Philippines: Enter a new mix of donors

Rory Tolentino and Tina Pavia

Today the Philippines is at a crossroads in history when the mood is generally one of uncertainty and perplexity about where the country is headed. It is hard to see ahead to 2015, much less to 2025. But if today’s new developments in philanthropy and the non-profit sector are taken as ‘beginnings’ with great potential for the future, then a hopeful picture may be presented.

The key feature of this hopeful picture is a new mix of donors, with diaspora Filipinos and their organizations as the driving force behind development in poor rural areas; with new coalitions of donors and NGOs emerging; and with companies and volunteers both taking on key roles. All these trends are present in the Philippines today. The question is what needs to be done to build on them to produce a philanthropy sector that can contribute to lasting social change?

Looking back 20 years

Twenty years ago, foreign and international organizations dominated the philanthropic scene. They provided private funding and facilitated the use of official development assistance (ODA) through NGO-managed mechanisms. Local giving was represented by corporate foundations and business coalitions, who also learned to tap into foreign funding. Individual giving, though in small amounts, was steady and consistent, to churches and schools and to less fortunate individuals. Volunteerism was the hidden asset of local philanthropy – half of civil society consisted of volunteers.

Development NGOs, or those committed to social justice and democracy, were a small but critical part of the larger civil society sector. During the 1980s and 1990s, donor collaboration with NGOs and the peoples’ organizations (POs) they had organized resulted in a ‘harvest’ of pioneering work on issues critical to the poor, among them primary health care and land access for urban communities, livelihood and credit for rural and urban associations of small fisher folk and farmers, and indigenous peoples’ rights.

By the late 1990s, many donors had phased out their programmes. By that time, they had contributed to building a highly networked and professional NGO sector. Frequent donor-NGO forums had resulted in several experiments to scale up successful pilot programmes. This included establishing NGO-managed funding mechanisms that provided capital to NGO projects (endowed through debt-swap arrangements, and others).

Corporate givers were most visible as corporate foundations and business coalitions, such as Philippine Business for Social Progress and the League of Corporate Foundations (LCF) and the corporate members of the Association of Foundations. LCF reported that about US$46 million was spent by corporate foundations. Individual giving from high-net-worth individuals was mostly channelled through their corporate, family or memorial foundations.

Looking forward to 2025

Looking forward to 2025, a very different pool of donors from today are now the movers and shakers of philanthropy. A strong focus on rural area interventions is helping to fast-track much-needed growth there. The new donors – migrant workers willing to contribute to lasting social change – are beginning to transform economic structures, starting at community level. And with economic empowerment, communities are finding a stronger voice to demand a more just, humane and equitable society.

Foundations or associations of the diaspora, and organizations supportive of them, are networked, as NGOs learned to do earlier, and connected to donor support organizations locally, nationally and internationally, using the internet and web portals. They have institutionalized partnerships that 20 years ago the Gawad Kalinga (GK), an NGO network, started to call ‘diaspora partnerships’. The first national congress on diaspora philanthropy was held in 2005.[1] Since then, many more meetings and strategic planning forums have helped to realize the ‘largely untapped potentials of diaspora giving for development’. It may be, as one speaker, Eugene Gonzalez, said at that first national congress, ‘Overseas foreign workers and their families, by default, may be the key asset for the Philippines’ economic survival … which is an additional burden they do not deserve.’

In the rural areas where the majority of overseas Filipinos (OFs) come from, most programmes continue to provide basic services, but there are also programmes showcasing how to modernize agriculture and improve agricultural support services. Small businesses have been incubated and rural banks revived with healthy loan portfolios. OFs hold the franchises for successful businesses located in growing cities. Government agencies are proactive and responsive players.

Diaspora giving is injecting resources into new and existing community foundations. OFs value them as their own investment in their communities. When OFs end their employment contracts, they rely on these community foundations to provide livelihood opportunities or small businesses for them as ‘returning’ migrant workers.

Complementing the action of diaspora foundations in the rural areas are coalitions of donors and NGOs focused on area development. Foreign foundation donors have found roles in this group, as have government and business.

Corporate social responsibility practitioners and advocates are playing their part – though many are more interested in implementing programmes related to their companies’ business goals than in providing support for wider social purposes. For example, the services sector (notably the outsourcing of call centre operations and medical transcription services) has made long-term social investments in education in order to produce the English language-proficient, highly skilled employees they require as their workforce.

Volunteers are a strong component of the skilled workforce for development. They help to develop diaspora philanthropy organizations, community foundations and coalitions of donors and NGOs working in the poorest communities. They staff church-based organizations and disaster response centres.

The new mix of donors is helping to build the infrastructure to spur the country’s progress. Poverty incidence in agricultural areas is slowly decreasing and new growth centres are becoming established. As workers gravitate towards these new cities, Manila and Cebu are increasingly seen as the ‘old’ urban centres and less attractive employment destinations.

Can philanthropy change?

To the question in Fulton and Kasper’s article, ‘Can philanthropy change?’ (see p19) the above picture provides a clear yes! The ‘new people’ will include migrant worker-leaders with a vision – one shared by strategic-thinking actors from the NGO and philanthropic sectors. The ‘pressure to demonstrate impact’ will be different in the Philippine scenario. It will not be limited to impact in terms of higher standards of practice and more sophisticated programme evaluation, but will also take account of progress made towards structural change benefiting the poor.

Philanthropy in the Philippines today

Diaspora philanthropy
Diaspora philanthropy has only recently started to receive attention after several years of media coverage. Many give support not only to families but also to community projects. Out of some $7.6 billion in remittances in 2003, it is estimated that overseas Filipinos (Ofs) gave about $218 million to their local churches, cooperatives, agricultural centres and community schools. The amount of remittances is increasing yearly as more workers leave the country, and these remittances have been hailed as the pillar of support keeping the Philippine economy afloat.

But at what cost? Many of the country’s able-bodied, educated and industrious labour force are ‘lost’ to their families whom they leave behind. Tremendous are the social costs to the family unit, a well-cared for Filipino institution. In the hands of the diaspora, there is the WILL to bring philanthropy to produce lasting social change.

Community foundation models
A new phenomenon of sustained individual giving to the local Church created one of the first successful community foundation models in the country. ‘Pondong Batangan’ (Funds of the People of Batangas) has now built a sizable endowment. The Archbishop who organized it has encouraged its replication at national level, which led to the creation of ‘Pondong Pinoy’ (Funds of the People of the Philippines). The idea is that each Filipino should give no more than 25 centavos, but every day. The daily collection is given to the Church to use for social purposes. The success of Pondong Pinoy has attracted other donors and institutions to contribute to the pool.

Microfinance and social enterprises
Microfinance and social enterprises provide one model for social purpose businesses or stand-alone ventures that generate revenues for an NGO parent. Major NGO microfinance ventures have millions of borrowers. A significant number of clients are able to move above the poverty line after some years of continued support, and borrowers are able to own bank shares, in one case up to 43 per cent of the total capital of the rural bank. According to one researcher, Raul Gonzalez,[2] this ‘model can be adapted to implement other market-based interventions to address other needs of the poor, in housing, education, health and other social needs’. External support for microfinance enterprises comes from a number of foreign foundations and from a few commercial banks. The lessons drawn by these donors could also translate into more support for this area.

Effective alliances among donors and NGOs
The BaSulTa coalition of 10 organizations, working in the three poorest provinces of the South (Basilan, Sulu and Tawi-tawi), has been cited as an ‘emerging model for NGO collaboration’. Armed conflict between the military and local rebels has severely retarded growth and development in these areas. Human security and bridging leadership thus form the framework for interventions. In its first year, the coalition produced a development agenda for the area addressing basic issues, with agreement from stakeholders including local government, business, civil society and religious leaders. This agenda has attracted some 100 million pesos of support from donors, and five projects in areas such as water, the environment and livelihood are ready for implementation.

Increasing role for corporate social responsibility
CSR is a field with great potential, with outsourcing companies, the ‘new blood’ in Philippine business, now engaging in it. The US company, Convergys, for example, has joined Philippine Business for Social Progress (PBSP), committing 1 per cent of pre-tax profit annually to social development, as well as supporting the Department of Education’s teacher training programme, with the aim of investing in qualified teachers who can help produce a qualified workforce. There is now a question as to whether companies such as Convergys will in time set up their own corporate foundations. There is a model to be found in the shape of US power generation company, Mirant, which in 2000 set up the Mirant Foundation Philippines, which has since implemented a major rural electrification programme for the country’s poorest areas in collaboration with the government.

Corporate foundations have the advantage of being familiar with the language and culture of both NGOs and business, and can thus broker joint programmes between the two. NGOs and POs can profit by using the business expertise and market access of corporate foundations (and the mother company). International businesses such as Body Shop and Starbucks are modelling this kind of partnership, with small producer groups acting as their suppliers.

Key role for volunteers
The spirit and vitality of volunteerism among Filipino non-profit sector workers is its strongest asset. The extent of the volunteer contribution was revealed recently by the Johns Hopkins Comparative Nonprofit Sector Project. Compared to other countries, there is an ‘unusually high volunteer participation’ rate, with about 2.8 million people (1.2 per cent of the economically active population) engaged. If the value of the work of volunteers is not taken into account along with cash donations, private philanthropy accounts for only 3 per cent of civil society revenue. With volunteers’ contribution included, the percentage jumps to 43 per cent. Volunteers are engaged almost equally in service and in expressive activities (culture, recreation and professional).

What interventions will be needed?

What interventions will be needed to effectively harness the energies of these forms of giving? There is a critical role for a think-tank advisory body, composed of practitioner-oriented leaders of the philanthropy and non-profit sectors. It should develop a unified agenda for philanthropy and the non-profit sectors, to which government, business and civil society could all subscribe, the aim of which would be managing social change.

The idea is not new – a long-term ‘development pact’ between donors and NGOs was proposed as the way forward back in the 1990s. This pact – or, better, the social contract – would help build consensus across sectors. The advisory body would monitor progress made, share learning, identify what worked and what didn’t, and advocate for redirection as needed. It would have a strong research orientation, with links to academic and research bodies, and an equally strong communications and media arm. Most importantly, the advisory body would have representation in government agencies to give the feedback about what’s being learned, and where gaps exist that only government can fill.

What are the major barriers to achieving the new philanthropy and its potential?

One of the most obvious barriers would be the failure of the next generation of NGO leaders to play their catalytic role as social change managers. In addition, Filipinos more widely must mature and heighten a sense of responsibility which extends beyond oneself and family to include community and country. They should work with their leaders more determinedly to achieve positive action.

The other barrier to achieving the desired future for philanthropy is a government that persists in paying only lip service to the cause of the poor and remains half-hearted about implementing the political, social and economic reforms needed if the country’s public institutions are to work for the common good. Poverty has worsened over time, with one-third of the country’s 80 million people living below the poverty line. ‘Economic take-off’ remains a dream, with low revenues vis-à-vis high levels of foreign debt posing a threat of financial meltdown, an uncertain business climate, and low morale in other sectors. Thus, there is a need for citizen action to demand accountability in public service.

Government interventions overall are weak and its responses inadequate to addressing root causes of poverty. At the same time, the political system is highly corrupt. The latest World Bank Country Assistance Strategy states the imperative for government: ‘If citizens begin to see that public institutions are improving their governance and delivery of services, they are more likely to vest authority and provide resources to the state. A stronger state will be able to increase social inclusion and cohesiveness. Increased revenues will improve fiscal balances, increase investor confidence, and thus spur a virtuous cycle of more effective public institutions, growth and poverty reduction.’[3]

So there are several ‘ifs’ and a good deal of hope. If these barriers are overcome – if government, civil society and Filipinos in general show leadership and responsibility – and if timely and adequate interventions are forthcoming, a new mix of donors will surely step up to spur the country’s development and lift its people out of poverty.

1 The ‘Good News for the Poor Conference’ was held by the Institute for Migration and Development Issues (IMDI) and the Commission on Filipinos Overseas. See http://www.filipinodiasporagiving.org
2 Raul Gonzalez (2005) Philippine NGOs in the 21st Century: Searching for renewed relevance Association of Foundations. Several main points in the article reflected Gonzalez’ findings.
3 World Bank, Supporting Islands of Good Governance: Country Assistance Strategy for the Philippines 2006-2008.

Rory Tolentino is Executive Director of the Asia Pacific Philanthropy Consortium (APPC). She can be reached at roryappc@pldtdsl.net
Tina Pavia is Program Officer of APPC. She can be reached at tinaappc@pldtdsl.net

The views presented are those of the authors and not of APPC.


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