How do philanthropists choose their causes?

Following our bridging philanthropy and development forum, one of the participants, B.S.Nagesh of TRRAIN, explains how he decided which cause to support:

Stepping out of the post of Managing Director of a successful publicly listed company at the young age of 50 was purely my personal decision. Setting up TRRAIN and TRRAIN Foundation was part of my personal philosophy of Learn, Earn & Return. Since two thirds of my career has been spent in retail, I was keen to start my returning phase by contributing to the same industry. People have been my passion and in an emerging industry in an emerging country the role of personnel is very critical. Therefore working for the betterment of people working in retail became a very natural choice for my cause.

It is also important that I am able to network and influence the key people in the industry as the vision of TRRAIN is to “Empower people in Retail” and the mission statement is:

We are committed to upgrading lives of people in retail both at work and home. We are the catalysts who create sustainable platforms through thought leadership backed by a not-for-profit objective.

Therefore the choice of the purpose was based on my ability to impact the cause either directly or indirectly by being a philanthropist in the early stage of development and a development agency as the trust gains momentum and stability.

I am not sure whether any of the goals or objectives set up by UN agencies or the MDGs had anything to do with my decision. In fact, I did not even think of understanding or looking at these directions because I was targeting a very niche cause and the large agencies seem to be working on a worldwide basis for global causes.

Yes, one day if my cause creates a great impact on the retail industry or the retail associate, we may come into the radar of the worldwide organisations. Let’s hope so!

 

 

Bridging philanthropy and development: one week on

Neelam Makhijani, Chief Executive at the Resource Alliance, shares an overview of conversations and outcomes at our #futurephilanthropy forum - as well as prioritising opportunities and next steps:

 

Join the #futurephilanthropy conversation on Twitter and Facebook.

Bridging philanthropy and development forum: day two

Day two kicked off with a presentation by Rob Garris, Managing Director of Bellagio Programs, of key findings from the paper on risk and philanthropy commissioned following the Bellagio Summit in 2011. The group then split to discuss key areas of risk identified in the report, and to address how to reduce operational and impact risks in philanthropy. 

Anchors for philanthropic decision-making

Defining ‘anchors’ as the intrinsic biases we hold, it was agreed that anchors influencing philanthropic decision-making can be based on: 

  • Past experience 
  • Perceived outcomes
  • Karma 
  • Relationships and trust

A venture philanthropist from Singapore spoke of how his experience running a foundation shifted the anchor he had from his experience in the financial world which had made him only consider quantitative results to be important. He now also appreciates the significance of qualitative indicators when applied to development. 

Risk and return for philanthropic investors

Discussion focused on the return expected by philanthropic investors, which is social rather than financial. Philanthropists explained that they are not risk-averse but are only willing to take informed, not blind, risk. They require organisations to demonstrate that their investments will be used effectively, using business planning principles such as key performance indicators. Philanthropists also expressed that they are willing to work in partnership with organisations to support and advise them to reduce risk. 

Some development actors spoke of the difficulty of demonstrating tangible outcomes for ‘risky’ causes such as advocacy, rights and social justice. Alternative methods were discussed for measuring the change that the organisations make, such as happiness indicators. 

Business as alternative to aid for development

Some development actors admitted their mistrust of the business sector, which came as a surprise to some of the philanthropists. Suspicion exists in Africa about the ulterior motives that they may have for investing there. 

A venture philanthropist presented a case study of his work setting up a game reserve in the poorest part of South Africa and spoke of the need to focus less on the causes of poverty and more of the creation of equitable wealth, including job creation and making employees shareholders of the business. This not only expands the tax base so the government can provide more services such as healthcare and education but also provides the employees with capital they can invest to improve their and their family’s future.  

Taking it forward beyond this meeting and towards more strategic philanthropy for development

Discussions identified actions that could make future philanthropy more strategic. Takeaways from the two days included specific actions for the Resource Alliance and the Rockefeller Foundation to look at putting into practice, including:

 

  • Credible directory/knowledge bank with data on both philanthropic and development actors
  • Case studies documenting both successes and failures in philanthropy
  • Guidance for new generation philanthropists, and mentoring from those with more experience
  • Additional forums to bring together philanthropists and development actors.

 

The Resource Alliance and the Rockefeller Foundation will now set to work on ensuring that these ideas are prioritised and developed.

What changed for these philanthropists and development actors

The final session closed with a reflection from the participants on what they would do differently as a result of their experience at the forum. Some of the changes included: 

 

  • A development practitioner from Kenya sceptical of the motivations of business has become more open to the potential for enterprise solutions to development
  • A retail entrepreneur/philanthropist from India is planning to change his business model to make it more sustainable 
  • A venture philanthropist from Singapore is now more encouraged to engage in cross-border philanthropy.

 

Thank you!

We would like to thank all of the participants in this forum for their valuable contributions over the past two days, and to wish everyone a safe journey home from Bellagio.

We feel that some of the bridges this forum set out to build have already begun to take shape. We are now looking forward to working on the actions outlined for supporting more strategic philanthropy for development in Africa and Asia. 

Continue the #futurephilanthropy discussion on Twitter and Facebook. 

 

Bridging philanthropy and development forum: day one

Day one of the forum on Bridging Philanthropy and Development in Africa and Asia saw a small group of new philanthropists and development actors with a diverse range of experiences come together to explore the factors influencing opportunities and risks in their potential collaboration. From the outset it was acknowledged that there is often mistrust and a lack of common understanding between these two groups, which the group here in Bellagio is keen to overcome so they can move forward together.

Community outcomes

The panel discussion on bridging philanthropy and development highlighted that the best resource for philanthropists seeking market information to improve community outcomes are people working on the ground with the end beneficiaries. In the experience of a former investment banker who set up a hospice for children with HIV in Indonesia, the information she gained from nurses working in rural communities proved more useful for facilitating needs-based development work than any statistics UN agencies were able to provide.

Lessons learned from collaboration

We shared stories of collaboration between philanthropists and development actors in small groups before reflecting on lessons learned and key factors for success, identified as:

• Community connections
• Demand-driven work
• Community-led and owned initiatives
• Clear communication of expectations from both sides.

Desire for sharing knowledge and experience to help the development of future philanthropy

Reflecting on their experiences, philanthropists were keen to share mistakes made and lessons learnt to benefit new philanthropists entering the field. Indeed, they expressed a desire for a central resource centre to help both philanthropists and NGOs understand the ‘how to’. They don’t want to reinvent the wheel, and would rather spend their time learning how to invest in a better way than making mistakes. They feel that what’s missing are the resources to help new philanthropists be more strategic.

Some philanthropists felt that, should NGOs they are supporting not live up to their initial expectations or under-perform, they would not simply walk away from the relationship they had entered into but rather work together to support them in working towards the agreed outcomes. However, this requires flexibility on both sides.

From project funding to institution-building

Both philanthropists and development actors agreed on the benefits of moving away from project funding and towards institution-building for sustainably addressing long-term issues. Institution-building requires a systems thinking approach with which philanthropists from the private sector may identify more readily than NGO practitioners accustomed to working on a project basis. The need for the concept rather than the entity to be institutionalised was identified, with reference made to Douglas North’s book explaining institutions as a collection of norms developed around a concept. However the challenges of institution-building, such as the need for on-going financial support and a diverse donor base, were recognised.

Who sets the development agenda?

It emerged that many philanthropists present today had not heard of the Millennium Development Goals, nor did they care about an international development agenda they feel they played no part in creating. Rather, individual philanthropists set theirown investment agenda based on their own passions. The philanthropists expressed that they are keen on sustained giving for long-term impact.

Social innovation systems

A social entrepreneur, who founded the Iko toilet project in Kenya, shared his experiences of developing a model for a social innovation system. We then looked at the scaling up of such a model, highlighting the associated significant financial, economic and political implications. The need for sustainability, scale and social impact of social innovation systems was emphasised, and the question raised of whether a loan gives a social entrepreneur more legitimacy than a grant.

Looking forward to day two

On day two of the forum we’re looking forward to a comprehensive exploration of perceived risk for philanthropists and drawing together actions to address the gaps to better bridge philanthropy and development in Africa and Asia. We hope to identify some concrete actions to take forward beyond this forum.

For all the latest developments from the June forum, or to contribute to the #futurephilanthropy debate, join us on Twitter and Facebook.

Bridging philanthropy & development: June Forum Agenda

Following last week’s Rio + 20 conference on sustainable development, the post-2015 agenda is very much at the centre of the international stage. So our meeting in Bellagio comes at a great time. Bringing together a small group of philanthropists and development actors from across Asia and Africa, we will be exploring how these two groups can work together to achieve sustainable change.

The agenda we’ve put together covers the broader issues affecting sustainable development and philanthropy as well as some more specific questions relating to collaboration, innovation and risk.

We’ll begin by introducing some of the key questions which will provide context to the discussions throughout the rest of the forum and inviting the participants to share their own experiences on the types of issues they focus on, how we might place more emphasis on investing in organisations rather than individual projects in the future and what philanthropy looks like in an interdependent world, where many development issues are borderless.

We’ll then move on to look at examples where collaboration between philanthropists and development entities has worked well and reflect on why these examples succeeded. We’ll also look at what we can learn from examples that didn’t work so well. By the end of these discussions we aim to develop a list of factors that influence the success of collaborations.

During the first afternoon, we also have a debate planned to address the question of who is driving the development agenda. We aim to provoke a lively discussion on who is setting the agenda, the relevance of such an agenda for philanthropists and whether we need a global case for support for development. Social innovation systems will also be examined, considering what they might look like and how such systems could be scaled.

The first day will end with a short presentation on the critical issues in risk and philanthropy. It will highlightsome of the key findings from the paper on risk and philanthropy we commissioned following the Bellagio Summit, which is published today.

The second day will take an in depth look at the critical issues in risk and philanthropy, picking up on some of the issues emerging from the report. We’ll be encouraging the group to come up with recommendations on reducing operational and impact risks. By the end of the forum, we hope to have a more concrete idea about what it would take to support people so that they can learn from the successes and failures of others and scale up the fundamental idea of our forum to give others the same experience.

We’ll keep you up to date as the discussions evolve and will really welcome your own perspectives and questions on these issues in the comments below and via Twitter and Facebook.

Observations on Bridging Philanthropy and Development in Asia

Next up in our series of guest posts we hear from Usha Menon, Executive Chairman of Usha Menon Management Consultancy, about the changes she believes could bridge philanthropy and development to create a thriving world for us and future generations: 

Resource_alliance_blog

This illustration is at the heart of my reflections for this blog, as I prepare for the forum to be held next week at the Bellagio Centre on Bridging Philanthropy and Development in Asia and Africa. 

For Asian development practitioner and philanthropists living in very interesting times, some even labelling it the Asian century, I believe we have a responsibility to be the change we want to see in this world.  Here are some of the changes that I believe could bridge philanthropy and development:

Participation: One that genuinely empowers the community, rather than as a tool for establishing power relationships between the donor and the charity or development agency. Despite the attempts and experimentation with bringing about collaboration between donors and implementing agencies, my observation in that in most cases it’s merely an attempt to integrate indigenous views into pre-determined positions of the donor or even the development intermediary, without much say from the impacted community.

Asian philanthropists and development practitioners have a great opportunity to put authentic empowerment into practise. The profile of an Asian philanthropist is very different from that of their western counterparts and leadership within funding agencies.

Bain & Company in their India Philanthropy Report 2012 reports that of the 400 high-net-worth individuals (HNWIs*) and emerging HNWIs in Delhi, Mumbai, Hyderabad and Pune surveyed:

•    More than 70% of the donors have less than three years of philanthropic experience. Majority were 40 years old or younger
•    Among families who participate in philanthropy, 76% have younger relatives who have assumed an active role in choosing charities, while 69% say young members shape or spearhead the family’s charitable mission
•    Private foundations are beginning to play a major role in Philanthropy

Process Innovation: Over the past few decades the dependence on ‘foreign aid’ has developed a whole generation of Asian development practitioners who are conditioned by the linear thinking and reporting requirements of their western funders. Despite these processes, the grant makers are often unable to receive the quality and quantity of written information that they seek of their grantees. At the same time, the application and reporting requirements have made these funding impractical for many grassroots organizations or the time and effort expended to get a grant is at times not proportionate to the size of the grant. Donor reporting requirements driven by matrixes and frameworks, do not consider stories from the ground as sophisticated theory, thus losing out on the possibility of hearing the real voices.

Asian philanthropists and development practitioners have a tremendous opportunity to close this gap by looking innovatively at the processes needed for engagement, tracking and celebrating the impact with the community.  Philanthropists have an opportunity to foster open, empowering, and flexible relationships with their grantees that could leverage on technological advancements in communications while at the same time build on our rich tradition of oral storytelling.

Perception:

The profile and motivations of the Asian philanthropists differ in many ways from the donors that development practitioners are used to dealing with, in the past. UBS-INSEAD Study of Family Philanthropy in Asia that covered over 200 surveys and over a hundred personal interviews with wealthy Asian families from 10 Asia Pacific countries, found the following motivations of Asian philanthropists: 

•    42% of respondents said their major reason to engage philanthropy is to make sure they ensure the continuity of their family values and to create a lasting legacy for future generations.
•    They tend to donate to their own countries, with roughly 70% of donations on average in 2010 given to national causes. However the younger philanthropists seemed more open to national and international causes.
•    36% of donations went into education, while poverty alleviation accounted for 10% and healthcare for 9%. However younger philanthropists seemed more open to sectors such as the arts, civil rights and the environment
•    Family business remains an important source of funds with 22% of the families studied reporting company profits as providing funding for their philanthropy and prefer maintaining operational control, rather than working collaboratively or as grant-making entities
•    36% of survey respondents ranked Social Entrepreneurship as the most important trend that will affect philanthropy in Asia, with a growing interest among family philanthropies in the sustainable and transformative potential of social ventures with earned income strategies.

Hence it is the mutual responsibility of both the philanthropists and the development practitioners to forge collaborations that will take us all to our common goal – a thriving world for us and our future generations.

Usha Menon is Executive Chairman of Usha Menon Management Consultancy, an international training and consultancy service for the non-profit sector across Asia, specialising in strategic management, inspirational leadership development and mission driven fundraising. Usha is a keen observer and an active global participant in the non-profit sector for the past 25 years.

Join the #futurephilanthropy debate online on Twitter or Facebook, or share your comments below. 

Philanthropy as Development

Rob Garris, Managing Director for Bellagio Programs at the Rockefeller Foundation, tells us more about the upcoming forum and introduces some of the main topics that will be discussed in Bellagio later this month:

"Last November at the Rockefeller Foundation Bellagio Center, Awkasi Aidoo of Trust Africa encouraged us not to think about doing philanthropy for development, but instead to think of “philanthropy as development.”  His comment carried a lot of meaning: philanthropy should be embedded in emerging economies and build on local traditions of giving and mutuality so that new wealth is shared, and shared wisely.  Philanthropy should seek to solve underlying causes of poverty.  Philanthropy should, as John D. Rockefeller suggested in 1913, improve human well-being around the world.  

The diverse participants from philanthropy and development at last year’s summit shared broad goals and values, but have different ways of working and different understandings, sometimes, of the worlds in which we work.  We are excited to partner with Resource Alliance to continue this conversation, again at the Bellagio Center, just a few weeks from now. 

Last year, we  asked an experienced group how to improve human well-being through collaboration and cross-learning between philanthropy and development. This year we have invited a group of new philanthropists, primarily from Africa and Asia, to work through some of the themes that emerged last year from the perspective of their own work.   On the table for discussion: how to balance risk and opportunity to maximize results; how to build trust with partners;, and how to spot and build on community-based innovations? I also expect we’ll generate new questions and hopefully offer a few answers, too.

We hope that our guests will teach and learn from each other, and sharpen our thinking on these issues.  We’ll share with you here and on Twitter what we learn as the discussions unfold.  Stay tuned!"