Private Foundations as Global Civil Entrepreneurs: An Answer to Poor Performance of Global Governance?
On September 4, GMF and the Heinrich Böll Foundation co-hosted a discussion entitled, "Private foundations as global civil entrepreneurs: An answer to poor performance of global governance?" Tine Stein and Lora Viola of the Social Science Research Center in Berlin were invited to share their research on the role of social and civil entrepreneurship in international development in government agencies, private foundations, non-profits, and global institutions. Helga Flores Trejo, Executive Director of the Heinrich Böll Foundation, introduced the speakers and Nicola Lightner, GMF Economic Policy Program Officer, moderated the discussion.
Tine Stein provided the conceptual and theoretical framework for her research. She discussed the emergence of cosmopolitanism and the evolving concepts of global citizenship and leadership as well as how these concepts have been placed center stage in recent political discourse. She highlighted the differences between civil entrepreneurs and social entrepreneurs by distinguishing their respective objectives and resources. Dr. Stein noted the key difference between civil and social entrepreneurs is that the former rely on celebrity status in order to raise awareness of a problem, activate donors or advocate for reform, and the latter rely on a particular skill set to find sustainable solutions to social problems.
Stein elaborated upon the emerging role of these individual actors in the international system by highlighting three primary functions by which they generate change. Stein noted that these actors may serve a replacement function when global governance performs inadequately or in some cases fails. Secondly, individual actors may provide a pioneer function in which they provide a path to follow. Finally, these actors may provide a mobilization and integration function by using their celebrity power or status to raise awareness or gain support.
Stein concluded by emphasizing that just as a democratic nation state depends on a free pluralistic society where citizens actively participate in the political system, so does a healthy global political order. She suggested that social and civil entrepreneurs that seek change need to be regarded as "one further tile in the mosaic picture of political order beyond the nation state."
Lora Viola began by recognizing the need for more opportunities for academics and practitioners to share their research and experiences with each other. Dr. Viola emphasized the great transformation in the global governance landscape with the emergence of civil entrepreneurs and private foundations. Previous options for generating change, she argued, revolved around conforming or shaming, trying to affect international organizations by joining them or attempting to shame them into changing through public awareness campaigns or boycotting. However, the arrival of well-funded civil entrepreneurs has presented a new option: competing by starting a separate organization. She highlighted that these private foundations now compete with official agencies not just for donor contributions, but for authority and legitimacy in the field.
Viola pointed to the fact that private foundations have provided a market-oriented approach toward development projects by creating incentive based systems and more accurate measuring of their results. Movement toward the "effectiveness per dollar spent" approach was the result of competition for donor funding. She suggested that this was effective but also encouraged private foundations to invest only in short-term, independent projects rather than work with local governments on long-term, necessary projects.
Among the many important points raised in the discussion was the fact that private foundations are not held to the same standards of transparency and accountability as public institutions, mainly because they do not use tax payers' money. Responses to this point acknowledged that there are indeed risks that come with investing in private foundations but that the efficacy of these actors is often the result of less stringent rules and regulations about how exactly funds are spent. Building on this topic, a representative from the State Department noted a general preference for funds from private foundations over ODA because of the flexibility with which the money can be spent. Dr. Viola responded that there is an important debate over the point at which we are willing to trade transparency and accountability for effective action; she then emphasized that private foundations not only have to be accountable to their donors but to the aid recipients.
Building on the issue of accountability, one guest asked about the primary ways in which private foundations led by civil entrepreneurs differ from other organizations. To this point, Stein responded that the concentration of power in the decision-making process is the largest distinction between the two. Some private foundations are trying to create larger boards to help distribute this decision-making power in order to alleviate this fear.
Another important observation was that with so much talk of private actors competing with governmental organizations, there is also a deep need for the two sectors to cooperate. Several other guests commented that it is important that foundations communicate more effectively with governments in order to help those countries who want it most and will make the best use of development aid. Dr. Viola responded by noting that while organizations such as the Gates Foundation often pursue projects independently of local governments, they are increasingly seeking projects that can eventually be handed off to government agencies.
In a her concluding response to a final round of questions, Dr. Stein stressed how quickly the role of private foundations is changing and that there is a serious need for more research in this area. Finally, Dr. Viola wrapped up the event by emphasizing the need to find ways to tie private foundations into global governance system-possibly through public engagement-without restricting their ability to act independently or reducing their efficacy.