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Fall 2011
Global Giving Round-Up & Resources
Global Impact Investing Rating System to measure social returns
The mix of philanthropy and finance known as “impact investing” has evolved since it began in the 1950s with investments in emerging-market enterprises to fight poverty. Today, it’s an established offshoot of socially-responsible investing, with over 300 social investment funds operating. J.P. Morgan estimates that the field will grow at least ten-fold by 2020 to include more than $400 billion in investments in housing, water, health, education, and financial services. But is impact investing actually having an impact in terms of both profit and social benefits? The new Global Impact Investing Rating System, or GIIRS, will help answer that question by tracking companies’ social and environmental performance. GIIRS creators hope that this information will attract more people to impact investing and make sure their money is used well. “We’re trying to show that you can actually do good and do well,” said Álvaro Rodríguez, head of IGNIA in Monterrey, Mexico, one of 25 social investment funds that completed a recent GIIRS pilot. “This rating system is putting your feet to the fire: You said you’re trying to have a positive impact – are you meeting that promise or not?” Much of the groundwork for GIIRS’s approach was laid at convenings in 2007 and 2008 including representatives of the Rockefeller Foundation, other foundations, family offices, and financial institutions including J.P. Morgan, Prudential, and TIAA-CREF. So far, GIIRS has been tested with 200 companies in 25 funds on five continents. Deloitte has verified responses; a third-party audit is now part of every rating. (Christian Science Monitor, September 24, 2011)
Basketball star gives back to his home town in Argentina
Manu Ginobili, a basketball player for the San Antonio Spurs professional team in the United States, is helping homeless and disadvantaged kids in his home town of Bahia Blanca, Argentina by partnering with children’s homes such as Mama Margarita House. Ginobili’s returns to Bahia Blanca in the off-season to help mentor kids at Mama Margarita House and attract resources to help it and other nonprofit institutions. “The goal was just to help out,” Ginobili said. “I knew I was becoming popular in Argentina. I was starting to feel that some companies in Argentina wanted to associate with me, so I just wanted to be a facilitator to raise funds and distribute them the way I thought was fair and to institutions that I trusted.” Ginobili has begun to expand his philanthropy past just Mama Margarita by supporting hospitals. (San Antonio Express News, September 28, 2011)
Wealth in middle-income countries could change the nature of aid, and suggests role for philanthropy
In a piece in The Guardian, Nick Perkins of the Institute of Development Studies explores the impact of increased income in populous countries such as China, India and Brazil on the future of aid programs. Noting that India is now a middle-income country, he writes that “International development policy is still coming to terms with what that means. Particularly with whether or not we still need to bother with providing aid to countries like India.” But because the government India may not have resources directly address massive problems such as child malnutrition, it must look to strategic interventions that leverage other resources. Some of those resources might come from international philanthropy. The Rockefeller Foundation and the Institute for Development Studies, through the Bellagio Initiative (www.bellagioinitiative.org), are looking to create a framework for philanthropy to better interact with aid programs. Perkins also looks to philanthropists from within middle-income countries, but warns that “They need to understand who they can partner with; they need to understand better the detail of how international development works.” (The Guardian, September 27, 2011)
Rise in philanthropy from India’s wealthy and middle class
Some top charities in India say the rise in the number of middle class donors has boosted their donations by an average of 20% in the last five years. “We’ve been pleasantly surprised when we tapped into the middle class donor since 2007. The ‘critical’ mass of the middle class has helped us gain almost R10 crore [R100 million – about $2 million] last year. These are from individual donations of R3,000 per year,” says Nisha Agarwal, CEO of Oxfam India. The Hindustan Times points to “…the rise in the number of salaried professionals who donate to charities, it shows this is a section that doesn’t want to continue with the ‘chalta hai, kuch nahin ho sakta’ attitude. They want to deal with developmental issues themselves, rather than wait for the government.”
A year ago, Bain & Company published the first edition of the India Philanthropy Report. Based on data from 2006, it found that while many Indians had accumulated significant wealth in the preceding two decades, private philanthropy was not filling the gap that had emerged with poorer members of society. But that is changing, as the 2011 edition points out: “Our data then was from 2006 when total giving was 0.6% of GDP and only a third was private giving. That picture has changed quite significantly over the last five years.” Bain states that giving in 2010 was between $5 billion and $6 billion, almost three times the amount in 2006. The Bain report also points to three critical factors in further growing charitable giving: lack of transparency/accountability, unfriendly tax laws, and lack of awareness of ways to give.
A number of online services have emerged to raise awareness about charities and make it easy to contribute, including GiveIndia, Samhita, and Charities Aid Foundation India. In addition, GuideStar India and the Credibility Alliance offer information to promote transparency and accountability. For example, GuideStar India includes self-reported financial information from more than 1,000 organizations. GuideStar India, which is led by Synergos Senior Fellow Pushpa Aman Singh, also helps connect large donors and companies to organizations that can use their support effectively. (Hindustan Times, October 1, 2011; India Philanthropy Report 2011; Wall Street Journal Online, October 21, 2011)
Distrust, fear inhibit charitable giving in Mexico
Violence fueled by narcotics trafficking and other criminality may be contributing to low levels of charitable giving in Mexico. The country ranks lowest among the 34 member nations of the Organization for Economic Cooperation and Development in taxes and second highest in income inequality, so clearly there is great need for private social action. But only 0.04% of GDP was donated to charity in 2003, nearly 40 times lower than the United States. Colombia, Brazil, Argentina and other developing nations also have more giving in relation to GDP. One factor that can perhaps be credited for this lack of philanthropy is the amount of mistrust existent in Mexico, which Alicia Lebrija, director of the Televisa Foundation, says “permeates the philanthropy world.” Due to fear of extortion and kidnapping among the country’s wealthy and middle class, individuals and businesses are hesitant to make large amounts of donations. In addition, giving tends to be assistential, as opposed to focusing on social causes and long-term development. (Washington Post, August 9, 2011)
Venture philanthropy model invests £6.8m in Scottish children’s charities
The Scottish government and Inspiring Scotland have picked 24 children’s charities to share in the £6.8 million Early Years Early Action Fund to support vulnerable children and families’ across Scotland. The fund pulls in support from over 120 individuals and businesses, including corporate partners like Microsoft and Pagoda PR. Some provide free or reduced fee services to awardees. Andrew Muirhead, chief executive of Inspiring Scotland, said “We are confident that through our venture philanthropy model of providing substantial development support from the private sector in addition to financial investment, we will strengthen the voluntary sector’s response in supporting families and children with the best start in life.” (Civil Society UK, September 27, 2011)
Where is the Bill Gates of global education?
In an opinion piece published by the Brookings Institution, Justin W. van Fleet asserts that there is relatively little interest among the signatories of Bill Gates and Warren Buffett’s Giving Pledge in supporting education around the world. Instead, donations to education, at least by US billionaires, tend to have a domestic focus. “Therefore,” he writes, “in a search for philanthropic champions of education in the developing world, we looked at the philanthropy priorities of billionaires living in developing countries and emerging economies.” There are some major proponents of education around the world, including Hüsnü Özyegin (a member of the Global Philanthropists Circle) in Turkey. His foundation has built about 50 schools and girls dormitories in areas with limited access to educational facilities and has provided about 10,000 scholarships to university students from disadvantaged backgrounds. But globally the picture is mixed due to the uneven distribution of billionaires between countries and regions. For example, there are only six billionaires in sub-Saharan Africa, compared to over 100 in Russia, 55 in India and 30 in Brazil. Van Fleet points to the possibility of philanthropy helping start broader efforts, “help[ing] catalyze national discussions and mobilize investments from other actors, such has been the case in the global health sector.” (Brookings Institution, August 18, 2011)
A new resource on large grants: Million Dollar List
The Center on Philanthropy at Indiana University has created the Million Dollar List (www.milliondollarlist.org), a new online resource of information about large grants. The aim of the site is to fill existing knowledge gaps, assist grant makers in gaining perspective about other large grant makers, show gaps in funding, and create an easy tool to add a global view on strategy in philanthropy and large donations. The site makes the raw data upon which the list is based available for download, and offers tools to explore the data in various ways. In reviewing the site, Maureen O’Brien of The Philanthropic Initiative says she “hope[s] the act of reviewing what is being funded – and what is not being funded – with these big gifts gets potential donors thinking more deeply about how they want to be using their giving to address the challenges they care most about.” The site was made possible with support from the Bill & Melinda Gates Foundation. (Deep Social Impact, October 11, 2011)
The five (and six) Cs of philanthropy
In an article in Alliance Magazine’s Philanthropy News blog, Michael Alberg-Seberich of Active Philanthropy adapts the “five Cs”, created by Rick Little as a framework for the positive development of a child, as a value compass for philanthropy. Little, founder of the International Youth Foundation, talks of competence, confidence, connection, character, and caring. For each, Alberg-Seberich identifies a transfer to philanthropy. For example, for connection he writes that, “Philanthropy is about bringing people together and building bridges between people. A donor needs to know where she is coming from and where he wants to go. The consideration of all stakeholders, the collective, is crucial to have a lasting, systemic impact with your investments.” He mentions the addition “contribution” as a sixth C to youth; that is clearly central to philanthropy. Alberg-Seberich concludes by saying this framework can help us understand the “why” of giving. (Philanthropy News, October 24, 2011)
© 2011 The Synergos Institute
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