International Philanthropy in a Time of Recession

Thursday, April 16, at 2 p.m, U.S. Eastern time

Jane Wales is president of the World Affairs Council of Northern California, in San Francisco, and director of the Program on Philanthropy and Social Innovation at the Aspen Institute, in Washington. She co-founded the Global Philanthropy Forum, and hosts the nationally syndicated National Public Radio interview show It's Your World. Ms. Wales served in the Clinton administration as special assistant to the president and senior director of the National Security Council.

A transcript of the chat follows.

Ian Wilhelm (Moderator):
    Welcome to today's live discussion. Today, we're going to talk about global giving, international aid work, and how the recession may be changing how donors that give abroad approach their philanthropy.

Ian Wilhelm (Moderator):
    We have a great guest this week, Jane Wales, who has an impressive background in public and international affairs. She is president of the World Affairs Council of Northern California and director of the Program on Philanthropy and Social Innovation at the Aspen Institute. She also hosts the nationally syndicated National Public Radio interview show "It's Your World." Ms. Wales served in the Clinton administration as special assistant to the president and senior director of the National Security Council.

Ian Wilhelm (Moderator):
    In addition to all that, Jane co-founded the Global Philanthropy Forum, an annual gathering of philanthropists. This year's forum will be held next week in Washington.

Ian Wilhelm (Moderator):
    To ask Jane a question during the next hour, click on the "ask a question" link on this page and type in your query. You are also invited to use the same link to post your comments or reactions to any of what you read during this discussion.

Ian Wilhelm (Moderator):
    For those who are new to this format, this is a text-based discussion. We'll also post a full transcript of this discussion at http://philanthropy.com/live. There, you will also find transcripts to more than 100 other Chronicle live discussions.

Ian Wilhelm (Moderator):
    Okay, to get started I've asked Jane to give us an overview about international philanthropy during the recession and tell us a bit about the Global Philanthropy Forum.

Jane Wales:
    Despite the economic contraction, the social sector continues to expand, with a growing number of actors committed to advancing the social good. Foundations led by living benefactors have matched the size, scope and potential impact of longer-lived grant-making institutions. These new philanthropists are often shaped by their private sector experience and remain eager to take on large, systemic problems in new ways. At the same time, the not-for-profit sector is experiencing a generational shift, as baby boomers retire and new leaders emerge, reflecting the values, style, skills and inventive approaches of their generation. In addition, the leaders and employees of private sector corporations, small enterprises and intermediaries are seizing ways to leverage markets to advance social change. The models they offer carry the promise of sustainability. Finally, governments, increasingly strapped for resources, yet charged with large responsibilities, are seeking novel ideas and effective partners to help achieve social goals.

Now, more than ever, these groups must collaborate and leverage one another to solve large problems that no one sector can solve alone. The Global Philanthropy Forum and Aspen Institute's new Program on Philanthropy and Social Innovation seek to meet this need by offering opportunities for strategic partnership and leadership development. At the Global Philanthropy Forum's 8th Annual Conference, taking place next week in Washington, DC, His Highness the Aga Khan, Secretary Hillary Clinton, Her Majesty Queen Rhania of Jordan, Nobel Laureate Muhammad Yunus and White House Climate Czar Corol Browner will be among those leaders joining 500 philanthropists for careful reflection on some of our most pressing international and domestic issues -- including poverty at home and abroad.

Ian Wilhelm (Moderator):
    Great. Now on to your questions.

Question from Afam Onyema, The GEANCO Foundation:
    Nigeria is by far the most populous country in Africa (1 in 5 Africans is a Nigerian) and is its biggest oil producer. However, it is virtually ignored by U.S. donors and foundations. Do you see giving to Nigeria changing? And if so, how?

Jane Wales:
    Not only has there been growing interest in giving opportunities in Nigeria, but there has also been increased interest in investing in small and growing companies, which will be the source of jobs and wealth creation -- as well as goods and services for the poor. The key will be to ensure that these companies are "investment ready" so that capital will flow. Thoughtful investors are taking a careful look.

Question from Dr. Avula:
    As a clinical psychologist who specializes in suicide prevention, I am all too aware of the large suicide problem in developing countries and the lack of any formalized intervention or aid from more privileged nations. Where can I look for funding to bring training on suicide risk assessment, management and treatment to India?

Jane Wales:
    This is a superb question. There is way too little attention given to issues of mental health despite the long term effects of violent conflict, of abuse and of the ravages of poverty. The Carter Center in Atlanta, Georgia, has taken a comprehensive approach to health and included mental health in its programming. And family foundations such as the Peter C. Alderman Foundation have given this issue the priority attention it deserves. But in neither case is the work focused on India. I recommend therefore that you turn to the Foundation Center's excellent data base to see which foundations are making grants in this all-important area, with a focus on South Asia.

Ian Wilhelm (Moderator):
    This is a reminder that The Chronicle also offers a searchable database of the largest foundations and the causes they support. It's available here: http://philanthropy.com/premium/stats/foundation/

Question from Liz Ogutu, ILRI:
    Hi Jane,

I work in an international research institute and most of our donors are governments. It is clear that we need to diversify where we get our funding because a) government overseas assistance will decline based on the global economic crisis and b) the government support was and is still not enough to support our research work. In a previous online discussion I was advised to deepen existing connections with philanthropies (we currently have 3 that took years to cultivate). My opinion is that we need to interest new ones and if we make one connection a year (even without funding being received) – this will be success. Now my questions are...is my strategy foolhardy in these economic times? And if the strategy is sound then what works in attracting US philanthropies to new areas (I'm only targeting those that are already involved in international giving)? Thanks

Jane Wales:
    Your strategy is far from foolhardy, and strikes me as very smart indeed, as is your measure of success. Relationships take a while to build, and if philanthropists know you first as a source of expertise on which they can rely, they will respect and support your work going forward.

Question from Ian Wilhelm:
    This question comes from a reader:

"Question for Ms. Wales-

What types of international organizations fare better for funding in these economic times? humanitarian? medical? education? Thank you. -- Dyann"

Jane Wales:
    By and large foundations are not changing their substantive focus, but rather zeroing in on those organizations in their field of interest that they deem to be best managed and most effective. If a foundation concludes -- as did the Gates Foundation -- that improving public health is essential to combating poverty, they will stay the course and work to ensure that each investment is a smart one. After much study that same foundation determined that equal access to quality education is essential to a resilient society here in the US. Like most foundations, they have not abandoned their strategy. Instead they have focused on those organizations that they believe produce the best results. I think therefore that it is a priority for grant-makers and grant-seekers to come to a shared view of how to measure and communicate success, so that high performing organizations are able to raise needed funds. We at the Global Philanthropy Forum and the Aspen Institute are committed to help build that consensus among grant-makers and grant-seekers alike. And very good work has been done in this arena by the Urban Institute. Coming soon will be a report by the FSG (Foundation Strategy Group) on the same topic.

Question from Ian Wilhelm:
    Technology entrepreneur Jeff Skoll this week said he is donating $100-million to start a new foundation to focus on "urgent threats" like climate change, Middle East conflict, and pandemics.

Mr. Skoll has been heavily involved in long-term development efforts in poor countries, but said in the last five years "certain issues have emerged very clearly that, if we don't get ahead of them soon, all of the other things we're trying to do won't really matter."

Jane, do you hear similar sentiment among philanthropists and others? Is there an almost-emergency mentality among some donors?

Jane Wales:
    Jeff Skoll combines foresight with the courage to take on the toughest issues. When he decided to transform Al Gore's remarkable speech into "An Inconvenient Truth", he was taking a huge risk -- not just financially, but politically. For, although there was a scientific consensus, there was no political consensus on the nature or source of the climate crisis. To Jeff Skoll that was simply a challenge to be met. I learned long ago never to confuse Jeff's humility and understated manner will a lack of courage. He is always there when the hard problems need to be addressed. I admire him greatly. Others now have a sense of urgency when it comes to poverty alleviation, climate change mitigation, or addressing threats to public health. But only some have stepped forward when it comes to prevention of violent conflict. He is among them.

Question from Regina Wright, small nonprofit:
    What are some new public policies that will impact nonprofits?

Jane Wales:
    The administration, strapped for resources, yet faced with large responsibilities is seeking opportunities to tap all sources of social innovation, be they from the private, non-profit or philanthropic sector. That aspiration is apparent in the budget, in the economic stimulus package, in the Serve America Act as well as in eforts to encourage volunteerism and community service. Several funds are in creation, including the Social Innovation Fund, aimed at providing resources to nonprofits that have developed and managed new models for social change. But there are also very significant funds within the budgets of the Departments of Energy, Education and other federal agencies that will be used in part to support nonprofit innovations. This will play out on the state and local levels as well, where, for example, the stimulus package offers $50-million for capacity building grants to help community based organizations. In California where I am today, the Governor will use federal stimulus dollars and private funds to create the california Green Corps, to place 1,000 at risk youth into green jobs. This partnership combines the efforts of nonprofits, businesses and grant-making foundations. So, the list is long.

Question from Ian Wilhelm:
    Jane, what do you hope to accomplish with this year's Global Philanthropy Forum?

Jane Wales:
    High Highness the Aga Khan, Secretary Hillary Clinton, Her Majesty Queen Rania, Nobel Laureate Muhammad Yunus, and White House Climate "Czar" Carol Browner will be among those who will join the 500 philanthropists present to discuss those crises we face which cannot be solved by governments alone. The Obama administration and other governments will need to tap all sources of social innovation to tackle such problems as poverty (both at home and abroad), climate change, the need for equal access to affordable health care and quality education, and the requirement for post-conflict reconciliation and reconstruction abroad. Our hope is that we can reveal some of the most innovative solutions that have come from the private, philanthropic and non-profit sectors, which can be replicated and brought to scale. As has been the case at prior GPF annual meetings, once philanthropists are informed of the nature of a problem, the opportunity for a solution and the partners available to them, then will act and do so effectively. In this instance, while the primary audience is composed of philanthropists, we hope that governments will be listening as well, and will sieze opportunities to partner across sectors and to scale up proven solutions.

Ian Wilhelm (Moderator):
    Here's The Chronicle's article about last year's Global Philanthropy Forum: http://philanthropy.com/premium/articles/v20/i14/14001501.htm

For those unable to attend the conference, The Chronicle will be providing online updates of the sessions and discussions.

Question from Doug Smith, Church World Service:
    What's the break down on international philanthropy by U.S. residents? Can you tell us how it differs from giving by individuals to domestic non profits? Other than giving to religious institutions does it parallel the U.S. pattern of education and health receiving the bulk of the gifts?

Jane Wales:
    While we do not have precise numbers on the level of individual giving that goes overseas, I can tell you that it remains a small percentage of overall giving. What makes this difficult to track with precision is that U.S. residents may give through their church, synagogue or local Rotary Club. And while a large portion of those funds may go overseas, they are considered domestic gifts. Finally, this does not take into account remittances, which can be a truly significant income source for many countries. It is among the income streams that has been hardest hit by the recession. Global health and education remain high priorities for philanthropists insofar as they are seen as key to economic growth and stability. The Rotary Club's initiative aimed at eradicating polio, for example, has been highly successful in raising funds, and leveraging other sources.

Question from Ian Wilhelm:
    Jane, at the Obama administration's request, you're helping to organize a series of meetings at the Aspen Institute to discuss social innovation efforts.

The White House has yet to provide details on its new Office of Social Innovation, so I wonder if you could share what you think the office could do to spur creative nonprofit and business ventures to solve social problems.

Jane Wales:
    The Obama administration has moved quickly on a number of fronts, taking on large problems. Now that the White House Office of Social Innovation is fully staffed, I am confident that it will make a significant contribution in a number of ways. First and foremost it has the opportunity to encourage public private partnerships aimed at addressing some of the toughest problems we face at home and abroad. Secondly, the administration is creating a $100-million Social Innovation Fund which may provide mezzanine funding to programs that have been proven on a small scale by the non-profit sector, and now need to be replicated or brought to scale. Third, the office can take a careful look at U.S. government policies, including tax and regulatory policies, and determine which policies spur innovation, and whether others might needlessly impede innovation. This is not an easy task. But the office is led by a remarkably talented person, Sonal Shah. If anyone can do it, she can.

Ian Wilhelm (Moderator):
    We're about halfway through today's discussion. For those who have just joined us, please note that you can ask a question at any time by clicking on the "ask a question" link and then typing in your question. We're getting a heavy volume of questions today, so please try to get your questions in soon to make sure our guests have time to answer them. Thank you.

Question from Maria Estrada, The Nature Conservancy:
    Many talk about a nascent philanthropy in Latin America. Do you see donors in Latin America beginning to approach philanthropic endeavors in the way philanthropists in the U.S. have done for so long?

Jane Wales:
    It is good to hear from you, Maria. I do see a shift occurring in Latin American, and a real increase in both strategic giving and smart social investing. However the allergy to the word "philanthropy" persists, as it is seen by some in the region as more show than substance. But this is a matter of semantics, not a question of will. The commitment to social change -- and to increased equity is there.

Ian Wilhelm (Moderator):
    I'd just like to add that the next issue of The Chronicle, which goes online Monday, will be looking at how the recession is affecting philanthropy in Latin America as well as other parts of the world.

We also asked U.S.-based international aid groups how the economic downturn if affecting their programs and fund raising.

In all, we found that there are lot of concerns out there -- and some cut backs in both giving and charitable programs -- but folks remain optimistic that philanthropy overseas will continue to grow in the years ahead.

Question from Kate McElligott, Microcredit Summit Campaign:
    My organization has focused much of it's work on international micro-finance but do you see an increased interest in domestic micro-finance in the coming years with the pressure of a slow American economy on local communities? What impact will the current economic climate have on the way American's view micro-finance and will it affect/refocus international giving in the field?

Jane Wales:
    We are seeing increased interest in providing financial services to the poor right here in the U.S. As you know, Shorebank was the trailblazer. But now Kiva has expanded its focus to include the U.S., and Grameen America was launched last year. The interest in micro-finance worldwide will continue to grow as it is seen as both effective and sustainable. The question is whether we will see the emergence of sustainable micro-insurance programs -- and whether as a general matter we will turn our attention from loans (credit) to asset building.

Ian Wilhelm (Moderator):
    I recently spoke with Vidar Jorgensen, president of Grameen America, who said: "Because it is sustainable, because it is targeted at people who are essentially locked out of the commercial credit system anyway, microfinance is able to grow nicley, while other programs that are depended on donors tend to be more affected" during a recession.

Question from Heather Herrell, Trees, Water & People:
    Is there any concern that foundations who have historically supported international projects will begin diverting their funds to U.S. issues during this economic crisis?

Jane Wales:
    U.S. based foundations have been dedicating over 76.5 percent of their giving to domestic grantees and causes. About 23.5 percent goes to international causes -- either to U.S. organizations doing work overseas, or to organizations based abroad. It is too soon to tell whether this balance will significantly shift. As a general matter, many of the largest foundations (like Gates and MacArthur) have increased their payout (percentage of endowment given) in order to retain their giving levels and patterns. Not surprisingly, many have launched initiatives aimed at meeting immediate needs at home. This includes the Open Society Institute, the Alfred P. Sloan Foundation and the Silicon Valley Foundation, to name a few.

The Global Philanthropy Forum will focus on both international and domestic issues this year in large part because issues such as climate change or the global recession are not bound by political borders. And most GPF members have always given both locally and globally.

Question from Ian Wilhelm:
    Given the financial constraints on the government, Jane, do you think President Obama will make good on his pledge to double foreign aid by the end of his term?

Jane Wales:
    My understanding is that the current plan is to raise international development assistance each year by somewhat under 10 percent. The question will be: to what extent might there be a reallocation to states that risk crumbling, and can provide training camps or sources of advanced weaponry for organized terror, like Afghanistan, Iraq or Pakistan?

Question from Robert Kent, The PeaceCamp Initiative:
    Hi - Considering recent events in Gaza, you would think that everyone would now realize the importance of finding and nurturing leaders from the Jewish and Palestinian populations who will actually be able to bridge the historical and rhetorical divide and create genuine peace.

My question - how do you get from everyone saying "wow, what a great program, good luck" to "Citizen action really can make a difference, how can I help?"

Jane Wales:
    There is a widespread understanding that the publics of Israel and the Palestinian territories yearn for peace, and that there is a roadmap for getting there, but that the political has been lacking. Political will does not always come from the top -- it often comes directly from the populace. Take note of Jeff Skoll's new initiative which will focus in part on the Middle East, and on the public. Jeff is the master at mass communications.

Question from Angelica Valenzuela, VP of Programs,Children Affected by AIDS Foundation. :
    In the last few years, the foundation expanded to support the provision of service for children affected by HIV/AIDS in Latin America and the Caribbean (LAC) we noticed two major giving-trends: that very few foundations were supporting LAC (less so receiving the central and south portions of the continent). The per-capita HIV impact in the region is comparable to some African nations, particularly in the Caribbean and Central America...and the second trend, in the last several years international donors have closed their doors to the region many of them who were previously giving to the region...is there a suggestion from your end to what we as a foundation could do to stimulate donors to look at Latin America as a region than needs their support?

Jane Wales:
    We have noted the very same trends, and so have consciously increased programming at the Global Philanthropy Forum on Latin America and the Caribbean. An earlier questioner asked about indigenous philanthropy in the region. It will be important for that to grow so that American and other philanthropists have knowledgeable and committed partners in their giving.

Ian Wilhelm (Moderator):
    We're getting close to the end of the chat so please ask your question now. Thanks

Comment from Rhesa J, Social Capital Investing:
    No question, just a thank for your work. Your answers here and the quality of the poverty program at CGI represent examples of excellence that the rest of us should be inspired to follow.

Question from Lorin, small non-profit:
    Jane - For those Foundations that give internationally as well as domestically, have you witnessed any backlash from U.S. non-profits in that there is perceived a greater need in the United States because of the economic downturn and if so how are these philanthropists addressing this perception?

Jane Wales:
    It is clear that the needs are growing just as the resources (government, private and philanthropic) are shrinking. Philanthropists are very aware, and seek an integrated strategy aimed at solving a specific problem or set of problems. Often that involves a portfolio of domestic and international giving. At other times it requires being region-specific.

Question from Tom in TN:
    Do you envision EU foundations partnering with U.S. foundations for projects in Africa?

Jane Wales:
    Absolutely -- it is happening now and will only grow. Great question!

Question from Emily, small international nonprofit based in DC:
    Any advice for seeking global conference funding from foundations? Will discussion analysis, conference papers/reports, online content modules for institutionalizing curriculum, etc. increase your chances for funding? And does a domestic vs. international location factor in as well?

Jane Wales:
    Funding for conferences is scarce. Funding for building lasting, learning communities is more available, and perhaps better spent. However, the good news for those who want to hold a conference is that events can be self-financed through registration fees.

Question from Steve Berry, small nonprofit:
    Are there any nonprofits that are connecting social networking with on the ground service projects? Are we going to see more of these groups in the future?

Jane Wales:
    With only one minute left I can say "yes" and "yes". Great question!

Question from Ruth Anne, Belize:
    What are the pros and cons of a foreign NGO establishing a corresponding 501-c-3 organization in the United States?

Jane Wales:
    The pros very much outweigh the cons. It makes it simpler for an American donor to give and gain his or her tax benefit for doing so. The only con is that it takes a bit of time and paper work. But, I would go for it!

Ian Wilhelm (Moderator):
    And with that we'll end today's discussion. I want to thank our guest Jane Wales and to remind everyone that a transcript of the chat will be available online at http://philanthropy.com/live/

Ian Wilhelm (Moderator):
    And next week we'll be talking about building a nonprofit career. Join us on Tuesday, April 21, at noon Eastern time.

Thanks to everyone who participated today.