The New World of Development Foundations

By Simon Scott, Counsellor, OECD Statistics and Data Directorate

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One of the compensations of growing old is that you may eventually find out what you always wanted to know.

Fifteen years ago I wrote an OECD study on Philanthropic Foundations and Development Co-operation which – despite its many glowing virtues – was decidedly thin on systematic financial and sectoral detail. Most of all, I found it almost impossible to get a handle on what the biggest development philanthropy of all, the Bill and Melinda Gates Foundation, was up to.

Now, in my dotage, my questions are answered by an excellent new study, Private Philanthropy for Development, a joint project of the OECD’s Development Centre and Development Co-operation Directorate.

How large is private philanthropy’s financial contribution to development? Answer: USD 24 billion from 2013 to 2015 inclusive, or USD 8 billion a year. What is the share of the Gates Foundation? 49%, which goes mostly to health, with agriculture next. And, by the way, the authors of these figures are not just guessing: they developed a special new data survey completed by 77 philanthropies and also gathered publically available information on many more. All the data – partly aggregated to protect confidentiality – are available here, and constitute a major new information resource.

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The three circles of philanthropy: Taking a tiered approach to achieving the SDGs

By Bathylle Missika, Senior Counsellor to the Director of the OECD Development Centre and Head of Unit – Partnerships & Networks, Organisation for Economic Co-operation and Development (OECD)

the-three-circles-of-philanthropy2People around the world have little faith in the ability of just governments to deliver on the promise of the Sustainable Development Goals (SDGs). They know governments alone can’t promote sustainable development and prosperity for all. What will make a difference is involving new partners. Philanthropic foundations, with their resources, expertise and quest for innovation, are prime partners in development. But how do we unleash the power of philanthropy to be agents of development change? How can we tap into this community of philanthropists and leverage their ability to take risks and to innovate in sectors like education, gender or youth empowerment? Better understanding foundations and how they view the 2030 Agenda will help us better partner with them. That’s why the OECD’s Network of Foundations Working for Development (netFWD) unveiled a new circle typology to outline a fresh way to think about and understand philanthropies and their role in advancing the SDGs and well-being overall. Continue reading

More than money: Optimising philanthropy’s potential to fast-track development

By Bathylle Missika (Acting) Head of Policy Dialogue Division, OECD Development Centre

The Sustainable Development Goals (SDGs) have such scale and complexity that they require governments to strengthen co-operation with a broad range of development actors. Foundations, among others, may play a role both in financing development as well as in designing and implementing innovative projects. On the one hand, North-South flows from foundations based in OECD countries alone have grown almost tenfold in less than a decade, from USD 3 billion in 2003 to USD 29.7 billion in 2013.[i]  The 2012 assets of the Bill and Melinda Gates Foundation, The J. Paul Getty Trust and the Ford Foundation equal the GDPs of Panama, Mongolia and Mauritius, respectively. On the other hand, foundations also have a non-financial value as last July’s Financing for Development Conference in Addis Ababa recognised. That conference was a turning point in thinking about foundations as more than mere ATMs for development.

Foundations have the potential to fast-track development; the momentum now is on how and with whom to do so. Realising such potential is neither a given nor a clearly defined pathway. Are foundations stepping up to the challenge? Are they applying their capacity to innovate further? Are they moving at the same pace? If and when they do act, how can foundations significantly make a difference in the post-2015 agenda?

To start, a growing number of catalytic, venture or enterprise-based foundations are focusing on achieving impact and broad scale that far outlive the benefits of short-term, ad hoc grant-making. The Shell Foundation, for example, transformed its model to focus on cost-effective approaches to deliver sustainable impact at scale and measure such impact on the ground. Among its many projects, the foundation is helping create a market for clean cook stoves in India by working across the supply chain and exploring new distribution models. Other innovative approaches are starting to flourish. Randomised controlled trials are increasingly being discussed in the philanthropic sector as an alternative way to assess impact.[ii] The UBS Optimus Foundation used them to explore how causal relationships inform development outcomes in the context of the Children and Violence Evaluation Challenge Fund in Uganda.[iii] 

However, despite recent efforts towards more accountability and monitoring, evaluating philanthropic impact remains a tall order for the whole sector. While foundations have the resources and ambition to design innovative programmes to achieve social change across a range of development issues, doing so often requires replacing their cherished autonomy with solid partnerships across sectors. No organisation, no matter how powerful, can single-handedly bring about true social impact, argues Larry McGill of the Foundation Center. Thus, as McGill points out, unless foundations are only interested in local, short-term change, they need a collective, macro perspective that looks at changing entire systems. Some encouraging efforts are already visible. For example, Novartis Foundation joined forces in a multi-stakeholder coalition with Columbia University’s Earth Institute, the Millennium Promise, the Ghana Ministry of Health and Communications, Airtel and Ericsson to transform health services for Ghana’s poorest. Mobile technology will allow doctors and nurses to see more patients, while reducing transport times and costs.

Unfortunately, only a handful of such initiatives exist so far. How can they be replicated more broadly across the development galaxy? The OECD Development Centre’s Global Network of Foundations Working for Development (netFWD) is working with foundations to answer this question. netFWD is taking the lead in the Accelerating Impact 2030 initiative, which will be launched at the Ford Foundation later this week on the margins of the United Nations General Assembly. This initiative provides foundations with tools, data and a space to share lessons on how to sustain impact at scale and play their part in achieving the SDGs at the local level.

Only then will the true potential of foundations fully blossom, well beyond the money.


[i] OECD DAC statistics. Figures are in real terms.

 [ii] Originating in the medical sector, randomised controlled trials in their most basic form are experiments in which people are allocated randomly into an experiment or control group, with the only expected difference between the groups being the intervention they receive or do not receive.

[iii] Bandiera et al. (2012), Empowering Adolescent Girls: Evidence from a Randomized Control Trial in Uganda, World Bank, Washington DC,http://econ.lse.ac.uk/staff/rburgess/wp/ELA.pdf

 


This article should not be reported as representing the official views of the OECD, the OECD Development Centre or of their member countries. The opinions expressed and arguments employed are those of the author.