Alliance webinar: Future of philanthropy in Latin America

Amy McGoldrick

As part of Alliance magazine’s anniversary celebrations this year, celebrating Alliance’s 25 years at the heart of global philanthropy, we have launched a series of events on what the future of philanthropy holds in different regions of the world. This webinar focused on the who, what, where and how of Latin American philanthropy, in partnership with IDIS.

Moderated by Elika Roohi, digital editor of Alliance magazine, the speakers were Paula Fabiani, CEO of IDIS in Brazil; Carolina Suarez, CEO of Latimpacto in Colombia; Magdalena Aninat, founding director of the Centre for Philanthropy and Social Investments at Adolfo Ibáñez University in Chile; and Inês Mindlin Lafer, who leads the Betty and Jacob Lafer Institute and is a board member of GIFE based in Brazil.

Paula Fabiani, IDIS

After Roohi made the introductions, Fabiani began by citing the World Giving Index’s report that in giving, ‘Latin America is not as developed as in other parts of the world.’ The variation in region starts with Chile which sits at 41st and ending with Venezuela in 208th position. Brazil sits at 74th. ‘Some believe that the regulatory environment in our region is not so favourable – others point out strongly that it’s a cultural matter. The fact is, there’s room for improvement – and that’s good news.’

A WINGS report from 2019 also demonstrated that half of Latin American civic space is now restricted, and most funds going toward education. ‘This becomes a great challenge to the climate, and other topics such as gender and racial equity – issues of great importance in the region.’ Fabiani also acknowledged that the pandemic had highlighted the importance of civil society organisations, reaching the most vulnerable through incredible initiatives. Corporations, too, played their part, where dramatically increased donations resulted in ‘unprecedented giving’.

Lastly, Fabiani sought to highlight trends from the Latin American philanthropic landscape:

  • Technology is here to stay
  • Data has become more relevant than ever
  • The importance of acting locally – including the rise of community philanthropy
  • The emergence of new mechanisms – including blended finance and venture philanthropy
  • Collaboration is key

Inês Mindlin Lafer, Betty and Jacobs Lafer Institute

Lafer was next to speak, and began by talking about the philanthropic infrastructure that has been built over the last 20-25 years. ‘We were concerned about designing public policies with civil society participation, stressing training processes and pilot projects… [which] could give new ideas. We’ve had some advancements and some defeats over the years.’

More recently, Lafer has noted in Brazil ‘a more consistent movement to value grantmaking and private donations. …Covid-19 has put a spotlight on this because we’ve had an increase in donations. But I still think we have room to grow.’

Lafer is now privy to witnessing a new generation of philanthropists coming through. ‘I see them very driven by impact, by the scaling up of the initiatives they’re involved with, by the idea of having a consistent business model, and… they are very close to the ideas of impact investing and ESG. No matter what generation you belong to in Brazil, I think it will be important for the next years to deal with anti-racism, climate change, violence and we should put all our efforts into reducing inequalities, in the country and in the region.’

Some believe that the regulatory environment in our region is not so favourable – others point out strongly that it’s a cultural matter. The fact is, there’s room for improvement – and that’s good news.

Lafer concluded by conceding that ‘we are in a delicate moment here in Brazil.’ The importance of pushing the philanthropic agenda has been recognised, but it is set against severe civic space closures. ‘Civil society was very key to rebuilding democracy in the country and to expand rights through public policy, and right now I think the value of civil society, independent media, science – things that were very important years ago – are now under attack… I think it’s a pity that we are seeing setbacks in Brazil in terms of poverty and hunger, and I think we can’t shut our eyes to it.’

Carolina Surez, Latimpacto

Suarez was then next to speak, calling Latin America ‘a region full of opportunities’. Latimpacto is a network, delivering activities and initiatives across the region, and including the Caribbean. Connected to sister networks in Europe (EVPA), Asia (AVPN) and Africa (AVPA), they mobilise providers of social investment capital, in order to promote more efficient deployment of financial and non-financial resources. Their belief is to prioritise environmental and social impact, connecting providers of capital in order to operate across borders, both regional and international.

Latimpacto released a report in February on Social Investment and Impact: Cases and Trends in Latin America, documenting 37 cases across the region in seven countries: Mexico, Guatemala, Brazil, Argentina, Peru, Colombia and Chile. Through this, they found that most cases were founded on SDG8 – decent work and economic growth. One opportunity emerging from the horrors of the pandemic has meant philanthropists considering how to deploy their resources in a more strategic way. ‘One finding showed that investing for impact is gaining traction in the region… We found that all of them are committed to prioritising social and environmental impact over financial returns. This is what we’ve found from the pandemic – how they want to increase their support.’

Secondly, giving is improving through varied financial instruments. ‘We’re still half grants, but we’re starting to implement debt, equity and other hybrid mechanisms. We are starting to understand that we can apply different financial instruments to deploy our philanthropic work.’ Non-financial support is also more widely understood, with philanthropists supporting strategy, impact measurements, and operational issues. In the same vein, now almost 60 per cent of the organisations included within these case studies are measuring their impact.

Suarez concluded with her reflections on this report: ‘Firstly, Latin America is keen to move forward to a more strategic philanthropy. We’ve found that we have more philanthropists and more impact investors ready to take more risks and committed to prioritising social and environmental impact over financial returns. We have also found that we have more actors involved in the social investment ecosystem – not only foundations. We’re also looking at how we can connect in a more strategic way the continuum of capital, from traditional philanthropy to impact investing and connecting these two black and white worlds.’

Suarez and her colleague Alan Wagenberg released an analysis of their findings recently on the Alliance website, which you can read here.

Magdalena Aninat, Centre for Philanthropy and Social Investments at Adolfo Ibáñez University

Last to speak was Aninat, who had additional thoughts on the future of philanthropy in Latin America. Aninat began with reflections on the pandemic. Currently, they are experiencing a massive setback in overcoming poverty, ‘with over 100 million people estimated to go into poverty, and 817,000 deceased in Latin America. We are in 90 per cent lockdown in Chile, unable to go to school or attend work, although we are in the process of vaccination. But this sector will require more institutionally effective solutions which cannot be supplied solely by governments.  Philanthropy has a key role to play, we know that, and we’ve seen the strong mobilisation of funding in 2020 for Covid relief.’

2020 is estimated to be one of the highest years ever for the number of registered donations, yet civil society organisations have been hit hard. ‘The Centre for Disaster Relief estimates between 11-38 per cent nonprofits in the US could come to an end as a result of this crisis; we don’t have the data for our region but things could go in the same direction or worse.’ For philanthropy to play a key role in this, Aninat argues that it’s important to reflect on the needs of philanthropy itself – ‘a space to improve its practices, to have a strong voice to advocate for an environment that will help both philanthropy and civil society to flourish, as Ines mentioned, and networks to expand connections as Carolina has shown.’

This is of course where the importance of philanthropy infrastructure comes in. ‘We have more research, more associations, more affinity groups than we did a decade ago and this is really good news.’ However, despite these advancements Latin America continues to be one of the least covered regions in terms of research, which is where Aninat’s Centre for Philanthropy and Social Investments steps in, working to ‘improve the environment of the sector – connecting both academics and actors.’

Whilst acknowledging the rise in Chile’s impact-driven donors, next-gen philanthropists and impact investors, Aninat finished her talk with three challenges:

  • Fund root causes: ‘If we start at systemic change and not just systemic needs, communities and people will be more prepared for the next disaster or catastrophe. …Changes require time, innovation and the best people, and that is where philanthropy can really add value.’
  • Collaborate: ‘One of the greatest lessons learned [this year] is that collaboration is possible and necessary.’
  • We need a favourable legal framework: ‘The Global Philanthropy Environment Index from the Lilly School of Philanthropy at Indiana University has identified that political environments and tax incentives are the two main weaknesses for philanthropy development in our region. We’ve seen a lot of examples of this in how governments can regulate towards facilitating or impeding the roles of civil society and philanthropy. Law should facilitate donations, whether they come from high-income individuals, corporations or middle-class donors, and incorporate new trends – impact investment, social impact bonds. We need more capital coming from the region.’

The floor was opened up for questions. Roohi asked if Aninat had any thoughts about philanthropists or foundations who are leading the way in Latin America for philanthropy’s role in sustainable recovery. Aninat responded that institutional philanthropy in Chile – as a study they did with colleagues in Peru, Colombia, Mexico and Argentina – that half of private foundations were created in the last 20 years. ‘We have a really emerging sector, which can be really change-making. When you’re starting out, you’re more open to change.’ In Chile, they’ve seen a consortium of foundations working in open, horizontal ways with nonprofits and community foundations, as well as working to start social impact bonds. These kinds of organisations ‘are not putting their name and logo first, but rather the cause and the problem they’re trying to address. Those open to thinking about new channels, new instruments, are open to risk, are the ones who will really be changemakers.’

Roohi stated that recent GIFE research indicated a growth in the number of family foundations, or at least growth in engagement among family foundations, and asked if Lafer had noticed this growth amongst her peers.

Lafer answered yes, that since the family Institute began ten years ago, they have noticed an increase in family foundations. ‘I think family foundations can take more risks because we’re not so close to the family business, so we can innovate and be more risky.’

Lafer continued in agreement with Aninat’s words: ‘we have specific and immediate problems due to many things, including the pandemic, but we won’t solve things if we don’t look to the roots of the many inequalities that we face here. We have room in Brazil to improve our legal framework for philanthropy, despite the professionalisation of the sector over the years.’

Roohi then turned to Suarez, asking two questions: firstly to ask the same question as Aninat’s, as to which foundations are leading the way in this space, and secondly an earlier webinar poll found that most attendees felt that social justice and democracy should be Latin America’s priority for funding, so which organisations does Suarez see who align with these priorities?

Civil society was very key to rebuilding democracy in the country and to expand rights through public policy, and right now I think the value of civil society, independent media, science – things that were very important years ago – are now under attack.

Suarez replied, ‘In Latin America, we have a lot of problems [exacerbated by the pandemic], so we cannot address all causes and specific issues. Social justice and democracy is a priority, but we cannot dismiss the SDGs. Right now we should follow the SDG agenda and we need to see how we’ll address these global targets.’ In terms of foundations leading the way, Suarez sees these as the ones who ‘understand the changes and adapt their strategies to this new reality. Paula mentioned using data, using technology – and how we can involve more transparency in practices, and how we can start using more financial instruments. … [We need to look at] how we give support to NGOs in a more strategic way and how we can collaborate with others. How can we connect our region? This is why a webinar like this is important, connecting us across the region and the world as well, and it’s about how we can promote a better deployment of resources.’

Pablo Marsal at the University of Buenos Aires said: ‘One of the main issues in Argentina, and I presume in the rest of Latin America, is the lack of precise information which tracks donations from donors to recipients, such as Candid in the USA. What is the situation now in your countries?’

Aninat responded that this is an important question, where it’s vital to ‘have tax, or a legal framework, which really promotes philanthropy and also provides more transparency.’ Transparency is a key way to build legitimacy and trust; ‘we have this in Chile but I know it’s a Latin American problem – we have a lot of mistrust towards institutions.’ Another important aspect is ‘to build this knowledge from providing data in an aggregated way so that we can have diagnoses to show where the advancements are, and what we’re missing.’

Fabiani also responded to this question. In Brazil, it is hard to track what is donated because without tax incentives, individuals don’t see any benefit to declaring their giving. ‘[IDIS] is doing the Brazil Giving Research this year to track who’s given during the pandemic in terms of individuals because we have no data at all, but I believe in having better channels to track where the money’s going.’ Following on from Suarez’s point, Fabiani emphasised the importance of ‘tracking the SDGs and collaborating towards their achievement, launched via the Catalyst 2030 movement here in Brazil.’

Fabiani continued by stating that another way that ‘Brazil can improve the environment for giving is the fact that we have legislation for building endowments. In that regard, we can track a little bit of the money – [currently] it’s just for the cultural sector, but it’s a start. I think for every area in Brazil, we need something broader, a framework for the philanthropic sector that could improve the sector as a whole. We are young, we are just starting to walk in the philanthropic field.’

We have a really emerging sector, which can be really change-making. When you’re starting out, you’re more open to change.

Suarez agreed, and believes that a lot of this is the responsibility ‘on the leaders of each organisation. Not Congress, not government; it’s our own responsibility as philanthropists… to be the ones to promote the implementation of best practice with regard to transparency and accountability.’

Ana Barreto from AfroResistance asked how small and community-based Indigenous and Black organisations can receive more sustainable international funding without the intermediary model.

Lafer answered first, that there are areas that don’t generate money, which need to be funded. ‘We need an ecosystem for small organisations, and the big foundations are struggling to see how they can support them and still have all their management criteria and steps they require for funding.’

Suarez encouraged Barreto to look to her organisation’s strategy. ‘Check your theory of change, and how you can ask for more financial support even beyond grants. We cannot limit philanthropy to grants.’ Suarez continued that this is something Latimpacto is promoting to investors – ‘something that we want to expand to teach some NGOs as to how to approach philanthropists and social investors, and what they’re looking for.’

Fabiani suggested that Barreto also look to look to ESGs as an opportunity. ‘The ‘s’ is local and many companies are looking into issues that they didn’t look at before, and how they can support civil society in improving racial equity and human rights.’

Aninat was the last to speak on the movement toward local development and community foundations. ‘We have a lot of them, and it’s something really interesting to look at [when] addressing the needs of a community. If the needs of a community are something about race or Indigenous people, that is another way of thinking how to gather different types of donors – big companies, but maybe also professionals that are related to a community that would like to address the health and development of a community.’

Amy McGoldrick is the Marketing, Advertising & Events Manager at Alliance.

Watch a recording of the full webinar below:

Our partners at PhiLab have translated this article into Spanish to enable more readers to engage with the content. To read the translated article click here.

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