Michael Alberg-Seberich

One of the stunning phenomena of our networked world is that certain public debates seem to travel the planet with great speed. Last weekend the German Sunday weekly Welt am Sonntag published an article called Da gehst Du stiften!. The title is a word play on the double meaning of the verb ‘stiften’, which can mean setting up a foundation or to scram. The journalist Inga Michler argues in the article that the foundation as a legal institution may not be so much in the interest of donors and society but more in the interest of bankers and lawyers.

The author develops her argument through conversations with a donor, researchers and practitioners in the field of philanthropy. The arguments are known to most of us in the field: the endowment of foundations is often too small, nobody talks about the administration costs of such foundations, or perpetuity is a very long time. These arguments raise many questions about current foundation administration practices and the legal framework for foundations in Germany.

On the other side of the Atlantic, Rob Reich, director of the Ethics in Society programme at Stanford University, published in the March/April issue of the Boston Review the essay ‘What are foundations for?’. This is a thoughtful piece on the pros and cons of foundations in a democracy. Reich also raises the question of who really profits from the foundation. He critically reflects on the role of the administrators of these institutions. But he takes the case a lot further. He shows how important transparency of foundations is in a democracy. This includes an open communication of the impact or failure of every grant. Reich pledges for more risk-taking and more long-term investments in philanthropy. He suggests that (smart, strategic) giving in the end can be a contribution the public good!

Is this a debate you are familiar with? It would be interesting to read how people around the world think about the future of foundations. How do people in emerging markets – subject of the forthcoming Alliance issue – experience this? It looks like the old institution the foundation is ready for a refurbishment, or even a complete new blueprint. In the end it is important that we do not scram away from giving but instead redefine the way in which we want to give in the future.

Michael Alberg-Seberich is managing partner of Active Philanthropy

David Bonbright

Following Alliance’s article from Buzz Schmidt in February titled Divining a vision for Markets for Good, David Bonbright has written a very thought-provoking response. Bonbright, currently chief executive of Keystone Accountability, was part of the initial debate exploring how to create greater social impact through the philanthropic ecosystem. Three years later, he considers how this transformative vision has drifted away from a focus on those who  should be benefitting from social change.

In this article, available to read for free on the Alliance website, Bonbright explores an inconvenient truth about Markets For Good, while making the case that it would be a far more exciting and impactful enterprise were it to open its doors to beneficiaries. He reflects on the points made in the previous article and offers his own amendments to Schmidt’s vision.

“…Instead of holding to the original vision of the beneficiaries as the core agents of change, it seems that Markets For Good is settling on a neutered understanding of beneficiaries as consumers of information about service availability and eligibility requirements. For the beneficiaries, the information flow is one-way, top-down. This prompts the troubling question, why is an exemplary process tending towards the wrong result? If Markets For Good is in every visible way a well-intentioned enquiry seeking a clear result – better lives for those who most need it and solutions to our big societal problems – why is it tending towards technocratic investments in information collaboration, like taxonomies and coding and data interoperability, rather than honouring the more politically seasoned theory of change that occasioned its birth?…”

“…I have been pondering what it would take to bring the beneficiaries back to the foreground at Markets For Good…It would be complicated and inconvenient – but not impossible – to figure out ways to represent beneficiaries directly in the Markets For Good enterprise. Maybe now is the time to give this some thought, before it is too late…”  Read more >

Read the full article on the Alliance website >

This article was published as part of the free content available on the main Alliance website. To discover more about subscribing to access the full content of the magazine, visit www.alliancemagazine.org/subscribe.

Victor Kuo

With AVPN’s inaugural conference successfully concluded last week, I wanted to list my five takeaways that were not only memorable but also worth a second glance! The first three are broad observations, and the last two are ‘surprises’… at least for me. For those who may have joined us in Singapore, as well as those generally interested in the development of philanthropy in Asia, I welcome your reactions!

• Top indicators of a favourable environment to build the philanthropic sector in Asia: 1) increasing private wealth; 2) increasing social challenge; 3) increasing government interest; and 4) presence of ‘Big Brains’ (intellectual capacity to grapple with problems and solutions)!
• Conference attendees are focused on building the ecosystem for philanthropy in the region. What’s needed to create an enduring sector? 1) Government and legal enhancements that do not hinder the sector; 2) professional networks and qualified human capital; and 3) knowledge and evidence, including precise language.
• External facilitators or non-family members are critical to help bring family foundation members together to work positively. Start young with the next generation of family members by including them on site visits and events to instil in them the right values for philanthropy. Other families and family business networks can bring awareness to and motivate best practices.
• Question to the keynote speakers: On a scale of 1 to 10, where is the Singaporean government in developing impact investing? And the US? Singaporean expert: ‘About a 3 or 4.’ US expert: ‘Probably the same!’
• Definitions in this pioneering landscape are in development! A pitfall that could potentially undo progress is a mix of diluted definitions and sloppy thinking. In China, the term ‘venture philanthropy’ remains fuzzy.

So these were some of my memorable highlights. What were yours?

Victor Kuo is a researcher, evaluator and educator who has spent a decade helping philanthropic foundations measure their social impact.

Ross Baird

The inaugural Asian Venture Philanthropy Network (AVPN) summit, more than any other gathering I’ve been to, provided concrete answers to the question: ‘how do business and philanthropy mix?’ Typically, they don’t. Kevin Jones, founder of the Social Capital Markets conference, often describes this as the ‘two pocket phenomenon’: ‘I do good with my philanthropy in one pocket; I make as much money as I can with my commercial pocket, and they don’t mix.’ Yet social entrepreneurship, impact investing and venture philanthropy broadly blur the ‘two pockets’ into one by solving social problems with business models. If business – primarily entrepreneurship – and philanthropy blur into one pocket, the conference addressed the question: what’s the role of each?

The consistent message: in social change, philanthropy provides opportunity; entrepreneurship turns opportunity into reality. I saw three core arguments throughout the conference:

1) Philanthropy and entrepreneurship are means; the problem you’re solving is the end.

Prashant Jhawar, CEO of Usha Martin Group, spoke on the final day about how his family thinks about venture philanthropy and impact investing. His take: don’t just do these things for the sake of doing them, or because you think ‘venture philanthropy’ or ‘impact investing’ is an interesting idea. First, identify the problems you want to solve, then use the appropriate tools to solve them. For Prashant, access to education for low-income families in India is a passion – grants are appropriate in some circumstances; investments in others. But staying grounded in what you are trying to do – and using money and structures as tools, not ends – keeps you from being all talk, no action.

2) Markets can solve the problem you identify, but not all markets are efficient; this is where philanthropy comes in.

Harvey Koh, co-author of the Monitor-Deloitte report From Blueprint to Scale, spoke in the initial plenary of the importance of solving the ‘Pioneer Gap’ – the stage in enterprise development where promising models are tested, receive customer feedback, and go to market. In the ‘two pocket’ world, business provides risk capital to enterprises in the Pioneer Gap. In Silicon Valley consumer technology, where markets are proven, hundreds of prior ventures have hit IPO, and the path to financial success is well trodden. Risk capital in the ‘Pioneer Gap’ typically comes from the ‘commercial pocket’; angel investors in traditional US venture capital provide 50 per cent of all start-up financing in the US.

Yet in the impact investment world, the ‘Pioneer Gap’ is not an efficient funding market: fewer than 5 of over 300 self-identified impact investors invest at less than $250,000 per deal. In a ‘one pocket’ world, philanthropy has a disproportionate role in businesses addressing social change. As an example, Harvey discussed the success of Husk Power, which operates micro-grid power stations in rural Bihar and seeks to bring power to 70 million people who currently live off-grid, and attributed its success to catalytic philanthropy. While Husk Power has received impact investment from Acumen Fund, Bamboo Finance, LGT Venture Philanthropy, and several other conference attendees, it was able to prove and validate its model through $2.3 million in grants from Shell Foundation – necessary to prove micro-grid as a technology and Bihar as a viable market, which traditional investors were unwilling to test. In inefficient markets, philanthropy can de-risk market conditions so that entrepreneurs have the opportunity to thrive.

3) Philanthropy’s primary value is to establish a baseline of opportunity; entrepreneurship provides a chance for growth.

I spoke on a panel where Chester Wooley, CEO of Unitus Impact and a founding board member of SKS Microfinance, and Happy Tan, CEO of Grameen Foundation Asia, reflected on the microfinance crisis in Andhra Pradesh, India, in 2010. The takeaway: one of the biggest risks with microfinance has been mismanaged expectations. Anyone who thinks that microfinance can ‘solve poverty’ is setting up for failure – microfinance can provide a very specific service (financial inclusion) that enables individuals to afford better goods and services at lower prices, but cannot, by itself, provide an income, an education/skills level to achieve that income, and a basic level of health to earn an income.

Financial inclusion, as an example, cannot solve poverty: worldwide, for the very poorest, much of the basics – health, education, social services, housing – are in fact being provided by government, with some input from philanthropy (in some places, very well – in some places, poorly). If those basic conditions are met, financial inclusion innovations have tremendous power to lift individuals out of poverty. Antony Bugg-Levine, CEO of the Nonprofit Finance Fund (who literally wrote the book on impact investing as a former managing director of the Rockefeller Foundation), sums it up this way in his article ‘Complete Capital’: philanthropy provides the safety net, while entrepreneurship and investing provide the chance for growth. In our organization, Village Capital, we see this as well: we operate business acceleration programmes for entrepreneurs – providing a basic level of financial and operational stability for ventures – supported by philanthropy, and we make investments in highest-growth ventures, backed by investors looking for a return on capital.

In three days of intense discussions around how to solve complicated problems, I saw some clarity. And when we’re solving the largest problems of our lifetime – an unprecedented number of wealthy living alongside an unprecedented number of desperately poor, and an increasingly resource-constrained world – with the very powerful tool of business and the critically helpful supplement of philanthropy, we need all the clarity we can get.

Ross Baird is the executive director of Village Capital.

The European Foundation Centre’s 24th Annual General Assembly and conference kicks off in just two weeks. Alliance is preparing to coordinate an international blogging effort so that as many people as possible are able to hear about what is discussed at the conference.

This year, the EFC conference will have a special focus on Sustainable cities: Foundations and our urban future. The conference will take place at the Bella Center in Copenhagen from Thursday 30 May – Saturday 1 June.

We will be featuring reports, photos and videos from the conference on this blog both during the event and in the following days. Our aim is to give a rounded view of the major topics and themes that are discussed, with members of our international team of bloggers each reporting from different sessions. Confirmed bloggers include:

• John Harvey, Council on Foundations
• Jenny Hodgson, Global Fund for Community Foundations
• Halima Mahomed, TrustAfrica
• Chandrika Sahai, Philanthropy for Social Justice and Peace Network
• Ise Bosch, Dreilinden gGmbH
• Paul Evans, Barrow Cadbury Trust
• Albert Ruesga, Greater New Orleans Foundation

We would also love to hear comments from others who have attended the conference, so please visit the blog often and add your voice to the discussions.

There are many interesting sessions taking place, so to ensure we report from the ones you are most interested in, make sure you vote in our poll.

Vote now for the EFC conference session you would most like to read about >

Those who are unable to attend the conference can also follow the event on twitter using the hashtag #AGA24. Make sure you are following @alliancemag to receive our updates and links to blog posts. If you plan to tweet from the conference, let us know and we will be sure to look out for your updates.

For those of you who are attending the conference, look out for your complimentary copy of Alliance magazine in your delegate bag. The June 2013 issue includes a special feature on philanthropy in a changing world economy – read more about the topics this will cover on the Alliance magazine website.

Jenny Conrad is Communication & Circulation Officer at Alliance magazine.

Mirjana Mirosavljevic Bobic

An unstable political situation and constant violations of human rights is a fertile atmosphere for emergency situations to arise, but also offers an opportunity for responsible philanthropists to act and react. Most readers would agree probably that the most important components of philanthropy and grantmaking support are to be alert, to be timely, to be aware of context and to make sure you address the real needs of people on the ground.

As long as I’ve been involved in this field, being aware of context and recognizing women’s human rights activists’ autonomy has always been a starting point for feminist philanthropy. In Serbia, the context is full of ‘provocations’, which create a need for human rights activists and funders to be alert and react promptly – a need we at the Reconstruction Women’s Fund seek to meet in the context of women’s rights.

For instance, several months ago, another blacklist of civil society organizations was published by a right-wing organization that has a lot of sway in society and that recruits young people for the purpose of demonstrating and advocating hatred and violence towards everyone and everything different. Paradoxically, the blacklisted organizations are known in Serbia for their human rights work and peace activism over the past 20 years. It’s not a coincidence that several of these blacklisted organisations were feminist organizations.

Aggressive campaigns like the above-mentioned blacklist are not unusual. Recently, a media campaign and petition was launched calling for the dismissal of the Commissioner for Protection of Equality — an independent and autonomous state authority working to end discrimination— as conservative forces believed that she was somehow favouring minority social groups, like LGBTQ people.

It is not only through public campaigns that human rights have been put challenged. Last year, the Ministry of Justice tried to reduce penalties for paedophilia, rape and human trafficking crimes – an attempt that was stopped by the intervention of women’s human rights organizations.

Some years ago, the celebration of the 100th anniversary of 8 March, International Women’s Day, was banned. Officials explained their decision basically to deny people their right to peaceful assembly by saying that the peace march would disturb public transportation and endanger health and security of people and property. In response to this ban, the Reconstruction Women’s Fund supported a street action called ‘Free citizens, never servants’, together with over 50 civil rights organizations.

Why rapid reponse grants are an important funding strategy

There are situations when an urgent reaction is needed – by activists and by funders. The Reconstruction Women’s Fund acts accordingly through our Rapid Response grants programme. Prompt, timely support brings attention to violations of human rights where and when needed.

For instance, in a local privatized factory that was going through a process of voluntary redundancy, management decided to give women less severance pay than their male colleagues – despite them doing the same job and having the same work experience. In response, the Reconstruction Women’s Fund funded activists to organise a roundtable that called the public’s attention to this case, aiming to prevent this from happening in other factories and to stop further discrimination in this particular factory. As a result, the Minister for Labour, Employment and Social Policy declared that this had been a case of discrimination and that the owner of the factory had to change his decision.

Our rapid response support, like that shown above, also creates an important opportunity for the general public to engage with human rights activism. We engage with the public in non-violent support for democracy, civic freedom and human rights as well as against gender-based, ethnicity-based or any other discrimination, and against the spread of fear and insecurity more generally.

Since 2005, in partnership with the Urgent Action Fund, a global women’s fund that protects, strengthens and sustains women’s human rights activists at critical moments, we have been making small grants intended to facilitate a short-term intervention in the course of a long-term strategy for the advancement of women’s human rights. We make grants in cases of unanticipated and time-sensitive situations and are able to respond to urgent requests within 72 hours. We opened the program to offer a point of stability for activists. It shows that we work from within the local context and care about activists’ community and wellbeing.

Our Rapid Response grants programme sets a precedent in the Serbian donor environment, as it is currently the only programme of its kind here. Our ability to receive a wide range of requests and process these grants quickly also stands in stark contrast to the majority of donors and international organizations that decide their own priorities and have a slower turnaround.

Beyond providing financial support, our grants also send a public message that we are taking an active stand against injustice and disruptive reality. To read more about our work in this area, our Rapid Response grants programme was featured as a case study in the ‘Small Money, Big Impact‘ report by Foundations for Peace.

Capacity support is important to sustaining human rights movements in Serbia

From our grantmaking over the past nine years we have learned that to be responsible funders, providing technical and capacity support in terms of knowledge and skills improvement, networking and cooperation of women’s groups as well as financial support is crucial.

Together with women’s groups working in various areas, the Reconstruction Women’s Fund is helping to organize campaigns, discussions and educational programmes. These cover issues like resisting conservative tendencies, addressing the insufficent implementation of women’s human rights, and protection of women’s groups and women activists, as well as preventing their isolation. All editions, films and publications that have been supported by the fund are used as educational materials by various women’s groups and the wider public.

We believe that this type of support contributes to the sustainability and autonomy of civil society organizations, which is a necessary precondition for strengthening movements. These social movements in Serbia are endangered by cycles of financial gaps, increased administrative demands by the government, and oftentimes stringent requirements and bureaucracy from governmental and international donors.

A local funder that is in it for the long haul

As a local foundation, Reconstruction Women’s Fund shares and lives the same reality as its  grantee partners. Donor trends come and go, but everyday life doesn’t stop. Unlike many donors that were (and still are) withdrawing from the Balkans, the Reconstruction Women’s Fund will stay. Politicians can change parties, suits and hairstyles, they can smile more and speak less loudly, but, as Zarana Papic wrote 12 years ago: ‘It is absolutely obvious that oblivion will always happen. Oblivion is possible. All these women’s initiatives and the participation of the women’s groups in the predemocratic period very easily can be forgotten. In the institutional domain, a new order can be easily established in which women will be unimportant. Learning to act differently in new circumstances is extremely important.’ 

Mirjana Mirosavljevic Bobic is executive director of the Reconstruction Women’s Fund, the only local women’s foundation in Serbia. Through its programmes, the fund supports activities pertaining to the fulfillment of women’s human rights, academic and activistic exchange, pacifist/anti-militarist engagement, cooperation and solidarity. Since it started working in 2004, the RWF has given a total of 89,429,622 RSD (approximately US$1,299,615) to 503 women-led projects in over 40 towns in Serbia. The fund is a member of International Network of Women’s Funds. This article is part of a series posted by Mama Cash sharing the perspectives of the local and regional funds that are its grantee-partners.

Caroline Hartnell

Not in the view of Scottish philanthropist Sir Tom Hunter. ‘He who has the pesos has the say-sos’ was how he put it, speaking at the Centre for Charitable Giving and Philanthropy (CGAP) conference on ‘Keeping philanthropy’s promises – today’s austerity, tomorrow’s riches?’ in London on 9-10 May. On the advice of his father, he chose a niche and an approach for his foundation just as he did with his successful sports shoe business.

Hunter sets a lot of store by sustainability and exit, and the need to recognize the moment when your work is done. He condemned the ‘western arrogance’ of trying to impose on developing countries what we think they need rather than being enablers of what they want to do. He described how he brought Paul Farmer of Partners in Health to Rwanda and asked him if he could develop a healthcare strategy for the country for the sum the government said it had to spend. The government is now rolling out the strategy Farmer came up with and the Hunter Foundation has exited. ‘We’re helping people help themselves,’ Hunter said. ‘We’re enabling Rwanda’s own vision.’

So what would it mean for philanthropy to be more democratic?  CGAP’s Cathy Pharoah outlined two options. First, and less problematically, it could mean a wider population of givers. In the UK the abolition of thresholds for Gift Aid in 2000, which meant that tax relief was available to any giver who pays tax, however small the gift, created what then Chancellor of the Exchequer Gordon Brown called ‘a democracy of giving’.  He assumed that this would result in more redistribution – the second way in which philanthropy could be more democratic. But this hasn’t happened, partly because increased uptake of Gift Aid has depended on promotion by existing charities, which tend to focus on larger donors rather than widening the base of givers.

Giving circles
But tax isn’t the only way to widen the base of givers. Angela Eikenberry of the University of Nebraska (US) talked about collaborative giving mechanisms such as giving circles, whereby donors pool resources and decide together where the money will go. There are over 600 in the US and around 50 in the UK. Although giving circles tend not to be diverse within groups – over half in the US are women only – very different types of people do form giving circles. This certainly means more different people participating actively in decision making, and giving circle members also tend to be more civically engaged than other donors, eg more likely to vote. Eugenie Harvey of the UK-based Funding Network endorsed the point about wider participation. TFN’s donors are ‘mass affluent not stupidly wealthy’, she said.

Do giving circles also expand who benefits from philanthropy? The picture is more mixed here. Giving circles and other donors give the same to basic needs but giving circle members are more likely to support smaller, grassroots, local organizations, women and racial and ethnic groups. But they are less likely to give to combined purpose funds like United Way, which gives a lot to the neediest.

Pluralism in philanthropy
What is the justification for tax breaks for philanthropy if it’s not to promote giving to the poor and marginalized? Diana Leat of Cass Business School pointed out that tax breaks are for public benefit, which covers more than the most disadvantaged. Tax breaks, Leat suggested, allow for democratic failure, for catering for minority interests that will never be catered for through a majoritarian democratic system. In fact they allow for pluralism in philanthropy.

According to Rob Reich of Stanford University, pluralism is the only halfway plausible rationale for tax breaks – the desirability of decentralizing the production of public benefits; of meeting the needs of minorities whose preferences will never be met in a democratic system; of redressing dysfunctions in the funding of public goods. This is a preference for a thousand flowers, for allowing as many people as possible to contribute their ideas about funding the public good. Admittedly, it is largely pluralism by the wealthy, plutocratic pluralism rather than democratic pluralism, but this is still better than no pluralism. If you introduced a flat-rate incentive, Bill Gates would still have a greater influence on public policy because he has so much more to give away, though he wouldn’t receive so much money back from the state.

What about redistribution?
But the pluralism rationale is indifferent to distribution, Reich emphasized. The idea of some causes having more merit than others is at odds with this rationale, which is all about pluralism among the givers.

Are there other ways of encouraging people to give more to the poor and marginalized? What about differential tax breaks, with bigger breaks for some causes than others? Interestingly, Cathy Pharoah admitted that her view on this had changed in her years at CGAP. A few years ago she would have favoured equal tax breaks for all causes, but in face of the continuing rise in inequality, her view has changed. Beth Breeze of the University of Kent suggested that government match funding schemes could be an administratively less complicated way to achieve the same end. Recently they have applied only to funding for higher education and the arts, but they could equally be applied to other areas. Mark Rosenman of Caring to Change mentioned that state governments in the US incentivize giving to priority areas through tax credits. A suggestion was also made that proportional representation would be a better way of meeting minority needs than greater diversity among donors.

The inescapable conclusion is that democratization is more evident among donors – albeit in a limited way, given the huge disparities in the amounts people have to give away – than among causes. There is no real reason to expect that more democratic decision making will necessarily lead to a fairer distribution of resources. There is nothing intrinsically progressive about democratic decision making, and donors tend to resist the idea of substituting for public spending. According to Beth Breeze, donors feel that charities should benefit the needy but their giving reflects their own interests and history. Finally, as Rob Reich pointed out, charitable support for basic needs will never amount to social justice.

Thank you, CGAP, for some thought-provoking discussion.

Caroline Hartnell is editor of Alliance magazine.

More articles from Caroline Hartnell can be found on the Alliance magazine website.

In a few weeks Alliance will be publishing the June 2013 issue of the magazine. Guest edited by Anthony Tomei, former director of the Nuffield Foundation, this includes a special feature on

While the ‘financial crisis’ may have resulted in significant changes in North America and Europe, for the rest of the world, it can be taken as a symbolic date for a longer-term shifting of economic power. This is playing out differently in different parts of the world. What does this mean for philanthropy – foundations, individual philanthropists, impact investors? Are relations with government being renegotiated? Are foundations rethinking their role? Coming up with new ways of working? Is impact investing increasing? These are some of the questions this Alliance special feature will seek to answer.

This issue will include a number of global perspectives on this topic. Matthew Bishop takes on the immensely difficult task of predicting trends in philanthropy around the world. From Europe and North America, Foundation Center president Bradford Smith talks about how American foundations are responding to the twin catalysts of financial austerity and the information revolution, while Luciano Balbo and Massimo Lanza argue that impact investing may be the best way to address Italy’s growing social problems. Alison Bukhari of Dasra considers how philanthropy is changing in India, now the world’s third largest economy. Looking at developing countries, Tony Emulelu explains the concept of ‘Africapitalism’ and Jacana Partners founder Stephen Dawson outlines why he still thinks that venture capitalism can be more effective than impact investing or grantmaking in creating long-term change.

Other articles in this issue include an interview with the new president of the Council on Foundations, an article looking at venture philanthropy in Europe, and a look at maintaining the balance between the technocratic and the humanistic.

Alliance magazine is a quarterly publication available in both print and digital formats. For further information about the subscription options available and to read the June 2013 issue, please visit www.alliancemagazine.org/subscribe.

Amir Khan

At the AVPN’s 2013 conference, the moot question is Do markets provide a solution to alleviating poverty? The answer seems to be a qualified YES.

Harvey Koh of Monitor Deloitte talked of the stages of social entrepreneurship and how each stage requires a different set of gloves. Social interventions start with a blueprint that sets out the insight and the idea that claims to solve a particular problem. The model then continues to define the next step as Validation. The initial blueprint is explained and articulated while it is also piloted to substantiate its claims and establish its credibility.

Post the validation and pilot phase comes the preparation stage that then equips the social entrepreneur with the tools to get ready for take-off. This is when the strategy is made and the human resources readied for the final stage that scales up. The issue with funding players in the social sector is who would provide the early money. There is the pioneer stage that requires funding that is clearly fraught with risk. Is this where venture philanthropy should come in?

Annie Chen of the RS Group in Hong Kong, Kristin Lindsey of the Global Fund for Children, Wolfgang Hafenmayer of LGT in Liechtenstein and Michael Traill of Social Ventures Australia spoke of the various concerns that venture philanthropy faces. One major point made was that communities hold the key to success and must be the owners of any solution that is tried out. The questions that emerge bring up various aspects of philanthropy and its role in social entrepreneurship and the entire process of moving from blueprints to scaling up.

• What role does philanthropy play? Is it the wedge that then leverages large public funds and then venture mainstream capital to go to scale?
• What constitutes innovation? Is innovation the key to success? Should funding be restricted to the novel and the inventive idea?
• Or should philanthropy look at existing solutions, some of which are minimal innovations but are essentially local in context?
• Scale is relative; sometimes reaching out to a few states or provinces constitutes a far bigger challenge than going national.
• There are some innovations and solutions that cannot be scaled up. Should these be allowed to remain small?
• However, those solutions that scale up only when they are heavily subsidised (the microfinance scale up has already cost $20 billion) beg a simple question – who will continue to subsidise these?
• Should these large solutions that appear vulnerable and unsustainable be allowed to fail?

The conference then went into various breakout sessions. There was an entire section looking at regional insights from China, India, South Asia and South East Asia. Another section looked at the health, water, education and financial inclusion sectors. The conference then went on to investigate the roles that governments play and the different ways in which families enter venture philanthropy. The European and the US perspectives on venture philanthropy constitute a body of work that serves as useful background that Asia can take lessons from.

Amir Khan is President, Glocal University. Formerly Senior Policy Advisor, Bill & Melinda Gates Foundation.

Amir Khan

This is AVPN’s inaugural conference where 30 countries are represented.  In 2009, the AVPN idea in Singapore began. The concept emerged when Doug Miller started the EVPA in 2003. In the last 3 years, the increase in venture philanthropy and social entrepreneurship in this region has been substantial.

The conference started with Tan Chi Chui, Chairman of the LIEN Centre for Social Innovation, who warned against hype, sloppy thinking and monitoring in the social sector that will make investors give up. The danger looms large in reducing the movement to feel good rather than a do good experience. The LIEN Centre was established in 2006 as a partnership between the LIEN foundation and the Singapore Management University on fostering and sustaining social innovation.

Doug Miller talked about leadership that takes on a pioneering role, then focused on the fact that engagement is a key to success. The EVPA now has 160 members and the AVPN has 124 in 35 countries. AVPN is in the business of breaking the silos that private equity, wealth managers, professional service firms, universities, corporate CSR and foundations work in and allowing them to network. AVPN members work across sectors – health, environment, education, children, economic development and financial inclusion. Members support both non-profits and social enterprises.

Lawrence Lien, CEO, National Volunteer and Philanthropy Centre, lamented the fact that NGOs lack the hunger and the ability to articulate their requirements. Philanthropy plays a critical role in nation building and operates through a social contract with innovation and policy change, while it is the government that primarily must provide public goods and governance.

Philanthropists must take more risks, especially in Asia where we avoid risk and spend too little on upstream work and more on downstream activities. The rich actually give far less as a percentage of their income than the poor, something that is not unique to Singapore. Collaboration requires humility and systemic change requires a large diversity in partners. The failure to attract enough leaders to this sector is a serious problem; in a full employment situation it is so much more difficult to get people to think of careers in the social sector.

Former director of the US Social Innovation Fund and senior partner Bridgespan Group, Paul Carttar pointed out that venture philanthropy is not a 21st century phenomenon. The Red Cross, the Carnegie Foundation and others are 19th century ventures that had a profound impact on mankind. The three phases of modern venture philanthropy are the decade of the 1990s when we saw the creation of initial VP houses, the next decade when we saw the expansion of investor bases, and the evolution of powerful investors. The Social Innovation Fund in the US offers some lessons for Asia in how the partnership between government and philanthropy can leverage each other’s strengths.  Aim high, seek models with realistic potential for large scale impact. Manage the risk of failure, and the only alternative is to do nothing. Trust your judgement.

Example: Youth Villages. For children from troubled homes. The insight driving this is that children are best served in their communities and homes and that good counselling can change families.

Never doubt that a small group of thoughtful committed citizens can change the world. In fact it is the only thing that has … Margaret Mead

Amir Ullah Khan is President, Glocal University. Formerly Senior Policy Advisor, Bill & Melinda Gates Foundation.