to as philanthropy and local need to ask for what?’ have a close bearing on many of the traditions of giving and other forms of more localised problems identified support. This gap, though it has long So do progressive funders ‘claim’ the by interviewees. been acknowledged, has yet to be word as ‘something of the people’, successfully bridged. Observers talk or do they pursue an inconclusive of the importance of traditional forms, search for a more satisfactory term? Conflict and migration but accounting for them, finding In Africa, she says, ‘there’s a narrative Conflict and migration present a major ways to stimulate them and bringing which goes: “people have always challenge for philanthropy. ‘We have them into the canon of philanthropy given, there’s no continent in the world more refugees now than at any time has seldom been successfully done, that understands giving and solidarity since World War Two,’ notes Barry despite the seminal work of Susan among people more, it’s in our DNA, Gaberman of Oxfam America. He Wilkinson-Maposa and others on etc”, yet when it translates into how suggests that one of the touchstones ‘horizontal philanthropy.' conferences are organised, who gets both for conflict resolution and to speak, it’s all people who’ve made internal displacement and for how Mahomed sees ‘space for innovation money out of business, it’s nothing philanthropy responds to these in individual giving but we have to to do with that narrative at all. These things is Colombia. ‘This situation and think about how we support it without things needn’t be irreconcilable but others like it will bring to the fore all destroying it. There are tensions at the moment they sit at two ends of that we’ve learned about truth and created by this charity vs philanthropy the spectrum so the narrative supports reconciliation commissions.’ debate. It comes from the global one thing, but the practice and the north, where charity is bad and power dynamics another.’ Atallah Kuttab agrees on the philanthropy is good, and that’s not a importance of the refugee question, dichotomy that’s helpful. Progressive but underlying it in the Arab region, institutions are beginning to talk what’s often at stake is the very about how to think about people’s survival of countries themselves. lives holistically. Gender violence, ‘The whole region is fragmenting. We patriarchy, the economy and the are losing the cementing agencies labour system all intersect with each of communities. The Gulf region, other and you can’t deal with one in which one thought of as the most isolation. Also, what’s happening to stable Arab countries, saw instability people right here and now cannot be erupting with Saudi Arabia waging a discounted in favour of looking only at war in Yemen and lately Bahrain, Saudi the long term.’ It’s a debate, she feels, Arabia and United Arab Emirates’ that is not being heard enough. conflict with Qatar.’

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Gerry Salole of the European Radicalism and intolerance Austerity, devolution Foundation Center sees migration and Brexit as a pan-European challenge. ‘How Unemployment plays into the do you get people to recognise that main issue Laurence Lien of Lien Austerity, devolution, Brexit and migration isn’t going to stop? Foundation and Asia Philanthropy the technological revolution are How do you make it easier for Circle sees in South East Asia: some of the biggest trends Carol people to get integrated? Unless radicalism and, in particular, the Mack observes in the UK, which we can occupy the space of debate spread of conservative forms foundations will inevitably be called around that, we’re going to have of religion which are breeding on to respond to. ‘Within the UK lots of trouble.’ intolerance. ‘Violent extremism is one there are four territories with distinct element of this. The more there is administrations, and within England Hilary Pearson notes the challenge radicalism, the more likely you are to there is increased devolution of of reconciliation with Canada’s have violent extremism and a number spending and political power, so indigenous communities. They of Asia Philanthropy Circle members that’s challenging for foundations form a fast-growing segment of are really concerned about this.’ – if you want to influence policy, the population, social problems are where do you go to do that?’ Philanthropy’s response should be disproportionately concentrated Such developments can also offer to ‘go upstream and make sure there there, and it’s a critical time, with opportunities, she notes, perhaps is no deprivation in communities’, a recent truth and reconciliation through a more local approach. ‘It he says, since a sense of deprivation commission and a fairly recently can be easier to influence change fuels radicalism. ‘If you feel you elected government committed through a place-based approach,’ should be at a certain level and to reconciliation. she says, ‘but that can be quite hard you are way below that, you start for a UK-wide funder to get their becoming angry. The education head around.’ Unemployment system is a major contributor. It is not producing graduates who are Thanks to the advance of deep job-ready. Youth unemployment learning and other forms of artificial Secondary education and is huge in many countries around intelligence, jobs currently done by a population bulge us, in some cases close to 20%, highly trained white-collar workers much greater than the general The biggest challenge for Pakistan is can be automated. Vulnerability unemployment rate. If young people demography, followed by secondary to automation – or to offshoring are hungry and out of work, that’s a education. The country has what – is already having an impact on recipe for disaster for the future.’ Shazia Amjad of Pakistan Center for jobs, and is likely to increase in the Philanthropy calls ‘a huge population future. In Spain, unemployment bulge between the ages of 18 and is a big issue, says Rosa Gallego 35.' The danger is that this will of Asociacion Espanola de produce greater inequality. Given Fundaciones, ‘which is very much limited state capacity, philanthropy linked with inequality.' There is a has a role to play in meeting this big coalition of foundations, public challenge. institutions and others exploring ways of getting particularly Another specifically Pakistani disadvantaged people into the job challenge is secondary education, market and to find out how existing says Narmeen Adeel. The mechanisms for getting people government is focusing its efforts on into employment fail and how primary education, so philanthropy philanthropy can help to address could usefully contribute to that. She sees room for Asociación secondary education. The models Española de Fundaciónes (AEF) of cross-sector partnership in ‘to reach out and bring other education in Punjab might provide stakeholders to the table, but we are a valuable starting point here. not there yet.'

09 2 Individual giving

Individual giving is increasing almost everywhere in the world. This chapter starts by looking at giving by individuals of modest means, and at new forms of giving such as online giving and crowdfunding through which much future giving is likely to be channelled. It then goes on to look at giving by high net worth individuals and finally at remittances and diaspora giving.

10 WINGS Global Philanthropy Report Individual giving

Individual giving, both by the very Muslim, and while ‘people might wealthy and by people of more GIVING BY ORDINARY give to it from a religious motive, it modest means, is an increasingly INDIVIDUALS is not a religious institution. There’s significant part of philanthropy a national zakat fund centre. Many The habit of giving is well established the world over. There are several Muslims give their yearly zakat to the in most places. By and large, it reasons for this. The first and most centre, which then distributes it.’ remains traditional in form and is obvious is its size. Individual giving often religiously based. One of the is almost everywhere greater than main problems with considering this institutional giving in terms of Which causes are type of giving is that estimates are so amounts given (China being one of most popular? often a ‘best guess’ – if that. ‘Religious the few exceptions to this rule) though giving,’ says Halima Mahomed, The evidence, anecdotal or otherwise, much of it is unrecorded. Second, speaking of South Africa, ‘is a very suggests that certain causes as other sources of funds for NGOs big motivator and that doesn’t get predominate nearly everywhere. come under pressure, individual giving measured at all. It’s not declared on According to CAF UK, medical is seen as a potential alternative tax forms, but it’s huge. At the same research was the most popular means of support. Third, new, more time, many people will give directly destination of individual donations direct forms of communication and – to someone who is poor, someone in the UK in 2016. Similarly in the of giving mean that individuals can in the community who needs help. Netherlands, health, medical research quickly support, or even create, an Knowledge about all this is a big gap.’ and support for hospitals mobilise issue and thus have more direct the largest number of donors – influence on policy and development though religious giving accounts questions. Fourth, a more holistic Religious giving for the largest amount, as already view of philanthropy is beginning ‘We have strong religious giving noted. Apart from religious giving, to gain ground, where giving is traditions across all major religions. says Srinath, ‘relief-type giving and seen not just instrumentally, as the Probably even the poorest Indian giving for public works would be making available of resources, but as puts some money in the temple the traditional forms and these are a way of building trust and a sense box and meets their annual zakat probably still the dominant forms of of common purpose among groups requirement, and so on,’ says Ingrid individual giving for India as a whole.’ and communities. At least two of the Srinath of Ashoka University. It interviewees for this research mention accounts for the majority of giving in Interestingly, a few European the importance of investigating and the Arab region, says Atallah Kuttab. countries depart from this type. In encouraging traditional forms of ‘The challenge,’ he says, ‘is how you Germany and Belgium, for example, giving as a way to stimulate this. move that giving towards sustainable international and humanitarian aid development rather than handouts. was the priority in 2013, accounting Right now the bulk is handouts.’ for 74% of total German donations and 61% of Belgian donations.5 Even in the secular countries of western Europe, religious giving still takes a big share of individual Giving to organisations philanthropy. In the Netherlands, for or individuals example, giving to religion accounts There are two competing tendencies 4 The challenge for 40% of individual giving. In at work here. While in many places Canada, Hilary Pearson reckons, some there is a marked reluctance to give is how you ‘50 per cent is going to churches, to organisations, there is also an mosques and other religious bodies.' acknowledgement in some countries move individual But she offers a reminder that religious of the need to support them. So, giving is too wholesale a category for for instance, says Narmeen Adeel of much precision. ‘Ultimately that money the Pakistan Centre for Philanthropy giving towards could be going through the churches (PCP), while most of Pakistan’s to social services, to relief, to giving tends to be individual to sustainable international development. All that’s individual, both organisations and telling you is that religious institutions donors see the need to incentivise development are still very appealing intermediaries giving to organisations. ‘We will for individual philanthropists.’ see organisations trying to tap into resources that are traditionally rather than Halima Mahomed also notes the allocated to individuals so you have unsatisfactory nature of the label. organisations making a conscious A humanitarian organisation in handouts” effort to get zakat money, for example. South Africa might be set up by a

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And organisations are becoming Ingrid Srinath notes that while there conscious that there is the possibility is ‘a class of urban, westernised, of small regular donations rather educated people who give to than looking for large donations.’ organisations’, such giving has been slow to take off and it depends very Whatever the cause, Andre Degenszajn notes ‘a much on the organisation. ‘Levels growing sense that people should of trust in NGOs have fallen sharply. reluctance on the part be connecting to organisations Depending on who you are talking of individuals to give to that they trust whose work they to, they are seen as either ineffective believe in.' As Brazil’s economy or ineffective and corrupt or, at the organisations is one of has grown, international funding highest level, ineffective, corrupt and the reasons why NGOs, has been diminishing as donors anti-national.’ While Singapore is an turn their attention elsewhere (a exception in East Asia, because it’s especially those working common phenomenon in emerging a well , ‘there are in more contentious fields, economies). ‘The pattern of support big issues in many other countries’, from government has also changed, says Laurence Lien. ‘Because there are beginning to feel and grantmaking is at a lower level is very little trust about where the the pinch" than we would like to see from funds go, a lot of grassroots NGOs philanthropic institutions, so people find it very difficult to fundraise from are starting to realise that in the long people who don’t know them.’ Sometimes it’s also the case that run individual donations could be working through NGOs makes the a reliable and sustainable source of It may be more a matter of people anonymous and companies funding.’ One or two organisations trusting some organisations and often want to use projects for marketing have been successful in raising not others. ‘This issue of trust and and want to see their name involved.’ funds from individuals, but there are organisations comes up a lot,’ obstacles. First, it requires a lot of says Halima Mahomed. ‘But what While Brazilian civil society played a investment and the infrastructure do you mean by an organisation? critical role in establishing democracy and experience to make it work. Isn’t a religious institution a form in the country in the 1990s, it was often Second, Brazilians are reluctant to of organisation? People give to unseen, believes Ana Valeria Araujo give to Brazilian NGOs. For both things that they know, formal or of the Brazil Human Rights Fund, so of these reasons, the successful informal, and that has to do with the public remains unaware of the organisations have been well- trust.’ For her, it’s more trust in importance of NGOs. Nor have NGOs resourced international organisations. some organisations rather than helped their own case in this respect, mistrust of others that makes since they have not been forthcoming Strikingly, the biggest recipient people selective in their giving. It in publicising their activities. group of individual giving in Turkey may be that local and informal is is street beggars. In TUSEV’s 2016 more attractive than formal and Atallah Kuttab notes that NGOs in the study,6 88% said they prefer to give more remote, either physically or Arab region have become vulnerable direct to those in need. Basak Ersen in outlook. A CAF Southern Africa because they have been intent on thinks that part of the reason for this study7 carried out in Gauteng pleasing their funders rather than their is that people like to see immediate province, South Africa, found that beneficiaries; as a consequence, their results. Only 12% said they prefer 84% of survey respondents who give constituents have no affinity with them. to give through an organization. to organisations give to informal NGOs in Egypt, he says, are being groups and only 16% to formal NGOs. subject to increasingly punitive laws, but ‘we do not see people taking to Why do people the streets to defend them because mistrust NGOs? Other reasons for the in many instances people don’t see reluctance to support NGOs them as part of the fabric, they see Often the reluctance to support them as contractors or subcontractors NGOs is based on mistrust. Ersen Mistrust of their integrity is not the of foundations or governments.' believes that mistrust underlies all only reason for reluctance to give to aspects of the relationship between NGOs. Carolina Suarez of Associacion Whatever the cause, reluctance on philanthropy, government, civil de Fundaciones Empresariales the part of individuals to give to society and the public. The TUSEV believes that ‘NGOs need to be more organisations is one of the reasons study notes a general lack of trust in professional, more lean. Sometimes why NGOs, especially those working in Turkish society. Only 1 in 10 said they they are amazingly bureaucracatic, more contentious fields, are beginning trust people outside their family or which makes their overhead high. If I to feel the pinch in many places. immediate neighbourhood. Despite ask my members why they don’t work We will expand on this discussion that, people will give to institutions, with NGOs, the answer is that they in chapter 7 on ‘Philanthropy, but only to those they are sure of. don’t want to spend a lot of money government and civil society.' covering their administrative costs.

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to bring together organisations the most important stimuli to this NEW FORMS OF GIVING on one platform.' Larger, more movement. In September 2015, In Hilary Pearson’s view, new forms administratively sophisticated TenCent initiated a giving day, and of giving – online, crowdfunding, organisations are already blazing the same event the following year via text message – mean that ‘the a trail. The Citizens Foundation, raised CNY100 million (USD15.2m) philanthropy model is going to be for example, ‘has found that its within three days, over CNY6 million upended. We don’t know how it’s online donations have multiplied (USD911,000) of which came in going to shake out but it’s definitely exponentially in the last few years the form of online donations. being upended.’ But these new because they have invested in the Barry Gaberman says that Oxfam forms of giving are developing way they fundraise online.' In the America, on whose board he sits, slowly, so it may be a while before meantime, there are a number of finds that its individual donations philanthropy is upended. obstacles to be overcome: one is custom – ‘people aren’t used are increasingly made online. to donating online.' In addition, Moreover, ‘it’s a whole cast of Online giving she points out, ‘not everyone has new people, demographically a access to online banking or they’re younger cohort. I will never give Estimates of online giving vary, as not comfortable with using it.' online. My children, I suppose, give does the degree to which it has This may be especially true in rural partially online. My grandchildren developed in different countries, areas of developing countries. will probably only give online.’ but the general view in most places is that while it is a coming trend, In some parts of the world, online it has not yet arrived. It’s growing giving has developed further. In Crowdfunding quickly in Turkey, notes Basak Singapore, Laurence Lien sees it Crowdfunding for social causes is in a Ersen, ‘because the technology is making rapid headway. The Giving. similar situation to online giving more improving and younger people tend sg site was already raising SGD2 widely. Andre Degenszajn believes to use it more and more efficiently. million (around USD1.484,000m) that in terms of the amounts raised, Probably in five years’ time online a year in 2008 before the National crowdfunding platforms are ‘not so giving will have doubled or even Volunteer and Philanthropy Centre significant’, but, he says, ‘they are tripled, but at the moment it is took it over when Lien became starting to play a very important probably just a small proportion of its CEO. That figure has now role because they have suddenly giving overall.’ In fact, according grown to around SGD20 million made people see they could raise to TUSEV’s research, only 1.9% of (USD14.840,000m). In the US, the money for causes from individuals Turks make use of online giving and Lilly Family School of Philanthropy’s and that wasn’t an option before.’ 7.5% of mobile giving, while the Philanthropy Outlook, 2017-18 8 figure for crowdfunding is 1.3%. notes that ‘giving to institutions In the Arab region, crowdfunding of higher education and private is limited though there is a lot of Halima Mahomed feels that schools has been particularly strong, interest in it, believes Atallah Kuttab. circumstances will be as important especially via online methods.' The principal obstacle is that ‘setting as technology in influencing up platforms to collect money is people’s behaviour. ‘People are Twenty per cent of all giving in India very difficult.' He describes helping going to give to what they know will be online within two years and to set up a crowdfunding platform and to the need they can see around 50% within 10 years, predicts a survey to help refugees in the region. them.’ If you live in a rural area, it’s undertaken in 2015 by CAF India and ‘Lebanon was the only place we more likely you’ll give direct to a Ethica.9 Ingrid Srinath notes that online could do it because JustGiving in person or a community group. It’s giving and retail giving generally London will deal only in Lebanon.’ in some urban areas that online continue to grow in India, simply giving is increasing, even if ‘it’s still because people are more prosperous nascent.' In Kenya, she adds, ‘mobile and there is more awareness of giving. Giving via text giving has taken off because the messaging/SMS technology platforms are much While, exceptionally, individual giving easier. We’re starting to see some probably accounts for the smallest According to a 2017 CAF Russia of that now – like SMS messages share of giving in China, the amounts report, the most popular means to donate to a particular cause.’ have increased dramatically over the of giving for Russians was by text last two or three years because of message (40% said they had given While direct giving remains the internet giving, says Yanni Peng. The in this way in the previous year), preferred form in Pakistan, Shazia Alibaba Foundation and WeChat, while online giving was some way Amjad notes that ‘every organisation the social media mobile application down the list of preferred methods. is looking to online giving now and developed by TenCent, used by over one of the things we are working on 900 million people, have been is developing an online giving portal

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Online giving and crowdfunding have democratised giving. Its convenience opens up the possibility that people might donate and feel that their responsibility is discharged without having any real engagement with the issue”

Advantages and Barry Gaberman raises the issue of adding more money to the corpus disadvantages of funding overhead, which is unlikely to of philanthropy. ‘When we talk be funded by online giving, especially about online giving, crowdfunding, online giving crowdfunding. He sees it as ‘an ethical etc, we’re talking about something There is a view that online giving and proposition. You cannot allow the different. It’s not about High Net crowdfunding have democratised capacity of an institution that drew you Worth Individuals (HNWIs) or well- giving. This view was expressed there in the first place to support its endowed foundations, it’s about at the Johannesburg workshop programmes to be diminished by your people supporting each other and and Danny Sriskandarajah support because you won’t deal with that being manifested in some sort also notes this possibility. overhead. You have to pay the freight.’ of financial transaction.’ The change is potentially a radical one. In some However, while its potential is Hilary Pearson also mentions the ways, it may not mark the introduction prodigious, enthusiasm should danger that core funding will decline of a completely new basis for giving, be tempered with caution. because of the squeeze on the likes of but rather the reintroduction of a Halima Mahomed feels its very United Way, ‘which are intermediary much older idea of solidarity and convenience opens up the possibility institutions that give money to small mutual aid given technological wings. that people might donate and charities. I’m sure that’s a trend feel that their responsibility is that’s also being seen in the US and In Turkey, while there is ‘a growing discharged without having any perhaps in parts of Europe,’ she adds. understanding of the importance of real engagement with the issue. giving more, especially in the younger ‘Because people are now giving generation’, says Ersen, the mistrust Online giving, particularly digitally not through intermediaries prevalent in Turkish society means crowdfunding, is often the expression but via phone or the internet, that this manifests itself in a particular of a spontaneous outburst of organisations like United Way that way: ‘young people don’t like to compassion or pity rather than a were very important in providing gather together in traditional forms, thought-out intervention. It’s popular core costs for small charities are in associations, foundations, even in in Singapore, says Laurence Lien, no longer able to do that.’ political parties. They’re more likely when there’s a catastrophic event, to get together in events like charity particularly where an individual is The dimension of solidarity runs and I think this is a new way of involved. It tends to favour ‘those coming together.’ He sees this form of who make it to the media with pitiful Both Danny Sriskandarajah and Basak loose association as ‘a new politics in stories. There haven’t been significant Ersen draw attention to something Turkey and it’s very strongly growing. amounts of money raised through very significant in new forms of giving: If you can’t do things legally and you crowdfunding for other things.’ that they are not just a matter of don’t like to be illegal, you have to find other ways of doing things.’

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intelligent business you can actually GIVING BY HIGH NET solve deep societal problems.'12 WORTH INDIVIDUALS In line with individual giving generally, (HNWIs) the top causes listed by the Major Giving Index are education and Public and media attitudes HNWIs play a significant part in health. BNP Paribas gives health as to giving by HNWIs individual giving, though often the top cause in three of the four The giving of HNWIs is well regarded they will establish a foundation regions studied (US, Europe and the in Pakistan – as far as it is visible. to institutionalise their giving. In Middle East), with wealthy Asian They are what Shazia Amjad calls Pakistan, for example, large donors donors preferring the environment. ‘leader-donors’ and have initiated a ‘have set a benchmark for healthcare number of significant organisations in services’, says Shazia Amjad. The both health and education. However, Business School at Lahore University Influence of the Narmeen Adeel of the Pakistan Center of Management Sciences, Habib next generation for Philanthropy notes that HNWIs University and the Indus Hospital were These indexes signpost other likely don’t have much of a media presence all funded by HNWIs. Often other developments, especially the influence because they don’t like to talk about sources of money follow, but the initial of the next generation. Millennials or quantify what they give, so they will pot comes from weathly individuals. are producing a change in the giving talk about the institutions they support of the very wealthy, ‘ushering in new Statistics are not plentiful, but good but not the amounts they have put in. models that combine traditional indications are offered by reports such foundations with profit-making Individual philanthropy in the Arab as the Coutts Million Dollar Donor endeavours and social enterprises.'10 region is a little more visible than Report, the BNP Paribas Individual institutional philanthropy, but not Philanthropy Index and the Major A BNP Paribas report on next- 11 much: ‘When someone important is Giving Index, compiled by Wealth-X. generation philanthropists similarly giving money it gets media coverage, The 2015 Coutts report records 2,197 notes an increasing interest among but it could be much greater because donations of a million dollars (or millennials in forms of financing other in spite of legal questions and the equivalent in local currency) or more than grants such as ‘equity investments closing environment, there’s plenty of across the three regions it covers, and loans, often directed at social good experiences out there to write the UK, the USA and the Middle East, enterprises.' The Jacobs Foundation, about. We have a shortage of writers.’ worth a total of USD56 billion. Eighty- under the leadership of its 36-year- old chair, ‘has invested CHF2.5 million five per cent of this amount, says the UK research on why rich people report, was contributed by individuals. (around USD2.5m) in impact finance and plans to increase this to up to give shows a degree of cynicism in the UK media about their motives. The BNP Paribas Individual CHF6 million (USD6m) by 2020.' Carol Mack contrasts this with the Philanthropy Index for 2016 samples much more favourable view of large donors with over USD5 million in A token of this change of emphasis, donations in the US, although it’s investable assets. Not surprisingly, if not of direction, is the willingness possible that the cynical tone of the the Index, worked out across four of wealthy young people to media does not accurately reflect dimensions including current and branch out from existing family the views of the public. What is projected giving and innovation, philanthropic traditions. The BNP clear is that the media calling into puts the US ahead on all dimensions Paribas study cites the example of question their motives makes it and overall, followed by Europe, Leyth Zniber, the founder of Impact difficult to urge philanthropists to Asia and the Middle East. Lab in Morocco, who decided not to follow his mother’s philanthropic be more public about what they Broadly in keeping with other forms of example, believing rather that ‘with give and to act as role models. giving, the trend for HNWI and Ultra High Net Worth Individuals (UHNWI) giving is an upward one, following a dip around the time of the recession, from 2008 to 2011. The Major Giving Index forecasts a growth in the major donor population (those who have donated USD1 million to good New forms of giving mean causes in their lifetime) from 18,500 in 2015 to 27,000 by 2020, and also that the philanthropy model foresees that they will give more. Fifty-seven per cent of these major is going to be upended” donors are based in the Americas.

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In Spain, too, big donations are often Need for HNWIs to talk REMITTANCES AND met with cynicism. Earlier this year, about philanthropy Amancio Ortega, the owner of Zara DIASPORA GIVING and ranked fourth on the Forbes Krystian Seibert of Philanthropy Remittances are hard to assess with Rich List, announced his intention of Australia notes that one of the any precision, but estimates suggest donating EUR400 million (USD476m) most effective tools for increasing they are very significant, particularly to the public health system to buy larger-scale philanthropy is ‘when as they are considered apart from equipment for diagnosing and philanthropists talk about it and say estimates of philanthropic giving. treating cancer. ‘You can’t imagine why they do it.' While this is happening According to the Hudson Institute’s the level of criticism that this has to a limited extent, substantial donors 2016 Index of Global Philanthropy received,’ says Rosa Gallego. ‘First, can be shy of publicity because public and Remittances,13 remittances people think that the public health attitudes to large donations can be from donor countries to developing system should be funded by public contradictory. While philanthropists in countries in 2014 totalled USD224 money and not depend on private Australia are generally well regarded billion (compared with USD147 money; second, that rich people and rank high on honours lists, there billion in official development should pay more tax instead of are signs that an undercurrent of aid). It’s a figure that has climbed paying low taxes and giving money suspicion may be emerging. He talks fairly steadily, bar the odd hiccup, away.’ This point – that more private of a USD400 million pledge made by since the turn of the millennium. wealth should go to public purposes Andrew and Nicola Forrest in mid-2017. through tax and that the state should While news coverage was generally Two interesting points to note here. be responsible for welfare provision positive, there was also some criticism, According to World Bank data14 on – finds wide acceptance beyond with one columnist arguing that remittances, the flow of south-south Spain and is also a factor in the philanthropy is inherently undemocratic remittances (34% of the total) was reluctance of people to give to NGOs. and that the Forrests should be not far short of that of north-south paying more tax. For these reasons, flows (38%). Second, and back to In China, feels Yanni Peng, the media he believes that it’s important to have the Hudson Index, though much are generally favourable, but they an ongoing discussion about the role less than the flow of remittances, are quick to criticise when there is a of philanthropy in society, how it uses there are significant amounts of scandal, which has coloured public its position and power, and how it can private philanthropy from non-DAC views of philanthropy and raised maintain its ‘social licence to operate.' countries (those that aren’t part of questions over its transparency. the OECD’s Development Assistance The desire to increase transparency In India, Ingrid Srinath still notes ‘some Committee and, by implication, not was one of the motives behind the discomfort with talking publicly about considered major donor countries) setting up of the China Foundation giving. Mr Tata and Mr Premji are almost to developing countries. Institutional Center, which has created the invisible.’ To a degree, setting up a and individual philanthropists in Brazil Foundations Transparency Index. foundation interposes an organisational gave USD34 million to developing shield between the donor and the money countries in 2014. In India, the figure donated, which helps to deflect public was USD249 million, in Indonesia attention, and she notes ‘a great deal of USD129 million and in Turkey USD267 reluctance to talk about sums of money million. Taken together, these findings and so on.' On the other hand, she feels suggest that private givers of all this is changing, helped in part by greater kinds, in places where giving has publicity for philanthropy in the shape of traditionally been more parochial, are awards by magazines like Forbes and the Private givers beginning to have wider horizons. Economic Times. Azim Premji recently of all kinds, in became the first Indian philanthropist to be awarded the Carnegie Medal for places where Philanthropy. Srinath also notes that the resentment or cynicism that often giving has accompanies large donations elsewhere is generally absent in India. The new traditionally wealth, she feels, is too recent to be seen been more as anything but an unmitigated good. In China, says Yanni Peng, ‘the feeling parochial, are that philanthropy should be done beginning to without drawing attention to it is changing.' The likes of Jack Ma are have wider happy to talk about their philanthropic work in order to raise public awareness horizons" of philanthropy’s function.

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It’s important to have an ongoing discussion about the role of philanthropy in society, how it uses its position and power, and how it can maintain its ‘social licence to operate’”

17 3 Institutional philanthropy

This chapter focuses on foundations: their growing numbers, especially in Europe and some countries of the global south; the largely conservative causes they support; the gradual spread of grantmaking and strategic philanthropy. It also discusses foundations’ much- touted appetite for risk; sometimes negative perceptions of institutional philanthropy; and the future role of foundations and future trends.

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The lack of clear legal definitions can CHINA In China, the sector has make it hard to see the size of the FOUNDATIONS – grown very fast since the Regulation philanthropic sector. Philanthropic A GROWING SECTOR on Administration of Foundations institutions in South Africa, for in 2004. Prior to this, most of example, ‘can be registered as Foundations in Europe China’s foundations were public trusts, as Section 21 companies or and essentially government run, but as CSOs and they are all governed and the US subsequently private foundations have by different laws.' So, although DAFNE (Donors and Foundations been the fastest-growing segment the sector seems to be growing, Networks in Europe) estimates a total and some 60-65% are now private, that growth can be hard to chart of 129,000 foundations in Europe, estimates Yanni Peng. The distinction because ‘much of the evidence is many of which are relatively young. between public and private continues, anecdotal’, says Halima Mahomed. Half of Swiss foundations are less than however, and until 2016 only public 20 years old. Between 2001 and 2014, foundations were legally allowed to In the Arab region, a foundation might the number of French foundations raise funds from the public. In 2016 a be an NGO or an association. This is more than doubled.15 More than 70% of new regulation stipulated that every not simply a matter of confusion. In a Germany’s foundations were founded charity operating for two years and sense, it has a philosophical basis and after reunification in 1990. In Spain, meeting certain criteria can apply for reflects how people see institutional more than 69% of foundations are a licence to fundraise. This will put philanthropy and its role. The under 18 years old. In Italy, the number pressure on the public foundations, distinction, very broadly, is between of foundations grew by 133% between since successful NGOs will no longer whether philanthropy sees itself as 1995 and 2005. need to work through them, but will be part of civil society or separate from able to appeal directly to the public. it. Barry Gaberman calls organised Italy is an interesting case. The philanthropy ‘a slice of the non-profit creation of the banking foundations INDIA In India, while the Tata Trusts sector.' He admits that some tend to by privatising savings banks in 1990 have ‘been around for over 100 years’, think of it as ‘a sector unto itself and produced a number of very large the new money ‘that came out of the not connected to broader civil society, foundations. They account for only 2% IT sector has started to find this more but I have always felt there was a of Italian foundations but hold about organised, foundation-type form’, says certain self-aggrandisement in that.' It half of the country’s philanthropic Ingrid Srinath. ‘It’s kind of the norm may be that the ambiguity involved in assets and about 10% of those of the now if you are an IT to have nomenclature is partly created by an whole of Europe. This has caused a a foundation.’ ambivalence in philanthropy’s attitude huge imbalance in Italy. Most of the to power. savings banks were in the north of RUSSIA You are more likely to meet Italy and their foundations continue a fundraising foundation in Russia to operate mainly in their own locality. than an endowed foundation on the This means these local areas are the Anglo-Saxon model, says Oksana overwhelming beneficiaries of their Oracheva of the Potanin Foundation. philanthropy, while the rest of the While most people still give direct to country is excluded. the cause or to the end beneficiary, there is a growing trend towards In India, it’s In the US, by contrast, the size of giving to fundraising foundations and the foundation sector remains fairly to other institutions, a trend which the steady. The Foundation Center formal philanthropy sector is trying kind of the website records 86,000-87,000 plus to promote. In terms of money, the with slight fluctuations between two biggest foundations in Russia are norm now if 2012 and 2014, though foundation fundraising foundations, both of them giving is increasing slightly. working in children’s health. While you are an there are private foundations and they are playing a significant part (not least Foundations in the the Potanin Foundation itself) they are IT billionaire global south few at the moment. to have a In many countries of the global south, SINGAPORE Though the foundation the foundation sector has grown sector is growing, it tends to be a in the first two decades of the new less significant player in Singapore, foundation” millennium, though the rate of says Laurence Lien, because there increase is uneven. are no tax advantages to setting up a foundation in a country which already has a very low level of taxation.

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‘People just give directly,’ he says, Both and foundations still ‘it’s a lot simpler, it doesn’t lock you tend to be family owned or closely in. That’s still the dominant form as associated with the founding family, opposed to using an intermediary.’ and the interests of the foundation are The main reason for setting up a not seen as separate from those of the foundation in Singapore, he believes, Corporate giving company. ‘Many of the richest people is to create a legacy, a sense of in Turkey have foundations under their continuity in the beliefs and attitudes is also the fastest own name, but often their companies of a family or group. are involved,’ says Basak Ersen. growing sector Foundations of this kind often shy PAKISTAN Here again, the concept away from political risk, since it might of a foundation is not clear-cut and it in Turkey, where jeopardise their business, especially is mainly associated with corporate where government contracts are an foundations – though, says Shazia the economy important element of that business. Amjad, a few private foundations have recently been set up by high net worth has grown individuals or families. There are two What is driving the growth large social funds, which essentially act significantly" in the foundation sector? as public foundations. One has been involved in poverty alleviation – ‘which In the global south, the main stimulus seems to have been the increase in could mean working in education, Corporate giving is also the fastest individual and corporate wealth. In sanitation, whatever’; it has received growing sector in Turkey, where the Europe, it may be partly demographic, a huge amount of funding from economy has grown significantly. too: families get smaller and people government and acts as an intermediary Most of it, notes Basak Ersen, is are more inclined to give a portion organisation, working through local in the form of CSR activities and of their wealth to causes they are CSOs. There are also a number of ‘most big companies now have interested in, which combines with provincial funds, like the community CSR programmes.' development fund in Sindh, which is increased public sensitivity to funded by the provincial government The potential role of corporate giving social and ecological problems. It and makes grants to small and medium- has been significantly enhanced in is also partly due to governments’ sized NGOs working in Sindh. India as a result of the 2013 Companies encouragement of philanthropy as Act, which makes it mandatory for their own means of paying for welfare companies over a certain size to invest provision shrinks. Corporate foundations a minimum of 2 per cent of their net In Europe the growth of philanthropy profits in activities undertaken as CSR Corporate giving tends to be the has often been stimulated by (though such has been the growth of strongest force in institutional reducing the amount of capital philanthropy overall in India that the giving in Latin America, where required to establish a foundation and relative share of corporate contributions most foundations are corporate decreasing the use of endowments. to philanthropy has fallen to 15 per cent foundations, and also in Russia This has produced a crop of smaller from 30 per cent in 201116). where are still the major foundations. One of the most obvious players in philanthropy, especially Rosa Gallego sees a development in the characteristics of the foundation when it comes to supporting both relationship of the corporate and non- sector in Spain is the smallness fundraising foundations and NGOs. profit sector in Spain and a change of of most of its constituents. ‘Our Their budgets, reckons Oksana attitude on the part of corporate donors membership fee is EUR600 (USD714),’ Oracheva, will be higher than those which is likely, in turn, to force a review says Rosa Gallego of Asociación of private foundations. She sees of the relationship from the non-profit Española de Fundaciónes, ‘but even both growing involvement and side: ‘the reality is that corporates are so there are many organisations who growing sophistication among big funders of NGOs. But they have got can’t afford to be members. We have Russian businesses, ‘not only in the to the point, following the crisis, that members who have a EUR6,000 communities where they have business they are not ready to just give money (USD7,140) a year budget.’ More than interests but also beyond. At a recent away so they are saying, “we need a 80% of Polish foundations in 2103 had conference there was a discussion value proposition from you”.’ no endowment. on why business needs NGOs and how good it is for business to invest It should be noted that in many While reducing the amount of capital in the NGO sector in different ways, places (Turkey, South East Asia, the required to establish a foundation providing grants, moving from giving Middle East and large parts of Latin has been a spur to growth, it may direct help to funding through them, America), corporate foundations also have made foundations more and using foundation methods like are not clearly differentiated from vulnerable to economic shocks. grant competitions.’ other types of foundation.

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In Spain, foundations with a budget Now you’re starting to see Russian of less than EUR30,000 (USD35,700) WHAT CAUSES DO and Chinese foundations with global were seriously affected by the financial FOUNDATIONS SUPPORT? aspirations.’ Part of the Potanin strategy, crisis and their role in the sector was she observes, is not simply to reproduce ‘Education is the largest category,’ considerably reduced between 2008 the same kind of foundation which has says Hilary Pearson, followed by health and 2012. characterised the global north, but to be and social services. These same causes a ‘different kind of animal.' Financial resilience apart, the merits of occur again and again, sometimes a large population of small foundations with the order slightly rearranged – are debatable. Danny Sriskandarajah under the guise of health, education Are foundations supporting notes that New Zealand has ‘400 and ‘human services’, as it is called in advocacy and social justice the US. ‘All the statistics we have say odd foundations for a country with 4 issues? million people and for me that’s too that most funding goes to the safest many. If you are a CSO, it’s a huge ask areas – education, children, healthcare US foundations are more likely to to survey 400 websites and fill in 400 – not human rights, for example,’ says intervene in public policy than is the different types of form.’ Oksana Oracheva. Basak Ersen notes case in most other countries. The the focus on providing scholarships in Gates Foundation, a prime example, It should be noted, though, that Turkey. Among the exceptions is the remains exceptional on account of it’s quite common for a country’s Netherlands, with religion, international its massive assets and expenditure. foundation sector to be dominated aid and health as the principal The foundation has been active in US by a few larger ones, with a ‘long tail’ recipients of foundation funds. education reform since 1999 when of smaller organisations. In the US, it set about funding smaller schools, the top 50 (out of 86,000-87,000 Most Asian philanthropy is still very and it then moved on to improving plus) foundations were responsible for traditional, feels Laurence Lien, partly the quality of teaching and curriculum nearly a third of overall US foundation because outside Singapore there is reform. The results have been mixed, giving in 2014. a lot of what he calls ‘low-hanging causing the foundation CEO, Susan fruit’, obvious things to do that are Desmond-Hellman, to acknowledge politically uncontentious. The Lien recently that ‘the Gates Foundation Family Foundation is one of the few doesn’t have all the answers.' that engage in advocacy or attempt to influence policy (in the areas of early Not only that, such interventions childhood education and elderly and have also received criticism in that end-of-life care). they potentially give unaccountable Not only are private money undue influence over It’s worth noting that some of these public matters. An editorial in the the numbers categories are vague. Are ‘education’ Los Angeles Times complains that donors giving to build a new school ‘public officials shouldn’t be allowing of foundations or institution? To improve the quality them to set the policy agenda for of teaching? To endow a scholarship? the nation’s public schools.'17 This in the global Such detailed knowledge is seldom is a longstanding and widespread available, as Pearson points out: ‘A debate, but probably nowhere more south increasing, foundation could have given a grant to contentious than in the US. a university which might ultimately be but they are for a project with Canada’s indigenous While there’s no official restriction communities, but it’s gone through the on what institutional philanthropy beginning to university because most indigenous can support in South Africa, there have larger communities don’t have registered are probably more international charitable entities.’ foundations supporting social justice ambitions (...) issues than local ones, thinks Halima Not only are the numbers of Mahomed. There’s ‘a concerted effort and global foundations in the global south to get local foundations to think about increasing, says Jenny Hodgson, but the broader social justice issues. It’s a aspirations" they are beginning to have larger small and slow process. Independent ambitions. She points to the Potanin foundations can more easily take risks Foundation’s new global strategy on human rights issues.’ and Azim Premji’s Carnegie Medal as indices of this kind of change. ‘The Funders can sometimes support assumption previously,’ she says, ‘was contentious issues by approaching that it was a thing of the global north. them from another angle.

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A foundation in Brazil, for instance, doesn’t focus on gender discussions GRANTMAKING but on generating resources OR OPERATING? for women. In the US, in 2014, only 3,687 of a total In Singapore it’s of 86,726 foundations were operating What is the increased become the norm foundations.19 Outside the English- corporate philanthropy speaking world, however, foundations that you need to be that make grants are still in the supporting? minority. Basak Ersen estimates that In India, Ingrid Srinath feels, the seen to be a good ’99 per cent of Turkish foundations new legislation has ‘pushed back corporate citizen” are operational.' The most often cited philanthropy into less evolved reason for this is mistrust of NGOs, avenues.' There is undoubtedly more It should be about ‘using your but there are others, too. ‘First, it’s not money in the sector, but ‘there is a assets, your strengths. What’s in our tradition, we like to do things list of themes that the government the point in getting highly paid by ourselves,’ says Basak Ersen, ‘and thinks are good things to fund and, investment bankers to paint walls the history of civil society in Turkey corporates being corporates, they when you could hire a whole army is not very old.’ That said, he believes stay within the narrowest definition of to do it and make a better job.’ that ‘in ten years’ time we’ll see more those things.' In addition, the reporting grantmaking programmes, even one or structure disincentivises long-term In the Arab region, feels Atallah two true grantmaking foundations.' work ‘so it’s very much programme Kuttab, ‘CSR is still PR and we are money, 12-month cycles, direct service still one step forward, two steps Grantmakers are few and far between, delivery, in the company’s area of backward. I was very optimistic in in Spain, too, says Rosa Gallego. ‘For operations or around the factory or 2012-13 that we were getting more one thing, foundations run their own plant, and staying completely away of what we call social investment, programmes; for another, the vast from anything that is long-term, that is social businesses, but money is majority of foundations in Spain would advocacy, that is rights-based, that is driving it rather than values.’ be considered charities elsewhere. strategic in terms of going where the They are organisations that raise funds need is.' So, while corporate giving is likely to and operate programmes.’ become more and more important as Some of the same issues apply an element of global philanthropy, it Very few Chinese foundations in South Africa. While the Black has limitations. Apart from the fact currently make grants to other non- Economic Empowerment (BEE) that it is apt to follow trends rather profit organisations: 43.5 per cent legislation has stimulated giving than needs, it is reluctant to fund areas provide some grants to grassroots in South Africa, there is some self- which might bring it into conflict with organisations, but only 9 per cent are 20 interest at work. The BEE points the authorities and its tendency to solely grantmaking foundations. In companies get give them credibility operate its own programmes means Colombia, too, the norm is the operating to bid for contracts under the BEE that it contributes nothing to creating foundation, and this is also the case in system. While data is lacking, Halima a civil society ecosystem. the Philippines and in Indonesia. Mahomed is fairly sure that the BEE Ingrid Srinath notes a move towards legislation has ‘diluted the power of In fact, corporate giving may actually operating, rather than grantmaking, giving because it tends to follow the weaken NGOs’ watchdog role. If among new foundations in India. points, rather than what is required. that’s increasingly where the big Much of the new philanthropy in India There’s a lot of box-ticking going on money is, NGOs will hesitate to and in many emerging economies without any real impact happening.’ be critical of business. This view is derived from the proceeds of She notes that ‘questions about how is endorsed by Amitabh Behar of successful IT ventures, she notes, giving can be more systemic and the National Foundation for India. and – among institutions at least – strategic’ need to be asked all across Writing in Alliance in September this has produced a technocratic the foundation spectrum, not just of 2016, he notes an explosion in the style of philanthropy. This means an corporate givers. philanthropy sector and also the role of the Companies Act in increasing impatience with existing approaches In Singapore, ‘it’s become the norm resources from CSR. But, he adds: and an emphasis on market-based that you need to be seen to be a ‘Almost none of the resources invested approaches, measurable achievements good corporate citizen,’ says Laurence in this way reach the elements of and innovation – as Srinath puts it in a 21 Lien. Again, one of the problems is civil society that are working for recent CIVICUS report, an emphasis that it’s more a question of doing human rights, accountability of the on ‘technology-driven solutions over what’s expected than what’s needed. state or life with dignity for all, or more complex political approaches, Another is that the approach of many campaigning to empower excluded a distaste for which marks many companies is not well thought-out. and marginalized communities.’18 emerging philanthropists.'

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At the 2017 AVPN Conference, Shuichi Ohno of the Sasakawa Peace STRATEGIC PHILANTHROPY Foundation spoke of grantmaking as This is not a new idea, but it is gaining creating dependency among NGOs. ground both as a label and as a There are signs practice. In Australia, Krystian Seibert Grantmaking on the rise remarks, ‘there’s certainly a focus that grantmaking on strategic philanthropy, setting There are signs that grantmaking is is beginning to objectives and then working in a beginning to grow elsewhere, even if structured and focused way to achieve only to a very limited extent, as donors grow elsewhere, as them in partnership with others. realise the importance of grants, donors realise the However, there are still foundations both in encouraging a resilient and that operate using a more traditional capable civil society and in providing importance of grants, approach based around benevolence.’ – sometimes – a more effective Participants in the Johannesburg way of addressing a need. Jenny both in encouraging workshop noted that giving is more Hodgson believes that we will see a resilient and targeted and the work of the sector is more southern foundations engage in more ‘organised, systematised, visible grantmaking because of a handful of capable civil society and measurable.' This is partly driven leading organisations in China, Russia and in providing — by desire for greater efficiency in use and other places who are showing that of resources, partly by increasing grantmaking is an effective strategy – sometimes — a more demands for transparency. ‘it’s not just giving away power, it’s the best way to get work done.' effective way of addressing a need” The pressure to show results In Brazil, for example, the operating But the pressure to show results – foundation is the norm but the idea the pressure to demonstrate ‘more of grantmaking is slowly gaining Why the popularity of the precision in an imprecise art’, as Gerry ground. Notable here is the work of operating model? Salole puts it – can have its drawbacks. the Philanthropy Network for Social ‘Sometimes,’ he says, ‘it means they Justice, which comprises a number There are a number of reasons for begin to count stuff that doesn’t of institutions that make grants. preferring the operating model. First, matter and demonstration of impact Singapore is, as so often, an exception NGOs are seen as either incapable can trump long-term strategic work. among its neighbours: its foundations or untrustworthy. Second, corporate It’s an unfortunate trend because it tend to be grantmakers. donors in particular often prefer to conduct programmes in-house. Third, forces foundations to be much more Up to now, says Hodgson, ‘it’s as if the there is an increasing number of transactional. There’s a very easy grantmaking bit has been missed out. living donors with an entrepreneurial critique that implies that traditional People have gone from implementing to background who often want to do philanthropy is less strategic, less much more market-driven investment- things themselves rather than let thoughtful, doesn’t evaluate, but I’ve style approaches. I think grantmaking intermediaries do it for them. never met a foundation that opens needs to be re-embraced because it’s the window and throws money out. It about resources being able to land in Laurence Lien notes an important doesn’t exist.’ places where they can do things.’ drawback to this approach. ‘By running your own programmes, you Unfortunately, he goes on, the results She also thinks that this will entail a are in effect condemning NGOs to mania means that ‘quieter work, work redefinition of ‘what capacity looks like death. You have to grow the capacity you can’t talk about, that involves for civil society. Capacity used to mean of these NGOs to take on the work. some risk and therefore some failure, your ability to receive a grant from the Just imagine the situation where every is now being overtaken by shorter- Ford Foundation or fulfil the terms of a foundation has its own education term work where you can show results DfID audit.’ She sees it moving more in programme for primary schools, all but the results are predictable up the direction of capacity to be relevant, to designing their own curriculum – that’s front.' He sees this as one of the most be locally supported and able to receive such a waste. So a more developed marked tensions in the European and disburse resources both externally ecosystem would mean stronger NGOs foundation sector. ‘People who’ve and locally. ‘Receiving money from a and intermediaries to help strengthen been in the game for a while are southern foundation rather than a USAID them, philanthropists thinking about frustrated that they can’t do longer- type entity means that civil society is strategic grantmaking, coming term work any more, that they’re being also going to have to look and think together to grow promising charities, asked to show results too quickly.’ differently and have a much richer blend NGOs, and to develop capacity- of constituents than were there before.’ building organisations.’

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the US wouldn’t even touch it, nor would the for-profit sector because of the liability issue, and it was the philanthropy sector that developed the pills and the inter-uterine devices.’ Quieter work, work you However, as he goes on, ‘the fly in the water with all of this is that, for the most part, philanthropy tends can’t talk about, that to be risk-averse, it tends to not want to take on politically sensitive things, it tends to want to follow involves some risk and the fads. To me that’s a real missed opportunity.’ The consensus at the Mexico City workshop was that, therefore some failure, generally speaking, foundations are more risk-averse than they say they are. One way to mitigate is now being overtaken risk is to use an intermediary, which means you are donating by shorter-term work through another organization. Risk-taking in the where you can show global south ... Atallah Kuttab saw a ‘small window’ results but the results are of risk-taking in 2012 in the Arab region. ‘Local philanthropists and diaspora were venturing into and predictable up front” investing in areas like Libya, helping write the constitution, engaging local organizations to discuss their aspirations for a new constitution, etc – which was indeed very risky activity for local philanthropists making their first foray into philanthropy.’ But the It’s a trend that’s becoming more measurement criteria should be.' window soon closed with the waning pronounced in South Africa too, says of the Arab Spring. The reason is fear Halima Mahomed, in part – though not RISK: that this will affect their business. entirely – because of the requirements APPETITE OR AVERSION? ‘In 2012, people thought being close of the Black Economic Empowerment to the government might influence (BEE) program, which prompt local The Mexico City workshop identified their business negatively – most organisations to fund things with four forms of risk for foundations, private donors in the region have measurement criteria in order to score political, financial and reputational, business interests. Now it’s back to BEE points. ‘You hear CSOs, and even and risk of failure. The principal two the point that it’s secure to be on the philanthropic institutions that get for our interview respondents were government side. The big foundations funding from elsewhere, say the work political and financial. and big private donors are seen as they do can’t be measured this way, extensions of the ruling family or a rich but in order to get funding they have ‘Each sector has a set of attributes family and they are in bed with the to try and fit the square peg in the that define its comparative government rather than playing the role round hole without thinking about the advantage,’ argues Barry Gaberman. of venturing into new areas, pushing the harder stuff that is much more difficult One of philanthropy’s much-touted government to do things differently.’ to measure. But that’s where we advantages is that ‘it doesn’t have should be putting our funding.’ to deal with risk in the same way the Likewise, the willingness of public and for-profit sectors have institutional philanthropy to take The remedy? Part of it lies with those to, so it can take risks and it can fail. political risk in India is ‘negligible’, international funders who are funding The classic case was contraceptive observes Ingrid Srinath, with one local philanthropy and saying ‘we development,’ he says. ‘When you or two honourable exceptions. trust you to use the money, we trust moved out of basic research to The reasons are similar to those you to decide what you think the applied research, the government in already cited.

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‘This government in particular has ... and in Europe and the US shown itself willing to be extremely vindictive, so any dissent will attract a Spanish foundations don’t on the really harsh response – whether in the whole get involved in political form of a tax inquiry or legal action. issues, says Rosa Gallego, though Local participation Essentially they will make your life there are exceptions. ‘One of the difficult if you cross them.’ Second, areas in which foundations are very in Spain has really as elsewhere, much of the new active,’ she says, ‘is in disability, emerged since the philanthropy is from people who are where there are some foundations still in business and the risks to their that are politically outspoken. crisis. There are a businesses are considerable. Another reason, she feels, is that there is no But it’s more a case of defending the lot of local groups collective voice, ‘no means to say or rights of individuals than defending working in many do the right thing without attracting civil society.’ However, she foresees the too much individual retribution.' possibility that Spanish institutional cities and I wonder if philanthropy may need to become this is the beginning Srinath notes, however, a greater recent more politically active if it is to remain willingness to take financial risk, ‘placing relevant. ‘An interesting thing about of a change in the what in the West would be called Spain is that local participation has way we participate in big bets, and also a willingness to try really emerged since the crisis. There anything in pursuit of an overall goal are a lot of local groups working in society and how we like, say, malnutrition.' She notes the many cities and I wonder if this is the case of the institution she works for, the beginning of a change in the way we organise ourselves” recently established Ashoka University. participate in society and how we Ninety philanthropists ‘gave upwards organise ourselves. This may mean How important is it for of INR100 million (around USD1.6m) that at some point people will be foundations to take risks? each to fund a not-for-profit liberal arts ready to give more money, or they will university, without any track-record or be asking organisations to stand up If you aren’t taking risks, are you certainty it would succeed.' more for certain things.’ addressing real needs, wondered one participant in the Mexico City workshop. In China, private foundations are Greater media scrutiny in the UK has The issues we face require innovation slightly more willing to take risks than been an issue. Foundations are led and innovation involves risk. While public foundations, whose money by trustees ‘who, on the whole, are there is some innovation in the way comes from the public. As a result individuals doing this on a voluntary people are funding, there is not much they face stricter public scrutiny, while basis’, notes Carol Mack, ‘and I have in what they are funding. However, private foundations are answerable heard some foundations cite the both Atallah Kuttab and Shazia Amjad only to their board. Even so, domestic pressure that was put on their trustees note, funding services in preference to foundations are very cautious about as something that limits the amount rights-based campaigning is not always funding rights-based or environmental of risk they are willing to take when it to do with avoidance of risk. While most activity and such funding has typically becomes very intrusive.’ philanthropic money in Pakistan goes come from foreign donors. This to the traditional areas of education caution has been increased since the In Turkey, Basak Ersen notes, social and healthcare, Amjad feels that this government cracked down on NGOs attitudes can dissuade foundations is because they are often seen as the working on workers’ rights in 2015. from grasping what is seen as a greatest need. ‘They happen to be particularly thorny issue: ‘they don’t safe but I don’t think that’s the leading Carolina Suarez would like Colombian like to confront society.' reason why they’re supported.’ foundations to be more willing to take risks but they are linked to In the last analysis, foundations corporations. She adds: ‘The Chair of are individuals and have their own the board of the foundation should characters, argues Hilary Pearson. understand that their role is not to be ‘Most foundations,’ she says, ‘are not CEO or officer of the , it’s As a foundation, you ever going to be risk takers, just as completely different. They should put most people aren’t going to be risk on their philanthropy hat and say that should maximise the takers.’ What’s more important for if we want to achieve social change, ability to be patient, them, she feels, is their ability to make we need to take risks, to innovate use of their other attributes: ‘you more; we need to think all the time the ability to partner, should as a foundation maximise the what we are doing.’ advantages of the ability to be patient, the ability to focus the ability to partner, the ability to and follow a strategy” focus and follow a strategy.’

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to progressive private philanthropy,’ FUTURE ROLES OF argues Danny Sriskandarajah. FUTURE TRENDS FOUNDATIONS ‘Institutional philanthropy’s main purpose,’ he believes, ‘is to support a Four key roles emerged from what The Chan Zuckerberg diverse and resilient civil society both respondents had to say about the direction for itself and in order to serve those role of institutional philanthropy, all of who are most marginalised in society.’ While the foundation model is still a which, to a greater or lesser degree, vigorous one, some respondents feel depend on foundations’ willingness to Diversity is crucial because we’re its appeal may lessen in the future. take risks. seeing the development of large ‘I think there is some threat, which NGOs that are ‘hardly accountable’ I can’t quantify, that the foundation Innovation and ill equipped to speak for the vehicle is just not going to be as most marginalised, and resilience appealing to the next generation as One key role is – or should be – because ‘independent civil society it was to the grandparents or even innovation. ‘Our role is to innovate,’ is increasingly under threat from the the baby boomer parents,’ thinks says Carolina Suarez, ‘to create pilots encroachment of both governments Hilary Pearson. Danny Sriskandarajah and have an independent voice.’ and those same large operating says something very similar. He Clearly there are limits to what charities.' For Barry Gaberman, points to the example of the Chan philanthropy can do. ‘A lot of the the main argument is that civil Zuckerberg Initiative, set up by the things that need doing in a country society is important in its own right Facebook founder and his wife in 2015 with a very difficult geography are because it ‘provides another layer of as a limited liability company, and infrastructural projects like roads. institutions that safeguard against notes that the kinds of organisation Philanthropy can’t do that, it’s a job for authoritarianism.' established by Zuckerberg and his the state.’ peers ‘may well not be part of the world we know and what does that ‘You can’t depend on government Acting for the long term mean for the world we know?’ to be a key innovator,’ says Laurence Finally, foundations have a role in Lien. ‘We have one of the most acting for the long term. ‘Of course, He goes on: ‘Many of those who’ve effective governments in the world, there are some issues on which it’s made money recently have been but governments are bureaucratic, necessary to act urgently,’ admits disrupters of traditional institutions. they don’t take risks, period, and Carol Mack. ‘In addition, foundations They’ve emerged at a time when trust they don’t want to fail at anything are thinking creatively about the way in long-term institutions is dissipating because failure represents political they can use their longer time horizon anyway, so why create one? There are loss.’ So far, however, in his view, to best effect.’ Gerry Salole notes that some very interesting ways in which philanthropy has been too risk- European foundations are increasingly you can create change and you might averse to take up the challenge. supplying intellectual capital. not see endowed foundations as the most effective one.’

Filling gaps Carol Mack also notes this trend in the A second role for foundations is to UK: ‘We’re seeing people choosing to fill gaps in provision, not just for the fund through non-charitable vehicles – sake of ensuring some provision but companies that decide to fund directly also to put a spotlight on those issues, out of their CSR budget or the Mark ‘mobilising people to see that there is Institutional Zuckerberg type donor, deciding to an issue. In a sense, that’s advocacy give as private individuals and not really because the government philanthropy’s set up a foundation. I don’t think the responds to people, since popular main purpose is to numbers are big enough to call it a pressure might translate into votes.’ trend but it’s something that’s been support a diverse current for at least a decade.’ Supporting civil society and resilient civil The growth of A third role is supporting civil society. This opens up a more philosophical society both for mega foundations question – do you support the civil On the other hand, Barry society sector because of the services itself and in order to Gaberman predicts an increase it provides or because it is a crucial serve those who are in the number of mega- element in a pluralist society? The foundations (the two possibilities one does not contradict the other, most marginalised – alternatives to foundations of course, and both are important. and more large foundations – ‘Civil society is both means and end in society” are not mutually exclusive).

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There are currently four mega- just ordinary Canadians, what do you foundations, he says – those with know about organised philanthropy, assets of USD20 billion or more: what do you know about foundations? Gates, IKEA, Wellcome and La And the answer is zero. You ask them Caixa. ‘In many ways those mega to name a foundation and they can’t. foundations are very different because They really have no sense of the work We did a benchmark they can almost be like states. Gates is of the philanthropy sector, or why it study in 2016 to ask the biggest private donor to WHO.’ matters.’ She feels that, unlike in the He foresees that, in the next decade US (often a benchmark for foundation influentials, not just or so, ‘that number of four will sectors around the world), Canadian ordinary Canadians, probably double.' foundations are scarcely visible. There are no mega-foundations; there has what do you know about Philanthropication been no major intervention in public organised philanthropy, through privatisation policy by a Canadian foundation, like the work of the Gates Foundation what do you know Another trend remarked by Barry on the US education system. But she about foundations? Gaberman is what Lester Salamon feels this will change: ‘we have to be calls ‘philanthropication through ready for that and we have to have And the answer is zero" privatisation.' Philanthropiccation a story about why the foundation through privatisation can be defined sector matters, why the work is as a transaction in which essentially important, how the sector is credible unknown or viewed with suspicion, public or quasi-public assets are and legitimate. We have a lot of work except in the areas where its transformed in whole or in part into to do on that. That’s why data and immediate effects are felt. ‘If you ask charitable endowments under the research are important so we can tell in Bogota, for example,’ says Carolina control of meaningfully autonomous the stories through the numbers as well Suarez, ’all people are likely to think charitable instutions. This is more as through the stories themselves.’ about foundations is that they were widespread than once thought. Apart created for tax purposes.’ from well-known instances like the Krystian Seibert, too, feels that the healthcare conversion foundations average person in Australia ‘will One of the challenges Gerry Salole in the US and the savings bank have little idea about institutional sees for institutional philanthropy is conversions in Italy, Salamon and his philanthropy, apart from the fact the unrealistic expectations placed researchers have devised a wider that they go to a hospital or a gallery on it ‘by government, the public and categorisation which includes ‘debt and they see a wing named after journalists – that foundations, in what’s swaps capturing money from corrupt someone or perhaps hear a story on known as the dwindling of the welfare activities and so on.' the news now and then about a big state, are somehow going to be able They’ve identified over 500 examples donation. Often, when I say I work in to pick up the slack. Foundations around the world of philanthropication philanthropy, I get a bit of a blank stare.’ have essentially what I consider to be through privatisation and some of “swimming pool” money in comparison them, like La Caixa in Spain, ‘are quite Atallah Kuttab notes that the to the resources of governments, significant. The importance of this for organisation he founded in 2006, Arab which is “sea” money if you like. They me,’ he says, ‘is that resources are Foundations Forum, ‘has the largest have these very finite resources which scarce and this is a potentially pool of foundations in its membership, they can use in a very skilful and clever important new source of revenue but we haven’t carried our weight. way and hopefully they can leverage coming into the private philanthropy Probably if you walked down the street, other resources but on their own they field.’ nobody has even heard of it.’ have peanuts.’ He notes ‘a tendency to think of the sector as ATMs that Even where people have heard of don’t have a plan of their own, have no foundations, their view of them is PERCEPTIONS OF expertise, and are waiting for the next not necessarily favourable. While the INSTITUTIONAL great idea to fund.' Spanish media ‘ignores us more than PHILANTHROPY it treats us badly’, says Rosa Gallego, This is a perception that government Philanthropy by individuals – giving it’s often the bad news – corruption often shares. The consequent focus time, goods or money for others’ scandals and so on – that draw media on grantmaking, he says, ‘has created benefit – is generally well regarded and attention. AEF ran an opinion poll this myth that the main purpose widely practised. When considered recently on the public perception of of a foundation is the money it in its institutional approach, which foundations which suggested that dispenses, and in fact we’ve done implied a structured approach to ‘the closer people feel a foundation something to create these unrealistic giving, the picture often changes. ‘We is to a corporation, the worse the expectations. I think this challenge did a benchmark study in 2016,’ says perception.' Likewise in Colombia, is an important one because it Hilary Pearson, ‘to ask influentials, not institutional philanthropy is either gets overlooked very easily.’

27 4 Community philanthropy

This chapter focuses on community foundations and more informal community-based philanthropy, and the wide variety of roles that community philanthropy organisations are playing, from creating community to offering donor services.

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Community foundations are the Though the community foundation prevalent form of institutionalised sector in Canada is well developed, ROLES OF COMMUNITY community philanthropy, though they it doesn’t see itself as a growth PHILANTHROPY have adapted to local requirements sector, says Hilary Pearson. Generally and circumstances. Community successful at fundraising, she believes Creating community Foundations are grantmaking public that even community foundations charities dedicated to improving won’t be immune to the sorts of ‘The current political climate – the lives of people in a defined local pressures that UNITED WAY (a non- populism, migration, which are really geographic area. They are very unevenly profit that raises and invest funds about communities and the extent distributed, thriving in some countries to improve lives in its community) to which they are working – brings and not others. There is also a great are coming under as more people the question of what community deal of community-based philanthropy give directly. The value of giving foundations do to the fore,’ says happening informally. Halima Mahomed through a community foundation is its Jenny Hodgson. ‘Those issues are points out a ‘lot of traditional knowledge of the community but she going to force greater creativity.’ The practices, religious, communal and feels they ‘are going to have to work other side of that is that ‘if you’re a individual, throughout southern Africa, awfully hard to demonstrate that.' community foundation and you’re not that continue even if their forms in touch with your community you’ll change.' Increasingly community In other countries community cease to be valid.' She foresees that foundations that are not sufficiently foundations are doing less well. the focus of community philanthropy in touch with their communities run There are relatively few in Australia organisations’ work will need to move the risk of becoming irrelevant. because the legal framework makes from providing grants or services no provision for them. Turkey has only to creating or recreating a sense one community foundation, which of community solidarity and trust was established by TUSEV. While – a key word in the Global Fund for COMMUNITY FOUNDATIONS Basak Ersen feels there is ‘huge scope Community Foundations’ More than THE WORLD OVER for community foundations, we’ve the Poor Cousin? report.22 not had any kind of success with it The Global Fund for Community because it’s a new model. There’s the Many community foundations Foundation’s Community Foundation mistrust of institutions and people already do this. Canadian community Atlas reports 1,864 ‘place-based don’t understand the importance of foundations, for example, pioneered foundations.' Most of them are small, community work. Most of all, people the Vital Signs method. Drawing on the majority having fewer than five don’t feel able to give money to an dialogue with local communities, this paid employees. While they occur institution they don’t know and uses a number of indices to measure nearly everywhere, they are very don’t understand.’ the health of those communities. unevenly distributed. At the extremes, As well as identifying concerns, the there are over 1,000 in the US and only In Spain, what has hampered initiative also helps to strengthen 11 in Latin America. Although they bear the growth of community local relationships. Begun in 2005, a common name, in practice they have philanthropy, feels Rosa Gallego, the technique is now widely used often adapted to local circumstances is the prevailing view that the throughout Canada and beyond.23 across a range of activities – from public sector is responsible for acting as a conduit for local giving to welfare: ‘we have to overcome that providing a focus for the expression of before community foundations community concerns and community can flourish in this country.’ action. Needless to say, this split is not absolute and many see themselves as doing both.

Community foundations have prospered in unlikely places – take the 70 or so community foundations in Russia in what has been a fairly inhospitable political climate. In Russia, The current political climate – there are community foundations in relatively big cities, like Penza and populism, migration, which are really Tolyatti, which are probably the best established and act as role models about communities and the extent for the others, but the majority are in smaller cities and rural areas, notes to which they are working – brings Oksana Oracheva, where there is no big corporate donor and they have the question of what community often forged their own distinct identity as a focus for community activity. foundations do to the fore” 29 WINGS Global Philanthropy Report Community philanthropy

Bringing local agency and Offering donor services He refers to these as local resources to bear on such as DAFs ‘fundermediaries’, funding intermediaries that exist explicitly to community issues An advantage of community channel donor funds more directly, Hodgson feels that the main foundations over other intermediaries, and ideally more democratically, development in community in Hilary Pearson’s view, is that they to the end recipient: ‘I think a huge philanthropy, and the direction in which promote donor advised funds (DAFs), priority over the next few years will it needs to keep moving, is ‘towards a which give donors a greater sense be to build these next-generation kind of multi-constituent civil society, of permanence concerning their “fundermediaries”. We need to think putting an emphasis on local resources donation. The Community Foundation through how we build effective and local agency as equally important of Singapore, in fact, acts chiefly as philanthropic institutions closer to the if not more so than external money.' a repository for DAFs (it now holds issues or the geographies we want She believes this is happening, that over 100, says Laurence Lien, and is to fund in, ideally with participatory community philanthropy organisations growing at the rate of 10-12 new funds or other forms of grantmaking ‘are starting to be not just money-raisers per year). It acts as both funding pool that challenge the typical power but also bridge-builders, trust-builders.' and source of advice for significant relationships in the donor world.’ givers who want to give but don’t She sees the real question in these know how. ‘We are trying to see how terms: which are the institutions that we can make it more democratic, more Global north community are meeting people and organisations self-help and community-driven.’ foundations with where they are and seeing them international funds in a linked up way? ‘It shouldn’t start with money, it should start Barry Gaberman notes that an with people, what they have and increasing number of US community what they want to do, and what foundations now have international would make this happen. This really funds. At over USD8 billion in brings us back to grantmaking as Community assets, the Silicon Valley Community an effective way to demonstrate Foundation (SVCF) is often in the top the power of philanthropy.’ philanthropy 10 of international giving of all US foundations (it was second behind organisations are the Gates Foundation in 2014). Bringing together starting to be This is part of ‘an incremental institutional and increase in the US in the amount of individual philanthropy not just money- philanthropic dollars that goes to Community philanthropy is also raisers but also international activity.' More significant an area where different forms of still, in his view, there has been ‘an philanthropy, the institutional and bridge-builders, increase in the amount of money the individual, intersect to potentially that goes directly to in-country exciting effect. Hodgson offers the trust-builders” institutions as opposed to developed example of the Kenya Community country intermediaries.' Findings Development Foundation (KCDF). from a joint Foundation Center- 24 ‘You can see in its institutional design HOW DONORS IN THE Council on Foundations study published earlier last year bear out how it is bringing together those GLOBAL NORTH CAN different actors because its funding this impression. Between 2011 and base is made up of external and local REACH RECIPIENTS IN 2014, says the study, grants awarded donors. The local donors include THE GLOBAL SOUTH by large community foundations for people with considerable wealth international programmes more than who don’t necessarily want to set up doubled, from USD103 million in 2011 Devolving power to to USD223 million in 2014. a foundation; middle-class people ‘fundermediaries’ giving to various kinds of funds; and ‘Another reason I think that’s communities that have created their One way of doing this is to work important is that it indicates a own funds and invested them in the through intermediaries in the rethinking about community in many KCDF endowment.’ This approach global south. ‘We need to induce of these institutions,’ says Gaberman. is part of exploring how small donors based in the global north ‘It’s defined not just in a place-based foundations can ‘disburse significant to relinquish power and to devolve way but also in terms of communities resources in a way that is effective and the responsibility for funding of interest and that’s certainly the reaches the people you want to reach to institutions that are closer to hallmark of the way SVCF looks at it.’ rather than just dumping a single grant their constituents,’ says Danny on a successful NGO.' Sriskandarajah.

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Community philanthropy shouldn’t start with money, it should start with people, what they have and what they want to do, and what would make this happen. This really brings us back to grantmaking as an effective way to demonstrate the power of philanthropy”

31 5 Beyond grants: different uses of philanthropic money

The different financial means philanthropic organisations are increasingly using to achieve their ends are the focus of this chapter. These include venture philanthropy, impact investing and socially responsible investment. It also looks at the growth of social enterprise/social business, which is seen as highly significant in many countries. Finally, it discusses the implications of the increasing ‘blurring of lines’ between the non-profit and for-profit sectors. 32 WINGS Global Philanthropy Report Beyond Grants: different uses of philanthropic money

Using philanthropic money in different While it is more youthful in terms civil society as a good in itself. Its ways is becoming an increasingly of institutional philanthropy than its proponents would argue that venture important part of the funding counterparts in Europe and the USA, philanthropy’s emphasis is precisely landscape around the world. This is Asia is probably the most dynamic on building organisations rather not just a matter of money, but of a region when it comes to developing than supporting projects – though growing realisation that traditional what AVPN terms ‘social investment’, the specific functions of those funding organisations may have more or all the varied uses of capital, organisations remain central. to contribute than grants. Increasingly, including grants, to produce social a hallmark of organisations working good. The 2016 AVPN survey of 111 of for social good is hybridity – the its members reported USD2.17 billion ‘blurring of lines’ – with organisations of financial capital ‘deployed across all IMPACT INVESTING with different legal forms adopting a sectors and markets.' Impact investing can be defined broadly variety of means of working. as the use of assets other than grant Unfortunately, talking about these new funding to produce social and financial approaches can be difficult because VENTURE PHILANTHROPY returns. This definition could also be of a lack of clarity about terminology. applied to the term ‘socially responsible ‘Terms like impact philanthropy, The venture philanthropy approach investing’ (SRI), which is the subject programme-related investments, is characterised by three core of the next section. According to Net 26 mission-related investing, venture practices, according to the website of Impact, ‘the key differences between philanthropy, social enterprise, etc, the European Venture Philanthropy the two lie in the strategies used to tend to be used interchangeably,’ Association (EVPA): tailored financing, accomplish positive outcomes as well says Barry Gaberman. One result organisational support, and impact as financial return expectations.' SRI of this lack of clarity is that all the measurement and management. refers to the practice of integrating different approaches can be tarred The willingness of the founders of environmental, social and governance with the same indiscriminately EVPA and its sister organisation the (ESG) factors within investment sceptical brush. Thus, in South Africa: Asia Venture Philanthropy Network analysis to avoid investing in companies ‘There are some who are sceptical (AVPN) to take an inclusive rather that have negative impacts on the still and who say “why are we mixing than a dismissive approach to existing environment and/or society. ‘Impact business and philanthropy?”’However, ways of doing philanthropy (seeing investing ... goes further by making Gaberman points to Lester Salamon’s venture philanthropy as one approach investments in organizations, companies Leverage for Good as an important among many, not insisting that and/or funds whose core mission is to first attempt ‘to come up with a they have the only answer) has no generate social and/or environmental terminology that’s consistent.'25 doubt helped venture philanthropy impact alongside financial return.’ to prosper. In any case its core practices are not a million miles from Impact investing is moving forward, the practices of most foundations. but it’s definitely an idea that is waiting Most venture philanthropy does to reach maturity. Hilary Pearson feels involve making grants rather than that it is happening, but ‘I can’t tell you using foundation assets, as well as that it’s happening in a significant way offering non-financial support. among foundations yet. We’re working Increasingly, on it as an association and we have a Since its establishment in 2004, project under way with our colleagues a hallmark of EVPA has grown rapidly. It now has at Community Foundations of Canada 210 members. Despite some initial to produce an online guide to impact organisations ambivalence from more traditional investing, trying to answer some of the European grantmakers, it has become basic questions that foundations ask.’ working together an accepted part of the landscape, to for social good the point where a venture philanthropy There’s strong interest in impact approach has been adopted by a investing in Australia, notes Krystian is hybridity with number of existing foundations. With 385 Seibert, ‘and many of our members members, the rise of AVPN, founded in are looking to undertake it. It’s a small organisations with 2010, has been more rapid still. part of their portfolio, but some of the smaller ones have got the objective to different legal Perhaps the most common criticism be fully invested in impact investments of the venture philanthropy approach and a lot of our members are doing forms adopting a is that it treats NGOs instrumentally small proportions of their corpus.’ variety of means – that is, it supports civil society He feels it’s getting to the stage where organisations to perform a particular if a foundation doesn’t do it, people of working” function rather than supporting ask why.

33 WINGS Global Philanthropy Report Beyond Grants: different uses of philanthropic money

Carol Mack uses the term social Why the slow progress? A further obstacle to Chinese investment, which she defines as foundations’ using their assets for ‘lending money to an organisation at Nonetheless, impact investing investing with a social purpose is that a below market rate. You will expect remains a minority pursuit in most the regulatory environment does not to have some or all of that money places at the moment. Foundations encourage it. Foundations must make come back to the foundation and you are mostly dipping a toe in the investments to protect their assets, will also expect some social return.’ water rather than diving in, partly says Peng, so boards are usually There has been ‘quite a lot of action in through caution and partly because unwilling to make risky investments. the UK’, she feels. ‘ACF [Association of the lack of what are seen as However, she says, there are ways to of Charitable Foundations] found good investment opportunities. work around this. A foundation can set GBP50 million [around USD67m] Krystian Seibert notes more supply up an impact investing company, for worth of committed investment when of investment funds than demand instance, and have the company make we researched this a few years ago for them in Australia. Laurence the investments. and a surprisingly large number of Lien says much the same thing. trusts and foundations that have made Caution isn’t the only reason. Impact social investments.’ She also notes investing is more a topic of debate at that social investments might not be SOCIALLY RESPONSIBLE conferences in Russia than a practice, made in preference to grants but as a thinks Oksana Oracheva, principally INVESTING (SRI) way of sparing a grants budget. ‘Some because most Russian foundations and foundations think that grants are such Gerry Salole believes the vast NGOs are not endowed and so don’t a precious currency now that if you majority of members of the European have investable assets. The same is can get something off the ground by Foundation Centre (EFC) are at more or less true in China, Spain and making a social investment rather than least doing negative screening – Singapore, where most foundations a grant, then you should do that.’ ‘not funding weapons, not funding don’t have significant assets to tobacco, or what have you – and there Danny Sriskandarajah feels that invest. While the law requires Chinese is now a transition from negative impact investing is happening, but foundations to be endowed, says screening to positive screening and not necessarily through foundations. Yanni Peng, the level is currently set there’s even a group that is beginning ‘There are a lot of people who share fairly low. If you set up a foundation at to play with full engagement with the the goals of private philanthropy or regional or provincial level, you only companies they invest in rather than traditional philanthropy,’ he says, ‘but need CNY2 million (USD306,000); withdrawing from companies doing they are not necessarily doing impact at national level you need CNY50 things they don’t like.’ Foundations, investing through the traditional route million (USD7.6m). However, the he believes, ‘are moving along the of creating a private foundation.’ situation may change at the end spectrum.’ European foundations of this year when the level of have evolved differently from those endowments will be raised to CNY8 in the UK or US, he argues (the Bosch Potential of impact investing million (USD1.2m) and CNY100 million Foundation, for instance, is the owner (USD15.2m) respectively. of the Bosch multinational company, Two significant developments in not the other way round) and ‘the idea 2017 were the launch by Japan’s that you would use your total assets Sasakawa Peace Foundation of an is not so foreign and is beginning to impact investment fund to the tune have some serious traction.' of USD100 million, which will focus on gender issues; and the Ford Foundation’s announcement that it will devote USD1 billion (a twelfth of its endowment) to impact investing over the next ten years. The Narada Foundation in China gave two soft loans to social enterprises in 2015 There are a lot of people who share and 2016. The US-based Heron Foundation’s commitment to devote the goals of private philanthropy all of its assets to impact investments is well known. Apart from being or traditional philanthropy but they significant in themselves, such high-profile commitments are likely are not necessarily doing impact to open the tap further. investing through the traditional route of creating a private foundation”

34 WINGS Global Philanthropy Report Beyond Grants: different uses of philanthropic money

The divest-invest movement is market and we’re just beginning to clearly significant in any discussion see that happening.’ In September THE GROWTH OF of SRI. While there is continuing 2015, the Japanese Government SOCIAL ENTERPRISE/ and fairly involved debate about Pension Investment Fund, the world’s SOCIAL BUSINESS whether it is better to disinvest largest pension fund, with a pool of or to try to influence companies USD240 billion, became a signatory Another significant index of changing with questionable practices by of the United Nations Principles practices in the use of capital for social engaging with them, the numbers for Responsible Investment and is benefit is the development of social of foundations choosing to disinvest making ESG-related decisions in enterprises, which are often supported is growing. According to the various investments. through impact investing as well as DivestInvest Philanthropy website, grants – though there are definitional 155 foundations, family offices and Endorsing Pearson’s view, a recent difficulties here too. The workshop charities have signed the Divest- article in the Financial Times quotes at the WINGS Forum in Mexico City Invest Philanthropy pledge to Rory Sullivan, the head of standards in February 2017, for example, spent divest from fossil fuels and reinvest and sustainable investment at FTSE more time discussing what social in ‘climate solutions and the new Russell, as saying that ‘a trend towards business is than it did discussing its energy economy.'27 large capital allocations into these merits or demerits, before arriving at strategies by the world’s leading funds a working definition of a cause-driven indicates a qualitative shift. “When business which puts all the dividends we write the history of this, we will back into the enterprise. see 2017 as the year in which [ESG investing] reached a tipping point,” However you define them, it’s clear says Mr Sullivan.’28 they are a growing presence in many areas. While the social enterprise sector The numbers is fairly new in most countries studied of foundations Why the slow progress? in the AVPN report on the landscape of social investment in Asia, the choosing to This may be optimistic. As Matthias study gives a figure of 2 million social Fiedler, chair of ethical investments enterprises in India, 51,000 in Japan disinvest is at Edge Funders, puts it, many and 60,000 in the Philippines – though growing... 155 foundations see their capital as a Laurence Lien doesn’t feel the sector is vehicle to generate returns rather growing significantly in East and South foundations, than as ‘a lever for change’, and East Asia. The governments of Hong simple conservatism on the part of Kong, Singapore, South Korea and the family offices and trustees and investment managers is Philippines are moving to stimulate the another factor.29 Many foundations development of the social economy charities have are anxious that ESG investments either by easing regulations for the pledged to divest might not produce the level of return sector or by facilitating investment that traditional ones do, and they lack in it or by providing seed capital for from fossil fuels experience in assessing the prospects start-up social enterprises. Hong Kong of an ESG investment. has a USD64 million Social Innovation and reinvest in and Fund for this ‘climate solutions A report in 2016 by Commonfund purpose, and in South Korea, gov- and the Council on Foundations into ernment, corporations and civil society and the new foundation investments in the US have a collaborative fund to stimulate suggests progress might be slow. It social enterprises. energy economy’" found that out of 123 private and 80 community foundations surveyed, ‘Certainly the social enterprise only 15 private foundations and 8 space is buzzing in India,’ says Ingrid Potential of SRI community foundations ‘sought to Srinath. ‘There are dozens of new include investments ranking high social enterprises every month.’ The There’s some sense that what is a on ESG criteria.' When it came to FASES report estimates some 20,000 trickle at the moment might easily screening out investments inconsistent social enterprises in Australia.30 The turn into a flood. Hilary Pearson with the institution’s mission, the figure for the UK is around 70,000, thinks ‘the key change will be when respective figures were 14 and 17. according to 2015 figures, while major institutional start Only 25 private foundations and 20 a new study by Social Enterprise to get in the game. If the pensions community foundations allocated Scotland finds 5,600 Scottish social funds and banks move into this more a portion of their endowments to enterprises, a number that has increased heavily, that’s going to change the investments that further their mission. by 400 in 2016.

35 WINGS Global Philanthropy Report Beyond Grants: different uses of philanthropic money

Atallah Kuttab feels there are plenty Why the slow progress? The latter, in fact, is a key obstacle to of examples in the Arab region – even social enterprises at various stages of if that’s not what they are called One reason for the slow growth of their development in many places. there. In Saudi Arabia, for instance, social enterprise in East and South ‘it’s amazing how much what I would East Asia, according to Laurence Lien, In the Arab region, though ‘people talk call social business there is but it’s is ‘because many don’t survive.' This about them, still we are not seeing not framed in that way. Markets being may be a more common problem the money flow into them’, says built, housing for young couples from than proponents care to admit. It’s Atallah Kuttab. One of the reasons poor neighbourhoods – this is all done a relatively new sector, and most why not is that ‘people forget that by endowment.’ social enterprises are young, while social investment entails risk and the supporting infrastructure has not there might not be profits right away One downside of social enterprise, always been worked out. In addition, and one needs to be in for the long identified in the Mexico City workshop, reconciling the social and economic haul, patient. Maybe we are not up is that it tackles only the consequences demands of social enterprises is front about the profit side. When we of problems rather than their causes. difficult. As Lien points out, ‘having a say impact investing, people hear the Another point raised in the workshop single bottom line is difficult enough. investing, but impact happens at a was that it is drawing away funding from When you have a double bottom line it price, which might be lower profit.’ areas such as advocacy and human just topples you over.’ rights that aren’t so amenable to the The Mexico City workshop noted social business approach. It’s debatable, In Canada, too, social enterprises a critical role for infrastructure though, how serious an issue this is. face an uphill struggle. The main organisations in bringing traditional 31 Those who fund social enterprises are obstacle, according to a 2013 report, philanthropy and social business probably unlikely to fund rights work in is absence of a distinct legal structure. together to see what they can any case. Would-be Canadian social enterprises take from each other. Some social can choose to be either charities businesses, one participant reminded or businesses. If they choose to be the group, are just as sceptical Potential of social enterprise charities, they aren’t allowed to make about traditional philanthropy as any profits; if they choose to be Kuttab feels that social enterprise philanthropy is about social business. companies, there are no tax credits has great potential in the Arab and it’s difficult to access capital. region. It bridges, ‘one, very high social need; second, linkage to the private sector because that’s where jobs are; and, third, government’s not clamping down on it so you can do lots of good things there and divert lots of money without being disruptive, in fact solving very important social problems.’ Many social enterprises His emphasis, in talking about social enterprise, is more on its ability to create jobs than it would be in many don't survive. countries. ‘It has its problems because at the moment lots of money is being spent on training rather than on Having a single bottom placement and you will very quickly reach saturation if that happens. It needs lots of dynamism and the line is difficult enough. involvement of the private sector in doing their share and agreeing to employ trainees.’ Crucially, he sees When you have a it as a potentially useful platform for collaboration between philanthropy, the private sector and academia. double bottom line it ‘SAANED continues to engage businesses to create more social business and more social value in just topples over" regular business. If you want to have any impact in society, that’s where things are.’

36 WINGS Global Philanthropy Report Beyond Grants: different uses of philanthropic money

• The realization that many-faceted THE BLURRING OF problems will need more than BOUNDARIES just the experience and resources that philanthropy can draw on. These developments are part of a At the 2017 AVPN Conference, blurring of the boundaries between Shuichi Ohno of the Sasakawa Institutional sectors. Both Carol Mack and Atallah Peace Foundation remarked that Kuttab emphasise the importance we live in a low-interest world and philanthropy of this trend. ‘I believe this is the traditional foundation investments way to go in the future, says Kuttab. are producing smaller returns at has more to ‘We are looking at a very small pie a time when more resources are which is philanthropy and there is a contribute to the needed. Atallah Kuttab, too, notes very big pie out there which is the the need to bring as much capital whole GDP, which could be moved creation of good – what he calls the ‘very big into a more friendly way of investing pie’ – to bear on the solution of societies than money for social and economic problems that seem increasingly equity.’ An increasing number of large and intractable. simply money" businesses have social purposes and might be in a for-profit vehicle, For Gerry Salole, it’s not just about the notes Carol Mack. In recognition philanthropy sector acquiring a bigger of this trend towards the blurring range of tools and allies. Institutional of boundaries, ACF has redefined philanthropy has more to contribute its definition of what constitutes a to the creation of good societies than grantmaking foundation to include simply money. He, too, notes a blurring those that make social investments. of boundaries within the sector and the development of hybrid forms. ‘We Ingrid Srinath talks of ‘a whole are seeing a trend for more conveners, continuum – social enterprise, social more people recognising that they business, there’s for-profit stuff are not just grantmakers. They are that has some social goal, there’s investors, they are partners; their not-for-profit stuff that has a more capacity to fund independent thinking businesslike character.' AVPN, too, is is being used more. Van Leer, for working on what it calls the continuum example, is becoming more of a think- of capital, where there is no clear tank than a grantmaking institution.’ distinction between for-profit and non-profit activities. He also feels the blurring brings with it ‘less of an obsession about the There are a number of contributory private nature of the money, so you factors to this development: begin to see foundations created by • The growing number of the privatisation of public resources entrepreneurs who are turning or, something even more exciting, philanthropist and their governments turning money over adaptation of business practices – to a foundation saying, “you can which is what they know best – do this better than we can”.' This to their new activity. is a trend he sees happening in Europe ‘and in very sensitive areas. • The relative underdevelopment Integration of migrants is a very of professional foundations in interesting area, so is radicalisation.’ emerging economies, which has Moving away from an obsession with made investment, rather than money, he feels, allows foundations grantmaking, seem a better option to play to their other strengths. for producing social good.

• A desire for effectiveness. The founders of EVPA, for example, were largely motivated by the desire to make their giving more effective. Businesslike standards of assessment of NGOs’ work seem to many to help achieve this.

37 6 Collaboration

This chapter focuses on collaboration, both within the philanthropic sector and between sectors, and the many different reasons why it is difficult. It also looks at the Sustainable Development Goals, which explicitly encourage collaboration, though instances are still few.

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Collaboration, both among ‘Such a unified regional vision philanthropic institutions and with COLLABORATION AMONG is critical if the initiative is to be other sectors, is increasingly touted as FOUNDATIONS replicated in the future,’ says Suarez. a way for philanthropy to maximise its ‘We understood the importance of In Colombia, Asociación de impact, making the best use of limited the leverage of working together, and Fundaciónes Empresariales (AFE) has resources and bringing together the positive effect of AFE foundations been making progress, despite the the respective skills of the different working with the same purpose of tendency of corporate foundations, sectors in an effective way. advancing the quality of life in the in particular, to act alone. They have project’s chosen communities.’ However, interviewees for this study launched a joint project, Learning to had much more to say about why Work Together (a significant title). While some collaboration is happening collaboration is difficult than about It’s a common project whose focus is in South Africa – ‘there is some existing collaborations. Restraining water, says Carolina Suarez, though it issue-based collaboration, there is an factors include cherishing of will have wider implications in terms of educational collaborative, there are foundation independence, the education, income generation projects, some infrastructure organisations that investment of time needed for etc. The point of the project is that are trying to support collaboration, success, and lack of staff resources the foundations have understood that there are efforts between international at philanthropic institutions. Basak ‘they cannot fund only in their own foundations based in South Africa and Ersen is unequivocal. There is little regions or where they have interests.' local foundations’ – it isn’t happening collaboration among foundations in Though there is an independent enough, says Halima Mahomed. She Turkey and with the government, none operator, the funding foundations will cites leadership as the key factor in at all. Foundations are no exception continue to be involved through an creating and sustaining collaborations. to the general rule of mistrust that he executive committee and an assembly ‘When you find like-minded individuals sees at the root of most activities in with representatives of the 17 whose thinking is aligned on the same Turkey. ‘People don’t trust foundations, participating foundations. The project sorts of goals, collaboration is easier.’ foundations don’t trust people, and seeks to foster a consolidated vision foundations don’t trust each other.’ of a region, and this will be the driving In the UK, ACF has got 14-15 issue- force of the participating foundations’ based, member-led networks on commitment to the project. topics like criminal justice, children and young people, and asylum-seekers and refugees. ACF has been putting in a modest amount of resources to nurture those networks, says Carol Mack, and it has paid dividends, she believes. ‘Off the back of that, we’ve started to ask ourselves what Collaboration is increasingly would happen if we took a more cross-sectoral approach, so at the moment we are scoping the potential touted as a way for for foundations to work together to address poverty.’ The important thing with collaboration, she feels, is to go philanthropy to maximise ‘where the momentum is and where the interests are.' its impact, making the best For Barry Gaberman, the key question is whether there is genuine partnership or not. Not everything that looks like a use of limited resources collaboration really is one, he believes. ‘When a group of foundations fund and bringing together an activity, they talk about it as if they are collaborating, when really it’s joint funding. You have partnership the respective skills of when you have the institutions that are going to provide resources in the room along with the organisations the different sectors that are going to be carrying out the work.’ He notes the difficulties entailed by such partnerships – the inherent in an efficient way" parochialism of foundations, the

39 WINGS Global Philanthropy Report Collaboration

COLLABORATION BETWEEN PHILANTHROPY AND GOVERNMENT One notable example of cross- Millennials, who may be either sector collaboration is the Vibrant Communities initiative, hosted by setting up foundations or taking the Tamarack Institute, which has been around for the last decade and over their direction, tend to be now operates in 13 Canadian cities, bringing business, philanthropy and more disposed to collaborate" government together at municipal level on poverty reduction strategies. Its local focus may offer a clue that collaboration can be easier on a unequal power relationships, which All of that means you can be super- smaller, municipal scale. mean that ‘people have to give up a confident in your own way of working little bit of their sovereignty’ – but he and less confident in someone Another good example is the work of believes things are changing and there else’s, so relinquishing power and the Cripplegate Foundation in London, are more real collaborations. collaborating is a challenge. It noted by Carol Mack. The Cripplegate is happening but it’s a perennial Foundation exists to address need in a Collaboration can be a way to offset problem. It can’t be taken for granted, particular part of London and has now risk because it makes individual you need to be very open and pledged to ‘take an active role in local donors less visible. On the other hand, transparent.’ Part of the job of the EFC partnerships which tackle poverty and one interviewee felt that collaboration is ‘to encourage more collaboration, inequality.'32 ‘They saw that the need can increase the risk in some but you have to recognise that there was much greater than they could circumstances, since you can’t control is a problem here, a genuine tension, cope with so they fundraised in their the other partners’ actions. then you can work around it. You can’t area and they’ve been very successful pretend that it’s easy or that it doesn’t in bringing in other foundations and Why is collaboration exist or doesn’t matter.’ companies that have an interest so difficult? in that area, local government and In Canada, says Hilary Pearson, few residents, too. It’s a great example In Danny Sriskandarajah’s experience, foundations are well staffed and of a place-based collaboration that’s ‘private philanthropy organisations people don’t necessarily have the skills cross-sector.’ She also offers examples have the least incentive to collaborate to manage collaboration. ‘It’s not one on a national scale. There is the ‘I Will’ and in most of the examples I’ve of those things you just do – to be campaign, funded by the Big Lottery seen are the worst at it when they successful at collaboration you have Fund, the Cabinet Office and a number do try.’ They are almost designed to be very mindful and trained.’ In of foundations. The Living Wage not to collaborate, he argues. They addition, family foundations tend to Campaign is both national and cross- have been set up to be independent. be run by a group that is essentially sectoral. If the issue is national in scale Carolina Suarez also notes that the closed and it can be difficult to bring and sufficiently specific, you can get habit of unaccountable independence in new ideas. collaboration, she believes. makes foundations little disposed to collaborate. Moreover, if they are She also feels there is a tendency In India Ingrid Srinath sees two ways in corporate foundations, as AFE’s among some foundation founders which collaboration between the two members are, they imbibe the spirit of an older school to feel that their sectors is beginning to happen, though of from their parent philanthropy is private. This may be there are drawbacks in both cases. companies, she believes. changing, though. Millennials, who ‘One is government encouraging may be either setting up foundations philanthropy to direct its attention to Gerry Salole, too, sees a tension or taking over their direction, tend things that should be government’s between a ‘well-understood’ need to be more disposed to collaborate. responsibility’ (a trend that seems to for collaboration and the difficulty If you’ve joined Philanthropic be almost universal). There’s also what of making it work. ‘The DNA and Foundations of Canada (PFC), she she calls the ‘rather naive utopian the music foundations play is about points out, ‘you’re already motivated belief by philanthropists and NGOs autonomy. They are very proud of to look at collaboration.' Moreover, that “we will develop a model then their ability to move fast, to have their ‘in the last five years we’ve seen the government will help us take it to own decision-making processes, to be development of a lot of funder affinity scale”. Some of it gains traction, but experts in their own particular field. groups’, which wasn’t the case before. most of it is just wishful thinking.’

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A lot of foundation activities in Russia Money is not an issue in Singapore, are approved by local, regional or he says. The government feels it has Whether foundations see any incentive federal government, but for the both the money and the solutions. to collaborate depends on how they most part government has no direct ‘It’s different in the countries around see their role, says Sriskandarajah. involvement. Occasionally, there is us. They do want philanthropy to be If they see their role as simply to more direct involvement when officials financially involved because they are disburse charitable giving, ‘they’re actually participate in activities really in deficit and, on top of that, unlikely to have sophisticated or initiated by NGOs. The problem is they struggle to be effective’ because robust relationships with any other that continuing dialogue depends on of lack of capacity and corruption. sectors. But if they’re there to individuals within the government Here, he feels, there is more promising make some sort of greater change agencies in question rather than material for real collaboration. including policy, they’re going to have being a matter of policy. The majority ‘Philanthropists are often people who to navigate how they interact with of government officials are either have run successful businesses and various stakeholders.’ neutral or not interested. What they can use the same skill-set to run drives dialogue, she believes, is the philanthropic programmes.’ Since independence in 1965, Laurence government’s need for money. Lien feels that the Singaporean At the moment, in Turkey, government doesn’t see much role In Spain, though the spur was initially collaboration with the government is for philanthropy. There is a tradition money, cooperation seems more not even an issue. ‘You can’t talk about of strong, paternal government genuine. ‘Since the crisis, when public collaboration with the government,’ and this has tended to ‘crowd out funds have become so scarce,’ says says Basak Ersen. ‘It’s just getting individual action’ in the form of Rosa Gallego, ‘the public sector worse and worse. On the contrary, philanthropy. In the early days, has approached foundations to say they are becoming enemies. It’s a one- government nationalised the schools, “how can we cooperate?” That’s way street at the moment. Everything much of public housing and much happened in science, for instance, with comes from the government and you of healthcare. That’s changing, he foundations that support research.’ have to accept it or ignore it. There’s feels, as social issues have become This has resulted in a joint national no real communication.’ more complex and government itself working group. Here, it’s not a question struggles with them. Still, they tend not to look to the non-profit sector of dipping into foundations’ pockets What is hindering because not many of that group of for solutions, though he feels they’d foundations have money, she says. collaboration between be very happy for philanthropy to philanthropy and participate in any projects they’ve While relations between philanthropy government? already designed provided they don’t and government in Pakistan are ‘meddle with policy.' ambivalent, there are NGOs that work While there is often a willingness well with government. In Punjab, for to be on good terms, even to make There is a strong contract model In example, where state schools are common cause, there is a certain Singapore, he says, where service failing, the state government has wariness on both sides and, at times, provision is outsourced to NGOs, asked a number of NGOs to take over a tendency to put self-interest before but again the government regulates their running. Several businesses are the interests of the partner. A common it very closely, ‘setting the funding also supporting this initiative, says complaint from the philanthropy side parameters and controlling the Shazia Amjad. Moreover, ‘some of this is that government sees philanthropy interventions.' To the extent that is funded by government, but not all, as a convenient pocket that it can the Singaporean government does so philanthropy money is topping it put its hand into to supplement the want to encourage philanthropy, it’s off. This has been going for a little public purse. While it’s a truism to for symbolic rather than practical over a year and it’s turned out to be say that foundation money is tiny reasons – ‘not so much for innovation, quite successful.’ beside government budgets, the fact because government still feels it’s got remains that philanthropy is seen in most of the solutions, but for the sake How successful collaboration is many government circles as a kind of of fostering a more inclusive society depends partly on the thematic emergency reserve. ‘In terms of inter- where the haves are seen to be giving area. Relationships between the government activities,’ says Danny back to the have-nots.’ government and civil society tend to Sriskandarajah, ‘we are clearly at the be better in classically ‘safe’ areas like stage where, because government Lack of mutual understanding is also a education and health. money to support international problem. While Krystian Seibert sees activity is drying up, foundations are ‘great examples of collaboration’ in Partnership between philanthropy part of the rescue strategy, a pot of Australia and a ‘growing appetite on and the government is very rare in money that government can dip into.’ both sides to do more’, he also sees a Singapore, says Laurence Lien. But number of challenges: ‘where do you there is more potential elsewhere in It’s partly a question of motivation: is start, how do you agree on outcomes East Asia. there a good reason to collaborate? and what are the respective roles?’

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Beneath all this, he feels that the two She notes that some foundations sides don’t really understand each are happy to work within that other as well as they might. Part of this circumscribed area, but that boils is experience. ‘In the US,’ he says, ‘a lot down to how the foundation sees of senior foundation executives have its role. ‘Does it see itself as an government backgrounds, and there is intermediary that will enable the state Collaboration more movement between the sectors, to do its work or does it see itself as but in Australia that’s not the case.’ an agent of change? We have all the across sectors is different shades between.’ Both this In order to try to foster greater mutual and the Australian example bring us seen as crucial understanding and, through it, genuine back to Barry Gaberman’s point about collaboration, Philanthropy Australia genuine partnership. The crux of the to the success of holds an annual Philanthropy Meet matter seems to be how collaboration the Sustainable Parliament Summit ‘so our members is interpreted by both sides. can go to Canberra and speak to Development Goals" politicians and, more importantly AFE Colombia views state- often, to officials who do the work. philanthropy collaboration as more We’ve talked about an exchange than just being a contractor but programme for government officials to ‘at the moment, that’s how most Gerry Salole. ‘There are institutions go and spend time in a foundation, so foundations understand working with saying, “we can finally see somewhere they’d learn what a foundation does. the government’, says Caroline Suarez. we can play a role that has impact and As they move around government This seems unlikely to change with relevance”, while others are saying, circles and become more senior, they’d the introduction of a projected new “I’m doing what I do. I don’t really see take that experience with them.’ law which will require foundations how this fits in”, and then there are working on government projects to others who are excited by the idea of contribute 30 per cent of the project’s this set of challenges but bemused by Is there genuine partnership? costs. While the new arrangements the number and extent of the Goals.’ There are cases where so-called will involve joint funding, there is collaboration between philanthropy and no suggestion that they will entail He notes that there are EFC members government really means government collaboration in the sense of joint involved in both the US-based seeking support for a course of design and responsibility. SDG Philanthropy Platform, led by action it has already determined. In the United Nations Development 2016, continues Seibert, an Australian Programme (UNDP), Rockefeller Philanthropy Advisors and the government department issued a THE SUSTAINABLE prospectus to philanthropy and the Foundation Center, and in the OECD- community about projects they’d DEVELOPMENT GOALS based Network of Foundations Working for Development (NetFWD). vetted in a particular policy area, Collaboration across sectors is Both are providing support to inviting support for the projects from seen as crucial to the success of institutional philanthropy organisations philanthropy, business, etc. ‘I’d be the Sustainable Development Goals looking for ways to engage with surprised if anyone is interested in it.’ (SDGs). What is exciting about them, the SDGs. The SDG Philanthropy The projects were already set up; in thinks Barry Gaberman, is that, unlike Platform is active in Colombia, Ghana, effect, what ‘partners’ were being invited with their predecessors, the Millennium Indonesia, Kenya, Zambia and Brazil. to do was to help pay for them. As he Development Goals, ‘there was a real NetFWD, set up by OECD in 2012 notes, ‘many philanthropic funders are attempt to include the for-profit and as a ‘global network of foundations rightly sensitive about picking up the non-profit sectors in the discourse, committed to optimising the impact tab, filling gaps in government service which was reasonably successful.’ He of philanthropy for development’, was provision, etc, but they’re very keen on notes the SDG philanthropy Platform collaboration, leverage.’ as a genuine attempt to connect US not specifically designed as a response philanthropy with the SDGs. to the SDGs, but it was active in Halima Mahomed offers a similar lobbying for philanthropy’s inclusion example from South Africa. ‘In in the process of devising the Goals 2016, the government started this Foundation engagement and now serves as a focal point for research to look at how it could with the SDGs ... foundations keen to work on them. tap into philanthropy. It was very limited because it was looking at How are foundations responding to In Italy, Assifero, one of two how philanthropy could contribute the SDGs in the rest of the world? Are foundation umbrella organisations, is towards its development goals rather they working piecemeal, concerting actively promoting the SDGs. In Spain, than asking how do we support and a strategy or scratching their heads? on the other hand, lack of activity on enable philanthropy for a broader As far as European foundations are the SDGs is ‘a failure of foundations so development agenda?’ concerned, ‘all of the above’, feels far’, believes Rosa Gallego.

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There are exceptions, like La Caixa AFE has launched a map of its language and categories in which the (which tends to be exceptional in members’ projects (more than 1,500 SDGs are formulated. ‘Very little of the most respects), but ‘AEF is not really of them) and ‘you can filter them language of the SDGs is used at all in promoting it and so we are not really according to the SDGs and their Singapore,’ says Laurence Lien. ‘It’s getting the sense of how our members targets, so you can see which ones almost as if it’s irrelevant to us.’ are working with them.' they are working on’, says Suarez. At the time of this research, AFE was According to Hilary Pearson, while A good example of a collaborative planning a joint seminar with the the infrastructure bodies in Canada effort in pursuit of the goals that Inter-American Development Bank in – PFC and Community Foundations involves European foundations is September to look at how Colombian of Canada among them – have been the ‘With and For Girls’ Collective, foundations could incorporate the talking about the SDGs, they have not initiated by the Stars Foundation, with SDGs into their work. yet ‘succeeded in mobilising a lot of partners including Mama Cash, Plan private philanthropic action around UK International and the Global Fund the SDGs per se. This is partly because for Children. ... and intentions to engage we haven’t been able to make the with them connection between them and the Colombia has a particular interest work that foundations are doing locally. in the SDGs, says Suarez, since they In many places, though, intention Foundations might say, “we have some offer a way to galvanise the country’s rather than activity characterises projects that are about eliminating development following the conclusion philanthropy’s response to the SDGs. poverty locally but I don’t know how to of peace. ‘We are the local partner of In a recent survey of grantmakers connect them to some broad impact the SDG Philanthropy Platform,’ she from the Arab region, over 90% statement by Canada.” So that’s the says. ‘For us it’s a must to involve the said they wanted to take part in the missing piece, that’s what we’re working SDGs in our work because it’s a way SDGs, though only 37% have taken on now.’ (At the time of collecting the for us to get foundations, and society this further than internal discussions data for this report, a meeting was as a whole, to think beyond the peace (and mostly ‘taking it further’ about to be held in Ottawa, convened process and to look at the big picture means discussions with others, by the Canadian government and of real development.’ A focal point for rather than initiatives). Naturally, attended by a number of philanthropy this is SDG 16 on peace, justice and there are exceptions. The King umbrella groups, with a view to making strong institutions, and it is where Khalid Foundation in Saudi Arabia these connections. Hilary Pearson is the Goals coincide with Colombia’s has conducted an assessment of hopeful that by the end of this year National Development Plan, whose its programmes in relation to the ‘we’ll have some tools that can help three central planks are peace, SDGs and is devising a strategy and our members understand what the equality and education. As a report allocating more resources in pursuit of framework means and how to connect it by AFE Colombia earlier last year the Goals. to what they do.') points out,33 peace is more than just The government of Pakistan has the end of armed conflict. Translating According to the Arab region recently set up an SDG unit to consult an end to violence into an inclusive workshop, with the exception of with the relevant stakeholders on and democratic society obedient to Morocco, there is little government how different partners, including the rule of law will require the pursuit buy-in to the SDG framework. philanthropy, can contribute to and fulfilment of many of the Goals’ Consequently, local NGOs do not meeting the Goals. But, says Shazia numerous targets. necessarily feel any strong obligation Amjad, ‘I don’t think there is any to connect their work to the Goals clarity within the government on either. All in all, workshop participants the kinds of philanthropic funds felt that the SDGs may not be the that exist and how they can be best framework for effecting real and harnessed.’ She notes another lasting change at local level. difficulty: ‘Most CSOs and foundations, with a few exceptions, don’t know Another problem is that the Goals The Sustainable what the SDGs are.’ Still, there is are explicitly intended to be universal Development dialogue and she is hopeful that a in application, but that’s not always common strategy might emerge. how they’re being interpreted. ‘We’ve Goals are a had discussions about what the SDGs Struggling to connect the mean in a UK setting,’ says Carol Mack, way for us to ‘but I don’t hear our own government global with the local talking about the SDGs in a UK setting, look at the big One problem is that local only in an international setting, and I picture of real organisations, both public and think how the government approaches philanthropic, are struggling to things sets the framework for development" reconcile their own priorities with the engagement in the country.’

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How relevant are the SDGs ‘often local foundations that don’t ‘This happened with the MDGs – “we to philanthropy? trust civil society feel that giving to will take your money, we know better.”’ the UN is the way to do it – I think ‘My sense,’ says Halima Mahomed, ‘is that’s deeply problematic. It avoids Moreover, the closing space for civil that with progressive philanthropy the whole question about how we society in the Arab region means institutions the position is: “these are make societies more just, more that, effectively, cooperation would the issues we want to look at. If there’s effective, more equitable.’ Unless you mean the government’s working alignment with the SDGs, great.”’ For can use the Goals to advance some with ‘a sector that is criminalised.' smaller organisations that don’t have fundamental questions like equality Kuttab believes that ‘unless there a progressive agenda already or don’t and power, she thinks they look like ‘a is a loosening up of laws, it’s just have much capacity, she feels they nice exercise where everyone shows empty talk. The SDGs will be just might provide a useful template, ‘but I they’re doing a great job and then a fundraising tool; foundations don’t see a lot of it happening.' nothing really changes.' She notes and NGOs will be saying they are ‘a big conversation’ in Kenya at the aligned with the SDGs so they Danny Sriskandarajah sees the moment about the SDGs, but ‘it always can capture some of the money SDG Philanthropy Platform as ‘a looks to me like the same actors not that might be spent through good attempt to provide the data dealing with the same fundamental the SDGs, no more no less.’ infrastructure for foundations to issues. The framework doesn’t monitor their expenditure against necessarily facilitate systems change Basak Ersen knows of few the SDGs.' On the other hand, ‘my thinking because it has been created organisations that are working on worry is that we’ll see a lot of tick- by the ultimate system.’ the SDGs in Turkey. Nor is Oksana box approaches and not enough Oracheva aware of any foundations of the transformation in terms of Atallah Kuttab sums up the two working on them in Russia. She feels collaboration we might need to contradictory currents in the thinking that, in Potanin’s case, ‘they’re not very make a significant change.’ In his of institutional philanthropy. On the close to what we do, maybe because view, ‘probably the biggest single one hand, everyone sees the need its different rhetoric.' In order for thing foundations can do to make a for integrated development: ‘you them to make more sense, they need significant impact on the SDGs and on can’t do education, health, and so on to be integrated in a broader agenda, sustainable development generally is alone. The links are very important ‘but I don’t see that yet.' Yanni Peng to change their investment practices, and different players need to be says the general view of institutional not make some marginal change in working together.’ On the other side philanthropy in China is that the their grantmaking.’ is cynicism. Foundations believe that SDGs are ‘more the international the UN and national governments are community’s agenda.' There is no Many of Philanthropy Australia’s after philanthropic money, and are not national platform. At the Narada members have heard of the SDGs, interested in genuine partnership. Foundation, ‘we haven’t positioned says Krystian Seibert, ‘though they ourselves around the SDGs.' haven’t necessarily figured out their relevance to philanthropy. There’s an educative role for infrastructure organisations in this regard and it’s something Philanthropy Australia is looking at for 2017.’ However, he goes on: ‘the cynical part of me says they’re a bunch of targets that are never going to be measured properly What we need is effective or governments will just choose which ones they measure to suit themselves. multi-stakeholder This highlights the important role of civil society in holding government accountable for working towards and involvement, and a meeting the targets.’ Jenny Hodgson is also ambivalent. platform for dialogue, ‘If all the SDGs mean is that private foundations in Zambia, say, start giving to the UN, that’s not an collaboration and acceptable outcome.’ And it’s not just a question of money, but of reinforcing existing power dynamics: mutual accountability"

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A coordinated national strategy? Australian foundations are looking at how they can ‘align their outcomes more broadly and the SDGs provide a good way of doing that as part of The SDGs will be just a national and international agenda’, says Krystian Seibert. The Australian example notwithstanding, it will be a fundraising tool: obvious from what has gone before that coordinated national strategies are few and far between, even within foundations and NGOs the philanthropy sector.

‘What we need is effective multi- will be saying they are stakeholder involvement, and a platform for dialogue, collaboration and mutual accountability,’ says aligned with the SDGs so Danny Sriskandarajah, ‘but I don’t see that happening. It’s hard to get small collaborations and alignments off the they can capture some ground, so it would be just too big to have a coordinated national strategy.’ of the money that might Ingrid Srinath sees ‘no platform for concerted strategy or formal cooperation so far. VANI, India’s be spent through the national NGO platform, has been trying to frame things in terms of the SDGs but I’m not sure whether they’ve SDGs, no more no less" made any headway. I’m not hearing a lot from the government either, so I suspect it’s mostly UN agencies that are SDG-oriented.’ She is doubtful, in any case, about the platform idea, which she feels would be likely to degenerate into a talking shop.

The SDGs will be the biggest feature of the international development landscape between now and 2030 and it’s inevitable that institutional philanthropy will have some relationship with them. The form that relationship takes will vary from place to place. It’s likely that, at a minimum, foundations will map what they are doing on to the appropriate goals. Whether they become any more wholehearted about them will depend on whether and who takes the initiative, locally or nationally, and whether national governments and the UN can allay the scepticism that exists in many quarters. For the moment, for many philanthropic institutions, the words ‘international development agenda’ are almost meaningless.

45 7 Philanthropy, government and civil society

While government often encourages philanthropy and NGOs when they are doing work it approves of, it can also be hostile where it sees its own interests at issue. This chapter focuses on governments’ often ambivalent relationship with civil society and philanthropy. It also looks at some more positive developments for NGOs, and at tax exemptions and incentives for donors and recipients.

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The broad outlines of the relationship new laws allow citizens to submit between philanthropy and civil society AMBIVALENT ATTITUDES ON motions and petitions, for the first are clear enough. Philanthropy operates THE PART OF GOVERNMENT time enabling them to bring their largely through civil society. As Barry concerns directly to the government Gaberman puts it, ‘philanthropy for Government support for civil and legislature. the most part does its work through the operating organisations of civil society and philanthropy ... In some countries improvement is society. There is a direct line that runs There is an increasing tendency for a matter of restrictive laws being from the work of CSOs to philanthropic governments to contract NGOs to defeated rather than more positive institutions and through them to deliver a particular service. This is ones put in place. ‘Kyrgyzstan had a philanthropic support organisations.’ a well-established practice in, for foreign agents’ bill that went through example, the UK and Australia, and it two readings in parliament before Relations with government are more is just beginning in Russia. For many it got rejected in 2016,’ he notes. In complex. Writing in WINGS' 2017 "A Russian NGOs, says Oksana Oracheva, Kenya in 2015, there were moves to New Global Picture of Organizations it’s the way to have a sustainable cap international funding at 15 per Serving Philanthropy" report, Adam future. She sees many areas where cent of an organisation’s budget, Pickering of CAF notes the paradoxical experienced NGOs can achieve much which would have left tens of millions situation that while many governments better results than the government, of Kenyans without access to primary are keen to encourage philanthropy for example in palliative care or the healthcare. ‘Parliament defeated that with one hand, they are preventing care of orphans. New and improved bill. In El Salvador, Honduras, Nigeria them from funding where they like on legislation has been introduced and other countries restrictive laws the other. as a result of a push by NGOs and have been defeated partly because of philanthropic institutions interested the engagement of civil society.’ So on the one hand government in promoting those areas (though, tolerates, even encourages, civil society parenthetically, she notes that the law insofar as it is doing work it approves regulating philanthropy, dating from ... and government hostility of – and that includes foundations as 1996, needs to be updated). funders of civil society. On the other Undoubtedly the biggest threat to civil society, particularly those hand, when CSOs espouse issues Chinese NGOs have an increased parts of it that are engaged in that call in question the government’s role in service delivery, notes Yanni campaigning and advocacy for rights, position or policies, that favour is Peng, again in similar areas – elderly is the phenomenon referred to as the withdrawn, and often replaced by care, services for the disabled and shrinking space. hostility. In an increasing number of education. The Indian government is cases, this is translated into punitive ‘very encouraging of philanthropy as The Indian government uses the legislation. Gaberman’s fear, shared by long as it conforms to their definition Foreign Contributions (Registration) many, is that while those CSOs that of where it should go’, says Ingrid Act (FCRA) as a means of policing work on what he terms ‘the safe side – Srinath. There is more ‘carrot than the NGO sector, says Srinath. Its use social services, health, education, the stick’ involved, she notes, and there is ‘entirely political’, she says. It’s arts’ will prosper, the threats to civil are no formal restrictions on where very difficult to get funding from society are going to make those on ‘the you can fund. domestic sources if, as an NGO, edgy side – social justice, human rights, you are involved in one of Barry community organising, independent Government is often the paymaster Gaberman’s ‘edgy’ issues; this means, policy analysis, incredibly important of civil society through grant in practice, you are dependent on organisations – harder and harder for funding, too. Carol Mack notes that external funding. Here’s where the philanthropy to fund.' in 2016, ‘for the first time in a long FCRA comes in. ‘You have to have time’, at GBP2.7 billion (USD3.5bn), a licence to receive foreign funding, foundation grantmaking is now which is valid for five years,’ says comparable to government grants Srinath. ‘You have to have a separate made to charities, while government funding for the Australian charitable bank account in which foreign sector was five times the amount monies are banked. Every transaction given by philanthropy. on that account has to be reported The threats to civil within 48 hours and there are very society are going to Doug Rutzen of the International onerous reporting requirements. Center for Not-for-profit Law (ICNL) They can freeze the account so you make those on 'the mentions a number of countries where can’t make any transactions at all the situation for NGOs is improving. or you have to seek approval before edgy side' harder for Argentina has launched a joint a transaction can be completed. philanthropy to fund. government-civil society initiative to Finally, you can just be delicensed. advance legislation, while in Morocco It’s completely arbitrary.’

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She goes on: ‘In the 40-odd years of According to one source, the Ministry that because you are a charity you are that law’s existence I can’t recall a of Public Security published a list of automatically a good thing.' (Only half single case where an NGO has been government organisations that will of respondents to a CAF study said they found to have either laundered money be in charge of supervising foreign trusted charities.) or funded terror or anything else that NGOs, ‘but the list does not include the law purports to prevent. Every supervisory units for NGOs operating Implementation, not legislation, is single case has been where an NGO in sensitive areas such as legal reform the problem facing foundations in a has challenged the government in and rights issues. The result could be number of countries. ‘In principle,’ says one way or another and has had their a situation where a majority of foreign Basak Ersen, ‘if you set up a Turkish licence to receive money withdrawn NPOs remain in a legal limbo.’ foundation for a lawful purpose, or curtailed as a consequence.’ you are free to do what you like.’ A Similarly, Rohini Mohan, writing in ‘Rights-based and grassroots 2008 foundation law, which TUSEV the New York Times in January 2017, organisations working for social change helped to draw up, is along the lines cites the use of the act to cut off in Colombia are having a hard time, of those regulating the sector in most financial supply to a Delhi advocacy because funding is drying up and they of western Europe. ‘But in practice group, the Lawyers’ Collective, which are probably not now getting sizeable there are exceptions. It’s always provides legal assistance to women, donations,’ says Carolina Suarez. hard to fund human rights work for non-union workers, activists and other example.’ Organisations can receive marginalised groups because, alleges foreign funding, but it’s very difficult Mohan, it had represented critics of for them to operate if they try to do so in defiance of government’s wishes prime minister Modi’s policies. and matters are aggravated by the In Russia, alongside government present state of emergency which support for service delivery by NGOs, A number of societies means ‘you can’t do even things which the Foreign Agent Law requires NGOs that you would have are legal, which are your right. We that receive foreign donations and don’t have freedom of expression or engage in ‘political activity’ to register seen as participatory association now, which are the basis of and declare themselves as foreign civil society. We can’t see the future. agents. This shows ‘there’s not enough are exhibiting threats Things might get worse.’ trust from the government side in against the enabling NGOs’, says Oracheva. One result of Reasons for the law is that the definition of political environment" activity has been broadened, creating government hostility uncertainty about what it is. Naturally, While the introduction of legislation this leads to an even greater degree The more authoritarian the restricting civil society and of caution. ‘With foreign funding, government, the more severe and philanthropy is widespread, the there’s always a risk,’ she concludes. manifold legislation to curtail civil motives for legislation are not The Dynasty Foundation, for instance, society activities is likely to be. always the same. Aside from the which has subsequently closed, fell Doug Rutzen speaks of ‘waves of desire to stifle opposition, Doug foul of the Foreign Agent Law. One of constraint over the last 12-13 years.' Rutzen points to several factors that their grantees was a liberal think-tank But, as Gaberman warns, ‘a number he sees as powering the current and Dynasty was financed by money of societies that you would have seen wave of constraint: ‘There is a that was kept abroad, so it was easy to as participatory, including the US, are group of countries that think that put pressure on the foundation. exhibiting threats against the enabling the governments themselves need environment.’ ICNL records ’98 laws to play a much stronger role in While the Chinese government likes restricting freedom of association coordinating international assistance. the service provision role that NGOs or assembly around the world … For these countries, it’s much more are increasingly playing, it’s not proposed or passed since 2012.' about that agenda than it is about so keen when they get involved in restricting dissent.’ A participant at advocacy – to the point, says Yanni In the UK, too, feels Carol Mack, the the Johannesburg workshop also Peng, where the local government will environment for philanthropy ‘has got saw this as a strong motive and restrict the entry of environmental more contested. It’s increasingly unclear felt that philanthropy is likely to NGOs into areas where there is what charities – and foundations are be regulated in most countries in environmental degradation. There charities in the UK – can and can’t say future in order to integrate it into are worries that the Overseas NGO in the run-up to an election.’ The trust national development agendas. Law, which came into force at the issue plays a significant part here, beginning of last year, will be used to she feels. The breakdown of trust in A second motive, Rutzen believes, is discriminate against NGOs working in institutions extends to the charity what he calls ‘misplaced concepts of politically sensitive areas. sector, and ‘it is no longer assumed accountability and transparency.'

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Banks play a part in India too, says GOVERNMENT CONTROL Ingrid Srinath; it's possible to appeal THROUGH REGULATION against the arbitrary operation of AND THE LACK OF IT restrictive laws. If you have deep enough pockets, you can take the The banks and Governments can also control civil government to court. Greenpeace society, and philanthropy, through did so and won, but still they have ministries are bureaucracy and regulations, which been unable to function effectively may or may not be primarily intended because the government has made monitoring the to be restrictive. Sometimes a lack of use of all the weapons at its disposal processes that regulation can itself be a problem. to make their work impossible: ‘banks don’t want to do business As the Hudson Institute Index38 with you, service providers don’t are ensuring the points out, ‘philanthropic freedom want to do business with you, your has been impeded by the increasing employees can’t get bank accounts. closing of the civil prevalence of foreign exchange It’s a concerted way of harassing regulations and capital controls.’ society space" you.’ It describes Venezuela’s foreign exchange regulations as ‘nothing short In Colombia, the civil society sector In the US, he notes ‘a grassroots of a disaster’, adding: ‘such policies is subject to the scrutiny of several initiative to expand or ramp up the are more pronounced in Venezuela, government departments, which is enforcement of the US Foreign Argentina, Bolivia, and Brazil, but are even more burdensome for NGOs than Agent’s Registration Act37 by by no means limited to South America. for foundations. Both are subject to progressive groups that are trying China, Egypt, Georgia, India, Myanmar, the same legislation, but foundations to hold the Trump administration Pakistan, Russia, and South Africa have lawyers and accountants, accountable – but in the name of all have currency control systems whereas NGOs often don’t, says transparency they’re going to end up, affecting philanthropic activity in Carolina Suarez, ‘so how are they I believe, unintentionally restricting their countries.’ civil society.’ Finally, he notes ‘the going to manage the bureaucracy agendas around counter-terrorism, involved?’ Nor is giving particularly issues of sovereignty’ and the natural Burdensome bureaucracy encouraged. You need government permission to be able to receive tendency of governments to want to In the Arab region, government consolidate power. donations. If this is forthcoming, your control over philanthropy is exercised donors qualify for a tax exemption. If by ‘a mix of disapproval and formal In the Arab region, thinks Atallah you don’t get that permission, they restriction’, says Atallah Kuttab. Kuttab, there are two motives for don’t qualify. While funding for services like health restrictive legislation. ‘The direct one and education is encouraged, ‘you is the political Islamic movement. There are no restrictions on domestic need approvals for grants, and if The indirect one is that people have donations in Pakistan, but there is someone creates a problem, you’ll be shifted their demands since 2011. Now, a draft law under consideration to in trouble.' Sheer bureaucracy can be security is paramount, so nobody is regulate cross-border philanthropy an effective way of stifling support to talking about freedom, integrity, etc. more closely. Currently, the State causes that governments in the region People are accepting tightening down Bank of Pakistan has its own don’t approve of. ‘I closed my NGO for better security and governments regulations for money coming in Jordan at the end of 2016,’ says are using that.’ in and out of Pakistan and those Kuttab, ‘because I couldn’t channel regulations are now being made Gerry Salole doesn’t think the anything through it. Permissions were more stringent, says Shazia Amjad. ‘shrinkage in wriggle room’ is caused stuck in the ministry. They didn’t say solely by anxieties over funding for no, but they didn’t say yes.’ At the terrorism or political discomfort with same time, it’s becoming impossible A lack of regulation to get grant money from outside civil society. He also sees a legitimacy Even where government attitudes the region. The banks, prompted question raised over the use (rather to philanthropy are in theory by government, ‘have become very than the provenance) of philanthropic positive, legislation is often in need money. ‘I think there’s a critical voice strict over the last six months. Other countries in the region are worse. of overhaul to suit it to the times. being raised that’s questioning the From one perspective, says Hilary legitimacy of private resources being Jordan is the softest. So the banks and ministries are monitoring the Pearson, the legal environment in deployed in particular ways. And Canada is very favourable because there’s also a genuine seeking for processes that are ensuring the closing of the civil society space.’ of a very generous system of tax accountability about where money incentives. However, it is also ‘sadly goes and how decisions are made.’ in need of modernisation.'

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She cites the examples of Australia and New Zealand, which have ‘at least THE FUTURE OF tried to take the regulator out of the CIVIL SOCIETY tax agency and make it independent, and broadened the definition of Pressures on NGOs charity’, but that has not happened in Government Canada. ‘When it came into office two Government hostility – and the years ago, the current government hostility – and the ‘shrinking space’ for civil society – is promised publicly it would look at ‘shrinking space’ not the only reason why pursuit of the legislative framework with a view their aims, even survival, is becoming to modernising it, but there’s a lot for civil society – is more difficult for NGOs. Many of the of resistance.’ One reason why it is sources of funding that they have dragging its feet on the question, not the only reason traditionally looked to are drying up. she says, is a worry about opening Government funding is becoming up charitable legislation to advocacy why pursuit of their scarcer as fiscal constraints bite. In organisations: ‘there are whole some emerging economies, where questions about the role of charities as aims, even survival, NGOs (especially those dealing with advocates for policy change – there’s is becoming politically sensitive issues) have a reluctance, an inertia in the system traditionally relied on funding from around that.’ more difficult for international sources, this has been dwindling steadily over the past 20 NGOs. Many of the years or so as funders have moved on Are the restrictions on to countries perceived to be in greater philanthropy deliberate? sources of funding need of support.

Rosa Gallego believes the that they have The lost international funding has detrimental effects on philanthropy seldom been successfully replaced can result largely from short- traditionally looked from local sources. Partly this is sightedness on the part of to are drying up" because many NGOs have no roots government. So while, in general in the local community and the terms, the Spanish government community remains ignorant of what is in favour of philanthropy, ‘the However, Shazia Amjad sees nothing they do; partly it’s because of mistrust; supervising authority makes sinister in Pakistan’s proposed and partly it’s because NGOs are seen everyone’s lives absolute hell. new regulations for cross-border as being able to attract external funds I don’t think it’s intentional. I philanthropy: it is simply in compliance rather than requiring local money. As don’t think government realizes with international anti-money- Atallah Kuttab notes: ‘in a meeting that by putting these obstacles laundering agreements, to which of Africans and Arab philanthropists in foundations’ way, they are Pakistan is a signatory. Hitherto, she that I moderated, they said it plainly: actually undermining their work.’ says, most Pakistani NGOs were free they don’t give money to local NGOs to do what they wanted. ‘Now that because they are supposed to bring While acknowledging that the government, under international money from outside.’ governments have a legitimate pressure, is beginning to put regulations interest in controlling currency flows in place, people say that the enabling There are other reasons why NGOs in and out of the country, the Hudson environment is being reduced, but even are feeling the pinch. They are often Institute Index suggests that the for regulating traffic, there are traffic out of step with new philanthropy, restrictions on philanthropy imposed lights. What would happen if there were believes Jenny Hodgson, ‘so there’s a by such regulations may be to no traffic lights? In a sense, CSOs are very narrow overlap where NGOs are some extent deliberate. ‘In Pakistan, now being traffic-lighted.’ doing something that new foundations Russia, Turkey, and Malaysia, there necessarily want to support and a is growing evidence to suggest that She also points to Pakistan’s huge gap between new foundations the damage to philanthropic activity geographical position. ‘Considering and organisations working on rights is not entirely unintentional. In each the kind of buffer state that Pakistan and justice.’ of these countries, legislation passed has become, considering that we ostensibly to combat IFFs [illicit have a sensitive border on both sides, Direct implementation of programmes financial flows] has been used to considering our geopolitical situation, by operating foundations; social limit the autonomy of philanthropic the amount of money that has flowed business competing for attention actors, investigate and surveil groups into Pakistan, and the amount of and support; the rise of new, more critical of the government, and impede terrorist attacks there have been, there informal means of social activism; the organizations attempting to access is a need to see such money flows willingness of millennials and younger foreign funds.’ regulated and curbed.’ people to donate to a much wider range

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of entities (for example Kickstarter, giving your money to and you have to Funding for diversity will be important, B-corps) – all these are calling into vindicate what they do with it.’ he believes, and donors will need to question the rationale of NGOs, to the work out how to support different point that Atallah Kuttab sees them as Jenny Hodgson acknowledges that types of organisation. ‘If all of your being ‘in real trouble as a subset of our ‘there are existential questions for civil progressive eggs are in one basket and sector.' Almost all of these pressures society’, but sees the possibility of suddenly the regulatory environment are being felt more acutely by those good coming from the solutions. She changes, you’re stuck.' Where trust engaged in issues that are considered ‘very much believes in the importance for NGOs is low, we need to ‘work politically sensitive. of institutions because when you sit out how to support those progressive down at the table with the big players, causes through different institutions.' who is the link? Even if you have a big, Social movements successful crowdfunding campaign, Thriving without an It would be easy to exaggerate the if you don’t exist as anything else, pressures on NGOs: there are also establishment players see no need to enabling environment engage with you further.’ more positive trends likely to affect In Sub-Saharan Africa, the Hudson their future trajectory. The possibility What are needed, she says, are Institute Index cites ‘the newness of creating social movements rapidly organisations that operate in a less of structured philanthropy’ as a through social media occupied a good transactional way than the classic reason for the absence of conducive deal of attention at the 2017 WINGS pattern of seeking grants, generally legislation. ‘Consequently, there Forum in Mexico City, with participants from outside, and applying them to a are fewer indigenous grantmaking wondering about the implications of a problem. If you start to raise money institutions in Sub-Saharan Africa situation where the impetus for change locally, she argues, you’re going to than in other regions, and the is more likely to be found in a fluid have to start thinking about building administrative infrastructure for movement than a formal organisation. constituencies for your work. That philanthropy remains underdeveloped.’ 39 might be money, ‘but it might just ‘I think most foundations can connect mean people caring whether you This underdevelopment may not be with social movements,’ says Gerry get closed down or not.' She sees too much of a problem, however. Salole. ‘A “let’s see what people want” this as an ‘inevitable part of the While South Africa ranks relatively low kind of approach goes back to very changing funding environment and the on the Index of Philanthropic Freedom, core charitable work, and to some shrinking space, which will force this Halima Mahomed notes that ‘we have extent what Jenny Hodgson is doing evolution into something that is more a vibrant civil society and we have with the Global Fund for Community responsive, more flexible and more progressive social justice foundations Foundations is rekindling some of that.’ organic.' She believes the real need that fund progressive CSOs who then is to build ‘strong organisations that take the government to court and have won. The best-known case was Local ownership and can advance tricky issues and have a constituency for that work.' the anti-retrovirals campaign which local governance took the government to court to force ‘If you can make the case that local Danny Sriskandarajah’s idea them to provide ARVs.’ Occasionally, ownership and local governance trump of ‘fundermediaries’ – funding she says, you find government officials outsiders making decisions on behalf intermediaries that exist explicitly murmuring about foreign-funded of people,’ he goes on, ‘whether they to channel donor funds more NGOs coming with an agenda, but are called community foundations or directly to the end recipient – government does nothing in terms of not, this is probably the most powerful touches on similar ideas. policy to curb them. intermediary we could be helping to develop. In the end you’re basically validating the idea that people know best. So what something is called shouldn’t matter, whether it’s been formally registered or not shouldn’t matter, resources should be able to go to people.’ The real need is to build strong He also points to this as another area where the shrinking space is having organizations that can advance a harmful effect. ‘In this context, the anti-terrorism legislation is going to make life more difficult. You can’t be tricky issues and have a as informal as you’d like in a situation where you have to know who you’re constituency for that work"

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‘Foundations don’t have to pay Do tax incentives TAX EXEMPTIONS company tax on their profits; they stimulate giving? AND INCENTIVES don’t have to pay tax on donations. Apart from a huge VAT issue, the tax It’s debatable, in any case, what role Most countries have some form of treatment of foundations is good,’ says tax incentives play in encouraging tax exemption for donors, recipient Rosa Gallego. But she draws attention giving. Much of the research done organisations or both. to a continuing issue for Spanish suggests that it’s not a primary motive philanthropy. ‘When a foundation for individual donors. According to Tax and foundations gives grants but does not operate its Oksana Oracheva, most individual own programmes, the tax authority donors in Russia don’t claim tax relief. In Turkey, for example, foundations questions whether it is eligible for tax There are studies in the US, says Barry are exempt from corporate tax and incentives, but if a grantmaker is not Gaberman, which argue that if you there are tax incentives for individuals eligible, who is? This is an issue that is don’t exempt charitable donations giving money to registered public still being debated.’ Apart from being from taxation, ‘you’re going to see a benefit organisations. Foundation an example of a kind of bureaucratic significant decline in charitable giving. endowments are also tax-exempt arthritis that can unwittingly disable I’m not sure that’s true. If you figure (while foundations are required to philanthropy, it has an obvious chilling that over 40% of charitable giving have endowments, they are often very effect on grantmaking. goes to religious activity, I don’t see small) and if you give or bequeath the tax code being the prime mover.’ money to a foundation, there is no While there are tax incentives for giving tax liability. in some countries of the Arab region, A report by CAF40 suggests that tax they are so complicated that few people incentives are a significant but not Ingrid Srinath feels there are pursue them. ‘It’s a nightmare,’ says decisive factor in increasing giving. no significant tax incentives Atallah Kuttab, ‘so the people I know It found that in countries with tax for philanthropists in India. The who give, they give without tax breaks.’ incentives 33% of people had given threshold for the 50% write-down However, the question doesn’t arise in in the previous month, compared of contributions is low. There are the Gulf, ‘where the bulk of the money with 21% in countries without them. limited tax incentives in Russia too. is’, since there are no taxes. However, it concedes that ‘the legal They apply to individuals, but not to environment in which civil society corporations or institutions. Yanni In other places, tax incentives are operates, the range of causes which Peng notes that Chinese foundations used to direct the flow of generosity. are incentivised, administrative have to pay income tax of 25 per cent ‘If you give to pseudo-government barriers to giving and the ability of on profits from investments. organisations, NGOs or foundations, organisations to fundraise publicly then it’s safe to ask for a tax rebate. are likely to be more important in Singapore has a very favourable But if it’s an NGO that’s doing work motivating giving than tax incentives.' regime if you are donating to outside the remit of government, then state-sanctioned programmes or don’t bother. The bureaucracy entailed However, while tax incentives are not organisations. If you give a dollar, is heavy.’ the only reason people give, they SGD2.50 is taken off your taxable may encourage people to give more. income. But the attitude underlying Ashish Dhawan, chair of India’s Central this regime is fairly parochial, says Tax for NGOs Square Foundation and co-founder Laurence Lien. If you work in an area of Ashoka University, believes that that benefits predominantly foreigners Tax is an issue for recipient institutions as well as donors. While in theory opening the gate can only encourage or people outside Singapore, you 41 Chinese NGOs can obtain an exemption givers to enter. The Observatoire won’t get the permit necessary for de la Fondation de France argues this deduction. Similarly, if you do from paying tax on donations, they often can’t in practice, says Yanni Peng. that, in Europe at least, tax incentives public fundraising, most of the funds might influence the size of gifts even you raise must be spent in Singapore. The position is complicated: ‘We don’t need to pay tax on the whole year’s if they aren’t a determining factor in ‘“Charity begins at home, Singapore whether to give or not. In France and balance of donations provided that the is a small country, what difference the UK, says their report,42 ‘countries average salary of our organisation is can we make to overseas causes?” with more generous tax breaks than less than twice the local average salary.’ That’s the sort of argument,’ he says. elsewhere, the proportion of the donor This, she says, is restrictive in another Though there are few restrictions, he population is only average, while direction, since it means ‘we can’t offer notes increasing amounts of reporting average donation amounts are the a higher salary to attract good people.' because of anti-money laundering and highest in Europe.’ anti-terrorist measures. In India, says Srinath, if you’re registered as a charitable trust or a society or In Spain, as mentioned earlier, the tax not-for-profit company, your income is incentive for donations of less than tax-exempt, but you must spend any EUR150 (USD176) has been increased. donations in the year you raise them.

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It's debatable, in any case, what role tax incentives play in encouraging giving. Much of the research done suggests that it's not a primary motive for individual donors"

53 8 Infrastructure organisations

Infrastructure is very unevenly distributed, with 80% of the funding for it concentrated in North America. This chapter focuses on the infrastructure organisations that support the philanthropy sector. It looks at the range of roles infrastructure organisations play and some areas where they could do better. Finally, it discusses the challenge of demonstrating their value to the sector and the viability of their ‘business model.'

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Last year, WINGS produced a study The Africa Philanthropy Network, of philanthropy infrastructure UNEVEN DISTRIBUTION the African Philanthropy Forum organisations, which gives as detailed OF PHILANTHROPY and the East Africa Association of a picture as possible of the state of INFRASTRUCTURE Grantmakers are all regional in scope. affairs globally. For the purposes There might be a desire among certain of this report, the salient findings organisations to set up national from that research are that 80% Density of infrastructure groups, ‘but they can’t get enough of the funding for infrastructure is in the US and Europe support or resources, so they join concentrated in North America and a regional network.' Partly this is One potential problem arising that infrastructure is weakest where because those international funders from the density of infrastructure it is most needed. who do fund infrastructure tend to organisations in North America and fund either global institutions or those Europe is duplication. ‘We’re beginning The organisations that make up in their own backyard. A lot of local to see too much duplication, says philanthropy infrastructure cover funders are either unaware of existing Gerry Salole. ‘You have broader a wide field. Barry Gaberman infrastructure organisations or don’t churches further afield, then when you provides us with a handy distinction, see the need for them. Infrastructure come closer to Europe and the US, separating them into ‘membership organisations, believes Halima you probably have more specialised organisations, like the Council on Mahomed, ‘need to go to where infrastructure, often competing in Foundations, the EFC and the 70 or philanthropists are and stop expecting the same terrain and perhaps a bit 80 national associations’ and what he philanthropists to come to them.' calls ‘second-aspect’ organisations too militant about their specific which specialise in particular areas approach to particular problems.’ The In the Arab region, feels Atallah ‘like endowment building, board continual pressure on infrastructure Kuttab, there is a need for ‘groupings development, fundraising, etc.' Mostly, organisations to generate income and in the Gulf, especially a network of this report will deal with the first to show results produces ‘a degree foundations and/or social investors’, category, though the implications for of marketing and selling’ which he is to supplement the three main regional the more specialist organisations in ‘very uncomfortable’ with. infrastructure bodies – the Gerhart what follows will be apparent. Center, the Arab Foundations Forum Barry Gaberman has an explanation and SAANED. for this duplication. Based on his experience, he says, ‘for the US at Both Jenny Hodgson and Ingrid least, every funder funding some bit Srinath point to the lack of a national of philanthropy infrastructure had network organisation as a significant a favourite of their own, so if you deficiency in the Indian philanthropy were talking about how to eliminate scene. In fact, Srinath identifies the redundancy, it was a loser.’ He also has The infrastructure absence of infrastructure organisations a suggestion for dealing with it. ‘We as probably the sector’s biggest should define for the US – but I think organisations in challenge. Dasra has some of the it would be true of any country – what functions of a philanthropy support is the core inner circle of infrastructure body ‘but without being a sectoral Africa are mostly organisations we need to support. In representative.' Dasra is important, but the second, outer circle, funders can ‘we need a dozen Dasras.' Bridgespan, regional and their go ahead and fund the ones they like CAF India and the Centre for the and let them meet the market test. If Advancement of Philanthropy all thematic reach they provide value, they’ll continue have some infrastructural role, but, to exist; if not, they won’t. But let’s at she emphasises, ‘they are all very is limited, which least try to establish what that core is.’ small relative to the need.' The lack means there are of infrastructure is ‘something the Scarcity of infrastructure sector is already paying a significant significant gaps in the global south price for and will pay a higher price for down the line if it’s not remedied – If in some places there is too much everything from the complete absence in the intelligence infrastructure, in others there is too of data to the complete absence of little – particularly in the global south. norms to the complete absence of any and information The infrastructure organisations in kind of collective platform.' Africa are mostly regional and their the sector can thematic reach is limited, which means In Singapore, what was formerly the there are significant gaps in the representative body has effectively draw on" intelligence and information the been co-opted into the public sector, sector can draw on. says Laurence Lien.

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‘The representative body used to be Oksana Oracheva feels that the National Council of Social Services ROLES OF PHILANTHROPY ‘infrastructure organisations need to before it was nationalized. Now it’s INFRASTRUCTURE represent the sector, not individual part of government so there is no ORGANISATIONS organisations. And they need to representative body.’ express the common agenda – not Philanthropy support organisations create, but express it. Infrastructure With the exception of the China carry out a very wide range of roles. organisations can’t create the agenda, Foundation Center, infrastructure Nearly everyone mentions research they can combine the elements of the in China is in relatively short supply and collection of data, sharing of agenda then present it.’ and ‘quite basic’, says Yanni Peng. best practice, and training and In addition to lack of data, there is convening, but there are many more. Carol Mack argues that ACF’s also a pressing transparency issue, Philanthropy Australia conceives members ‘don’t have to be united for highlighted earlier in this report. The its mission very broadly as working us to speak for them. What you want China Foundation Center is helping towards ‘a more giving Australia’ by to do as a membership organisation, in both of these areas, both through ‘serving the philanthropic community and what is valuable to policy-makers, collection of data (Narada Foundation to achieve more and better is to make sure the spectrum of is supporting the Center to create philanthropy’, says Krystian Seibert. opinion is heard. Our members are a database of NGOs in China) and This is partly because the Australian united about their independence and through its Foundation Transparency philanthropy sector is so diverse. the value of having an independent Index (clearly, better data is important Because of that, ‘we don’t go for any sector, so that means we are going to to this, too). There is also a big gap in particular segment and say “they’re be more than usually scrupulous about advocacy and lobbying. ‘Maybe fewer the ones we’ll look after most”.’ what they think on an issue before than five organisations are lobbying presuming to speak for them.’ for change in policy towards the sector and the law,’ says Peng. Human Representing the sector For the future, she would like to see resources are also at a premium. There To what extent can network ‘a set of principles about what good are two organisations headhunting for organisations represent the sector, foundation practice looks like that the the sector and encouraging business especially given that there will not sector is united around and committed people to work in it, but she also sees necessarily be agreement among to implementing in its work. That’s a need for a broker to bring together members on any given issue? what we plan to do as part of our business and the philanthropy sector strategy over the next five years. and to facilitate collaboration. We also want to influence the policy environment; we want to be certain that foundations are valued.’

‘If you are an honest broker,’ says Gerry Salole, ‘you represent the diversity, you remind people that there isn’t just one type of player. So WE need a body you have to understand the diversity and you have to play back what that diversity is.’ to promote Rosa Gallego notes the role network organisations play in creating a common identity for foundations. AEF has brought ‘different types of philanthropy foundations together around the idea of being a sector. Even if they are completely different individually, there is one place in which the uniqueness generally, and of having the form of foundation is celebrated and there is a common identity.’ Similarly, ACF’s greatest achievement, feels Carol Mack, is especially ‘helping the foundation community see itself as a sector, and providing a platform where foundations can come together, take common action and among HNWIs" share best practice.'

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There is often a lack of understanding federal government and trying both among other sectors about what to increase the flexibility of regulation role philanthropy can play. Laurence and to defend against regulation that Lien talks about infrastructure makes things worse rather than better.’ organisations representing the sector to the government – and this can Better legislation is a focus for many Infrastructure happen even when the sector doesn’t organisations. ‘We campaign on want to engage with the government, behalf of the sector, though we don’t organisations says Doug Rutzen. ‘There are a lot represent it, for better legislation, of cases where the sector doesn’t a better fiscal regime, etc,’ says can also play a want to have a profile,’ he says, Basak Ersen. He sees Turkey’s 2008 diagnostic role, says ‘perhaps because it doesn’t want Foundation Law as one of TUSEV’s to engage with the government, or biggest successes. ‘In those days, Rutzen, ‘figuring maybe it feels it doesn’t have much we were more successful because there was space for us and there credibility with the government. out what the key was demand coming from the Infrastructure organisations can public sector.’ SAANED worked on sometimes bring these different challenges for developing a model Arab Philanthropy types of organisation together and Law in 2013. The idea was that it philanthropy are in act as the voice of the sector.’ contains the general elements that a particular country Infrastructure organisations can practitioners and philanthropists in also play a diagnostic role, says the region wish to see but it would be and where there Rutzen, ‘figuring out what the key customized in each country. Though challenges for philanthropy are in a little has been achieved so far – as is a reasonable particular country and where there is Atallah Kuttab points out, matters have actually become worse – the a reasonable possibility of change. I possibility creation of such a model at least think infrastructure organisations are gives the philanthropy sector an well placed to address that because of change" agreed position if and when better it’s not usually in the mandate of any times come. particular group.’ ... and internal Infrastructure organisations can also Underdeveloped philanthropy Advocacy has an internal as well play a role in linking the local and the infrastructure in a country or region as an external dimension – what global, says Rutzen. Sometimes it means the sector will lack a collective Krystian Seibert calls ‘lobbying in, helps to get global support for a group voice and a coherent picture of itself. as well as lobbying out.' Internal or an issue in a particular country. In Latin America, says Carolina Suarez, advocacy means ‘working with Often local groups, particularly outside ‘there are lots of bits and pieces, but our members to try and shift them the capital, ‘don’t have access to say often even at national level, there is a towards best practice.' Laurence Lien the UN Special Rapporteur – from lack of coherence.' talks of encouraging more strategic what we hear their involvement can philanthropy and more grantmaking. often be helpful because the UN Advocacy, external ... has leverage in that country – or to A number of participants at the philanthropy in another country, Mexico City workshop pointed out Most interviewees see advocacy and they can play a role in making that network organisations should be as part of their role. The priority those connections.’ prepared to challenge their members for AFE in Colombia is moving the to improve their work and, to an sector towards ‘the achievement He notes that the capacity of extent, to lobby them to take different of sustainable development’, infrastructure organisations to do approaches. Advocacy can be a two- says Carolina Suarez. ‘Our focus these things is not always governed way process – having your positions is on connecting, advocacy and by resources. ‘It depends on the shaped by member input and communications so we will work country. There are some where feedback and also seeking to influence with our members to promote the infrastructure organisations do the views of members. conversations with government, have the capacity even with slender with partners and with international resources. Then there are cases where Lack of accountability and cooperation to achieve social change.’ adequately staffed organisations just transparency, in the face of growing don’t have the capacity. Maybe they demands for them, is a big issue Hilary Pearson also speaks of ‘a lot of don’t want to do it or don’t know for foundations. In Spain, says Rosa advocacy. I’m very involved in public how to do it, but I think there is a Gallego, ‘there is a lot of talk about policy work and being a voice for the role for them to step up in some of transparency and a real need for Canadian foundation sector with our those countries.’ some foundations to say what it is

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they do.’ One of the things AEF has ‘We can mediate because we Fostering collaboration done is to ‘go through the websites are independent,’ says Carolina of all our members to see whether Suarez. ‘AFE has no commercial or Infrastructure organisations can they publish accounts regularly and territorial interests, and no links to play an important role in fostering recommend it as best practice. Our any corporation’ so, for instance, the collaboration. They are ‘the analysts, by-laws actually stipulate this, but foundations involved in the Learning they can understand what’s going we don’t have any way to enforce to Work Together programme ‘are on and help to surface things it. We’ve provided them with looking on us as the backbone which haven’t been surfaced’, says guidelines on codes of practice.’ organisation, maintaining the Gerry Salole. ‘You can find ways of philosophy of the programme.' convening meetings, and you have to be very skilled at making collaboration Introducing new ideas and happen.’ You also have to be very confronting difficult issues Creating and careful about claiming these things. disseminating knowledge ‘If infrastructure organisations are ‘We try to introduce new models to good they work in the background,’ Turkey,’ says Ersen. ‘This is important Ensuring the sector has the he says. ‘You have to be a very quiet because Turkish institutions don’t information and knowledge it needs is midwife in some ways. People know have very close relations with peers widely seen as a role for infrastructure if you’ve done something well or not, in other countries. So for example organisations. ‘We can aggregate the you don’t have to talk about it.’ This we are working on a grantmaking knowledge our members generate,’ may be true, but achievements are database to gather information on all says Krystian Seibert, ‘which they easily overlooked. This could go some the grantmaking institutions. We were wouldn’t necessarily have the time to way to explain why infrastructure also the first organisation to promote do themselves. They’ve all got their organisations often lose out when it community philanthropy and we day jobs. So we organise events, comes to resources. organised giving circles.’ focus on thought leadership and disseminate knowledge. Infrastructure The convening of affinity groups by Sometimes an infrastructure organisations have to be the focal network organisations (and/or helping organisation can enable institutional point for that.’ to support them, as ACF does in the philanthropy to confront the questions UK) also offers a way to encourage it would prefer to avoid. After Krystian Philanthropy support organisations habits of joint working. Hilary Pearson Seibert joined Philanthropy Australia, can also commission research is one who feels her organisation its first conference (2014) ‘was all themselves to try to fill gaps, though ‘could do a lot more to support the about how good philanthropy is. their capacity is limited. TUSEV in development of affinity groups and In 2016, there was this willingness Turkey, PCP in Pakistan, and GIFE and link them with each other. For the next to be introspective and at the next IDIS in Brazil have all done this. five years, I can see us playing a much conference we’re not going to be stronger role in developing that.’ afraid of addressing the elephants In addition, there is a new crop of in the room like the non-democratic academic institutions with a focus Specifically in terms of collaboration nature of philanthropy. If we hadn’t on either teaching or research in between the public and philanthropy been there, that wouldn’t have philanthropy, which will help both sectors, the annual Philanthropy Meets happened.’ For him, the organisation’s to offset the data deficiency and to Parliament Summit convened by biggest achievement is ‘making boost the research capacity of the Philanthropy Australia and Foundations members feel comfortable with being sector. Two of these are in places on the Hill in the US are significant self-critical and open-minded in a where infrastructure is thin on the efforts to create greater understanding constructive way and providing them ground: the Centre for Social Impact between the two sectors – though with the content to do that.' and Philanthropy at Ashoka University the latter is more an opportunity for in India and the Chair in African foundations to represent their interests Gerry Salole also recognises mediation Philanthropy at Wits University, to legislators than a more general of differing viewpoints as a critical South Africa. exploration of issues of mutual concern. part of developing the foundation sector’s thinking and practice: ‘what you have to realise is that foundations learn from themselves and their peers, and your job is to put them together with peers who disagree with them so they can influence each other. They Sometimes an infrastructure need to hear alternative views. And organization can enable institutional you have to keep things civil enough so that people stay in the room and I philanthropy to confront the think this is something we at the EFC do pretty well.’ questions it would prefer to avoid"

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A similar ‘bits and pieces’ state of affairs WHAT COULD applies in Russia. There’s an annual INFRASTRUCTURE report by the Russian Donors’ Forum, ORGANISATIONS but, feels Oksana Oracheva, ‘some of the data would be questionable.' There DO BETTER? Reliable data is is some research by CAF Russia ‘but in limited areas.' There’s also research on Collecting good data on definitely a missing civil society from the Higher School of the sector piece. The absence Economics’ which, while it is statistically based and robust, is not specifically ‘Reliable data is definitely a missing about philanthropy. piece,’ says Oksana Oracheva. of data – the lack of The absence of data – the lack of information about, ‘The pieces of infrastructure are information about, and analysis of, the there in the Arab region,’ says Atallah philanthropic sector – was stressed by and analysis of, the Kuttab, ‘but data is not there so we many interviewees, even in countries don’t know what we are talking about, with relatively well developed philanthropic sector we are guessing.’ Among other things, infrastructure. Hilary Pearson the sector needs ‘more self-definition. would like ‘much more Canadian – was stressed by We should not only document the infrastructure that helps foundations institutions of philanthropy along understand their own effectiveness many interviewees, western lines, we should go in with and how to become more so’ and fresh thinking and see how money more investment in research. even in countries is given, how it’s used and how it reaches the end users.’ When it comes In India, infrastructure is generally with relatively to social investment, he says, many are lacking and data is the greatest well developed practising it but they don’t know they gap. The nearest approach to its are ‘so those rich experiences are not collection is Bain & Co’s annual India infrastructure" collected. They are doing cutting-edge Philanthropy Report ‘and that’s the work with gut feeling rather than from only quantitative estimate’, says Ingrid precept, but that makes them more Srinath. ‘The Centre for Social Impact encourage philanthropy at all levels valuable and what they are doing and Philanthropy is preparing data – but this will require considerable needs to be captured and replicated.’ but it will take us a while to get it out.’ investment if it is to be done properly Shazia Amjad sees capturing more and have an impact, and this support data on Pakistan’s philanthropy sector will have to come from a group of Supporting individual and as a big priority in the coming years. foundations, although there is a indigenous philanthropy compelling case for co-investment Often where there is data, it’s not from government.’ More than one interviewee spoke of collected in a way that the sector the need to promote philanthropy finds useful. There is a lot of data in ‘We don’t have an overall statistical generally, rather than just institutional Singapore, but, says Laurence Lien, picture of how the third sector philanthropy. ‘We need a body to it’s collected by the government is funded,’ says Rosa Gallego. promote philanthropy generally and the government largely doesn’t ‘Foundations’ annual accounts – and especially among HNWIs,’ said share it. Such data as is accessible, showing who foundations are, how Rosa Gallego. like that collected by the Charity much money they have, what areas Commission, ‘is very macro. They’ll they work in – should be made Halima Mahomed wants infrastructure give you the state of the charity public by the supervising authorities,’ organisations to do more to sector, the total amount of giving, she says, ‘but they don’t have the support individual and indigenous broken down by subsectors, resources to do it.’ philanthropy. ‘We keep saying that but it’s all aggregated data.’ the narrative has been imposed and ‘With almost any aspect of giving,’ that there are all of these traditions in Philanthropy Australia is launching a says Halima Mahomed, ‘we know bits Africa and that they really symbolise ‘Foundation Maps Australia’ project, and pieces of bits and pieces.’ Some what philanthropy is here, but the in partnership with the Foundation elements of philanthropy have their infrastructure organisations are for the Center in the US, to address the data own infrastructure organisation, but most part supporting the institutional issue. ‘We have reasonable data on they have a partial view, restricted and not the individual.’ The reason is the size of the sector,’ says Krystian to their particular field of endeavour. partly financial: ‘it’s much easier to Seibert, ‘but we don’t have micro-level ‘Nobody has an overall view. And get funding for conferences where data.’ He also notes that ‘it would be that’s in South Africa where the institutions will come or to support great to have some sort of ongoing infrastructure is much more developed philanthropic institutions to learn how public campaign in Australia to than in the rest of southern Africa.’ to do something differently.’

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This might just as easily involve ‘WINGS needs more resources to get rediscovering older forms of giving IS THE BUSINESS more staff capacity and it needs to and giving them new life as creating MODEL VIABLE? learn how to use the capacity of the new ones. In the Arab region, Atallah institutions that are its members.’ Membership organisations across the Kuttab and his organization, SAANED, board and across the world are having is trying to highlight indigenous These points raise what some a difficult time. The continual bugbear practices of giving and adapt them to interviewees see as a crucial question of infrastructure organisations is trying current circumstances. One example is for the future of infrastructure to meet the demands made on them an endowment-style practice known organisations: is the ‘business model’ with the limited resources at their as AlQard AlHasan (giving money many of them adopt – provision of disposal. As Krystian Seibert puts or property to be used for specific technical or information services in it: how do you match expectations periods of time and then given back exchange for an annual membership (‘We get asked to do a lot of things to the giver at the end of the specified fee – one that is going to be tenable and it’s hard to say no’) with the period). Another is donation of one for much longer? If it isn’t, what resources you have? Most network third of one’s wealth as a legacy should take its place? These points organisations have few staff. They (strictly speaking, Kuttab explains, were also raised by participants in are unable to offer more services Islam does not countenance bequests, the Johannesburg workshop. without asking for more resources but setting aside one third of one’s from members, which, in turn, wealth for social good is permissible). Carolina Suarez notes the produces higher expectations from responsibility of members. Too often, those members. ‘It’s a vicious circle.’ foundations are more concerned Supporting CSOS ‘We constantly have to make the with what they can get out of an Helping to develop the capacity of case to our members about why it’s organisation rather than what they the non-profit sector is another role important to fund us,’ says Hilary might put in. ‘It’s important to infrastructure organisations might Pearson. Halima Mahomed speaks of remember that they can contribute to usefully play, thinks Laurence Lien. infrastructure organisations having us rather than us simply contributing Shazia Amjad sees a need for support to ‘scrounge for money to do what to them. They can share information to fledgling CSOs who ‘don’t need they need to do. I almost feel like and experience with us.’ money, but do need organisational we are setting up our infrastructure Gaberman’s solution to the resource support and capacity building’ – organisations to fail. We constantly question is a simple one: ‘If we said, though PCP is not necessarily well talk about encouraging philanthropy “this is of value to us all in the sector placed to supply it. Now that cross- and we’re not putting our money and it’s the responsibility of us all border financing is less forthcoming, where our mouth is.’ to support it and we can come up looking into how CSOs can generate with a formula that’s sort of self- funds to become sustainable is Barry Gaberman puts this in taxation”, it would be peanuts to another possible role for PCP. perspective: ‘the public sector and the for-profit sector would never, ever think any single institution to put its of de-funding the support organisations share into a pot for supporting the for their sectors, yet when you come infrastructure organisations.’ to the non-profit sector, there is such a grudging, niggling commitment For many, the very fact that they to funding the infrastructure that it’s continue to exist because they’ve embarrassing.’ The result is that ‘when been able to demonstrate their It would be we get hit with an issue, we moan value is itself a big achievement. about the fact that those support ‘Our biggest achievement is having peanuts to any organisations whose capacity we have AFE as the forum for us to come not maintained are not up to the task together, and the trust we have single institution of protecting the sector. You just can’t created in doing so,’ says Carolina have it both ways.’ Suarez. Hilary Pearson feels the test to put its share of PFC’s value is that its membership If there’s a grudging willingness to has grown every year since it was into a pot for support infrastructure organisations, founded 15 years ago. ‘We’ve created supporting the in general, he says, ‘there is a doubly voice for this sector, we’ve created grudging willingness to support those a community among foundations, infrastructure that are umbrellas for infrastructure we’ve shown them there are ways in organisations.’ WINGS and CIVICUS which they can aspire to be better organisations" survive on next to nothing and would and we’ve supported them in being scarcely have survived at all if it leaders – taking risk, having vision, weren’t for a few key institutions. looking forward.’

60 WINGS Global Philanthropy Report Infrastrucuture organisations

We’ve created voice for this sector, we’ve created a community among foundations, we’ve shown them there are ways in which they can aspire to be better and we’ve supported them in being leaders – taking risk, having vision, looking forward”

61 9 Some ways forward

This chapter does not pretend to be a comprehensive look at the future. Rather, it takes a few of the major issues facing philanthropy that have arisen in this report and suggests some ways philanthropic institutions, including infrastructure organisations, might address them. It also discusses the need for philanthropy itself to develop an overarching vision of its role in the world and for infrastructure organisations, especially WINGS as a global body, to play a bigger role in holding philanthropy to account.

62 WINGS Global Philanthropy Report Some ways forward

HELPING CIVIL SOCIETY ORGANISATIONS TO SURVIVE Chapter 7 looks at the various How do we support community pressures on NGOs in many parts of the world that threaten their operation, even their survival. What resilience in decades to come? can philanthropy do to help? What are the institutions we Provide core funding need to build now to protect In the UK, says Carol Mack, the pressure on voluntary organisations is forcing foundations to rethink it and what is the role of the kinds of support they offer. ‘It’s become much more about how we the traditional philanthropy can help the organisations we really care about to survive. Let’s give them sector in supporting that?" core funding so that they can secure their future and patch in other bits of funding from other funders.’ She also notes the development of a One foundation is funding sabbaticals who see their role as having a political discussion about how funding ‘can to help deal with this problem. dimension. He believes there are be made easier for the organisations ‘too few opportunities for NGOs, the that funders want to support – making Build more democratic forms consumers, so to speak, to have a processes simpler, publishing charters collective and honest conversation for grantees in some cases.' of philanthropy with the donor world. Rather than Danny Sriskandarajah points to philanthropists going from Mexico to Increase resilience through the possibility that crowdfunding Warsaw to wherever and talking to income generation and offers of building more democratic, themselves, we need opportunities broader-based forms of philanthropy for them to talk to folk from the fundraising training for community support. Seen in sector at the structural level, rather The Mexico City workshop also this way, he thinks the real question than on a particular theme or identified things that might help to both for philanthropy and for operational level.’ Because it would create more resilient organisations. infrastructure organisations is ‘how involve a sector-level gathering, An obvious way is to earn income, do we support community resilience this kind of convening would be though this has its downside in in decades to come? What are best done by an infrastructure the risk of the organisation’s being the institutions we need to build organisation, he suggests. distracted from its main purpose. now to protect it and what is the Training in fundraising for NGOs role of the traditional philanthropy (and for local communities where no sector in supporting that?’ Stay involved where NGO is involved) was also mooted. funding is difficult We have seen earlier his advocacy A cost-effective way to do this is of the development of what he calls Participants at the Mexico City WINGS through e-learning courses which ‘fundermediaries’ to channel donor Forum noted things funders could do can help mobilise communities both funds more directly to end recipients. to stay involved where official funding to do their own fundraising and to He argues that ‘groups like WINGS for NGOs would be impossible. These advocate for themselves. Another idea could take the lead on this, convening include working through groups with along similar lines is a pooled fund, others such as AWDF and Mama Cash, no formal existence and educating whereby two or more foundations groups with a solid track record of civil society groups on the terms might set up a sustainability fund working close to communities.' of legislation, so they can be clear to encourage the development about what is and what is not legal. of resilience among NGOs. Convene forums to bring The Open Society Foundation, for example, undertakes financial training Also noted was stress on the together donors and NGOs individuals involved, not just on the because, at a basic level, it means organisation. There is a good deal Sriskandarajah also suggests that government auditors can’t use the of burnout in the sector and a high infrastructure groups might convene absence of it as an excuse to shut an turnover of personnel. peer groups from the global south organisation down.

63 WINGS Global Philanthropy Report Some ways forward

Ensure compliance with Helping with protection the ‘refugee question’ in the Arab existing laws region. ‘Philanthropy can’t do anything Rutzen also notes ‘a set of things that much because we haven’t positioned Doug Rutzen sees a number of ways can be done for protection. It might be ourselves for an effective role in philanthropy can help in mitigating digital security, it might be training in our society.’ the effects of restrictive laws. ‘If physical security, it might be helping you look at almost any country, move someone to a neighbouring An immediate consequence will be there’s a web of laws that can catch country for a cooling-off period. that ‘whatever money is there will go charities and NGOs and we don’t So there’s a whole set of protective into relief work. I expect more relief want them to be so focused on the strategies depending on needs will be coming up whether it’s law that they can’t go about their the circumstances.’ as a result of wars or refugees.’ fundamental mission, so philanthropy needs to provide assistance to allow What can foundations do to help charities to continue operating.’ people to recognise the reality of CONFLICT AND MIGRATION migration, and the fact that it’s not In authoritarian regimes, restrictions Chapter 1 points to a number of going to stop? ‘It’s not a funding job,’ can often rest on minor technical major challenges arising from conflict believes Gerry Salole. ‘Foundations points. There are examples where and the resulting displacement of need to engage with people, talk to ‘philanthropy and other donors have peoples. Barry Gaberman notes the them, set up places where people can stepped forward and helped create key role of the International Center have safe conversations about this. an infrastructure so they can’t close for Transitional Justice in conflict People need to feel they are being groups down because they don’t situations. ‘It’s a very difficult area listened to. One of the things that have enough fire extinguishers – to get into, there’s a lot of risk, but comes over starkly from what Trump which is a real example. So you it’s increasingly important.’ Given and Nigel Farage have taught us is can help with compliance. You can challenges like this, funding and that people need to express their help with adaptation. Sometimes sustaining ‘that set of institutions views and have somebody to listen to the best thing to do is simply that holds the banner for human them. If they don’t they become more not to operate as a non-profit, so rights and social justice’ becomes extreme – feeling like they’re losing donors can think of ways they can increasingly important, he argues. their culture, becoming strangers in engage with social enterprises But Atallah Kuttab sees a limited their own cities. All that needs to be and fund them in that capacity.’ role for philanthropy in addressing listened to and handled.’

People need to feel they are being listened to. If they don’t they become more extreme – feeling like they’re losing their culture, becoming strangers in their own cities"

64 WINGS Global Philanthropy Report Some ways forward

NEEDED: AN OVERARCHING ROLE FOR PHILANTHROPY GLOBALLY At a global level, ‘there needs to be The effects that digital much more of an abstract, value-based proposition about what philanthropy technology might have on is’, believes Jenny Hodgson. This is a matter of principle and also of policy: as the idea of global philanthropy the sector are incalculable at starts to grow, ‘the pushback is going to be global, too’, and questions about the moment. What is clear its legitimacy, about the justification for its intervention in policy-making, is that they will be profound will become more prominent. The growing number of collective giving efforts and of mega foundations/ and they will intensify" donors is magnifying the global debate about wealth inequality and the source of philanthropic money. She In the Canadian context, where the a concept which Philanthropy Australia sees the need, therefore, for a global question of indigenous communities is importing and which is likely to platform ‘that can take a position looms larger, foundations might have spread in one variant or another. about what philanthropy is for.' a mediating role. As Hilary Pearson points out, while the government The Digital Civil Society Lab at Halima Mahomed feels that is often ‘seen as an adversary by Stanford Center on Philanthropy infrastructure should play a much indigenous people, I don’t think and Civil Society is in the process of bigger role, holding philanthropy philanthropy is seen that way.' holding a series of workshops around itself to account. As she sees it, the world to examine the progress infrastructure organisations are and techniques of digital data and reluctant to confront the question its implications for civil society. of power in philanthropy, but, if they DIGITAL TECHNOLOGY This project will consider potential want to be taken seriously, they will infringements of rights in its use as have to. ‘The people who set up Digital technology is already well as the possibilities offered for foundations are complicit in the power affecting many aspects of the way civil society and philanthropy. Hilary relations that dominate society. If the philanthropy sector operates. Pearson points out that the Canada you want to encourage philanthropy Carol Mack sees a crucial role for Revenue Agency has made available to address inequalities, you have to infrastructure organisations and ‘in machine-readable form a huge address the notion of how they are funders in helping the sector make dataset on charities and foundations.' complicit in existing relationships.’ the transition to digital technology ‘in a good way.' She describes the There will be implications for the At the moment infrastructure technological revolution as ‘a really ‘demand’ side of philanthropy, too. Solve organisations are saying ‘we want to big game-changer’, particularly Education! in Asia is exploring ways to support philanthropy’, but ‘they’re digital technology. ‘It’s transformed make use of smartphones to develop not asking whether the philanthropy the high street, it’s transformed the educational programmes to reach they want to support is productive or commercial sector, it will transform children who don’t go to school but counter-productive.' the voluntary and community sector who do have a smartphone. Increasingly, and foundations, being the traditional NGOs and funders will explore new Underdevelopment of the funders of innovation.’ ways of working to capitalise on philanthropic infrastructure in a technological developments. country or region means the absence As we have seen, digital technology of a forum in which to develop a is already having a profound effect The effects that digital technology coherent view of philanthropy’s role on individual giving as online giving might have on the sector are and purpose (big conversations aren’t and crowdfunding platforms develop. incalculable at the moment. What happening in a number of places Also noted above, the possibility of is clear is that they will be profound because of the lack of somewhere to manipulating large sets of data in and they will intensify, and they will hold them, thinks Hodgson). increasingly sophisticated ways is require the attention of philanthropy being explored by the Foundation practitioners, observers and students – Center in its Foundation Maps project, and support organisations.

65 WINGS Global Philanthropy Report References References

1 AFE, GDFE, Cemefi et al (2015) Private 17 ‘Gates Foundation failures show 32 Cripplegate Foundation, Strategic Funds for Social Transformation: philanthropists shouldn’t be setting Objectives and Priorities, 2016-18. Philanthropy and private social investment America’s public school agenda’, in Latin America today. Los Angeles Times, 1 June 2016. 33 AFE (May 2017) Peace and Sustainable Development in Colombia: The role of 2 TUSEV (September 2016) Individual Giving 18 Amitabh Behar, ‘What role for philanthropy philanthropy in building a shared future. and Philanthropy in Turkey: www.tusev. in a democratic India?’ Alliance, September org.tr/usrfiles/images/belgeler/Individual_ 2016: www.alliancemagazine.org/ 34 Rohini Mohan, ‘Narendra Modi’s Giving_and_Philanthropy_in_Turkey.pdf feature/what-role-for-philanthropy-in-a- Crackdown on Civil Society in India’, New democratic-india York Times, 9 January 2017. 3 Clubs of 12 or more people which act as rotating credit unions or savings schemes 19 http://data.foundationcenter.org/#/ 35 http://theconversation.com/a-new-law- in South Africa. foundations/operating/nationwide/total/ in-china-is-threatening-the-work-of- list/2014 international-ngos-70884 4 Observatoire de la Fondation de France, Giving in Europe 2015: 20 ‘The Rise of Foundations: Hope for 36 Hudson Institute, Center for Global www.fondationdefrance.org/sites/default/ grassroots civil society in China?’ 10 May Prosperity, Hudson Institute Index of files/atoms/files/philanthropy_ 2017: www.chinoiresie.info/the-rise-of- Philanthropic Freedom, 2015. in_europe_2015.pdf foundations-hope-for-grassroots-civil- society-in-china 37 Curious to note that the progenitor of 5 Observatoire de la Fondation de France, Russia’s Foreign Agent Law and others in op cit. 21 Ingrid Srinath (2017) ‘Will the new the same vein may be the 1938 Foreign Southern Philanthropy live up to its Agent’s Registration (FAR) Act in the 6 TUSEV, op cit. potential for Transformational Change?’ US. The ‘foreign agent’ terminology was State of Civil Society Report 2017, picked up from the FAR Act a few years 7 CAF Southern Africa (2015) ‘I believe I CIVICUS. ago by a lawyer in Venezuela and the can make a difference’: Individual Giving government of Venezuela subsequently by ‘Ordinary People’ Living in Gauteng 22 GFCF (2010) More than the Poor began referring to foreign-funded NGOs Province, South Africa. Cousin? The Emergence of Community as foreign agents. The term has since Foundations as a New Development gained wide currency through the law 8 TUSEV, op cit. Paradigm. in Russia and similar projected ones in Israel, Kyrgyzstan and Ukraine. Coming 9 CAF India/Ethica (September 2015) Online 23 http://communityfoundations.ca/ back to the US, there is, says Rutzen, a Giving in India: Insights to improve results. vitalsigns/community-vital-signs ‘brewing controversy around the Trump administration’s engagement with 10 Wealth-X (2016) Changing Philanthropy: 24 Foundation Center/Council on Russia, so now groups are looking at this Trend shifts in ultra-wealthy giving. Foundations (2017) Local Communities engagement in the light of the 1938 Act. with Global Reach: International Giving The Project on Government Oversight has 11 BNP Paribas Individual Philanthropy by US Community Foundations: now launched an initiative asking citizens Report (2017) Passing the Torch: www.cof.org/content/local-communities- to write to their members of Congress to Next-generation philanthropists. global-reach-international-giving-us- give teeth to the Department of Justice to community-foundations enforce the FAR Act.’ 12 Ibid. 25 Lester Salamon (2014) Leverage for Good, 38 Hudson Institute, op cit. 13 www.hudson.org/research/13314-index-of- OUP. global-philanthropy-and-remittances-2016 39 Hudson Institute, op cit. 26 www.netimpact.org/careers/what-is-the- 14 World Bank (13 April 2015) Migration and difference-between-socially-responsible- 40 CAF (2016) Donation States: An Remittances: Recent developments and investing-and-impact-investing international comparison of the tax outlook, Migration and Development Brief treatment of donations. No.24. 27 divestinvest.org/philanthropy/about 41 See www.bridgespan.org/insights/library/ 15 Statistics in this section are taken 28 James Kynge, ‘The Ethical Investment remarkable-givers/profiles/ashish-dhawan- from Observatoire de la Fondation Boom’, Financial Times, 3 September 2017. rejects-the-status-quo/tax-incentives- de France, Giving in Europe 2015: increase-giving-india-ashish-dhawan www.fondationdefrance.org/sites/default/ 29 See Andrew Milner, ‘What happens to the files/atoms/files/philanthropy_ rest of it?’ Alliance, June 2017. 42 Observatoire de la Fondation de France, in_europe_2015.pdf op cit. 30 Social Traders, Finding Australia’s Social 16 Bain & Co (2017) India Philanthropy Enterprise Sector, 2016. 43 WINGS (2017) Infrastructure in Focus: A Report 2017. new global picture of organisations serving 31 University of Toronto (Spring 2013) Failure philanthropy. in Social Enterprises.

66 WINGS Global Philanthropy Report Annex A Annex A

LIST OF INFORMANTS FOR THIS REPORT

We would like to express our gratitude to the following interviewees who provided much of the material for the document:

Andre Degenszaijn, Executive Director, Instituto Ibirapitanga, Brazil

Atallah Kuttab, Founder and Chairman, SAANED for Philanthropy Advisory in the Arab Region

Barry Gaberman, Chair Emeritus, WINGS and Former Vice-President, the Ford Foundation

Basak Ersen, Secretary General, Third Sector Foundation of Turkey (TUSEV)

Carol Mack, Chief Executive Officer, Association of Charitable Foundations (ACF), UK

Danny Sriskandarajah, Secretary General, CIVICUS

Douglas Rutzen, President and CEO, International Center for Not-for-Profit Law (ICNL)

Gerry Salole, Chief Executive Officer, European Foundation Centre (EFC)

Halima Mahomed, Independent philanthropy consultant, South Africa

Hilary Pearson, President, Philanthropic Foundations of Canada (PFC), Canada

Ingrid Srinath, Director, Centre for Social Impact and Philanthropy, Ashoka University, India

Jenny Hodgson, Executive Director, Global Fund for Community Foundations

Krystian Seibert, Advocacy and Insight Manager, Philanthropy Australia

Laurence Lien, Founder, Lien Foundation and Executive Director, Asia Philanthropy Circle, Singapore

Maria Carolina Suarez Visbal, Executive Director, Asociación de Fundaciónes Empresariales (AFE), Colombia

Narmeen Adeel, Research Manager, Pakistan Centre for Philanthropy (PCP)

Oksana Oracheva, General Director, Vladimir Potanin Foundation, Russia

Rosa Gallego, Director of International Relations, Asociación Española de Fundaciónes (AEF), Spain

Shazia Amjad, Executive Director, Pakistan Centre for Philanthropy (PCP)

Yanni Peng, Secretary General, Narada Foundation, China

67 WINGS Global Philanthropy Report Annex B Annex B

WORKSHOP ATTENDEES

JOHANNESBURG WORKSHOP Andres Thompson Social justice & Philanthropy Network Brazil Andrew Chunilall Community Foundations of Canada Canada Ansis Berzins Community Foundation Movement in Latvia Latvia Beulah Fredericks Southern African Community Grantmakers Leadership Forum South Africa Bill Lockington Community Foundations Canada Canada Brian Toller Community Foundations Canada Canada Carola Carazzone ASSIFERO - Associazione Italiana delle Fondazioni ed Enti della filantropia Istituzionale Italy Christopher Worman TechSoup United States Colleen du Toit Charities Aid Foundation South Africa South Africa Dajana Berisha Forum for Civic Initiatives Albania Dana Doan Lin Center Vietnam David Jacobstein DCHA/DRG Cross-Sectoral Programs Team United States Emmanuel Marfo GADeF – Global Alliance for Development Foundation Ghana Florencia Roitstein Centro de Estudios de Estado y Sociedad: CEDES Argentina Hansa Goolab Charities Aid Foundation South Africa South Africa Ian Bird Community Foundations of Canada Canada Janet Topolsky Aspen Institute Community Strategies Group United States Jason Franklin Dorothy A. Johnson Center for Philanthropy (GVSU) United States John Harvey Independent Consultant United States Kathleen McCarthy CUNY – The Center University of New York United States Kevin McCort Vancouver Foundation Canada Lara Kalwinski Council on Foundations United States Monica Nkrumah GADeF – Global Alliance for Development Foundation Ghana Natalie Ross Council on Foundations United States Nick Deychakiwsky The Charles Stewart Mott Foundation United States Olwethu Sizani SGS Consulting South Africa Sahar Khajeali Community Foundations Canada Canada Sarah Tansey Human Rights Funders Network United States Sean Lowrie The Start Network United Kingdom Shannon L. Lawder The Charles Stewart Mott Foundation United States Shaun Samuels SGS Consulting South Africa Shazia Pakistan Centre for Philanthropy Pakistan Shekeshe Mokgosi The Other Foundation South Africa Stewart Mtulisi Mantula Community Foundation for Western Region of Zimbabwe Zimbabwe Titania Fernandez Community Chest South Africa Vuyiswa Sidzumo The Charles Stewart Mott Foundation South Africa

MEXICO WORKSHOP Amanda Martin Australian Environmental Grantmakers Network Australia Amy Taylor CIVICUS World Alliance United States Ana Valeria Araujo Social justice & Philanthropy Network Brazil Andres Thompson Social justice & Philanthropy Network Brazil Angela Bishop Community Foundation of Nova Scotia Canada Anke Paetsch Association of German Foundations Germany Ansis Berzins Community Foundation Movement in Latvia Latvia Armando Casis Asociación UNACEM Mexico

68 WINGS Global Philanthropy Report Annex B

Artemisa Castro Fondo Accion Solidaria, AC Mexico Barbara Ibrahim American University in Cairo Egypt Bruce Thao Minnesota Council on Foundations United States Carol Brennan Charities Aid Foundation United States Christian Tohmé International Committee of the Red Cross Switzerland Christopher Worman TechSoup United States David Perez Rulfo Corporativa de Fundaciones Mexico Emmanuel Marfo GADeF - Global Alliance for Development Foundation Ghana Esther Hughes Global Dialogue UK Florencia Roitstein Centro de Estudios de Estado y Sociedad: CEDES Argentina Heather Grady Rockefeller Philanthropy Advisors United States Hideo Tone The Toyota Foundation Japan Iara Rolnik Grupo de Institutos, Fundações e Empresas - GIFE Brazil Ingrid Srinath Ashoka University India Jacinth Morgan Collie Jamaica Public Service Company Limited (JPS Foundation) Jamaica James Magowan Spanish Association of Foundations UK Janet Mawiyoo KCDF - Kenya Community Development Foundation Kenya Jason Franklin Dorothy A. Johnson Center for Philanthropy at Grand Valley State University United States Jessie Charities Aid Foundation America United States John Harvey Independent Consultant United States Joyce Teo The Community Foundation of Singapore Singapore Lorenzo Davids Community Chest of the Western Cape South Africa Lourdes Sanz CEMEFI- Centro Mexicano para la Filantropia Mexico Luiza Souza Institute for Climate and Society Brazil Maggi Alexander The Philanthropic Initiative United States Maree Sidey Australian Communities Foundation Australia Marisa Ohashi Grupo de Institutos, Fundações e Empresas - GIFE Brazil Mizmun Kusairi GuideStar United States Natalie Ross Council on Foundations United States Niamani Mutima Africa Grantmakers' Affinity Group United States Nick Deychakiwsy The Charles Stewart Mott Foundation United States Nolitha Tiba African Philanthropy Network South Africa Oksana Oracheva The Vladimir Potanin Foundation Russia Patricia Lobaccaro BrazilFoundation Brazil Paula Johnson Harvard University United States Richard Marker Wise Philanthropy Institute United States Sameera Mehra Charities Aid Foundation UK Sandra Richardson Community Foundations of Canada Canada Sarah Afraz Ashoka University India Sarah Tansey Human Rights Funders Network United States Shazia Maqsood Amjad Pakistan Centre for Philanthropy Pakistan Stigmata Tanga The Foundation for Civil Society Tanzania Susan KCDF - Kenya Community Development Foundation Kenya Tevfik BaÅŸak Ersen TUSEV - Third Sector Foundation of Turkey Turkey Tina Thiart HGG NPO Sustainability Solutions PTY Ltd. South Africa Wendy Richardson Global Fund for Community Foundations Brussels

AMMAN WORKSHOP Barry Knight Centris UK Atallah Kuttab SAANED for Philanthropy Advisory Jordan Guesturd Haule Foundation for Civil Society Tanzania Hannen Khatib Arab Foundations Forum Jordan Helena Monteiro WINGS Brazil Larry McGill Foundation Center Unites States Lauren Bradford Foundation Center Australia Naila Farouky Arab Foundations Forum United States/Jordan

69 WINGS funders and supporters

WINGS Knowledge partner

The opinions expressed in this report are those of the authors and do not necessarily reflect the views of any of these funders.

www.wingsweb.org email: [email protected] Tel: +55 11 3078 7299

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