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Philanthropy and Global Development: When Worlds Collide

April 16, 2013

(Jeff Falkenstein is vice president of data architecture at the Foundation Center. In October, he wrote about the challenges of gathering foundation grants data in a timely fashion.)

Globe_africaEarlier this month I had the good fortune to join policy makers, academics, and leaders from civil society and the private sector in Paris at the Organization for Economic Co-Operation and Development's (OECD) annual Global Forum on Development. (For those who haven't heard of it, the OECD works with governments, multilateral agencies, and bilateral agencies to better understand global trade and investment flows; the drivers of economic, social, and environmental change; and what can be done to address urgent global development problems. It then builds on that work to predict future trends in global trade and development.)

In the past, forum attendees typically discussed the challenges and opportunities presented by efforts to alleviate poverty around the globe. This year, however, the focus was on the progress made over the past decade in meeting the UN's Millennium Development Goals (MDGs) -- and on jumpstarting a dialogue about new challenges in a post-2015 world.

It was clear from reports presented at the meeting that, two years from their original 2015 target date, the MDGs are already a success. Poverty rates have declined globally. Access to health care has improved. The number of deaths of children under the age of 5 has fallen, to 7 million in 2011, down from 12 million in 1990. The number of AIDS-related deaths also has fallen, to 1.7 million in 2011, down from 2.3 million in 2005. Thanks to the MDGs, well-designed and coordinated social programs are producing a wide range of positive outcomes, including improved nutrition and food security and higher rates of school enrollment.

Despite this progress, forum attendees made it clear that challenges remain. The income gap between the poorest and wealthiest individuals continues to widen, while acute poverty afflicts tens of millions of people around the world. In sub-Saharan Africa, half the population still lives on less than $1.25 a day. Access to basic services remains a global challenge; close to 2.4 billion people around the world go without proper sanitation facilities, while 1.1 billion people lack access to clean drinking water. Meanwhile, the economic growth of the last twenty years has not translated into job creation. The number of informal, poor-quality jobs remains high in many developing countries, with young people particularly affected. In Africa and the Middle East, young people comprise 60 percent of the unemployed.

Somewhat lost among the good news is the fact that development aid globally fell some 4 percent in 2012, following a 2 percent decline in 2011. There has also been a noticeable shift in aid allocations from the LDCs (i.e., the poorest countries) toward middle-income countries. For example, bilateral aid to sub-Saharan Africa totaled $26.2 billion in 2012, a year-over-year decline of nearly 8 percent.

As already thread-bare social safety nets become more frayed, the global development sector is looking to the private sector to pick up the slack, leading many to question whether that's an appropriate role for foundations -- and whether, collectively, they have the resources to do so. After all, the majority of foundations in the U.S. are independent or family foundations that focus their grantmaking in two or three areas of interest and/or in a specific geographic region. Similarly, corporate foundations tend to fund efforts in communities where they have employees and facilities, while community foundations, by definition, target local geographic areas. Outside the U.S., foundations tend to use their resources to operate their own programs and often look more like grantseeking public charities than private foundations.

The U.S. foundation at the epicenter of global development work is the Bill & Melinda Gates Foundation, and the scope and scale of its work has tended to reinforce the notion that foundations are the answer to shortfalls in global development assistance. In the global health field, for example, the Gates Foundation is the third largest donor after the government of the United States and the Global Fund to Fight AIDS, Tuberculosis and Malaria.

The level at which Gates supports global health work is an exception, however, not the rule. And while Heather Grady, vice president for foundation initiatives at the Rockefeller Foundation, noted in her plenary remarks that Rockefeller itself has been an important driver and supporter of multi-stakeholder engagement with global development issues over its hundred-year history -- and while many other foundations are active in the global arena -- Gates is by far the biggest player.

So the question remains: If the global development community is eager to increase its engagement with private foundations, how do we bring more foundations to the global development table? And for those foundations already at the table, how can they better coordinate with other actors in the global development space?

I'm happy to report that a number of initiatives to do just that are under way. In an effort to increase communication among various stakeholders in global development work, the OECD and United Nations Development Programme created the Global Partnership for Effective Development Co-Operation to support and monitor development cooperation and "ensure it achieves the maximum impact in eradicating poverty and building better lives." To date, the partnership has brought 160 countries and 45 organizations together around a set of principles that it hopes will form the basis for effective development cooperation going forward.

In addition, UNDP, the UN's Economic and Social Council, the Worldwide Initiative for Grantmaker Support (WINGS), and OECD's netFWD initiative are actively engaged in helping the global philanthropic community understand how it can support development efforts and, with an eye to the future, are working to scale collaboration among philanthropic organizations, governments, and multilateral agencies. To that end, feedback from an ongoing e-discussion will feed into a special policy dialogue on "The role of philanthropic organizations in the post-2015 setting" on April 23 at the United Nations in New York.

The Foundation Center, too, is doing its part to increase the engagement of foundations with the global development sector. Through our partnerships with OECD, Development Gateway, and the World Bank, as well as through the development of Web portals like WASHfunders, the center is helping to shed light on the intersection of global development and philanthropy and creating greater understanding of those fields among governments and foundations.

I'll be attending the event at the UN on the 23rd and will be interested to see which foundations are represented there. In the meantime, I'd love to hear your thoughts about whether private foundations should think of themselves as part of the global development community? And if not, why not?

-- Jeff Falkenstein

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Posted by Andrea   |   April 17, 2013 at 07:55 PM

I do believe that private foundations should think of themselves as part of the global development community as they are part of the planet earth. We are all connected whether a company is private or public just like human beings. Great article, very informative. Thank you!

Posted by Brad Smith  |   April 22, 2013 at 11:28 AM

Agreed, this is an excellent and informative article. As indigenous philanthropy is brought into this dialogue we may well have to question the whole "development" paradigm. A Brazilian or Chinese foundation working in its own country or community may think of its work as being about job creation, sanitation or secondary education without necessarily framing it as "development."

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