Philanthropy and Social Change
The Benefits of Philanthropy
It is estimated global philanthropy to developing countries totaled $53 billion in 2008 (CGP, 2008). The question is – can philanthropy tackle our current challenges and those that have yet to arise? Does it hold the key to unlocking social and environmental innovation? Or is it losing its relevance on a dynamic global stage?
As someone who has worked in and around the foundation world for the past nine years as program staff, grantee and consultant, it strikes me that there are three broad buckets of giving in ‘Realphilanthropik’ terms defined by intent and outcome. I draw this distinction to make sure motive, goals, and expectations are aligned (with a healthy dose of self-awareness!):
• Ego Philanthropy
Giving primarily centered on recognition of funding but with little to no social or environmental value generated. For example, in India, the largest single grantee of big-ticket philanthropy is Harvard University. Given Harvard’s $27.6 billion endowment, it’s probably safe to assume the donor’s primary intent is not development! (I’ve only ever seen one name-endowed example that I’ve appreciated
• ‘Bang for Buck’ Philanthropy
This giving tends to be more focused on direct intervention or programs that can be easily measured. From soup kitchens to after-school programs, this philanthropy focuses on maximizing quantity and quality with a set amount of capital. In the United States, foundation leadership draw up budgets based on the mandatory 5% release of assets and decide how to extract the most value from the funding.
• Game-Changing Philanthropy
The ‘whatever it takes’ approach to philanthropy – targeting a particular problem or sector and devoting all resources available – grants, investment, advocacy funding, media, operational vehicles and so on – regardless of tax implications. If a philanthropist does not have the resources, she partners and collaborates with whoever she needs to. Arguably, the best example of this would be what the Gates Foundation
has done in the health sector, FSG’s recommendations on shared metrics
, and the multi-faceted interventions of the Omidyar Networks
and the various Skoll
Sector-changing initiatives of course are rare to come by but prior examples include the creation of the Head Start
program and Shorebank
/ Muhammad Yunus’ impact on creating the global microfinance sector. For new initiatives that strive to change the game, even a carefully crafted strategy and intent is not enough. For example, at Waste Ventures
, we understand that if we do not reach 200 cities in India in the next several years, we will have fallen short of our tipping point and will rather be a ‘Bang for Buck’ philanthropy case.
Looking at it from a lens from the field – what seems to be creating the most change right now is not a carefully business-planned social enterprise but rather spontaneous popular uprisings demanding democratic freedom sweeping through the Middle East. From what I can tell, philanthropy had little to do with this – understandably as authoritarian regimes have shuttered the civil society groups that foundations would fund.
Perhaps though, the change in the Middle East is indicative of a new trend towards the individual, rather than an organization, as the unit of change. In those places void of civil society but in need of social intervention – traditional grants can be replaced by affordable technology, social networking, and individual giving. Giving that can be more nimble, focused, and, in greater in sum.
What do you think the ultimate benefit of philanthropy could be?
- If you run a social enterprise, how do your interventions match these broad buckets?
- Do ‘black swan’-type events like the Middle East pro-democracy protests indicate the diminishing relevance of big ticket philanthropy in the scheme of global change? How can philanthropy play a role in such events?
- Is it worth conducting ‘Bang for Buck’ Philanthropy if it won’t change the system? What if alternatives exist that may in fact create a paradigm shift?
- How can individuals create philanthropic change through collective action and/or through technology?
Join Parag Gupta, founder of Waste Ventures and Talking Trash blogger on Social Edge, in the conversation.