Over the past decade or so, philanthropy has taken an increasingly large role in global development. Collaborations between members of what is being called "the development galaxy" – the many, very different, large-scale donors, governments, NGOs, businesses, social enterprises, civil society organisations, foundations and others – offer exciting possibilities for improving billions of lives.
So how should philanthropy increase its effectiveness?
This question was the starting point of a recent roundtable discussion held at the Guardian in association with the Shell Foundation. The event, which brought together senior figures in the fields of philanthropy and development, set out to consider how philanthropy could have a more sustained impact.
Chris West, from the Shell Foundation, kicked off the discussion by addressing the role of philanthropy in development. "When [the foundation] started out, its mission was to scale up sustainable change. Development challenges are by their nature big," he said. So while historically the foundation had been supporting social enterprise, that was not something that could create sustainable change by itself. All parts of the market needed to be involved to create systemic change. To put it another way, all parts of the development galaxy needed to be involved and philanthropy had a specific role in that, stressed West.
"Foundations are sitting on a large capital base, but they are still adopting risk-averse strategies," he said. "Foundations and philanthropic capital have a major role in taking risk and unlocking new disruptive opportunities. They can't solve problems in isolation."
So what are foundations or individual philanthropists doing, and what should they do better? How can they be more effective? Bathylle Missika from the OECD Development Centre pointed out that foundations were now much more prominent in the development galaxy, especially the Bill & Melinda Gates Foundation. However, that left many thinking all foundations had similarly vast amounts of money to disperse.
Different agendas
As Clare Woodcraft-Scott from the Emirates Foundation put it, the philanthropic sector is hugely heterogeneous – it involves many different types of organisations and individuals, with very different agendas. "But we have huge amounts of commonality, and many of our issues would also resonate with NGOs." She considered one of the frustrations that arose over philanthropic investment: the outcomes should have been greater, given the amount of money that had been involved. "In retrospect, there was no systemic change," she said.
So should there be a more effective use of philanthropic capital? According to Caroline Fiennes of Giving Evidence: "One of the defining features of philanthropy is that there are no normal incentives to do a good job. You can just carry on; it's your money. No one will shut you down," she said. So could this mean that some interventions were actually harmful? "We don't know. It is quite possible," she continued.
According to Richard Graham from Comic Relief, many philanthropists will not be persuaded to look at best practice. "The motivations are not there for them. It's their money, they can do what they like." Others, however, are open to listening and learning. "We have a coalition of the willing – people who are interested – and that group is growing and changing," he said.
West queried the meaning of risk in philanthropy: is it doing things new and differently? "Those with capital who are less exposed to quick return can take risks," he said. "The commercial sector is good at taking risks but it has commercial return expectations."
There was also a growing recognition that partnerships between foundations, NGOs, civil society and businesses had a vital role to play in development.
Alexandra Stubbings, from development consultancy Talik & Company, pointed out that: "Business has a role and particular strengths, as do foundations and NGOs." They each bring different qualities and help to keep each other truthful. Mike Barry from Marks & Spencer stressed that many foundations have good partnerships and this had ensured, for instance, the improvement of factories in Bangladesh. "So now, how can we transform the lives of women beyond the millennium development goals?" he asked. Hugo Sintes from Oxfam talked about how farmers, whose businesses were currently not self-sustaining, were being helped to grow better crops that in turn would sell to better markets, thereby providing a higher income to the farmers.
Graham spoke about "catalytic philanthropy", where philanthropists were involved in the design and implementation of a project, and using different approaches, such as investing, giving grants, or lobbying. "It is an interesting space for philanthropists to identify how they can draw on different skill or knowledge sets to create the systemic changes they are interested in," he said.
So what could be done in order to shift the focus away from how much money is given, towards what is done for this money and how it has – or has not – achieved what it set out to do.
Measuring results and impact was discussed by several participants. Ambika Sampat from Acumen – a non-profit venture fund – talked about her organisation's work on measuring impact, not just on inputs (what is given financially, or in other ways). "This is about measuring depth and breadth," she said. Allister McGregor from the Bellagio Initiative considered that development as a whole was about: "…moving between utopia and a messy reality. One of the traps of measurement is that it is a straitjacket. You lose space for innovation and risk, as it doesn't fit into that straitjacket," he said.
Tangible results
Laura Kelly from the Department for International Development (DfID) spoke about the need for results that has been DfID's focus for few years, with NGOs not always knowing how to show this. "We need monitoring to show what works, and at the end we will have a sense of whether we should do more of something or not. We need to show something to aid sceptics. This has tangible results on people's lives," she said. This was something that could be done if aid was translated into the number of mosquito nets delivered, or girls sent to school.
However, the less quantifiable results may be hard to see in the short term.
Fiennes reminded participants that: "There is a tension between having impact and measuring it. They are not the same," she said, pointing out that some innovations – for instance, the sequencing of the human genome, and the work of Tim Berners-Lee who invented the internet – may have an impact far beyond the duration of the project, in ways that could not possibly have been foreseen when they were developed.
Michael Green, from the Social Progress Imperative, looked back at the rather different development situation prior to the 2008 financial crisis, where governments were considering ways to deliver the millennium development goals. After 2008, though, philanthropy was seen as a "new source of free money". Now the international system is more complex, messier. "There is more pressure on philanthropists to be accountable and there is a push to transparency. The risk is that philanthropy responds becoming more like government, becoming risk-averse. We need philanthropists to be bold and dynamic," he said.
Accountability and transparency is important, in terms of what money is being spent, and how and what the results of this spending are. According to Graham, there are various levels of accountability. "You have accountability to the people you are seeking to support. You have to find a mechanism for feedback. There is also broader accountability to the public domain: if you are investing, you should say this is what worked, this didn't, this we should do differently."
So what is working? How are various parts of this development galaxy coming together to be more than a sum of its parts? And are there things that should be done to make this work have more impact?
Vineet Bewtra from the Omidyar Network considered that it was important to encourage more capital to support innovation at local level, and that it be locally funded. "Local partners are where the gold dust lies," agreed Sampat. "And listening to what people on the ground are saying, providing solutions based on that." Graham also pointed out that the greatest philanthropists for any country were its diaspora, through remittances and investment, and as consumers of local products, and providers of expertise.
Richard Gomes from the Shell Foundation looked at the way successes could be built upon, citing the potential of mobile phones, which now have a penetration of 80-90% in parts of east Africa, to deliver various kinds of positive social impact. Gomes wondered how philanthropists could do more to support the next major breakthrough. What were the ways in which it had been effective to use philanthropy for this purpose? "And what is the opportunity cost of letting this potential slide?" he asked.
Key discussion points
In recent years, philanthropy has taken on a much greater role in global development. Philanthropic organisations now have their role alongside large-scale donors, NGOs, governments and civil society in improving the lives of people in countries across the world.
So how should foundations, and other philanthropists, ensure their work is most effective? Is it the amount of money given that is important, or how well it is being used? Is there a good way to measure this impact, or is such measurement impossible or pointless? And can philanthropists really be called to account when they are spending their own money – could they do more harm than good?
At the table
Jo Confino Executive editor, the Guardian
Mike Barry Head of sustainable business, Marks & Spencer
Vineet Bewtra Investment director, Omidyar Network
Richard Graham Head of international grants, Comic Relief
Richard Gomes Head of policy and advocacy, Shell Foundation
Caroline Fiennes Director, Giving Evidence
Michael Green Executive director, Social Progress Imperative
Laura Kelly Head of the business engagement hub, Department for International Development (DfID)
Prof J. Allister McGregor Director, Bellagio Initiative
Bathylle Missika Acting head of division – policy dialogue, OECD Development Centre
Ambika Sampat Business development associate, Acumen
Hugo Sintes Enterprise development programme manager, Oxfam
Alexandra Stubbings Co-founder and director, Talik & Company
Chris West Director, Shell Foundation
Clare Woodcraft-Scott CEO, Emirates Foundation
Credits
This roundtable was supported by the Shell Foundation, an independent charity. Contact Rachel Joy (rachel.joy@theguardian.com).