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October-December 2008
Global Giving Round-Up
Overviews of best-practices around the world and links to learn more about them
Philanthropy in an economic downturn: Initial responses and challenges
The global financial and economic crisis is impacting foundations, donors and civil society organizations worldwide. A review of recent articles from around the world demonstrates that the non-profit sector faces declining individual contributions, cuts in grantmaking from foundations whose endowments are losing value, as well as complications and increasing costs of current or prospective credit arrangements. In developing countries especially, these financial hits come in conjunction with increasing costs of food and fuel, multiplying operating costs where populations are already struggling.
Some foundations, notably the Bill & Melinda Gates Foundation and the John D. and Catherine T. MacArthur Foundation, have announced they will increase their grantmaking this year and next, despite hits to their endowment investments. While some individual donors have taken a “wait and see” approach, putting off large gift pledges for a few weeks, others are publicizing continued large gifts to meet the growing needs of the organizations they support.
In a time of challenges, opportunities also exist. Low-performing traditional investments have created an opening to promote socially responsible investing or mission related investing (SRI/MRI) as an alternative, especially for foundations and other groups with a public service mission. These investments can be as profitable and in times of slower returns organizations can find comfort in the results of the work as well as the investment dividends. Consolidation among civil society groups and reduction of duplicitous or off-mission activities, forced by budget cuts, might turn out in the longer term to be an overall benefit for the sector.
In a coming issue Global Giving Matters will explore some of the ways philanthropists are responding to this challenge. In the meantime, it is clear that the current crisis underscores the need for strategic global giving and the impact of sustained giving.
Dubai Cares demonstrates growing reach of Arab philanthropy
Dubai Cares (www.dubaicares.ae), a charitable organization created in 2007 by Dubai’s ruler Sheikh Mohammed bin Rashid Al Maktoum, has grown quickly through work with well-known organizations such as Save the Children, UNICEF, Oxfam and CARE International. The organization’s gift to Save the Children, for example, will provide support to 115,000 children in 200 schools and 50 early childhood development centers in Sudan. Dubai Cares is also working with Room to Read, an American nonprofit organization, to provide books in local languages to India, Nepal, Sri Lanka, South Africa and Zambia. Other places in which Dubai Cares has programs or partnerships include Bangladesh, Bosnia-Herzegovina, Chad, Palestine, Pakistan and Yemen. In its first year, Dubai Cares raised $1 billion, half through a fundraising campaign in Dubai and half from Sheikh Mohammed, who in 2007 also founded the Mohammed bin Rashid Al Maktoum Foundation (www.mbrfoundation.ae). That foundation works on issues related to culture, education and employment. (Wall Street Journal, November 11, 2008; Save the Children press release April 16, 2008)
Actress’ anonymous gift revealed in Korea
The revelation of the name of the largest donor to the Community Chest of Korea (www.chest.or.kr) as Moon Geun-young, despite her wish that her gift remain anonymous, has opened her to attacks from a few right-critics that her giving is for “partisan propaganda” due to her grandfather’s known sympathy toward North Korea. But beyond the specifics of the 21-year-old actress’ donation of 850 million won (over $500,000), the controversy points to challenges Korean philanthropists in terms of public attitudes toward giving. Kang Chul-hee of the Center on Philanthropy, a research unit of the Beautiful Foundation (www.beautifulfund.org), states “The reason Moon Geun-young wanted to remain anonymous was, I believe, she was afraid of such attacks. I meet many rich people, and the thing they worry about is, ‘When I give this money, how will society interpret it? Will they think, ‘Is he giving the money by squeezing it out of the labor union?’” Hwang Sang-min, a psychology professor at Yonsei University, said organized philanthropy is still evolving in Korea, with much of the giving spent on acquaintances and weddings, funerals or when someone is ill. “Our society is not yet accustomed to Ms. Moon Geun-young or anybody making donations,” Hwang said. “For ordinary people in Korea, when we have to accept something that is not familiar, we tend to take it not as it is, but with some negative interpretation.” Organizations such as the Community Chest and the Beautiful Foundation, which is led by Synergos Senior Fellow Won Soon Park, are working to improve the practice and public perception of philanthropy in Korea. (Yahoo News Asia, November 19, 2008)
Charitable giving on record pace in China
Total giving in China is expected to reach 100 billion Yuan ($14.6 billion) in 2008, according to a government spokesperson. These gifts were driven in part by response to terrible natural disasters such as the Sichuan earthquake, the donations for which accounted for 60% of the total. It is unclear whether this amount of giving will continue in the absence of dramatic events, but interest in philanthropy is growing. One example of this change is the establishment of a list of more than 300 companies, organizations and individuals nominated for the China Charity Awards (conducted by the country’s Ministry of Civil Affairs). Another is the recent China Philanthropy Forum, jointly hosted by the Boao Forum for Asia and the Red Cross Society of China Jet Li One Foundation, in November in Beijing. Among the speakers were the actor Jet Li and Jiang Yiman of the Red Cross, the latter of whom called for raising the profile of well-known philanthropic “brands” and increased attention to transparency and professionalism within the nonprofit sector. (China Daily, November 28, 2008; China.org.cn, November 3, 2008)
Travelers’ Philanthropy Conference focuses on sustainable development in Africa
The second Travelers’ Philanthropy Conference (www.travelersphilanthropyconference.org), held in Arusha, Tanzania in early December, brought together over 200 people from around the world under the theme of “Making Travelers’ Philanthropy Work for Development, Business and Conservation.” Topics included linking tourism businesses and travelers’ philanthropy to environmental and cultural conservation through financial support and economic incentives, and designing development projects that would address the root causes of poverty in Africa and other parts in the world. The event was organized by the Center on Ecotourism and Sustainable Development, a U.S.-based nonprofit organization, and was supported by a range of organizations from Africa and around the world that are working in the fields of tourism and development, including the Africa Travel Association (of which Global Philanthropists Circle and Synergos board member Eddie Bergman is executive director), the Ford Foundation, the United Nations Foundation, the U.S. Agency for International Development, Ethiopian Airlines and Virgin Atlantic.
Philanthropy growing in Czech Republic
Corporate social responsibility (CSR) has increased dramatically recently, with companies of all sizes developing programs and working in partnership with nonprofit organizations. Klára Šplíchalová of the Czech Donors Forum (www.donorsforum.cz) states “Corporate social responsibility programs and philanthropy trends are coming from abroad. Now we see that large companies, SMEs and even [individual] entrepreneurs want to take part. I remember times when companies would ask why they should or be involved. Today, they ask how to be involved, how to help and be active businesses in the community.” Czech companies spent 750 million Kc ($38 million) for charitable and social responsibility purposes within the last year. One form of the increase in CSR has been in efforts of companies to engage their employees through volunteering. (Prague Post, November 26, 2008)
Huge charitable bequest in the United Kingdom
Lord Ashcroft, a leader of the UK’s Conservative Party, has pledged to give away about 80% of his fortune when he dies to help set up a charitable foundation bearing his name. His family will receive the remainder and play a key role in running the foundation. He said, “It will give my family and my kids something very enjoyable to do during their lives...They’ve known my views for a long time. It’s not as if I’ve come from wealth and therefore when you have what is regarded by others as a large amount, sometimes it sits uneasily.” Ashcroft’s fortune mainly comes from service and manufacturing businesses he has helped grow, manage and sell. (Philanthropy UK, October 22, 2008)
Community foundations play strong but little known role in United Kingdom
A new study, Building Bridges: Philanthropy Strengthening Communities, by Rhodri Davies and Louisa Mitchell, points out that community foundations in the United Kingdom are not very well known, but play an important role in connecting donors to even less-known local nonprofit initiatives. As one person put it “There are a lot of small charities out there with fantastic potential, but the trick is to find them.” The study, published by Policy Exchange (www.policyexchange.org.uk), concludes with recommendations including the establishment of giving circles to help connect donors with nonprofit groups, greater focus on the visibility of local philanthropic intermediaries such as community foundations, and more support from government for philanthropic action. (Philanthropy UK, November 20, 2008)
© 2008 The Synergos Institute
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