A plethora of actors and multiple forms of financing are emerging in the development ecosystem. While donor agencies and international NGOs are still powerful, agenda-setting actors and aid remains crucial, the development landscape today is far more complex and multi-faceted than when the Millennium Development Goals (MDG) were officially adopted in 2000.
Philanthropic giving has increased rapidly.
One aspect of significant change is the growth of philanthropy. The OECD estimates that philanthropic giving in development has increased by 128 percent since 2000. In the UK, annual development spend by foundations is estimated by Cass Business School at £290 million, with CIFF, the Wellcome Trust and Comic Relief being the biggest givers. Globally, according to financial flows to developing countries in 2010, philanthropic giving (US$56 billion) is creeping up to nearly half of Overseas Development Assistance (ODA) (US$128.5 billion), though both are dwarfed by foreign direct investment (US$514.3 billion) which remains the most substantial source of finance for developing countries.1
The Bellagio Initiative on the Future of Philanthropy and Development and the International Development Select Committee's Inquiry on the Role of Private Foundations in Development marked 2012 as a year of vibrant debate about the implications of these trends.
The general consensus was that philanthropy plays a complementary role to ODA. Free from some of the restraints of donors, philanthropists can exercise:
- Financial leverage: driving funding to neglected or high risk areas and where impact is uncertain or long term (e.g. vaccine development)
- Policy leverage: advocating for change with governments, civil society and the public in a way other actors would struggle to do (e.g. supporting gay rights movements)
- Market leverage: stepping in when markets fail to meet needs (e.g. insurance and banking schemes for people with HIV/AIDS.
What also came through in these debates was a fundamental irony at the heart of philanthropy: that the same characteristics from which it draws its strength, for instance, independent funding and decision-making, have also attracted criticism of a lack of accountability, transparency and the requisite expertise to direct funds where most needed. The challenge for philanthropists now is to try to meet these concerns without sacrificing the very independence that makes them both a vital and complementary actor in development. In turn, if we want philanthropists to abide by sector set norms, we must get better at engaging with them.
Philanthropy is still evolving.
Traditionally identified with large family foundations like Rockefeller and Ford, the new breed of philanthropic donors tend to come from growth sectors like technology and finance, bringing with them sector knowledge and new models of engagement, beyond grant-giving from a distance. The injection of technical expertise and innovation can shed new light on obdurate issues. For instance the Omidyar Network, recently co-hosted the Open Up! conference with DFID on the role of technology in promoting open government and transparency.
Ark's own trustees primarily come from the finance sector which has imbued ARK with a focus on cost effective interventions which can achieve measurable change. Public and private sector partners are increasingly recognising the value of such collaborations, with new ways of working which amplify the distinct roles and comparative advantages of each emerging.
Ark's diarrhoea control programme in Zambia is a case in point. Co-created with a respected national partner CIDRZ, and with the government on board from the start to ensure systemic impact, ARK is developing and testing a model of diarrhoea control which combines both prevention and treatment. Using its networks and funding commitment as leverage, ARK has doubled its investment and convened a range of partners, including the Bill and Melinda Gates Foundation, Comic Relief, DFID/GAVI and GSK, to extend the scope and reach of the programme. (further details at www.bond.org.uk/networker).
Although a more complex picture has emerged, bringing with it challenges around decision-making and coordination, we have found that as long as there are shared goals among partners and clearly defined roles and relationship structures, complexity is not necessarily a bad thing. Indeed, it may be the very hallmark of the future of development.
References 1 'Private Foundations, Business and Developing a Post-2015 Framework,' IDS Policy Briefing, June 2012