Peace and Security

netFWD launches new report on venture philanthropy in development

Alliance Magazine - Tue, 02/25/2014 - 07:40

Venture Philanthropy in Development: Dynamics, challenges and lessons in the search for greater impact is the title of a new report from the recently created Global Network of Foundations Working for Development (netFWD), launched today at the Rockefeller Foundation Headquarters in New York City.

netFWD sees the study as ‘a first step towards offering an in-depth insight on how foundations working for development are evolving in their search for greater impact. It looks at the journeys, enabling environment, incentives and drivers that led a number of philanthropic organisations willing to seek novel ways to address global development issues to (re)define their operating model. While they were once “grant-makers only”, considering allocated money gone for good, an increasing share of foundations are becoming real investors, i.e. expecting a financial return alongside social impact or at least seeking to recover their initial capital.’

The report defines venture philanthropy as ‘an entrepreneurial approach to philanthropy that combines a variety of financial and non-financial resources to identify, analyse, co-ordinate and support self-sustaining, systemic and scalable (for
and not-for profit) solutions to development challenges aimed at achieving the greatest impact’. The authors emphasize that the report provides a broader overview of innovative ways to support development and to create shared value.

The report includes case studies of the Emirates, Lundin, Rockefeller and Shell Foundations.

To download the report

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

Categories: Peace and Security

Central African Republic - Making the Mission Work

By failing to engage when Crisis Group and others warned that the Central African Republic had become a phantom state, the international community has now had to become much more heavily involved, at much greater expense, after horrifying loss of life and massive displacement, with much greater odds of failure.

A wake up call for funders

Alliance Magazine - Tue, 02/25/2014 - 03:00

Angela Kail

If you wanted to talk to a fellow funder about collaboration six years ago, you’d be talking to yourself—so said  one of our speakers at an event on the topic last week. Over sixty people came to debate the whys and wherefores of collaboration, which certainly seemed to imply it is beginning to gain currency today.

The basis of stronger collaboration producing “collective impact” has become a rallying cry for many funders seeking to address complex economic and social issues. It stems from the idea that systemic change will require cross-sector coordination—a shift away from the isolated intervention of individual organisations. Notable proponents include Bill Gates, whose foundation has collaborated with the World Health Organisation, Unicef and the National Institute of Allergy and Infectious Disease, to name a few. Elsewhere, partnerships are flourishing in the shape of networks of learning, pooled funds and giving circles—models designed to help funders give more effectively.

In the UK, the hole in funding left by the state’s retreat from the charity sector has given added impetus to this development. Funders hope that by working together to prevent replication, to understand what works and where their money could blend, they might step in to fill this gap.

But although funders seem more willing to work together, the collaborations themselves can be tricky to get off the ground. One of the main barriers is a lack of information about funding flows; for a new funder working in an area, it can be difficult to find out who they should talk to. This is one reason why NPC welcomes Indigo Trust and Nominet Trust’s joint initiative, Open Philanthropy, which seeks to publish information about which organisations UK grant-makers are funding, helping donors with smaller networks get a handle on who is funding similar work and so who they might approach.

Even when funders are working on the same issues, idiosyncrasies of approach can make it difficult for them to come together. Most funders, even professional ones, have strong personalities. The trick, according to those who have successfully navigated collaborations, is to find funders that add to your work rather than do exactly the same thing. This contributes to a more holistic approach, allowing you to tackle more of the problem, and also makes it less likely that there will be a head-on difference of opinion that could derail the project.

One thing we have noticed at NPC is that the UK feels behind other countries when it comes to collaboration. In the US, for example, funders appear more willing to team up around social issues, possibly because larger funders (like Gates) are pushing for collaboration. Perhaps funders are compelled to work together by the scale of problems in international development. Or maybe successful collaborations pave the way for new collaborations and we just need to try it more often in the UK.

Bill Gates, the world’s richest man, understands that on its own his funding is unequal to the task. Surely this provides some sort of wake up call to other philanthropists.

Angela Kail, head of funder effectiveness at NPC.

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

Categories: Peace and Security

Can philanthropy support the transformation of society?

Alliance Magazine - Mon, 02/24/2014 - 03:30

Can philanthropy be more than a smile on the face of inequality? Two of America’s leading philanthropists say “yes.”

When was the last time you ate a tomato? Recently, we’d guess, since tomatoes are ubiquitous in most people’s diets. But did you stop to consider who picked it for you, and under what conditions, and what it cost in human terms?

Tomatoes are a $600 million a year industry in the state of Florida alone, bought in vast quantities by food giants including Wal-Mart, Taco Bell and McDonalds.

Yet the working conditions of the women and men who pick them – mostly migrant workers – have been riddled with exploitation, violence, sexual harassment and abuse for decades. On average, full-time workers pick 150 30-pound buckets of tomatoes every day, and earn about $11,000 a year in return.

Today, however, the tomato industry is undergoing unprecedented change. Growers, pickers and corporations are negotiating to clean up these abuses by ensuring better working conditions and fairer wages.

Philanthropy has played a part in this story – not the most important one, which belongs to the workers themselves, but not insignificant either. By supporting people to organize themselves, defend their rights and make their own decisions, we believe that philanthropy can play a role in the transformation of society.

The small town of Immokalee in Florida used to be a swamp (Immokalee means “my home” in the Seminole Indian language). Then the swamp was drained, and over time agriculture became the most important industry, centered on tomatoes. Immokalee is only a few miles away from the affluent ocean-coast retirement communities of Naples and Fort Lauderdale, where some of the town’s produce ends up in high-priced hamburgers and salads.

Immokalee is also home to a community-based, human rights organization called the Coalition of Immokalee Workers (or CIW), which has worked tirelessly to change inhumane working conditions by educating and organizing agricultural workers. The CIW has also focused critical attention on large purchasers like Wal-Mart, who until recently looked the other way.

In 1960, CBS News anchor Edward R. Murrow reported on working conditions in the area for his “Harvest of Shame” report, which described the harsh lives of migrant workers. Today, this is all changing due to the CIW’s Fair Food Program.

On a visit to Immokalee in January, 2014, we stood in the parking lot where the workers waited to be picked up in the early morning hours. The Coalition had provided us with a guide who described a pivotal moment in the struggle for workers’ rights.

“Many years of diligent, strategic hard work and organizing bring us to today,” he told us, “when Wal-Mart executives, produce-growers and migrant farm workers can sit down together, look one another in the eye as fellow human beings, shake hands and agree to work to end gross exploitation and harmful conditions in the produce supply chain.”

Wal-Mart, America’s largest retailer, had just signed on to the Fair Food Program, which had been initiated by the CIW in 2001.  Grassroots pressure had already persuaded fast-food chains like McDonald’s, Taco Bell, Burger King and Subway to agree to a price premium for their tomatoes, and to adhere to a binding commitment to safe working conditions, and zero tolerance for forced labor, child labor, sexual harassment and violence.

According to Susan Marquis, Dean of the Pardee RAND Graduate School, “the Fair Food Program, unlike most social-responsibility programs, is fully enforced and, as a result, has had real, measurable effects. Accountability comes from formal audits conducted by the Fair Food Standards Council, a nongovernmental, independent, third party, as well as a manned 24-hour complaint hotline.”

So far so good, but where does philanthropy enter this story?

Continue reading here>

Jennifer Buffett and Peter Buffett.

This post first appeared on Transformation, the blog of OpenDemocracy.

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

Categories: Peace and Security

Venezuela: De la polarización a la violencia

Las muertes ocurridas y la ola de represión emprendida contra la oposición por parte de las fuerzas de seguridad y cuerpos paramilitares en Venezuela representa un punto de quiebre, incluso para la convulsa historia venezolana. De la polarización política hemos pasado, en una semana, a la violencia política.

Surging or not surging? What’s the truth about giving by the rich?

Alliance Magazine - Fri, 02/21/2014 - 03:00

Alliance magazine

Gifts Surge From the Wealthiest U. S. Donors reported the Chronicle of Philanthropy on 9 February. The Chronicle’s ranking of the 50 donors who give the most to charitable causes shows that the wealthy contributed $7.7 billion last year, 4 per cent more than in 2012.

Last year’s stock-market surge was behind the boom, but one expert also suspects the intergenerational transfer of wealth is starting to kick in. Mark Zuckerberg, co-founder of Facebook, aged just 29, and his wife, Priscilla Chan, led the ‘philanthropic pack’ in 2013 with a gift of nearly $1 billion to the Silicon Valley Community Foundation.

But not all commentators have seen unqualified cause for rejoicing in these figures – for two distinct reasons. First, it has been pointed out (Chronicle, 18 February) that a Closer Look at Data Belies ‘Surge’ in Giving by Rich. According to Businessweek, the increase in giving was dwarfed by the growth in billionaires’ assets. Adjusted for inflation, giving by the most generous philanthropists has risen only slightly since 2003, while the combined wealth of the Forbes 400 more than doubled to $2 trillion.

The other reason for scepticism relates to where the donations go. ‘Giving Pledge Signers Gave Big in 2013 but Not Much for Today’s Needs’, reports the Chronicle (9 February). While Melinda Gates says the pledge has inspired people to give more and earlier, concerns are growing about whether the effort is channelling enough new money to urgent causes today. At the heart of the criticism is a concern that too many of the billionaires are putting their money into foundations that may not dole out grants for many years.

For more information>
Chronicle of Philanthropy, 9 February
Chronicle of Philanthropy, 9 February
Chronicle of Philanthropy, 18 February

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

Categories: Peace and Security

Danger de rechute au Burundi : question foncière et consolidation de la paix

Le Burundi est l’un des pays les plus pauvres (le taux de pauvreté atteint 67 %) et les plus petits d’Afrique (27 834 kilomètres carrés) avec l’une des plus grandes densités humaines du continent (près de 400 habitants par kilomètre carré). C’est du reste un pays profondément rural où seulement 11 % de la population réside en ville. Alors que l’accès à la terre et à la propriété est un véritable enjeu socio-économique, le Burundi fait face à de sérieux problèmes agricoles.

Venezuela Conflict Alert: Respect for Human Rights and Dialogue Must Replace Violence

Political confrontation in Venezuela has turned violent in the past few days with the killing of six demonstrators, the injury of many more and a clampdown on civil liberties. This threatens to further erode stability and human rights in an already polarised nation facing acute economic crisis and where the homicide rate is one of the highest on earth. The government and the opposition must promptly find a way to foster a basic political dialogue. Ultimately, this dialogue – on the country’s economic direction, on how best to control crime and on tamping down Venezuela’s increasingly febrile politics – will need to result in an outcome all can accept peacefully. In the short-term, without even the start of such talks, there is a clear and present risk of a further spiral of political violence and economic meltdown. The international community, particularly Latin American powers, must use their existing leverage to call for immediate dialogue but also make clear to all sides – particularly the government – that further human rights violations and erosion of democratic values will exact a heavy cost.

Stewarding wealth for the common good: how an Asian family office incorporated climate change mitigation into its portfolio

Alliance Magazine - Thu, 02/20/2014 - 03:00

Annie Chen

‘From an Asian perspective, climate change is not a distant threat – it is happening today. I want to make sure that the way my capital is invested is part of the solution and not the problem.’

So says Annie Chen, founder of RS Group, a Hong Kong-based family office. Air pollution in Beijing, bushfires in Australia and typhoons in the Philippines underline her remarks. Consequently, RS Group incorporates climate change considerations in all its activities and across asset classes, with the dual goal of contributing to climate change mitigation and ensuring its investment portfolio is fit for the future.

RS Group uses a ‘total portfolio management’ approach, under which all of its activities, from strategic philanthropy to capital management, support its mission of contributing to sustainable development. Since 2009, it has built a globally diversified portfolio managed by over a dozen external asset managers (typically 3-4 per asset class). At the moment, sustainable strategies make up over 70 per cent of its investments. In the coming years, legacy private equity investments will be replaced by sustainable and impact strategies, bringing RS Group closer to its goal of a 100 per cent sustainable allocation. Philanthropic capital is also used to support transformative ideas on sustainable development, especially in the Asian region, while at the same time empowering people and communities in building a more balanced, productive and just society. RS Group takes a long-term horizon (typically 7-10 years) when constructing its portfolio to achieve returns in line with its mission.

About Annie Chen

Born in Hong Kong and educated in the US, Annie Chen is the founder and chair of RS Group, her family office, which is physically housed within a broader family office shared among her parents and siblings across three generations. Since 2008, she has been working on incorporating her own values into her private portfolio through RS Group towards the goals of sustainable development.

Climate change strategy
Recognizing the importance of climate change to sustainability, RS Group sought ways in which different parts of its portfolio could contribute to climate change mitigation and adaptation. The challenge was to select measures that would lead to a tangible impact without substantially changing risk and return levels of the overall investment portfolio. The Group devised a three-part strategy:
•    Support (invest in climate change solutions)
•    Avoid (divest from fossil fuel-intense industries)
•    Engage (engage with investment holdings and share experiences with the broader community)

 Continue reading here>

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

Categories: Peace and Security

Clinton and Gates Foundations join forces to track women’s development gains

Alliance Magazine - Wed, 02/19/2014 - 03:00

Alliance magazine

On 13 February the Bill, Hillary & Chelsea Clinton Foundation and the Bill & Melinda Gates Foundation announced a new partnership to gather and analyse data about the status of women and girls’ participation around the world, as part of the Clinton Foundation’s No Ceilings initiative. The partnership was announced during a discussion between Hillary Clinton and Melinda Gates hosted by New York University and moderated by Chelsea Clinton.

The foundations will work with leading technology partners, including Google, to collect this data and compile it into a review that will identify the progress that has been made in the 20 years since the UN Fourth World Conference on Women in Beijing and the gaps that remain. It will also provide evidence of the strong connection between rights and opportunities for women and girls and prosperity, stability and security around the world.

The data will be released in digital and written forms as part of a progress report in 2015 in advance of the anniversary of the Beijing Conference.

For more information>

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

Categories: Peace and Security

Power to the people?

Alliance Magazine - Tue, 02/18/2014 - 03:00

Tris Lumley

The issue of power dynamics in philanthropy has recently come to the fore. Should grantees have a greater say in their relationship with funders? And what would this look like? It comes into particular focus in light of recent debates over different types of investment approach:  ‘strategic philanthropy’ where control sits with the funder versus ‘responsive philanthropy’ where the grantee calls the shots.
But for me, the discussion ignores the most important part of the equation: the beneficiary. At the heart of any charity or charitable giving is charitable purpose – the idea that what you do benefits others. So the best decision-making – be it led by charities or by funders – should represent what’s in the best interests of beneficiaries.
At NPC we fundamentally believe in the power of research, evaluation and outcome measurement. This is often interpreted as putting us firmly in the strategic philanthropy camp, where funders set the agenda based on their depth of analysis, theory and data. But what these tools essentially help us do is understand the lives of beneficiaries and represent what really happens to them when charities intervene. They belong to the same set of tools that the best charities use, even those that are closest to their beneficiaries – like co-design and co-production.
So measurement and evaluation are important because they help us all – whether funder or funded – to give voice to beneficiaries.
But for this to make sense, decisions actually need to be made on the basis of evidence that measurement, evaluation and research produce – and at the moment, this simply isn’t the case. We can’t compare data across a field to work out what works best. We don’t (generally) have a growing evidence base to which new research is added, and on which claims about outcomes are based. We may ask about outcomes, but most of the time they aren’t the primary driver of decision-making.
Charities measure results because they think funders want to know, not to manage and improve what they do. Funders collect outcomes, but have nothing to compare them with, and therefore don’t use the data to make better decisions. Outcomes and impact are tools in a funding transaction – at its worst, a game – not in the genuine inclusion of beneficiaries’ perspectives in decision-making.
At NPC we’ve been arguing for a greater focus on outcomes and impact for well over a decade, so it seems we should offer some suggestions of how to address these huge challenges.
I’ll offer two – both involving the real transfer of power towards beneficiaries. The first is based on the conviction that it’s possible to include beneficiaries in decision-making in a real and robust way. Sophie Pritchard of the Edge Fund gives an exhilarating tour of a number of philanthropic vehicles in which beneficiaries are involved and sometimes lead the decisions about where money should go. This brief article should be a source of great inspiration to us all, and spur innovation in new forms of philanthropy.
What would happen if you put together crowd-funding and participatory budgeting for example? What if zopa.com, Locality and localgiving.com formed a joint venture? formed a joint venture? My faith in the disruptive power of the internet makes me optimistic about the future on this front. I was working in the dotcom bubble in 2000, and almost everything predicted back then about disruption of business models has now happened – it just took a while.
What about other ways to redistribute power? I believe – and it’s part of an emerging strategy for a project at NPC – that if charities come together around shared goals, they can shift the power balance. Rather than competing against each other for limited grant funding and shrinking or more tightly constrained contracts, charities could use their closeness to, or representation of, beneficiaries as their USP and form a partnership that collectively seeks funding. Funders of any type find it hard to resist when the sector gets together and brings a single proposition to the table.
I believe the most progressive funders are already eager for this to happen; they’re seeking out collaborations with each other and with the field. They’re acknowledging that they operate as part of a complex system (as do those they fund), and that as well as providing funding to grantees, they all need to work together to fix some of its failings.
If you doubt that either of these approaches needs to happen, and feel that the status quo in philanthropy is fine, then my final thought is this: if philanthropy is supposed to be about benefiting others, shouldn’t we give ‘others’ the chance to ensure that it is?

Tris Lumley is head of development for New Philanthropy Capital

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

Categories: Peace and Security

Are Freedom, Peace and Justice incompatible agendas?

Address by the Honorable Louise Arbour, President & CEO of the International Crisis Group, on the occasion of the Inaugural Roland Berger Lecture on Human Rights and Human Dignity, 17 February 2014, Oxford.

It’s the Year of Impact Investing: What Does That Mean for Foundations?

Alliance Magazine - Mon, 02/17/2014 - 03:00

Beth Sirull

A growing body of evidence suggests that, as more investors get comfortable with the concept of impact investing — deploying capital with the intention of producing social benefits alongside financial returns — 2014 will be the year impact investing ceases to be a buzzword and becomes a real option for financial firms, pension funds, and endowed institutions. Indeed, research by JPMorgan Chase projects that impact investments worldwide will approach $1 trillion by 2020, while a 2013 survey by the World Economic Forum suggests that nearly two-thirds of U.S.-based pension funds expect to make an impact investment in the future. Meanwhile, major Wall Street firms such as Goldman Sachs and Morgan Stanley have already assembled teams dedicated to impact investing. What does all this mean for foundations, and what role should and can they play in the fast-growing impact investing field?

The term impact investing was coined in 2007, but activities of this kind have been around for much longer. Since 1969, when program-related investments (PRIs) were created under the U.S. tax code, private foundations have provided more than $4 billion in unconventional financing for enterprises and activities that further their charitable purposes in areas such as poverty alleviation and education. In recent decades, socially responsible and sustainability-oriented investments have expanded in the public markets and in private equity.

In the last few years, attention has largely been focused on building the supply side of the impact investing field. The Global Impact Investing Network (GIIN) has convened a group of more than sixty investors representing $11 trillion in assets under management, including $60 billion in impact investments; the White House has used its bully pulpit to activate investors; and in 2013 the G8 created the Global Social Impact Investment Task Force. All this activity is promising, but it isn’t enough to unleash the true potential of impact investing in terms of delivering game-changing social, economic, and environmental gains.

Unfortunately, too little attention has been paid to the demand side of the impact investing equation. Where are the investment opportunities to put capital to work for social impact and financial returns, whether at market or below-market rates? The last thing those of us working to build the field want to see is a whole lot of capital piled up with no place to go. In such a scenario, we know it wouldn’t be long before that untapped capital fled for greener pastures. Even worse, we don’t want to see impact capital invested in enterprises that are not ready to deploy it or where “greenwashing” and excessive profiteering undermine the very social and environmental purposes that motivate our work. Recent challenges and setbacks in the microenterprise field send a strong warning signal: a run of failures on either the financial or impact front will set the field back a generation. We must avoid that outcome.

Foundations have at least three critical roles to play in meeting this challenge. First, many potentially investable impact enterprises are too small and/or require a substantially longer investment horizon than investors (especially those looking for market-rate returns) are willing to commit. These enterprises need to be nurtured, and foundations are in an ideal position to provide the kind of patient, growth-oriented, and risk-tolerant equity and debt financing that enable such enterprises to take root and flourish. Foundations also can provide expertise and access to prospective investors, either directly or through partnerships with programs and organizations whose mission is to build high-impact enterprises. Pacific Community Ventures’ Business Advising program is one such partner, among many others. Over time, many of these enterprises and perhaps entire new sectors may become viable for impact investments with more conventional financing terms, or even “plain vanilla” market-rate debt and equity. But absent early-stage, catalytic capital from foundations, neither the social impact nor the financial return is likely to be realized. By sharing successes, these investments can also provide the additional benefit of “signaling” the market, both in terms of attracting like-minded investors to specific deals and new investors to the impact investing field itself.

Second, in some markets, conventional financing will never work due to the underlying economics, population served, regulatory constraints, and/or political risk. Real estate developers, for example, can’t generate market-rate returns while providing housing for a senior citizen living on a fixed income of, say, $10,000. While public subsidies can help make the math work, they often create obstacles of other kinds. As Debra Schwartz, director of program-related investments at the John D. and Catherine T. MacArthur Foundation puts it, “In hard-to-finance markets, large-scale impact investments are made, not found.” Foundations can play a role in these markets by providing patient, flexible financial support to mission-driven intermediaries such as the Nonprofit Finance Fund, Root Capital, and others. Foundations also can provide the first-loss reserves, guarantees, and subordinated investments needed to create innovative, structured finance vehicles like the New York City Housing Acquisition Fund, which offers “tranches” tailored to different kinds of impact investors, including those requiring market-rate returns.

Impact investing is not meant to eclipse traditional grants; both are necessary. The point is to use impact investing dollars where appropriate and to free up more grant dollars for where grants are truly required. As Amy Klement of Omidyar Network says, “Problem first. Tool second. You really need to understand the problem and the need before you decide the best way to address it (grant, equity, debt, etc.).”

A third way foundations can support the impact investing field is to use traditional grants to fund learning and policy activities, along with enterprise development and financial innovation. For example, Omidyar Network, along with the Rockefeller, MacArthur, Ford, and Surdna foundations, is funding case studies and other research to inform impact investing policy and practice in the U.S. and abroad. These efforts are also supported by a number of government agencies and are critical to the long-term development of the field.

As noted above, 2014 will be a critical year for impact investing. Today’s biggest challenges are helping the demand side tap into a growing supply of capital and building the field itself. Foundations have a long history of developing and implementing innovations to address social problems. Building the field of impact investing should be added to that list.



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Beth Sirull, is president of Pacific Community Ventures.

This post first appeared on Philanthropy News Digest’s PhilanTopic blog. Philanthropy News Digest (PND) and PhilanTopic are services of the Foundation Center

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

Categories: Peace and Security

Fields of Bitterness (II): Restitution and Reconciliation in Burundi

To avoid a revival of past ethnic tensions between Hutu and Tutsi, Burundi needs to find the right balance between land restitution and national reconciliation.

New Hope for Peace in Cyprus

As reunification talks begin between Greek and Turkish Cypriots, a number of new developments have excited diplomatic hopes.

First donations made to new pan-African foundation

Alliance Magazine - Fri, 02/14/2014 - 03:00

 

Alliance magazine

Established by the African Union Assembly in May 2013, the African Union Foundation aims to finance African priorities through voluntary contributions. Its mission is to ‘mobilize resources in support of the African Union’s vision of an integrated, people-centred and prosperous Africa, at peace with itself and taking its rightful place in the world.’ To accomplish this mission, the foundation will focus on five key programme areas in its first five years: 1) skills and human resource development, 2) women’s empowerment and gender equality, 3) regional integration, 4) youth development and entrepreneurship, and 5) advocacy and support for the African Union.

On 1 February, following the convening of the African Union Heads of State Summit in Addis Ababa, the inaugural promoters’ meeting of the newly established African Union Foundation was held and the first donations to the new foundation made. While the Tony Elumelu Foundation made a grant of $150,000 towards the start-up costs, a pledge of $100,000 was made by the Government of Jamaica, represented by Ambassador Carlton Masters, who indicated, ‘This underscores the commitment of the Diaspora towards African development.’

‘It is time for Africa to mobilize our own resources in support of our development and take charge of our own destiny,’ said Dr Nkosazana Dlamini Zuma, Chairperson of the African Union Commission. The foundation will strive to engage Africa’s private sector, African individuals and communities, and leading African philanthropists.

For a full report>

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Categories: Peace and Security

Foundations – a stitch in time saves nine or saving for a rainy day?

Alliance Magazine - Thu, 02/13/2014 - 03:00

Abigail Rotheroe

Foundations exist to provide funds and support to other organisations for a range of charitable purposes—that much is clear. On the face if it sounds like an easy job—giving away money—but behind the scenes foundations have to wrestle with intricate decisions around whether to give all their money away now or invest it (socially or otherwise) for future generations. If my granny ran a foundation she would undoubtedly give all the money away now under the firm belief that a stitch in time saves nine. But if my grandpa held the purse strings he would save it for a rainy day.

Permanently endowed foundations have a specific remit: to preserve the real or inflation adjusted value of their money so they can exist in perpetuity. This isn’t easy. If the income produced by investments falls, maintaining the same level of grant-making results in a shrinking endowment. The foundation is therefore forced to choose between accepting a—hopefully short term—reduction in the real value of its endowment, or reducing its grant-making programme.

For foundations that are not permanently endowed, a more nuanced calculation is required. It begins with the question: should we spend the money now or save it for later? No one can eradicate stubborn social problems such as homelessness or youth unemployment in one fell swoop, but under what circumstances is there value in spending down to improve the life chances of beneficiaries today rather than tomorrow? For example, early intervention parenting programmes are aimed at addressing current behavioural issues of parents and children to improve long-term outcomes for the children. So spending money now makes sense. There is an opportunity cost in waiting for problems to materialise some way down the line, which will be more expensive to address. On the other hand, there will always be a need to spend money later—no amount of early intervention will remove the need for palliative care.

So, how does a trustee factor this into their decision making? Trustees clearly recognise the need to maintain the financial spending power of their endowment by getting a return on their investments that exceeds inflation. But how do they maintain their social spending power? It will be different for all grant makers and is affected by  issues of mission, evidence base and a host of other factors—but it is a debate worth having at the next trustee meeting.

Social investment presents further difficult decisions for trustees. Up front it seems to offer a win-win situation, enabling foundations to use more of their assets for social good. However, social investment also tends to sell itself as trading financial for social return. We don’t know how great that trade off is, but it does imply that returns on social investment will be lower than financial investment, which can make it even harder to preserve the value of your endowment.

For example, a recently launched social investment fund is targeting an annual return over its10 year life of 3- 5%. So the return may exceed inflation—but does the extra return over inflation compensate for the risk you are being asked to take over that 10 year period? Is it prudent to do this as a trustee? Who knows—maybe yes, maybe no. But is it a risk worth taking? Possibly, if the social investment produces an impact consistent with your mission and therefore increases the difference you make.

It will be interesting to see how foundations approach these debates going forward—whether the rainy day wins over early intervention. In the meantime, I don’t envy them.

Abigail Rotheroe is a consultant at NPC.

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

Categories: Peace and Security

US narrowly tops BNP Paribas’s new index for individual philanthropists

Alliance Magazine - Wed, 02/12/2014 - 09:02

 

Alliance magazine

How committed to individual giving are the wealthy in Europe, the US, Asia and the Middle East? In what ways are philanthropists from these regions similar, and how are they different? How important is timing in philanthropy? The newly released BNP Paribas Individual Philanthropy Index offers answers to these questions.

Now in its second year, the index is based on a survey of 414 high net worth individuals (at least $5 million in assets under management) from Europe, Asia, the Middle East and, for the first time this year, the US.

The overall ‘commitment measurement’ of individual philanthropists, according to the 2014 BNP Paribas Individual Philanthropy Index, reveals that the US, Europe and Asia are roughly halfway to a philanthropic ideal, while the Middle East seems to be about a third of the way there – a score that is ‘adversely affected by lower points on promotion but may not fully acknowledge the strong cultural heritage of philanthropy in the region’.

The scores are:
•    53.2 US
•    46.3 Europe
•    42.4 Asia
•    29.4 Middle East

An interesting finding is that the Middle East is the region where philanthropists take the longest-term view. More than half of all philanthropic donors are prepared to wait more than 25 years to see the impact of their philanthropic actions, while donors in Asia, the US and Europe expect to see faster results, ie in under 10 years.

To read the full report>

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

Categories: Peace and Security

Fields of Bitterness (I): Land Reform in Burundi

Unless the government revives land governance reform in Burundi, long-term peacebuilding efforts will remain compromised.

Who do you think should win the Second Olga Alexeeva Memorial Prize?

Alliance Magazine - Wed, 02/12/2014 - 03:00

Alliance magazine

The finalists for the Olga Alexeeva Memorial Prize have been announced, one by one, on this blog over the last three weeks. The final shortlist is as follows:

The winner of this year’s prize will be announced at the WINGSForum to be held in Istanbul 26-29 March. I don’t envy our panel of judges their hard task of selecting a final winner from this group of outstanding finalists!

In the meantime, we’d love to know what you think. Between now and the end of February, members of the public are invited to vote for their preferred candidate through an online vote. The “readers’ winner” will be announced in the first week of March – and it will be interesting to see if the judges come to the same decision as you do.

This year’s shortlist is once again extremely diverse, both geographically – with finalists coming from Brazil, China, India, Latvia, Russia and Turkey – and in terms of the approaches to building philanthropy for social change that it represents.

Both Natalya Kaminarskaya in Russia and He Daofeng in China have done much to transform philanthropy into a more integral part of the life of their country, stressing the importance of transparency, accountability and information sharing.

Both Dhaval Udani in India and Rūta Dimanta in Latvia have developed hugely successful online giving platforms in countries where giving by individuals was until recently almost unknown, while Itır Erhart and I Renay Onur are promoting philanthropy in Turkey by raising money through sporting events.

While Lucia Dellagnelo is the founder of Brazil’s second community foundation, Larisa Avrorina has been supporting community foundation development in Russia for over a decade.

You can find out more about the finalists in a special supplement, kindly sponsored by Charities Aid Foundation, which gives a short profile and interview for each finalist.

View the finalist profiles in this special supplement.

Find out more about the prize here>

And now, please vote for the readers’ winner of the Olga Alexeeva Memorial Prize.

Latest from Alliance is the blog of Alliance, the leading magazine for philanthropy and social investment worldwide. Subscribe to Alliance magazine here.

Categories: Peace and Security