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Global Philanthropy Forum
April 24, 2009
Global Philanthropy Forum
Avoid 'Philanthropic Colonialism,' Says Grant Maker
While foundations want to help African nations, they must avoid “philanthropic colonialism,” in which projects last for only a few years and ignore local needs, said Peter Buffett, co-chair of the NoVo Foundation.
Speaking on the final day of the Global Philanthropy Forum, Mr. Buffett described how his organization has worked hard to avoid such pitfalls in the African nation of Liberia, where NoVo, the World Bank, and others are trying to rebuild the education system.
For example, in helping to set up vocational schools to teach former child soldiers, the NoVo Foundation and its partners have tried to find out what job training is relevant to the country’s marketplace.
“If you’re turning out tailors and you need plumbers, it makes no sense,” he said.
In addition, he said, to fully appreciate the challenges of working in a country recovering from war like Liberia, donors need to see the place firsthand.
“You don’t know if you don’t go,” he said.
After visiting Liberia, he said, he had a better understanding of the cultural and economic obstacles that affect his foundation’s efforts to improve education for girls. For example, female students often have responsibilities at home that keep them away from school, some families force them to get married at a young age, and a few teachers offer good grades for sex.
Finally, Mr. Buffett said working effectively in Liberia means operating closely with the government.
In response to the interest in the country by NoVo and other foundations, Ellen Johnson-Sirleaf, president of Liberia, has established a “philanthropy secretariat,” said Natty B. Davis, a Liberian diplomat.
He said the position will help make sure the foundation interest Ms. Johnson-Sirleaf has attracted will continue after she leaves office.
Mr. Buffet said that the dynamic Ms. Johnson-Sirleaf was why he first considered helping Liberia. But now having developed a close relationship with other government officials and a place in his heart for Liberians, his charitable commitment will not waver when she leaves office.
“We support her, but we support the country,” he said.
Global Philanthropy Forum
Grameen Bank Founder Says He's 'Nervous' About For-Profit Microcredit
While microcredit has grown in popularity in recent years, the increasing number of for-profit efforts that provide loans to poor people is a concern, said Muhammad Yunus, a Bangladeshi economist who founded the Grameen Bank.
Mr. Yunus pioneered the idea of providing small loans to poor people to start their own businesses in the 1970s. In 2006 he and the bank won the Nobel Peace Prize for their antipoverty efforts.
Since then microcredit has blossomed around the world. But Mr. Yunus said he is “nervous” that many nonprofit lending groups are converting to businesses and big commercial banks see money-making opportunities in cultivating low-income borrowers.
While some of these institutions say they only want to make a small profit with microcredit, usually “people aren’t satisfied with a little money,” he said. Over time, these business enterprises will become too focused on the bottom line, and not the customer, he predicted.
He said if an institution is charging somewhere upwards of 15 percent interest on a loan, they have perverted microcredit’s charitable intentions.
“You’re no longer in the microfinance area,” said Mr. Yunus, “you are in the loan-shark area.”
Global Philanthropy Forum
Nonprofit Venture Capital Fund Discusses Impact of the Economic Crisis
Jacqueline Novogratz sees business as part of the solution to poverty in developing countries.
The organization that she founded, the Acumen Fund, in New York, raises philanthropic dollars, which it then invests in businesses in South Asia and East Africa that provide health, water, energy, and agriculture products and services to people earning less than $4 a day.
Too often, says Ms. Novogratz, traditional aid breeds dependency. But at the same time, she says, market capitalism alone isn’t enough to lift poor countries out of poverty. She describes the Acumen Fund as a middle approach.
Ms. Novogratz, who was in Washington to speak at the Global Philanthropy Forum, talked to The Chronicle about the effect the world economic crisis is having on the Acumen Fund’s work and the businesses that the group invests in.
April 23, 2009
Global Philanthropy Forum
How, Exactly, Does a "Public-Private Partnership" Work?
“Public-private partnership” is a favorite buzzword in philanthropy, particularly now that the Obama administration has voiced a commitment to working alongside foundations and nonprofit groups.
But what do such partnerships among governments, businesses, foundations, and charities look like? And how can philanthropists create or participate in such efforts?
Jean Case, who runs the Case Foundation, with her husband Steve discussed those questions at a session today along with Walter Isaacson, president of the Aspen Institute, and Shelly M. Esque, vice president of legal and corporate affairs with the Intel Corporation.
The three described their work as part of the U.S. Palestinian Partnership, an effort started in 2007 to expand economic and educational opportunities for Palestinians. The effort was one of about four large “public-private partnerships” started by Condoleezza Rice, when she was Secretary of State, and other government officials, said Mr. Isaacson, but the only one that survives today.
Mr. Isaacson said the partnership has focused on two things: giving medium-sized loans to businesses in the Palestinian Territories and developing youth centers in the West Bank. The effort has attracted financial and technology help from not only Intel, but Cisco, Google, Microsoft, and other companies, he said.
Mr. Isaacson said the new administration ought to seek to use a similar approach elsewhere. “We hope this can be a template, whether you’re working in Nairobi or Palestine or anywhere in the world,” he said.
Asked why the U.S. Palestinian Partnership has generated support while the other attempts at public-private partnerships foundered, Mr. Isaacson credited Ms. Case’s “persistence” in recruiting corporations. He also said that donors who want to get involved in this kind of work have to be risk takers who are willing to look at long-term results, not those achieved in the short term.
Several people in the audience pointed out that the notion of “public-private partnership” is nothing new. But some nonprofit officials in the audience, as well as the panelists, said they sensed the new administration would be particularly open and committed to working with nonprofit officials and businesses.
Global Philanthropy Forum
Can Green Enterprise Go "Mainstream" Like Microfinance?
The development of innovative clean-energy businesses in poor countries could, in 15 years, be “rivaling where the microfinance sector is today,” Christine Eibs-Singer, co-founder of the nonprofit group E+Co, told donors assembled at the Global Philanthropy Forum.
Ms. Eibs-Singer, whose organization supports clean energy projects in Africa, Asia, and Latin America said such efforts are poised to grow quickly, just as microfinance has done over the last decade or so. She encouraged people with experience working in microfinance to share what they have learned, particularly with respect to the importance of providing long-term philanthropic investments.
“We can take a lot of lessons learned that went into growing microfinance to growing this space,” she said, “and we can recognize that there are a lot of benefits of linking these sectors together.”
Ms. Eibs-Singer described the successes of her nonprofit group in identifying and expanding green businesses. The organization supports 32 businesses in the developing world and has helped to attract $180-million in additional capital for those companies.
As of June of last year, the businesses supported by her nonprofit group, which was started by the Rockefeller Foundation, had offset 4.6 million tons of carbon and brought clean energy to 4.8 million people. Her group now returns 3 percent on capital.
But she says that having a sustainable business model, one that returns a profit, has put her organization in a sort-of “nowhere land.”
“For those on the charitable side, many say our job is done. You’re a self supporting. Go off and do good,” Ms. Eibs-Singer recounted. “You go over to the private-sector side and they say 3 percent, please. We’re looking for more than 3 percent.”
There is a commercial opportunity for clean energy, she said, but philanthropic investments are still needed to develop small businesses and make them sustainable.
“That’s a quandary of public-private partnerships,” she said. “When do you need to be fully private and take the risk of losing social innovation and diluting your mission, versus when should you stay in the public or philanthropic side?”
Global Philanthropy Forum
Philanthropist to Create New Prize for Energy Innovation
Thomas Siebel, a technology entrepreneur and chairman of the Thomas and Stacey Siebel Foundation, said today he plans to establish a $20-million prize to encourage the creation of affordable energy-efficient homes.
Mr. Siebel, whose foundation is best known for its efforts to prevent methamphetamine use, told an audience at the Global Philanthropy Forum that he has been working for two years with researchers at Stanford, Princeton, and other institutions on the project.
While it’s possible today to build homes that have zero energy footprint, Mr. Siebel said, it’s an incredibly costly task. By contrast, the philanthropist said, he wants to support the development of energy-efficient homes that are no more expensive to build than ordinary houses.
Mr. Siebel said he plans to officially announce the prizes this fall. The awards will be given out in three phases: first, for the development of ways to reduce to zero the energy footprint of homes; second, for the design of houses that use that technology; and third, for the construction of the 10 types of homes that show the most promise.
The home that performs the best, he said, will be awarded $10-million. Mr. Siebel said he would support the construction of a 100-home energy-free community based on the winning designs on the campus of the University of Illinois at Urbana.
Global Philanthropy Forum
Kiva's Numbers Continue to Mushroom, but Gift Size Has Shrunk
Kiva.org, the popular Web site that enables people to give small loans to entrepreneurs overseas, is attracting more and more donors despite the recession, its co-founder said today.
Matt Flannery told an audience at the Global Philanthropy Forum that traffic to the site, and the number of loans being provided, has doubled since late last year. People now lend, on average, a total of $1-million per week through the site, and this week alone the site brought in $2-million.
That said, people who give through Kiva.org are contributing smaller amounts. But the drop in the size of loans hasn’t been large enough to offset the big jump in users, Mr. Flannery said.
“If you’re innovative on the Internet, you can get a larger piece of a shrinking pie,” he said.
He also described how enthused entrepreneurs overseas have been by Kiva’s recent announcement that it will enable borrowers in the United States to participate in the site.
“For the first time you see someone in Africa on a level playing field as someone in the U.S.,” he said. “That really excites people in Africa because they feel they’re becoming part of a truly global community where the barriers between benefactor and recipient are really breaking down.”
Mr. Flannery encouraged donors at the conference to help identify and support new ways to use technology to drum up and channel more philanthropy.
Global Philanthropy Forum
Attendance at Global Philanthropy Meeting Holds Steady
While other philanthropy and fund-raising conferences have experienced declines in attendance this year, roughly the same number of people are attending the 2009 Global Philanthropy Forum as last year.
Steve Fox, a spokesman for the World Affairs Council of Northern California, which runs the event, said that about 400 or so donors and philanthropists have come to Washington to discuss global affairs and giving. While the event is not immune to economic problems and has trimmed some of its costs, it is an elite, members-only meeting, which keeps the numbers of attendees fairly steady.
To join the forum, a philanthropist must apply for membership or be nominated by a fellow donor. While it does not require attendees to make a pledge, like the Clinton Global Initiative, its online eligibility guidelines state: “This event is geared toward individual donors and investors with a significant commitment to philanthropy.”
The application form asks how many years an applicant has been involved in grant making, how much of his or her giving goes abroad, and what global causes interest them.
The forum also has another rule for its members: “All conference participants are required to adhere to the GPF’s strict ‘no-fundraising and no-solicitation of business’ policy throughout the conference.”
Global Philanthropy Forum
Official Urges Donors To Work With African Philanthropists
American philanthropists who want to help Africa should work closely with a spate of new homegrown foundations that are emerging on the continent, said Akwasi Aidoo, executive director of TrustAfrica, during the Global Philanthropy Forum.
“There’s been phenomenal growth of African foundations,” he said. He pointed to the work of Theophilus Danjuma, a businessman and former defense minister of Nigeria, who is establishing a foundation with assets of “hundreds of millions of dollars.”
(Read The Chronicle’s article about the new foundations in Africa.)
Grant-making institutions are also being set up in South Africa, Ghana, and Tanzania, said the head of TrustAfrica, which is a foundation in Dakar, Senegal.
Partnerships between American and African donors are crucial to the long-term success of development and antipoverty work on the continent, he said.
“Africa has been literally — and I don’t mean this in a bad way — a playground for external donors and funders, each one coming in and doing their own thing. It doesn’t add up,” he said.
Too often, government aid agencies and foundations suffer from “project-itis.”
“It’s almost like a disease where the donors come in, they do a project for two or three years, with benchmarks and so on, and then move on” he said. “And not much is left behind in terms of the vehicles that are required to keep things going.”
He said the new foundations in Africa are trying to fix that problem by strengthening African charities, improving their management and leadership skills. He asked other grant makers to join them.
“My plea is that these are institutions you really need to figure out a way to partner with,” he said.
Mr. Aidoo also weighed in on the new book Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa, by Dambisa Moyo, a Zambian-born and Oxford-trained economist.
He said the book has generated an important debate about how foreign assistance can be effective, but its analysis that most aid is bad is flawed.
“Aid is talked about in a very limited sense and then condemned,” he said.
“Everybody should read it,” he said, “but I wouldn’t necessarily go out to buy it.”
(Read an opinion article in The Chronicle about the book.)
Global Philanthropy Forum
State Department Seeks Collaboration With Nonprofit Groups
Secretary of State Hillary Clinton said her department is starting a new program to work more closely with foundations and philanthropists and has assigned a veteran diplomat to lead the effort.
Speaking during the Global Philanthropy Forum last night, the secretary announced the Global Partnership Initiative, which will work with nonprofit groups, businesses, and others to fight poverty abroad.
“I know that we’ve only been in office for a little shy of a hundred days. But I’m even more convinced now than I was when I became secretary of state that the problems we face today will not be solved by governments alone,” she said.
“It will be in partnerships –- partnerships with philanthropy, with global business, partnerships with civil society. We have to find new ways to fill that space that is unfortunately left to create vacuums in too many places around the world.”
(A transcript of Ms. Clinton’s speech is available on the State Department’s Web site.)
Elizabeth Bagley, who was a senior adviser to former Secretary of State Madeline Albright and a former ambassador to Portugal, will lead the program, Ms. Clinton said.
“Elizabeth is a talented diplomat, a gifted networker, and a wonderful person, and I’m delighted she agreed to champion our efforts,” she said.
While several participants welcomed the new effort, saying it was a change from how the Bush administration operated, some said they would like to know more specifics about what types of collaboration the secretary and other Obama officials are looking for.
Copyright © 2009 The Chronicle of Philanthropy