Rodrigo Pipponzi, founder of Editora MOL.

As part of our series of interviews with leaders of social impact infrastructure organisations and their funders, in partnership with Propel Philanthropy and WINGS, Alliance talks to Rodrigo Pipponzi, founder of Editora MOL and of the Brazilian ecosystem organisation Instituto MOL, which it has spawned.

This interview series is aiming to collectively galvanize a significant change in how funders and others think and feel about building infrastructure, unlocking global resources, and establishing robust ecosystems.

AM: Do you want to start off by telling us what Editora MOL is and its relationship with Instituto MOL and how this all came about?

RP: Instituto MOL comes from Editora MOL that I co-founded 16 years ago. Editora MOL is a social business, a for-profit business that was set up in 2008 with the idea of creating a platform of micro-donations through retail companies by the sale of editorial products. So the idea was to sell our magazines and so forth for a very cheap price in the branches of a drugstore chain that at that time had around 130 stores in five states in Brazil, and all the profit would go to an NGO, GRAACC which, at the time, was the main cancer hospital for kids in Brazil, and the idea was very powerful and it worked very well. In the first year, we donated around 1.5 million Reais. Five years later in 2013, GRAACC built a new hospital with the money that was raised from the selling of these magazines and when I understood the power of this model, I said okay, now we need to scale the model to all the retailers in Brazil, and so that’s what we did so Editora MOL became a social impact business working to foster philanthropy through this micro-donation platform selling editorial products.

I don’t believe that you can change anything if we don’t have those structure organisations.

Today, we are selling products through 17 different retailers in Brazil which is a total of around eight thousand stores, and we have so far raised around 61 million Reais, which translates to something like 20 million dollars and this year the potential of donation is around 15 million Reais. So it’s a very powerful micro-donation platform. It’s very convenient for the consumers, because usually, when you go to a drug store, a pet store, a toy store, a fashion store, you are not there to make a donation, but if while you’re there buying something else, and you have the opportunity of making a small donation by buying a very cool product, like a book, a magazine, a calendar or something, very cheaply, probably you do that. So that is the business we created. And three or four years ago, it occurred to me that, while it’s nice to have created this platform, there’s a huge problem around the culture of giving that we are not addressing.

I remember going to my partner at MOL and saying, we’re not going to build a giving nation through this platform alone, we need to do more. We need to understand how to change the behaviour of Brazilians and how we can foster trust in civil society in Brazil. We need to understand how we can improve the laws to create a better ecosystem for donations, we need to have more data on the philanthropy ecosystem so people can better understand the world of giving and can make better decisions. So, there were lots of issues that we were not addressing, and that’s why I had the idea of creating Instituto MOL to address those more structural issues with the mission of fostering philanthropy amongst individuals and companies, especially through communication projects, because communications is our DNA in the business that we created, and I believe that communication’s a very powerful tool to drive all the changes that we want to drive.

So in a sense, you’re a little different from some of the others in this research because you’re not a funder of infrastructure generally, you set up your own infrastructure body.

Actually, we had this conversation because in the first year of Instituto MOL, we had a mixed strategy. We started our own project, a podcast on the culture of giving in Brazil, which has been running for three years and it’s amazing work. We have already produced 83 episodes. So we started funding this podcast. We started funding Descubra Sua Causa in partnership with IDIS, and we funded an award for journalists that were writing about culture of giving. But also, we understood that we could use part of our budget as grantmakers for some organisations that were working for the field. For example, ABCR [a social organisation focused on improving fundraising]has some very cool advocacy work around philanthropy, and we understood that we were not going to do this advocacy work so it made sense for us to fund ABCR to do it. There is also Movimento pela Cultura de Doação, a movement in Brazil to promote the culture of giving, so we funded these two projects for two years, but, last year, we decided that we were not going to be grantmakers any more because we felt we were losing our focus. We don’t have a huge budget – we are talking between 1.5 and 2 million Reais a year – so a much better strategy for us is to invest the money in our own projects because we see that as the better way to address our mission.

Were there any internal challenges in Editora MOL to setting up Instituto MOL or did it naturally flow out of the social business?

As I told you, today we work with 17 different retailers, and I’m talking about the biggest retailers in Brazil – we have Raia Drogasil, the biggest pharmacy retailer in Brazil, Petz is the biggest chain of pet shops, we have four of the biggest five fashion retailers in Brazil. So, we work with huge companies and I have come to understand through working with these platforms for the last 15 years, that we have the opportunity of changing the mindsets of those leaders so they can improve their work around philanthropy. The CEOs of those companies started calling and saying, ‘I want to do more. I want to set like some social investment programme in the company, I want to hire a consultant to drive the social investment strategy in my company.’ So when I began to notice this, I said why don’t we create some way of linking those leaders to those issues that we have around culture of giving? And so five years ago, we decided that two per cent of all the money that we were raising from those donations through the retail chains would go into a fund that would build those structural projects to change behaviour, but would also be a demonstration project for those leaders, so they could see they were actually funding the culture of giving in Brazil, not just this or that civil society organisation. For the retailers, it was amazing because suddenly they were together with us. We gather them every six months to talk about the culture of giving and it was eye-opening for them, so the fund started to get bigger and bigger, and we understood that we had to do more, so we created Instituto MOL as a more formal structure from the fund. Money still comes to Instituto MOL from the donations to Editora MOL and the good news is that it’s not two per cent any more, it’s five per cent, because the retailers wanted to do more so it was kind of an organic process for us to create the fund, and then Instituto MOL.

That’s interesting because often support organisations are quite a hard sell for funders, they’re very reluctant to buy into the idea, but you’ve found that the impulse actually came from them to a certain extent.

Yeah and probably because this was our mission already. MOL was created with this idea of fostering micro-donations inside the retail companies and Instituto MOL was a natural step for us. Of course, we have huge challenges because when we decided to scale the work that we have in Instituto MOL, we needed more money – the five per cent that comes from the fund is not enough. We need more like 50 per cent and it’s very challenging to raise that because it’s so hard to get money for this kind of work. We are struggling a little bit and trying to be creative in the strategies. We have three external partners that are funding Instituto MOL – BTG, Instituto Mandarina and Movimento Bem Maior – and it’s good to have three or four external funders, but it’s still very challenging to raise this money.

Why do you think that is? Because people would rather directly support NGOs?

Yes. That’s the point. It’s very hard to see the direct effect that you have because, if you fund such-and-such an NGO, you’re going to benefit 200 families with food, with education, with clean water and at the end of the year, you can get a report showing the impact that your money had, the social investment return. When we are talking about the work that we do at Instituto MOL, it’s very hard to create indicators because, how can I prove to you as a donor that the 300,000 Reais that you put into Instituto MOL really moved the needle in the culture of giving in Brazil? We also lack a lot of data in Brazil around this subject. The main research that we have is Pesquisa Doação Brasil is every two years and it lacks a lot of information. From my experience, the money we raise comes much more from people that are passionate about the culture of giving and they really want to drive change. And they believe in us. They really see our work as exemplary and believe that if they fund Instituto MOL, in the long term it will make a difference. But I think 90, 95 per cent of the donors in Brazil are driven by direct indicators and that’s why most of them fund projects directly which, of course, for a country like Brazil, is also very important. A lot of them say, ‘I would love to fund your work but I’m already funding this education NGO, this health NGO because I only have a certain amount to give and I think this is a more urgent issue to address.’ So it’s really hard.

What’s the most important contribution Instituto MOL is making to philanthropy and development in Brazil?

First, I really think that we can change the behaviour of individuals, not only in society, but also the leaders of companies. It’s that work that you have to keep hammering all the time. People have to listen, to read about this, to talk about it all the time so they understand that donation is a civic act, it’s not something that I do once in my life or twice in my life and I’m clean. It’s something that needs to be a big part of your life. This attitude comes when this discourse is constantly repeated, so I think we have the power through communication and as a social impact group with the voice that we have to change behaviour. That’s a long-term project. It’s not something that we’re going to build in one or two years.

We have huge challenges because when we decided to scale the work that we have in Instituto MOL, we needed more money – the five per cent that comes from the fund is not enough. We need more like 50 per cent and it’s very challenging to raise that because it’s so hard to get money for this kind of work.

Another point is that I think we now have the legitimacy to gather more actors in this work. When I see that we are working with IDIS, with GIFE, with Movimento Bem Maior, with other funders, with the retailers, with organisations that work a lot with government, I think we are in a position to try to build a common agenda, because the first thing that I learned working on a culture of giving in Brazil is that it’s impossible to change things alone. I saw that with Editora MOL. I remember thinking ‘okay, it’s amazing to have this platform, but we are working alone.’ I’m trying to change the behaviour in these companies, in the clients and the employees of these companies, but it’s not enough because I’m not tackling the structure. That’s why I’m revisiting the theory of change of Instituto MOL because I really think that Instituto MOL has to have in its mission the role of being an agent that gathers the actors to drive common agendas, which we lack in Brazil. We have major organisations, and each one is working individually to address one part of the structural problem, but we need to do it together. At Instituto MOL, we bring together both mentalities, the third sector mentality and the business mentality, and this mix is very powerful.

How important is it to have that collective voice to sort of strengthen the philanthropy sector as a whole?

I think it’s really important and again, it’s something that I learned from my experience. I have been on the board of GIFE for the last two years and it was amazing to see that GIFE and Instituto MOL are talking about the same things and we are trying to build the same things and for me, it was a huge privilege to be on the board of GIFE because I could bring our ideas and strategies closer and when you get into the detail of strategies, that is where the real collective work begins.

I really think that we can change the behaviour of individuals, not only in society, but also the leaders of companies. It’s that work that you have to keep hammering all the time.

I’ll give you one practical example. Some years ago, we started discussing in Instituto MOL the idea of creating a one per cent pledge in Brazil like you have in the United States or other countries where companies of all sizes commit to donating at least 1 per cent of their net profit and to publicising it. So, three years ago, we started to look into the idea to understand how it would work here. And when I started to talk with IDIS, with GIFE and with Movimento Bem Maior, I understood that all of them already had that idea, but nothing had yet been done, so we brought together 26 organisations in the field and said, we want to create a one per cent pledge in Brazil. We had two meetings and after that, we understood which were the organisations that were more able to work together and we gathered Instituto MOL, IDIS, GIFE and Movimento Bem Maior and started to build pledge idea, with the intention of launching it at the beginning of next year. We had a workshop last month and we invited six big companies in Brazil to work together with us to develop the pledge and those companies are probably going to be the funders and promoters, as Salesforce is in United States. For me, this is an example of the power of this collective work. But someone has to raise their hand and say, ‘okay I’m going to lead this,’ because collective work doesn’t work if you don’t have very clear leaders, and that’s what Instituto MOL and IDIS did. We’re going to listen to those 26 organisations from the original meetings, we’re going to have these four or five organisations to give direction on the strategy, but we need leaders, and the leaders in this case are Instituto MOL and IDIS. You have those layers of understanding when you talk about collective work, and that’s where I see Instituto MOL’s role as bringing together the collective.

Jornada Doadora (‘Donor Journey’) is a project run by Instituto MOL with the goal of informing and stimulating our team to become donors and share their donation habits with their family and friends. Here, the team has gathered to donate blood. Photo courtesy of Instituto MOL.

It’s interesting because someone else I was talking to in this series of interviews was also saying that the important thing is the collective, and you need the infrastructure organisations like Instituto MOL or GIFE to create it. What are the biggest obstacles to creating of the culture of giving in Brazil that you’re talking about?

First, we have a huge problem of money because we are in the middle of an economic crisis. And from the latest research, we have seen that many smaller individual donors are becoming beneficiaries themselves because of the crisis, so we have a huge income problem. Second, we have a big problem of trust in Brazil, towards institutions, towards the government, and of course, towards the third sector, so people lack trust in social organisations. It’s very common. For me, working with micro-donations in retailers, the most common question is: does the money really go to the social organisations? Does the retailer keep any money? I think, looking at the latest research, we are getting better but trust is still a big issue in Brazil. I think that’s the second problem. Third, we don’t have many legal incentives to encourage donations. For example, the taxes that we pay on donations are the same taxes that people pay when, for instance, they inherit money. Even for individual incentives that do exist, it’s very hard, it’s very complicated, so people generally don’t use them. So we really need laws and public policies to create a more sustainable, a clearer and more engaging ecosystem for the culture of giving.

And a fourth point, we lack data on the field. It’s very hard to take decisions because we don’t have like a clear idea of what we are looking at. Some weeks ago, I went to a meeting with one of the biggest donors in Brazil and he has a huge foundation. The first slide of the presentation at the meeting said that Brazilians give so little, and he said, ‘no. I completely disagree. I think we donate a lot,’ so we don’t even agree on the amount given because we don’t have definitive data. Everyone has different set of data they take their decisions from and that creates a very complicated ecosystem and makes it hard to work together on the same objectives. We should invest much more in data, in research, in understanding the field so we can create those common agendas.

You mention a number of things there. Are there other areas of the ecosystem that need to be strengthened?

Yes, the four areas I mentioned all need to be to be addressed and that’s very difficult in a country like Brazil because we’re talking about a very huge country with different regions, so what’s happening in the south is very different from what’s happening in the Northwest, which is very different from what’s happening in the Amazon, and, at the same time, we are all facing urgent problems, so the money from donations goes to those issues.  So, flooding here in São Paulo, a lot of donations, and then suddenly, one month later, when the crisis is over, no more donations. Of course, emergency donations are very important, but we need to balance what you might call emergency philanthropy with strategic philanthropy. I haven’t mentioned it before, but that’s why I have another institute that I created with my family [Instituto ACP] that works to fund institutional development for social organisations, because I really believe in a strategic philanthropy that can look at the long-term and understand how can we make the civil society field stronger. We need the balance but the problem in Brazil is it’s very hard to achieve it because donors in general are looking for urgent matters, which I understand because there are so many of them. Those structural points that I gave you like trust, data, behaviour, laws, public policies, those are the verticals that we need to work on but maybe first of all we need to understand donors’ behaviour and to show them that you can put 80 per cent of your money here, but put 20 per cent here in more strategic aims, because if we do that, the 80 per cent will be much bigger in the future.

And are there signs that this is happening?

I really think so. For example, I’m a member of a social committee of a huge bank, BTG, it’s one of the wealthiest and biggest investment banks in Brazil. For the last four years they have had a very strong programme to foster the institutional development of social organisations. They have already supported more than 50 organisations in Brazil. They are building governance and they are building better management skills in those organisations so they can create higher impact in the future. For me, it’s amazing to see a bank like that working on this kind of project, because that is strategic philanthropy and other companies are seeing what’s happening at BTG and are starting to develop similar initiatives, but still with little money compared to other forms of giving. So we’re starting to see examples in Brazil but we need more momentum on the subject. We need to have those first examples and those first voices. Five, six years ago, this trend didn’t exist, now it’s starting to happen, so it’s slow but it’s happening. It’s impossible to think about Brazil without civil society. We will be a much poorer and a much more complicated country without it, and civil society in Brazil depends on this money and normally, again, 80, 90 per cent of this money goes to the projects that are supporting people.

What lessons have you learned from funding ecosystem, or funding an ecosystem institute like Instituto MOL?

The first one is to be resilient! It’s something that you have to keep talking about all the time, saying the same things to the same people, to new people to get them to understand that you can create this change. So resilience, and for me, resilience requires passion. I think you have to be very passionate about the field because, as I said, it’s very hard to prove with numbers and indicators the change that you are aiming to foster and when people see that when your eyes are bright, that you are passionate, that you understand what you’re talking about and that you are a specialist in that field, that’s when you can gather more money and more people.

And also, for me in particular, it was very important to study the field, to network with others who are addressing change, with people outside my bubble here in Sao Paulo, to understand the country better because that is the kind of knowledge that you need to create your strategy. It’s important to study the field when you want to change the structure of the field, which is very complex. You have thousands of different organisations in Brazil working in very different contexts, you have been leaders of these organisations, you have companies that are funding those organisations, and those companies have all kinds of motivations. You have the families that are supporting those organisations and they also have different motivations, and you have initiatives like GIFE that are working on the structure of the field and for me was very important to navigate these different actors and understand their motivations, the problems, and to try to build the solutions together.

Do you need those structure organisations, ecosystem organisations to make sense of that?

Yeah, they have a critical role. I don’t believe that you can change anything if we don’t have those structure organisations. There are more than 800,000 social organisations in Brazil, that are addressing local and particular causes, but we need this layer of structural organisations. If we make philanthropy stronger, for sure we’re going to have more money being directed to the social organisations. So I love to say that philanthropy is the cause of all causes because it really is.

Andrew Milner is Features Editor at Alliance.

This interview is being shared free-to-read as a part of the Propel Philanthropy interview project. In addition to this article series, Propel Philanthropy collects stories demonstrating that modest grants can drive but results. You can learn more here.