A Q&A With Michael Edwards, Author, 'Small Change: Why Business Won’t Save the World' (Part 2)

In November, PND spoke with Michael Edwards, author of the 2010 book Small Change: Why Business Won't Save the World, which offered a sharp critique of the philanthrocapitalist worldview. In part two of our interview, Edwards talks about the impact of the Occupy Wall Street movement and shares his take on the recently established Bellagio Initiative, which seeks to establish "a new framework for philanthropic and international development collaboration in pursuit of human well-being in the twenty-first century."

To read part one, click here.

Philanthropy News Digest: Are you surprised the Occupy Wall Street movement has gained as much traction as it has? And do you think it will continue to have an impact on the income inequality debate in the United States, or in other countries, for that matter?

Michael Edwards: I'm not surprised that Occupy Wall Street has had an impact, especially when you consider that inequality in this country is at its highest level since records began to be kept. Something like one in four American children today live below the poverty line, and across a very broad swath of the American population people are feeling economically stressed, fed up, and want some change. Historically, that's precisely the kind of environment that spawns social movements. It just happened to be Occupy Wall Street, but it could have been something else. That said, the movement already has had an impact on the public debate, across party and ideological lines, and people are now talking about inequality in a way that they weren't even six months ago.

That's what social movements do. They may not have a direct impact on policy in the short term, but they give large numbers of people permission to talk about critical issues in a way they weren't able to before, and they tend to change the cultural conversation in ways which are important over the long term. In a sense, Occupy Wall Street is just a convenient platform for people, many of whom are somewhat suspicious of it, but who feel that something has gone terribly wrong. Whether it will continue to play that role in the future is the big question, and no one knows the answer. But I don't think that matters much right now, because, to give the movement its due, it has done something pretty remarkable in terms of changing the national, and in some ways international, debate about inequality. Will it be able to transform itself into something more formal, politically speaking? Will it develop a policy platform? Will it align itself with other existing movements for change? I don't know. But even if it disappeared tomorrow, its impact would continue to be felt.

PND: What is the appropriate role for foundations with respect to social movements? Should they be doing more to support a movement like OWS in its initial phase?

ME: Foundations have never been very important in supporting social movements in the United States or anywhere else, because that's not how social movements develop. Social movements are self-organized, self-created entities which largely run on their own firepower, including financial firepower raised through small donations, membership dues, labor contributions, and so on. Sure, if you look at the civil rights movement or the women's movement there were foundation dollars involved at various stages, but they were never particularly determinate, and the same holds true today, though maybe the Tea Party is an exception. Part of the reason I think -- and it's a good reason -- is that foundation funding comes with certain strings and accountability requirements attached. And that has an impact on the movement itself in terms of who makes decisions and how they're made. It implies a level of formality that people may not be comfortable with, and it can sometimes de-radicalize a movement in ways that are quite damaging.

It reminds me of the old battle cry "The revolution will not be funded." It might seem silly now, but it's based on something quite important, which is that you have to be sensitive when you introduce foundation funding into a spontaneous, democratic, disorganized movement space. That doesn't mean there isn't a role for foundations and foundation funding. But, generally speaking, what you typically find is that foundations are most effective in these situations when they take a back seat in the process of movement-building and focus on something very concrete where their funding can really make a difference. In the civil rights era, for example, foundations concentrated on supporting voting rights and voter registration, and I think there are parallels to that today.

A Q&A With Michael Edwards, Author, 'Small Change: Why Business Won’t Save the World' (Part 1)

Over the past decade, philanthropy has been invigorated by the arrival on the scene of some very large and innovative foundations, many of them established by hugely successful individuals from the worlds of business and technology. In 2009, Matthew Bishop and Michael Green brilliantly captured the spirit of the decade in their book Philanthrocapitalism: How Giving Can Save the World. But while the book was well received within the sector, not everyone was ready to jump on the bandwagon.

Last month, Philanthropy News Digest spoke with Michael Edwards, author of the 2010 book Small Change: Why Business Won't Save the World, which offered a sharp critique of the philanthrocapitalist worldview. During our conversation, Edwards criticized the growing tendency to adopt a "one size fits all" approach to philanthropy and suggested that, in order to solve complex problems, we need a large dose of humility and a wide range of tools and techniques. Edwards also spoke about the impact of the Occupy Wall Street movement and shared his take on the recently established Bellagio Initiative, which seeks to establish "a new framework for philanthropic and international development collaboration in pursuit of human well-being in the twenty-first century."

A leading expert on civil society, philanthropy, and democracy, Edwards has worked for the World Bank, Oxfam, Save the Children, and other NGOs in Washington, D.C., London, Colombia, Zambia, Malawi, and India. From 1999 to 2008 he was the director of the Ford Foundation's Governance and Civil Society Program, and he currently serves as a distinguished senior fellow at Demos, a progressive think tank in New York City, and as a senior visiting fellow at the Brooks World Poverty Institute at the University of Manchester.

The first part of our conversation with Edwards follows; part two will be posted tomorrow.

Philanthropy News Digest: You've been a vocal critic of the philanthrocapitalism approach popularized by Matthew Bishop and Michael Green in their book of the same name. Given that philanthrocapitalism is a somewhat nebulous set of ideas with no universally accepted definition, is there any aspect of the concept you find value in or agree with?

Michael Edwards: Sure. Let's go back three years in time when I wrote that little pamphlet, Just Another Emperor?, which was the first shot across the philanthrocapitalists' bow. Back then, philanthrocapitalism was all the rage: "Oh yeah, you know, I'm a philanthrocapitalist and I'm going to save the world." The aim of the pamphlet was simply to start a debate about what philanthrocapitalism was, to cause people to stop and think, because people were believing in something without actually knowing what it was. And to do that, it had to be fairly polemical or oppositional, which it was, as was my book Small Change: Why Business Won’t Save the World, which is based on the pamphlet. In both, I was saying, "Don't buy this stuff, it often doesn't work, and here are the reasons." It was a tactic. But what really matters is delving into the details of who is doing what on the ground, regardless of the labels they use to describe it. So to answer your question, there are lots of ways in which people can use the market to drive change, ways that are socially and environmentally beneficial; but I wouldn't confuse them with what I would call philanthropy.

In fact, for me there's a major conceptual and practical difference between philanthropy, which I see as funding for activities that do not generate short-term returns and results, and social investment, which does. It's simply a case of helping people figure out which tool to use. You wouldn't use a hammer to write a book. You wouldn't use a typewriter to plough a field. You have to select your tools carefully and systematically if you hope to achieve the results you want. And what pleases me now is that we seem to be moving into a different phase of the debate: instead of arguing about who is or isn't a philanthrocapitalist, we're talking about how we can use the different tools in the tool kit to make progress. In some areas, venture philanthropy, business techniques, and technology can be very useful in pursuing social change. In other areas, they're not and can actually be damaging. As long as people get that, they can describe it any way they want and I won't care because they'll be using the right tool for the right purpose.

PND: Matthew Bishop, Michael Green, and other proponents of the philanthrocapitalist approach would argue that more competition in the nonprofit sector is bound to help reduce and eliminate inefficiencies, which would mean more resources being allocated to the problems we all want to see solved. Do you agree with that perspective?

ME: No, that's nonsense. It's nonsense because we are talking about completely different worlds that operate on very different principles. Philosophers would say the philanthrocapitalists are committing a category error, which is when you take one set of ideas and principles that works in a particular setting and you transport those ideas and principles into a very different setting while expecting the same results. That's the definition of insanity. None of the great social movements of the past have been based on competition. They've been built on solidarity, cooperation, bridge building, and networking.

That's not to say there isn't room for some competition in the nonprofit sector; of course there is, because there are never enough resources to go around. But there's a difference -- a huge difference -- between recognizing that people need resources to do their work and believing that classical market principles like competition apply in the world of social change. What happens when you apply formal market principles to civil society -- and we see this already -- is that lots of very important organizations will be eliminated. Big ones will tend to get bigger, and small ones will tend to get smaller. A lot of organizations doing easier work will attract more resources, while many doing the more difficult work will lose out. Sometimes, though, they're the most important of all. No one would suggest, for example, that we force local volunteer fire departments to compete with each other in the interest of making them more efficient, because they play a role in their communities which can't be analyzed in terms of profit and loss. It's a rather ridiculous application of something that works in economic theory but not in social practice, and it can actually be very damaging when applied inappropriately.

PND: Do you think foundations, individual donors and nonprofits, working together, can solve huge, seemingly intractable problems such as poverty, our broken public education system, and climate change? Is that where nonprofits and philanthropy should be focusing their efforts and energies?

ME: Well, they should be playing a part in focusing everyone's efforts and energies on those problems. But the idea that philanthropies and nonprofits by themselves could address any of them successfully is, again, nonsensical. They are far too small, and the levers they have over change are far too weak to be able to effect that kind of change. What you need to effect that kind of change is, obviously, strong government intervention. You also need a thriving market economy that creates wealth which can be used for socially useful purposes. Instead of holding themselves responsible for solving climate change or poverty, philanthropy and the nonprofit sector should be constantly nudging, pressuring, and filling in gaps so that other, larger institutions do their jobs properly.

I think that's where my critique of venture philanthropy -- my fear that we will use scarce philanthropic dollars to tackle problems that are important but which should be dealt with by other parts of society -- is particularly relevant. There's an issue here of how we make sure we remain focused on the fundamental transformation of society and don't get locked into simply being social businesses, which are important but not particularly consequential in the deeper areas of social change.

Eight International Philanthropists to Watch

(Nick Scott is assistant to the publisher at PND. In his previous post, he wrote about the One Campaign's messaging around disaster relief efforts in the Horn of Africa.)

Most Americans are familiar with celebrity philanthropists such as Bill Gates, Warren Buffett, and George Soros. But how many could name the biggest philanthropists outside the United States? And how many are aware that while the U.S. is home to one in three billionaires globally, that number is down from one in two a decade ago, or that Brazil, Russia, India, and China have added a total of 108 newly minted billionaires to this year's global list.

How many people also know that, on average, American billionaires give away more of their wealth than their counterparts overseas -- a generosity that is mirrored across the entire U.S. population, whose overall rate of giving as a percentage of GDP is higher than anywhere else in the world. Of course, American-style mega-philanthropy can be traced back to the late nineteenth century and the huge fortunes amassed by the so-called robber barons of the Gilded Age (some estimates put John D. Rockefeller's inflation-adjusted net worth at its peak in excess of $600 billion). But it really came into its own in the middle decades of the twentieth century, as the U.S. economy became the most dynamic wealth-generating engine in the history of the world, and it continues today.

Then again, a decade into a new century it is increasingly apparent that philanthropy is growing globally alongside rapidly expanding economies in Asia, Eurasia, South America, and other parts of the world. And as it grows, the question on many people's minds is: Will a new generation of billionaires overseas embrace the American model of philanthropy pioneered by the likes of Carnegie and Rockefeller and most recently exemplified by the Giving Pledge campaign launched in 2010 by Warren Buffett and Bill and Melinda Gates?

The answer is unclear. For starters, it's important to remember that many of the fastest-growing countries, economically speaking, are still coming to terms with wealth creation on a massive scale. And as Bain & Company partner Arpan Sheth notes, "In the U.S., large-scale philanthropy lagged large-scale wealth creation by a number of decades. I think a similar pattern will emerge in India."

Then, too, we should keep in mind the example of Carlos Slim Helú, the Mexican telecom magnate, who declined to sign on to the Giving Pledge when approached, explaining that he felt he could achieve the greatest social impact by growing his businesses and creating more jobs. Will more billionaires follow Slim's lead in the years to come? No one knows. What we probably can say is that mega-philanthropy will continue to spread as the global economy expands, and that as it does, it will develop differently in different places in accordance with local custom and homegrown innovations.

In the rest of this post, I'll look at leading philanthropists in eight different regions -- India, East Asia, Latin America, the Middle East, Russia and Eastern Europe, Western Europe, Oceania, and Africa -- and briefly mention other notable philanthropists from those regions. (Note: A 2010 survey of the world's distribution of billionaires shows that this categorization scheme doesn't entirely correlate with the distribution of billionaires. Turkey, for example, is home to more billionaires than Africa and Oceania combined, while the United Kingdom alone is home to almost as many billionaires as Latin America.)

A few other notes on methodology: I have not included philanthropists who were born outside the United States but have become U.S. citizens or hold dual-citizenship (e.g., Pierre Omidyar, George Soros, Nicolas Berggruen, and Patrick Soon-Shiong). Foreign currency amounts have been converted into U.S. dollars, and estimates of future philanthropic commitments (e.g., 40 percent of an individual's total wealth) have been calculated based on current net worth. Because personal net worth at these rarified levels can fluctuate greatly from year to year, all dollar figures should be treated as approximations.

Is the 'One Campaign' Being Unethical?

(Nick Scott is assistant to the publisher at PND. In his previous post, he chatted with Barbara Ibrahim, director of the Gerhart Center for Philanthropy at the American University in Cairo, about the situation in Egypt.)

Choose the better tagline to promote disaster relief efforts in the Horn of Africa: "The situation in Somalia is complicated, but we'll do our best." Or, "Let's put an end to famine." It's the latter, of course, even though the first is a more accurate characterization of the situation on the ground.

Does it matter?

With contributions from American donors for famine relief lagging well behind previous disaster appeals, and the UN reporting a significant gap between the amount of aid pledged and the $2.5 billion it says is required to address the crisis, U2's Bono has pulled out all the stops, recently enlisting a Who's Who of celebrity spokespeople for his One Campaign, which bills itself as "the campaign to make poverty history." Mike Huckabee, Michael Bloomberg, Arianna Huffington, K'naan, Clive Owen, Jessica Alba, Idris Elba, Colin Farrell, Liya Kebede, Annie Lennox, Justin Long, Rob Lowe, Ewan McGregor, Evan Rachel Wood, and Kristin Davis -- all make appearances in the campaign's famine relief video appeal, The F Word - Famine is the Real Obscenity.

5 Qs for... Barbara Ibrahim, Director, Gerhart Center for Philanthropy at the American University in Cairo

(Shortly after the government of Egyptian president Hosni Mubarak was toppled earlier this year, we asked What Lies Ahead for the Egyptian Philanthropic Sector? Seven months later, the Supreme Council of the Armed Forces is still serving as de facto head of state as various factions attempt to shape the oft-delayed transition to a democratically elected government. While the form and composition of the next government remains uncertain, few people are better positioned to assess the situation in Egypt than Barbara Ibrahim, director of the John D. Gerhart Center for Philanthropy & Civic Engagement at the American University in Cairo and co-editor of From Charity to Social Change: Trends in Arab Philanthropy. We recently had the opportunity to ask Ibrahim about the role of philanthropy in shaping the future of the country, what Western foundations can do to support democratic transitions in the Middle East, and why she is optimistic about the future of Libya.)

Philanthropy News Digest: The first chapter of your book From Charity to Social Change is titled "Arab Philanthropy in Transition." Now that we're seeing one authoritarian Arab government after another crumble, one has to wonder whether the political changes sweeping the region will accelerate the changes already taking place in Arab philanthropy.

Barbara Ibrahim: There is no doubt that the pace of change will be faster and deeper now in the countries experiencing political uprisings -- and perhaps also in neighboring countries trying to avoid a popular uprising. However, the direction and pace will very much depend on specific historical and socioeconomic conditions in individual countries.

Philanthropy in the Arab world had been growing fairly rapidly until the global economic recession, driven partly by the recognition that governments could no longer provide quality welfare services for their populations. Some of that philanthropy was too closely allied with ruling families and not transparent in its mode of operation. Now there will be a necessary period of "resetting."

PND: The Egyptian people have taken an amazing step toward self-determination, but longstanding social issues and economic problems in Egypt clearly won't be solved by the ouster of Mubarak alone. While the new government, whatever form it takes, will have the primary responsibility for addressing these problems, philanthropy seems poised to shoulder some of the burden -- especially in the human services sphere. Is philanthropy in Egypt developed enough to meet the challenge? And what are some key areas where philanthropic resources could do the most good?

BI: This is a moment of tremendous potential for philanthropy in Egypt. Always a country of great individual generosity, now we are seeing an unleashing of interest in more collective means of problem solving. When the police withdrew from protecting citizens in January, thousands of neighborhood watch groups sprang up spontaneously across the country. Many of those are hoping to evolve into more sustainable community development organizations -- the classic motivation for a community foundation. I also anticipate that middle class and professional Egyptians will become more engaged in giving through new institutional forms. Social media like Twitter and Facebook are already being utilized to inform and mobilize citizen funding for good causes.

A Strange Catalyst for Philanthropy in South Korea

(Nick Scott is assistant to the publisher at PND. In his last post, he wrote about U.S. aid policy and disaster relief efforts in the Horn of Africa.)

Philanthropy News Digest recently ran an item recounting the rather bizarre saga of South Korean billionaire Chung Mong-Koo's record-setting philanthropic pledge of nearly $1 billion.

Some sources in the region optimistically speculated that the gift might encourage more philanthropy by the mega-wealthy in South Korea -- a strange conclusion to draw from the more-or-less coerced pledge that Chung, the chairman of Hyundai Motor Group and the second wealthiest man in South Korea, seems somewhat reluctant to fulfill. Taking a very charitable view of the situation, the Korea Herald professed uncertainty about what might have inspired Chung to make his pledge before adding this postscript:

One may recall that Chung Mong-Koo had made a commitment to donate 840 billion won in 2007 when he was accused of making illegal profits through business improprieties. As the criminal charges were denied later by the Supreme Court, Chung was relieved of the obligation, but he must have felt moral responsibility to make good on his pledge....

Maybe he did, but the Herald apparently felt no moral responsibility to report that the charges were actually dropped after Chung received a presidential pardon based on his importance to the fast-growing Korean economy. Apparently, this sort of crony-capitalist two-step is a rite of passage among South Korea's mega-wealthy, as evidenced by billionaire tycoon Lee Kun-Hee receiving a similar pardon after being convicted of tax evasion in 2008. Following a two-year hiatus (and no time in prison), Lee has returned to his former position as chairman of the Samsung Group, the multinational conglomerate. Despite a certain amount of outrage on the part of South Korean civic groups about the government's lenient attitude toward corporate malfeasance, it would seem that in South Korea, the health of the country's surging economy trumps concerns over corporate governance.

When it comes to philanthropy, Chung Mong-Koo and Lee Kun-Hee are hardly ideal role models. Their charitable gifts surely will be welcomed by many NGOs and civic groups, but the idea of philanthropy as a "Get Out of Jail" card seems like a troubling precedent to embrace -- in South Korea or anywhere else.

-- Nick Scott

As Humanitarian Crisis in Somalia Intensifies, U.S. Relaxes Aid Policy

(Nick Scott is assistant to the publisher at PND. In his last post, he wrote about the implications of the Patriot Act on U.S. disaster relief efforts in the Horn of Africa.)

In a post last week, I criticized the Patriot Act's "material support" clause for rigidly preventing U.S. development agencies and NGOs from distributing food aid directly to the parts of southern Somalia under the control of Islamist insurgent group al-Shabaab. Since then, the humanitarian crisis in the Horn of Africa has intensified, the United Nations has declared a famine in parts of Somalia, and many have accused developed countries of not doing enough to help.

In a significant policy shift, our own government has pledged an additional $28 million for the region and indicated that the money could be used in parts of southern Somalia under the control of al-Shabaab if assurances are provided by the World Food Programme and other aid recipients that al-Shabaab will not benefit from the aid.

Realistically, it may be impossible for the UN or NGOs to provide such guarantees, but USAID deputy administrator Donald Steinberg told the BBC that the agency's goal was

not to play a game of "gotcha" with a UN agency or any other group that is brave enough to go in and provide that assistance. What we need is assurances from the World Food Programme and from other agencies, the United Nations or other agencies, both public and in the non-governmental sector, who are willing to go into Somalia who will tell us affirmatively that they are not being taxed by al-Shabaab, they are not being subjected to bribes from al-Shabaab, that they can operate unfettered.

This new flexibility in the face of an urgent humanitarian crisis is to be welcomed, and may even signal a policy shift with implications beyond the current situation in the Horn of Africa. For now though, the situation remains critical and more aid is badly needed. Here are some ways you can help:

• You can donate to the United Nations through its children's agency UNICEF, the Refugee Agency, or the World Food Programme.
• Other organization's working in the region include OXFAM, the International Rescue Committee, the International Medical Corps, and the International Committee of the Red Cross.

We'll keep you apprised of developments in the region as we learn of them.

(Chart: Reuters)

-- Nick Scott

The Patriot Act and Aid: Focus on Somalia

(Nick Scott is assistant to the publisher at PND. In his last post, he wrote about the role of philanthropy in the Arab world's transition to democracy.)

With a severe drought once again visiting misery on the Horn of Africa, international NGOs and aid agencies are pouring into southern Somalia to provide food aid and other assistance in an attempt to blunt the looming humanitarian crisis. Due to a provision in the Patriot Act banning all "material support" for designated terrorist groups, organizations from the United States will not be among them.

Southern Somalia is controlled by al-Shabaab, an Islamist insurgent group classified as a terrorist organization by many Western countries, including the United States, Australia, Canada, Norway, Sweden, and the United Kingdom. Until last week, the group did not allow foreign aid organizations to operate in areas under its control, and it has a long history of committing violence against foreign relief workers and locals who partner with them. There's no questioning the group's grisly record of terrorism.

Still, after nearly twenty years of bloody civil war, Somalia is one of the most neglected and war-torn countries in the world, and its people desperately need outside help. It speaks volumes about the severity of the situation that refugees seeking food aid are leaving rural areas in droves for Mogadishu -- quite possibly the most dangerous city on earth. Since October, the U.S. has contributed $368 million in emergency relief to other countries in the region, so our inaction is not a result of indifference. It should also be acknowledged that Americans give generously to organizations like UNICEF, which recently resumed operations in southern Somalia.

Event: The Arab World in Transition: What’s the Role of Philanthropy?

(Nick Scott is assistant to the publisher at Philanthropy News Digest. In his previous post, he looked at burgeoning civil society movements in the MENA region.)

Taking my seat in a crowded conference room at Philanthropy New York earlier this month, I felt a bit like an interloper in the company of so many foundation presidents, investment bank VPs, and executive directors. But banishing my insecurities, I settled in to listen to an excellent workshop moderated by Foundation Center president Brad Smith.

The panel of speakers featured Stephen Heintz, president of the New York City-based Rockefeller Brothers Fund (and a former co-founding president at Demos: A Network for Action & Ideas); Dr. Bassma Kodmani, executive director of the Arab Reform Initiative (and a former senior program officer at the Ford Foundation's MENA office); and Anthony Richter, associate director at the Open Society Foundations and director of OSF's MENA initiative and Central Eurasia project.

A Limited Role for U.S. Foundations in the Arab World

It was clear from the outset that the major theme of the evening was going to be caution and restraint. Political reform in the Middle East is the kind of topic that gets international funders excited, but the panelists all agreed it is important for Western foundations, NGOs, and development agencies to respect the fact that the democracy movements in the Arab world are homegrown and driven by local actors. Moreover, the appropriate role for an outsider is almost always a supporting one -- and only if requested. Kodmani spoke of the hyper-sensitivity to Western intervention she experienced firsthand recently in Egypt. Change, when it comes, "will be on our terms" was an oft-repeated sentiment, and outside funders, she said, need to understand that the debate over issues such as minority rights, religion, and women's participation would continue to be an internal conversation. The events of the last decade have made citizens of many Arab countries wary of American interventionism, so any attempts to influence the political discourse -- well intentioned though they may be -- are likely to be met with resistance.

The Arab World: From Statism to Civil Society?

(Nick Scott is assistant to the publisher at Philanthropy News Digest. In his previous post, he took a look at what may lie ahead for the Egyptian philanthropic sector.)

As a follow-up to my previous post, I thought I'd take a look at some of the broader issues and trends driving change in the Arab world. These include a "youth bulge" and other demographic trends of importance; the pernicious effects of high unemployment, political exclusion,
and low per capita GDP in large parts of the Arab world; and the ways in which social media and modern communications technology have accelerated the dissemination of ideas and helped protest movements spread rapidly across borders. My lens is what all this might mean for civil society development and engagement, with a special focus on the role of philanthropy in the region. If, and this is a big "if," we have entered a new epoch in the Arab world, the role of philanthropy in providing social services could increase exponentially.

It's important to note that the turmoil in Arab countries such as Tunisia, Egypt, Libya, Bahrain, and Yemen cannot be reduced to a single neat formula; unrest stemming from sectarian discrimination in wealthy Bahrain is not analogous to the largely secular/cross-denominational calls for democracy in Egypt. That said, lack of economic and political opportunity are endemic to the region, and if some of the causes behind country-specific uprisings are unique, they nevertheless share a common context.

Demographics and the Youth Factor

The wave of unrest in the Arab world was not inevitable, but the main ingredients -- rapid population growth combined with lack of economic and political opportunity -- have been in place for a long time. Populations in Arab countries, where the median age is 22 compared to a global average of 28, are among the youngest in the world. And in sharp contrast to their political aspirations, many of these young people have lived their entire lives under a single, autocratic ruler.

According to the 2010 ASDA'A Burson-Marsteller Arab Youth Survey, "The single most important priority for young people in the Middle East is living in a democratic country, followed by having quality infrastructure, and access to the best universities: 99 per cent of those interviewed said living in a democracy was either 'very important' or 'somewhat important'."

What Lies Ahead for the Egyptian Philanthropic Sector?

(Nick Scott is the assistant to the publisher at Philanthropy News Digest. This is his first post for PhilanTopic.)

While it remains to be seen whether widespread hopes for a more inclusive, democratic Egypt are fully realized, there are reasons to be optimistic. Assuming a positive outcome, the legal environment for foundations and nonprofits could become much more favorable in the coming years. Even with the political obstacles erected by the Mubarak regime, however, philanthropy in Egypt has been growing over the past decade or so. With that in mind, now seems like an opportune time to take a look at what has been going right in Egyptian philanthropy, obstacles to the sector's continued growth, and what the future may hold.

Success Stories...

Long thought of as a leader in the Arab world, Egypt is emerging as a leader in the Arab philanthropic world as well. It is home to the Gerhart Center for Philanthropy and Civic Engagement at the American University in Cairo and boasts long-established and effective foundations like the pioneering Sawiris Foundation, established by the Sawiris family after the UN Millennium Summit in 2000 to address the country's unique development goals. And while more money overall may be awarded in oil-rich states like the UAE, Egyptian philanthropy has made significant progress in recent years.

Charity is not a new concept in Egypt. The country -- indeed, the entire Islamic world -- has a long tradition of religious charity. Individual giving in the form of zakat -- a type of religiously mandated alms-giving -- totals an estimated $1 billion (USD) annually in Egypt, making it far and away the country's largest charitable outlet. Charitable foundations are a much less established tradition, although the sector has been expanding rapidly. There are currently well over four hundred registered foundations in Egypt, and the number continues to grow. But while the field is relatively young, with many Egyptian foundations still finding their way, a more open political system would remove many of the roadblocks preventing them from realizing their full potential.

A 'Flip' Chat With...David Callahan, Co-Founder, Demos

(This is the thirteenth in our series of conversations with thought leaders in the nonprofit and philanthropic sectors. You can check out other videos in the series here, including our previous chat, with Foundation Center president Brad Smith.)

On a snowy January morning, a dozen people convened at the offices of Philanthropy New York to discuss David Callahan's new book, Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America. During the discussion, the Demos co-founder and senior fellow explored a number of topics covered in the book, including the westward shift of wealth creation as the United States has transitioned from a manufacturing- to a knowledge-based economy. Callahan -- who in 2000 co-founded Demos, a public policy think tank dedicated to pursuing a more equitable economy and vibrant, inclusive democracy -- is the author of several books, most recently The Cheating Culture (2004) and The Moral Center (2007).

Fortunes of Change centers around the shifting demographics of the ultra-wealthy in the United States. As the number of tech billionaires and computer-savvy financiers on the Forbes 400 list continues to grow, the "typical" billionaire, says Callahan, is both more educated -- and more liberal -- than ever before. What's more, because many of the new billionaires have come into wealth at a young age, a growing number are adopting a "giving while living" approach to philanthropy. This, in turn, is having an enormous impact on the amount of money flowing into American politics generally and "liberal" causes more specifically. Indeed, during the 2008 election, "Obama...raised more money than McCain in eight of the ten wealthiest zip codes in the United States and...outraised him in any number of industries, including hedge funds, venture capital, private equity, corporate law, investment banking, and high tech," writes Callahan in Fortunes of Change. "In a first for Democratic presidential candidates, Obama even raised more money than McCain did from commercial bankers."

After the event, we had a chance to sit down with Callahan to discuss how the composition of the country's ultra-rich has changed over the past decade and what the implications are for philanthropy.

(If you're reading this in an e-mail, click here.)

 

(Running time: 5 minutes, 48 seconds)

What do you think? Does philanthropy give the mega-wealthy outsize influence in a democratic society? Should government do more to regulate the way private dollars are used to create public good? And what, if anything, should we do to ensure that tax-advantaged dollars are used to address issues of fairness and social justice?

-- Regina Mahone and Nick Scott