Panel discusses role of philanthropic foundations in international development cooperation
On July 14, GMF hosted Jan Martin Witte, Associate Director of the Global Public Policy Initiative (GPPi) and Country Representative for Living Goods Uganda, for a roundtable discussion on his co-authored GPPi research paper, "Transforming Development? The Role of Philanthropic Foundations in International Development Cooperation." Jan Martin Witte was joined by Geoffrey Lamb, Managing Director for Public Policy at the Bill and Melinda Gates Foundation, who discussed the report's insights and shared his views on the unique role that foundations play in the development arena. The discussion was opened by GMF's Executive Vice President Karen Donfried and moderated by Nicola Lightner, GMF Economic Policy Program Officer. Approximately 60 representatives from the development, philanthropy, foundation, and government sectors were in attendance.
Jan Martin Witte began the dialogue by presenting the following key findings in his study:
• Foundation engagement in development is on the rise, though still comparatively small to official development assistance (ODA).
• Foundations bring new money, competition and innovation to development, though expectations should be kept within reason.
• For recipient countries, foundations bring new resources, but can also bring new challenges to the overall picture.
• Official donors and multilateral development organizations will have to find creative ways to engage with new donors.
Framing the discussion in a transatlantic context, Mr. Witte provided a snapshot of the existing trends involving American and European-based foundations. Mr. Witte noted that U.S. organizations drive much of the growth in development spending while Europe lags significantly behind. He also noted that on both sides of the Atlantic, foundation engagement in international development is primarily driven by a select number organizations with large funding capacities. Those with smaller funding capacities tend to be less global in their reach.
Mr. Witte discussed the principle issue-areas being addressed by foundations today, including health-oriented initiatives, education, environment, agriculture, and civil society/governance. Geographically, the majority of overall foundation-spending is aimed at emerging economies. Mr. Witte stated that only a small proportion of total funding is invested directly in partners on the local level and that foundations generally use the same implementers who are responsible for facilitating ODA.
Building on the key points above, Mr. Witte introduced questions related to current transformations in development approaches, and specifically, whether there are potential limitations that accompany the new "business approach" many foundations are advertising. He explained that this trend in development - a "new philanthropy," so to speak - is "strategic," "market-conscious," "knowledge-based," and tries to maximize the ability to leverage donors' monies. But while foundations are becoming increasingly savvy in these respects, Mr. Witte stressed that what is really needed to push development forward is more people and offices on the ground in those areas where development activities are to be carried out. Moreover, he noted that foundation engagement is seldom integrated into national development strategies, resulting in high demand for increased communication and coordination of development efforts between recipient and an increasing number of donor organizations.
Other implications of the "new philanthropy" in development that Mr. Witte addressed included the possibility of duplication of projects due to a lack of coordination between private donors and official donors. He mentioned that this potential for duplication has created a certain level of skepticism in Europe toward the role of private donors in global development, and pointed out that there may even be a tendency for official and private donors to enter into competition with one another, for good or ill.
To view Jan Martin Witte's presentation, click here.
Geoffrey Lamb responded to the points raised in Mr. Witte's report, noting that foundations need to work toward increasing their levels of transparency. He was optimistic that public scrutiny will play a significant role in driving this process forward over time, along with new evaluation exercises that encourage greater openness. Regarding the implications of the new "business approach" to development, Mr. Lamb noted that that a key challenge is to remain flexible and consider that such a model may indeed have its benefits. He recognized that the role of foundations in development is significantly growing, though he stressed that as foundations continue to become more active in this field, their role should not be to substitute for country actors or official development assistance. A major aim of foundations should be to anchor grantees and development intermediaries on the ground - not to replace them. Mr. Lamb added that foundations could benefit from more regional and global entities through which their work could be channeled.
Regarding the question of competition between official and private donors, Mr. Lamb stated that a certain level of competition could have positive effects on the course of international development efforts. He further noted that while it is important to avoid the duplication of such efforts, it is also crucial that the development community continues to encourage governments to become more engaged and to take stronger actions to achieve development goals.
Following the remarks from Jan Martin Witte and Geoffrey Lamb, the discussion opened to comments and questions from around the table. Key issues addressed during the exchange included other differences between American and European foundations, and the question of whether some European foundations are not as (comparatively) engaged in development work. Some explanations that came forward included the view that many European foundations are operating organizations - not grant-making organizations. Also, it was suggested that a higher level of risk aversion exists among European foundations as compared to American Foundations.
More generally on the topic of risk, participants noted that private donors typically have the ability to take more risks than official donors are able to. Despite this flexibility, foundations are often restricted in terms of their scope of activities due to a higher level of risk aversion among their board members. The event participants agreed that it is vital to involve board members more actively in foundation-funded projects, and to ensure that they are better connected to other stakeholders in the field, in order to increase their understanding of the issues and encourage their support for future projects.