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November 15, 2011

New directions in philanthropy – report from the Bellagio Summit

November 15, 2011
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Summits are clearly losing altitude these days if people like me are getting invited. But when it’s the Rockefeller Foundation’s legendary lakeside conference centre at Bellagio, on Italy’s Lake Como, you’d be crazy to say no – it’s every bit as exquisite as everyone says (see pic).bellagioview

The Summit in question is on ‘The Future of Philanthropy and Development in the Pursuit of Human Wellbeing’ (catchy, eh?), hosted by Rockefeller, the UK Institute for Development Studies and the Resource Alliance and bringing together philanthropic foundations, ‘impact investors’, NGOs and academics, with a decent geographical spread of people. Here are some impressions, thoughts and half-hearted attempts to spin the conclusions after day one, drawing on the conversation and the pile of background papers available on the Bellagio Initiative website.

First, some numbers. According to a paper by Michael Edwards, foundations provided between $7bn-$9.5bn to ‘international’ or ‘development’-related activities in 2009. Big money, but only 7% of total aid. The Bill and Melinda Gates Foundation  account for a third of the total – a whopping $2.5bn in 2009. The US is by far the biggest source (total of $6.7bn in 2009). European foundations only mustered a measly $0.5bn in 2007.

And how do philanthropists see development and their role? Some impressions from a rapid series of plenaries and panels:

What’s Hot:

  1. The Arab Spring has had a massive impact in highlighting the importance of dignity, well-being, empowerment, citizenship, voice etc etc , along with youth as a crucial change agent (often ignored by the development industry).
  2. Networks, systems, complexity etc

What’s Not

  1. The State. Philanthropic types may grudgingly acknowledge the need for partnership with the state, but they basically see government officials as a bunch of corrupt parasites, definitely more problem than solution, intent on thwarting the efforts of heroic entrepreneurs to improve the lives of their countrymen and women.
  2. Political and historical analysis: I don’t attend many discussions where I find myself wishing for fewer stories, and more analysis, but this was one of them – more NGO than the NGOs when it comes to substituting heart-warming anecdotes for academic rigour.

Perhaps the most interesting theme for me was the rise of the national. The role of domestic philanthropists in developing countries is growing both in volume and recognition, with a rich variety of traditions of giving from the zakat tradition of Islam (see excellent background paper on Islamic philanthropy) to southern Africa’s Ubuntu philosophy. Add to that the rise of middle classes in emerging economies with money to spare. Much of this giving is religiously-inspired, personal, private (it is often seen as very poor behaviour to blow your own philanthropic trumpet) and fragmented, which offers real grounds for improving quality and impact. Beyond raising money directly for philanthropy, there is a wider area of new money stemming from improved tax systems and natural resource revenues. As official international aid declines, financing for development is likely to become increasingly domestic and ‘southern philanthropy’ is likely to play a significant role. 

So what future directions for philanthropy emerged from all the bla  bla bla? Two big ones

Innovation: Philanthropists spend their own money so in the words of philanthropist James Chen of the Hong Kong- based Chen Yet-Sen Family Foundation, they can take risks and fail: ‘Governments find it hard to pilot and fail – there’s career risk for them –  but we can be an James Chenincubator at the pointy end of the stick, and then take our successes and persuade government to adopt them and scale them up.’ But the appetite for risk doesn’t always extend to issues of power and social change. Could that thirst for innovation be applied more often to empowerment and accountability as well as business models and mobile phones or, in the case of the totally charming James (pictured), adjustable glasses?

Advocacy: this is an altogether trickier one, but just thinking about the impact of Bill Gates at the recent G20 summit, or of George Soros’ Open Society Foundations, there is no doubt that the philanthropic community could exert far more influence than it currently does if it made a more concerted entry into advocacy (it could do so and easily remain impartial, in terms of party politics, as Oxfam does). For example, it could more actively support active citizenship and accountability. I decided to pitch advocacy on something that seemed a bit uncomfortable (at least for some of the people in the room – philanthropists are of course all different and it’s perilous to generalise), namely what philanthropists could do in leveraging new forms of finance for development. Think about it. Faced with a likely decline in global aid levels, they could:

At Domestic level:  work with religious givers and institutions; push for better corporate giving; advocate for more and more progressive tax systems and closing down loopholes and tax evasion.

At International level: advocate against tax havens and capital flight, work to increase the volume and impact of remittances and giving from diaspora communities, support innovative ways to raise more cash such as the Financial Transaction Tax or carbon taxes.

So will the philanthropy sector come to the same conclusion as the NGOs, who realized some time ago that it was necessary to tackle the structural causes of poverty with advocacy as well as programming? There are signs that this is happening, but judging by yesterday’s conversations, it will mean confronting the deep ambivalence to the state shown by some philanthropists.

Let’s see if any of these ideas survives today’s discussions.


  1. Duncan,
    Wikipidia says that ‘Impact investing’ is an investment strategy whereby an investor proactively seeks to place capital in businesses that can generate financial returns as well as an intentional social and/or environmental goal. I find the language interesting. It appropriates the notion of impact and thus imply that it is the only type of intervention that indeed has an ‘impact’. More importantly I would like to know your thoughts: can the guest for financial returns really generate social ones or are the two goals incompatible? and should we, as NGOs, have a much clearer position on this than we currently have?

    1. Can’t see why you can’t direct investing towards a subset of projects that generate good social or environmental returns, Ines. Examples abound from the impact investors at Bellagio, from James Chen’s adjustable glasses (which I’ve tried – they work!) to a Mexican colleague discussing how to make afterschool clubs commercially viable in poor neighbourhoods in Mexico.

  2. Ducan,

    since you’re already on the topic: what’s the mood about Impact Investing over there (50 km from where I live, by the way…)?

    How is it generally perceived by the “traditional” philanthropists (NGOs, foundations, etc…)?

    Sometimes I have the sensation that it’s not taken as a “serious” effort neither by the private sector nor from the third sector…

    I hope that my perception is wrong!


    1. the general attitude to impact investing was positive Stefano, although there isn’t much evidence of its ‘impact’. In fact, the impact investors kept saying how much better NGOs evaluate their work – now THAT is worrying!

  3. I am a bit puzzled that you and Frans feel that politics has been missing from the Bellagio discussions so far. I’ll come back to it below but I can just about understand why that might be a reasonable observation for the second module of the meeting that has just finished but I think that Frans is just wrong in his definitive judgement about the discussions in module 1. The three key ideas/words that shone out from that set of discussions were ‘dignity’, ‘voice’ and ‘social justice’. If these are not politics then I don’t know what is? I agree with him that the big picture of global crisis (crises) has not been adequately considered in either module, but Roberto Bissio of Social Watch (http://www.socialwatch.org/) did bring that back to the discussion in closing session of today’s meeting.

    Returning to your observation on module 2, I know I may just be a fuzzy academic but I thought that the detail that we got involved in over the last two days was only a thin veil over what was a profoundly political set of discussions. For example, the discussions of the relationships between publicly funded development effort and new channels and sources of philanthropic funding brings us into some of the fundamental areas around rebuilding the social contract between state and citizens; how new and burgeoning philanthropic efforts relate to that social contract; and in this new complex world of givers and donors, who can hold whom accountable and for what?

    And of course, across the whole initiative so far the big issue of bringing together a coalition of activists, development veterans, enlightened private sector types, new and old philanthropists (and a leavening of cynics) to consider reframing their joint development efforts around a value orientation that focuses on ideas of dignity, justice and voice seems quite a political project to me. On day one Jay Naidoo urged participants to focus on the politics of this challenge and to reorient development and philanthropic effort to understanding the ‘demand side’ of the development equation. Maybe we need to keep playing that over.

    1. Thanks Alllister, I’ll leave Frans to speak for himself, but my reflection would be that, OK, everything is political, in a way. But what was weak for me was the analysis of political power, conflict, and the drivers of exclusion and inequality + the historically central role of the state in constructing a whole set of institutions central to promoting wellbeing. Instead, people preferred to stay either immersed in a fluffy world of motherhood, apple pie (who’s actually against dignity, justice, transparency or accountability,at least openly?) and uplifting entrepreneurial anecdote. Without a decent power analysis, it was hard to usefully discuss an advocacy role for philanthropy. I think maybe one problem was that some viscerally anti-state social entrepreneurs in the room blocked the thinking of more experienced philanthropic foundations who ‘get’ the importance of systems, public sector and advocacy.

  4. Duncan,
    Since education (in particular for women) is the primary engine for any development, what is the possibility of creating a “A Central for Education”? This will include volunteer teachers (from the first world), who during their holidays or some given periods during the year, devote time to teaching in developing countries. This of course, could apply to retired or semi retired professional like me, in particular if they possess French & English languages.


  5. I agree with Duncan. The word ‘political’ can easily be misinterpretated, but what I mean has more to do with ‘political economy': what are the global and local power relations/systems that inhibit development/wellbeing? And how can we address them? And aren’t we or at least many of us part of such a system, in one way or the other?
    What I read from Duncans comment is the same feeling I got from many of the discussions: every time that a more ‘political’ aspect was brought up, most of the people did not react, but went on with quite technical ‘aid’ debates about the logical framework or examples of specific projects. Some of those were implicitly ‘political’ (for example the shrimp fishers in Bangladesh trying to organize themselves against export policies, and opposing to western NGOs only working for fair trade benchmarks for that export industry, instead of defending the small fishers against the big companies that take over). But such examples were never brought to a more systematic analysis, they were not generalized, there was no trying to for example categorize different sorts of NGOs/Foundations in these terms.
    You are right ALlister that in some breakout groups we were talking about social justice and dignity as a central element in the Arab Spring, but this was only in terms of political ‘goals’ or ideals. Social justice as an ideal was not related to how the development industry works and in many cases obscures the economic, political, social et cetera relations that inhibit social justice.
    Another thing that was always again brought up was the relation that had to be built between development NGOs and Foundations. To my opinion there is no difference between the two, or at least, there are much more important differences within both of them. For example, there are more ‘political’ NGOs, trying to change the systemic conditions for development in many ways, and there are NGOs directed at service delivery. The same within the Foundations world, although you might say that they are mainly focussing on service delivery.

  6. Duncan, you’re a hard man – I suppose when you bring a diverse group of people together, who really do come from quote different ideological starting points, it’s just difficult to keep a conversation going without either breaking down into outright conflict, or lapsing back into platitudes. I prefer to find ways to look at the hard side of fluffy – why focussing on human wellbeing really requires us to get out of the usual (state or market) trenches and engage in a real political analysis of whose wellbeing wins out because of the distribution of power and resources. Of course, no-one (well not many people) would speak out against dignity, voice and social justice: but it would be very political for the development industry to put those values centre stage in policy decisions, to be seriously considered alongside efficiency, rate of return, and value for money,

    And Frans, yes I can live with your deeper analysis on the dynamics in the meeting and that we really need to get a systems analysis. I am happy to call it political economy and in the wellbeing work that I have been doing it is manifest in the question ‘how do we live well together?’ For me it’s still about how you start the conversation and build forward.

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