What would it take to really get global philanthropy going?

In its December 2004 edition, Alliance held a roundtable on increasing global philanthropy with a panel of respondents involved in the field from around the world. From the ensuing debate, two things stood out most clearly: the need to create a new culture of giving among individuals, and the need to make it easier for them to give, both by simplifying the process and by assuring them that their donations are going to reliable groups. Panellists made a number of suggestions on how to do this, ranging from peer influence to the use of internet ‘brokerages’ through which givers could be put in touch with recipients. The potential of tax incentives and diaspora giving were also explored.

These deliberations formed the basis of a subsequent online discussion hosted by Social Edge in February, but by this time a massive new element had been added to the debate – the tsunami. Would it be the stimulus for a new phase of increased global giving, with internet portals playing a key role, or would the massive philanthropic urge subside once the disaster had disappeared from the world’s front pages and from public consciousness? The following is a brief survey of what the discussion participants thought about these and related questions.

The ‘need spotlight’

Charles Cameron (Rheingold Associates) felt that, ironically, an early effect of the tsunami had been to divert giving away from other areas of need. He quoted Christopher London of Educate the Children Nepal: ‘The redirection of donations to tsunami victims is hurting us, as I expected it would.’

The awesome scale of the disaster has exerted a massive gravitational pull on both media attention and giving. ‘While we want to respond to actual need,’ argues Cameron, ‘… we respond to something more like a need spotlight, which if it highlights Sri Lanka and Bandar Aceh may leave Kathmandu a little short of funding.’

In the longer term, too, Simon Hebditch (Charities Aid Foundation, UK) was sceptical about whether responses to the tsunami appeal would lead to greater giving. It did not, he reflected, in the case of the Band Aid/Live Aid events in the 1980s, nor after 9/11. Christopher London agreed that ‘as the waves eventually subside, so too will the donation dollars’. The short-term nature of giving is a key problem. To do any real good, funding needs to be longer-term, because change, as he put it, doesn’t happen in the short term.

‘A renewed commitment to Africa and to long-term development’

Adele Simmons (Synergos), however, disagreed that the powerful beam of public attention that had focused on post-tsunami South East Asia would create a contrasting darkness in other areas of need, or that its effect on giving would necessarily be short term. She had recently attended the World Social Forum and felt that ‘the tsunami event has helped to mobilize an interest and capacity in giving and renewed a commitment to Africa and to long-term development issues’. At the Forum in Davos, she said, government officials, foundations and NGOs devoted much attention to Africa and to poverty reduction generally and there was a renewed sense of urgency. Tony Blair and Gordon Brown outlined plans for an International Finance Facility to speed up the flow of aid and committed the British government to meeting the UN’s 0.7 per cent of GNP target for overseas development assistance.

She agrees, however, on the importance of publicity in sustaining this sense of urgency. The challenge, she feels, will be ‘making long-term investments in development where immediate results will not be visible, and making these investments in regions that do not receive daily coverage on the evening news’.

‘Tax incentives largely irrelevant to people’s giving’

This had been the general view of roundtable panellists. And surely tax incentives are unlikely actually to make people give. ‘After all,’ as Alliance’s Caroline Hartnell put it, ‘even if I get a tax benefit, giving to charity will still cost me money.’

But Yvonne Morgan (CAF South Africa) felt that panellists had understated the potential of tax incentives. She cited a recent CAF survey of employees of two South African firms in which 99 per cent of those surveyed said they would consider giving under a payroll giving scheme if there was an immediate tax benefit. From his experience of GlobalGiving’s workplace giving scheme, Dennis Whittle felt that tax deductibility does remain critical, at least in the US and particularly among wealthier donors. Simon Hebditch at CAF UK felt that while ‘cause and commitment come ahead of tax incentives’, such incentives are a bonus to donors, especially at the wealthier end of the spectrum.

For Svitlana Kuts from the Ukraine, what is important is government policy on the matter. ‘There should be clear government policy on tax deductions for philanthropy,’ she feels, ‘so people understand that they are giving to publicly accepted causes.’

Jim Fruchterman (Benetech) reported that two of the biggest social enterprises in Brazil got more funds from corporate sponsorship than other sources. He was told that one of the reasons for this is that there is a lack of tax incentives for individual givers. The general consensus seems to be that, while tax incentives are not the main stimulus to giving, they can be ‘an important part of the mix’, as Caroline Hartnell put it.

Workplace giving

As Yvonne Morgan and Dennis Whittle suggest, the contribution of workplace giving schemes is not negligible. Tax incentives play their part, says Whittle, but he lists a number of other factors that are equally, if not more, important: awareness (the company often ‘markets’ the opportunity to employees, which is important in overcoming the individual’s lack of knowledge, especially when the recipient is overseas); ease of giving (the company facilitates the process); the fact that giving can take the form of small, regular donations; knowledge of where the money goes; and, perhaps most critical of all, company matching.

Many of these considerations resonate with the conclusions of the roundtable panellists: that we need to make giving easier by providing, at the same time, opportunity, means and reliable information. Donor education, in one form or another, remains a key issue. As one correspondent remarked: ‘here in Germany, we have increasing top wealth but virtually no guidance on strategic giving.’

Personal connection

The forging of personal links between would-be givers and communities in developing countries by, for instance, encouraging young people to work and travel abroad emerged from the roundtable discussion as one of the most important means of fostering a culture of giving.[1] Dennis Whittle completely endorsed this view, but he would extend it to include everyone, not just the young. From his own experience at GlobalGiving, people want to have some direct connection with a project or with other donors. How to do this by internet? It is difficult, but possible, he believes. GlobalGiving is experimenting with a number of approaches such as, for instance, Joseph Stiglitz’s wedding list idea, where the economist invited guests to contribute to overseas projects.

Robert Daoust (Algosphere Enterprise) was even more categorical on the need for personal involvement. ‘Money will never suffice, personal involvement is necessary first and foremost.’ He suggested the following formula as a means of promoting giving: each citizen should spend one or two hours every week ‘rescuing’ an individual who will suffer or continue to suffer severely if this citizen does not intervene. He suggests a kind of brokerage (which he calls, for the sake of argument, universalrescue.org) which would present people with cases of individuals who are suffering and will continue to suffer from hunger unless people intervene. This, he argues, would answer both the need for personal connection and the desire for information and measurement.

Bonnie Koenig (Going International) also agreed that having some overseas experience is important, but argues that such experience is beyond the reach of the vast majority of potential donors. ‘Perhaps’ she said, ‘we need to be more creative in developing programs that allow potential international donors to have a “citizen of the world experience” closer to home.’

Venkat Krishnan (GiveIndia) suggested something that is closer to home, even if it would not make participants citizens of the world. Talking of the street children in Mumbai, he explained he was trying to convince his colleagues that ‘we should take groups of 20-30 payroll donors [GiveIndia runs a payroll giving scheme] out on a Sunday to cook food, go out on the streets, serve these children and talk to them. I want us to be able to create a school programme where we take children from private schools to visit six different places (show them poverty, show them disease, show them child labour, but all with the possibility of change) and after six months, tell each one of them – now you go ahead and raise money/resources for whatever you believe in from your friends/family, etc.’

What’s the use of philanthropy?

Mal Warwick, however, felt that much of the discussion was ‘off the mark’. The biggest problem faced by developing countries, he argues, is not a lack of philanthropy from the Global North but ‘a dramatic economic imbalance between poor countries and rich ones’. In any case, he said, not all philanthropy is good. Broadly speaking, if it is tied to the agenda of the giver, then it is of little use. ‘There are two ways that philanthropy from rich countries can truly help poor people in the Global South rise out of poverty,’ he argues. ‘By providing capacity-building funds and tools, we can help them build home-grown institutions with the ability to generate local resources, making them truly self-sufficient. We can also fund much broader and more far-reaching efforts to identify sound, successful locally-run NGOs that have demonstrated the capacity to make a difference in their communities … Philanthropy is at its best when we help them – in the ways that they want us to help.’

Idealism an essential, not a luxury

Caroline Hartnell agreed on the importance of creating locally developed institutions and identifying good and capable local NGOs, but felt that Warwick’s view of philanthropy was unduly pessimistic. ‘Philanthropy,’ she argues, ‘may have a limited role to play in the overall scheme of things but it could surely do more and better than at present.’

‘I suspect,’ said Charles Cameron, ‘that we’ll get the level of giving that’s requisite when we realize that idealism is not a sort of luxury that can be … tolerated on the margins of an unabashedly pragmatic and materialist society, but a necessary ingredient in the sustainability of the very system in which we live.’ He feels that humanity is at a crisis point, where the depletion of resources is reaching a point of no return’. Only when ‘the immediacy of the situation comes home to us’ will we get the giving we need.

If this is the case, he suggests, then ‘philanthropy’s task, in raising funding from “normal” to “tsunami” levels … is to sharpen the awareness of our interconnectedness, and specifically of the various system properties which – crossing all national, ethnic, religious, political and disciplinary boundaries – threaten the future of our grandchildren.’

Applying pressure to create political will

But in order to give force to such awareness, changes in structure will be necessary. As Robert Daoust remarked, these ‘will happen because compassionate people will insist on having them’.  First, though, says Caroline Hartnell, compassion needs to be translated into political will, and philanthropy can have a small but significant role in supporting campaigning NGOs in areas like fair trade and debt relief who will be important in lobbying governments and mobilizing public opinion to press for change.

An open verdict

Inevitably, a debate of this kind raises more questions than it provides answers. What seems clear is that increasing giving will not be the result of any one development, but of a set of them – in which donor education, use of the internet and workplace giving schemes may all have a part to play. Correspondents may have partly answered some of the questions that both they themselves and roundtable panellists before them raised. Organizations like GiveIndia, for instance, have gone a long way towards meeting the need for the kind of feedback that Robert Daoust among others would like to see, both in terms of establishing a critical connection between donor and recipient and in terms of providing a satisfactory means of accountability.

But other questions remain. One of the ways in which philanthropy can really be made to count is in helping to bring about the kinds of structural change that will obviate need. How do we ensure accountability and personal involvement in cases where neither the results of the intervention nor the object of compassion are immediately visible? And – perhaps the biggest question of all – how is philanthropy and the need for it to be moved from the periphery to the centre of people’s consciousness in developed countries? The Social Edge online forum is closed, but the debate continues.

1 Perhaps surprisingly, in the years following the September 11 attacks, US high school and college students have been travelling, studying, and volunteering overseas in growing numbers. During the 2002/03 academic year, the number of American students receiving credit for study abroad programmes almost doubled, from 4.4 per cent to 8.5 per cent. While the desire to ‘see the world’ remains the primary motive, increasing numbers of students and teachers seem also to be motivated by a new-found appreciation for the importance of cultural exchange and learning based on first-hand experience. According to David Allen of the Brighton Foundation, which provides international study programmes for high school and university groups, ‘travel programs for young people are changing after the attacks of September 11th. Students have become increasingly aware that what happens in the US is part of a global story…’ Source www.pnnonline.org/article.php?sid=5772

See www.socialedge.org/?14@@.3c412c02/0 to read the Social Edge entries in full.