Ambassador Andrew Young, Dr. Martin Luther King Jr., and my dad, Dr. Robert B. Hayling (photo by Frank Murray)
I always remember that I was not supposed to be born.
When my mom was pregnant with me, the Ku Klux Klan decided to teach our family a lesson. My father, Dr. Robert B. Hayling aka “that damned negro dentist,” was at an organizing meeting at his office. Carloads of Klansmen drove up to our small house late in the dark, St. Augustine Florida night. After pausing to yell insults and take aim, they shot up our house. My sisters Robin and Tamara still remember the sounds of gunshots and splintering wood. The smell of gunpowder. And the sight of our beloved family dog, who had run to the front door protectively, dying in a pool of her own blood.
This was the birth story I heard over and over. My mother told it to me. My father told it to me. Not to scare me, but to remind me that nothing is promised and that freedom is never free.
We talk a lot these days about terrorism, about people who seek to limit other people’s freedom by instilling fear through despicable acts of violence. The Ku Klux Klan specializes in that type of terror. And in the South, in the 1960s, it took a crazy type of activist to stand up to that terrorism. My dad was such a man.
He snuck into Klan rallies. He took pictures of the license plates on the parked cars to prove the truth everyone knew but wouldn’t acknowledge: that many of the city’s leaders pulled down municipal salaries by day and donned white robes at night. He invited college students to come to Florida not for a beach break, but to participate in civil disobedience. He was arrested and beaten, but still he fought.
The very public, brutal struggles of St. Augustine’s civil rights activists have been credited by many with tipping the scales toward passage of the Civil Rights Act of 1964. Its passage was not enough to make St. Augustine safe for us and not long afterwards our family left town — refugees from that particular brand of terror.
Decades later something amazing happened: the residents of St. Augustine fought to acknowledge and memorialize the city’s violent history. Those who preferred to sweep the ugliness under the rug were outnumbered by those who insisted that commemorating the struggle is almost as important as having fought in the first place. There is a Freedom Trail in St. Augustine, with historical markers at the homes of the everyday people who were heroes. There is a monument in the city square honoring the Foot Soldiers of the civil rights movement. And city leaders understand that the re-telling of history is the evidence of progress and the impetus to do better.
Our family paid a high price for the movement, but I thank the citizen activists of St. Augustine Florida who years later welcomed my father back and honored his accomplishments. It meant the world that he was seen and his sacrifices not forgotten.
My dad passed away last week. I’ll miss him every day. But I know he died feeling the arc of the universe bending towards justice.
Originally published in Medium, December 30, 2015.
On September 24, 2016, the city of St. Augustine, Florida dedicated Dr. Robert B. Hayling Freedom Park commemorating my dad and the movement he led for truth and peace.
‘Kids are the canaries in the coalmine. Where kids are doing well, communities are doing well. Where kids are not doing well, communities are not doing well,’ came the challenge from an audience member.
‘True, but many foundations decide, for example, that education is THE answer to community improvement. That’s like saying, “If only the canaries were smarter …”’ responded John A Powell, director of the Haas Institute, in a breakout session on inequality at the Center for Effective Philanthropy’s 2015 conference in San Francisco on 19–21 May. The purpose of the canary, he stressed, is to tell us what’s wrong with the environment, with the system that surrounds us.
This exchange captured a theme that ran throughout CEP’s conference—the importance of understanding systems, not just symptoms, in order to drive philanthropic impact and effectiveness.
Van Jones, who received a standing ovation for his remarks, challenged the more than 300 foundation leaders to consider systemic bias and not just individual outcomes. He gave as example working to close prisons rather than just treating individual offenders. The latter is certainly important, but the former is an upstream, system change that has the potential to shift the trajectory of the problem, not just outcomes for x number of individuals.
Jones, a CNN correspondent and non-profit leader who worked in the Obama White House, encouraged foundations to step outside of their comfort zone to build allies for change, citing his current prison reform initiative in partnership with Newt Gingrich. ‘Turns out you can work with people you disagree with, on the issues you agree on.’
Further encouragement to push past business as usual was delivered by Henry Timms, founder of #GivingTuesday and exec director of 92nd Street Y, one of the largest social service non-profits in NYC.
Henry put the crowd through exercises to uncover their understanding of what he and Jeremy Heimans in their much-discussed Harvard Business Review article coined ‘new power’ and the way it will transform how people engage in good works.
The power to do good will no longer be concentrated in the hands of large incumbent organizations filled with professionals, but will likely be more distributed through technology-enabled networks where messages are not centrally controlled and brands will be co-created by aligned publics.
Echoing themes of partnership and alliances, Barbara Kellerman of the Harvard Kennedy School challenged our current fixation on what she called ‘the $50 billion leadership industry’.
Why, she asked, have we created a culture where following is seen as less than and inferior?
A terrific challenge for our times as we see foundations with giant communications budgets and branding strategies that trumpet their leadership and distinctiveness from others.
Maybe she’s on to something.
This theme of followership and partnership also appeared in breakout sessions highlighting foundation collaboration, co-creation and examples of shared impact.
Overall, the conference seemed to succeed in challenging current thinking while also providing tools and ideas for improving foundation effectiveness. New research by CEP showed the disconnect between foundation talk about social investing vs the actual work being done in this area.
Perhaps most fascinating was the success of a nine-person panel—which seemed like a terrible idea but actually worked because it showed the breadth of approaches foundations are taking to achieve their work.
Clara Miller from Heron pushed foundations to stop being ‘hedge funds with a tiny philanthropy office on the side’ and put the other 95 per cent of assets to work.
And Sylvia Yee shared the Haas Foundation’s experience of funding marriage equality from the early days of the movement to current successes—describing the donor commitment necessary to see through the many failures and setbacks along the way.
Do conferences change foundation practice? Perhaps yes. Certainly so if participants left with Lynn Perry Wooten’s opening remarks in mind, ‘A good leader’s role is not just to serve, but to enable others to act.’ CEP’s conference provided tools, if foundations want to take action.
The Philanthropy in Asia 2014 conference launched on 20 October in the chambers of Singapore’s Old Parliament Building, the wood-panelled halls where the city-state was founded. Prime Minister Mentor Lee Kuan Yew’s worn leather seat bears his name etched in a bronze plaque on the headrest.
The historic site was purposely selected by Patsian Low, conference organizer at the National Volunteer and Philanthropy Centre, in order to evoke the economic progress that supports increasing levels of philanthropy – and the uneven distribution of wealth that calls for it.
Current affairs played a role in the conference proceedings. Attendance at the swearing-in ceremony of Indonesia’s newly elected President Joko Widodo prevented Mr Tahir of the Tahir Foundation (and recent Giving Pledge signatory) from delivering the keynote, and teatime hallway discussions included many questions to Hong Kong participants about the ongoing protests. Yet the focus remained on the future.
The keynote was ably delivered by Audette Exel of Australia’s ISIS Foundation who described the lessons learned from her long-term philanthropic work with children in remote villages in Uganda and Nepal. The ISIS Foundation (which will soon undergo a name change) is funded entirely by ISIS Asia Pacific, her niche financial services corporation where all profits go towards funding the non-profit foundation. ‘I’m not a successful businessperson now turning to doing good, I am a social activist who figured I needed to learn about business.’ She talked about the importance of ‘purpose’ for all employees, not just those in the social sector, and the fact that more financial services firms need to take up social engagement.
Prapti Upadhyay and I shared highlights from the Lien Centre for Social Innovation’s report Levers for Change: Philanthropy in Select Southeast Asian Countries which outlined key public policies that can encourage strategic philanthropy in the region. These include creating clearly defined charitable legal structures, improving tax policy, encouraging more community philanthropy, building philanthropy advisory services, mandating greater transparency and data collection.
Following that, a plenary panel entitled ‘Windows to the Future: A Networked Philanthropy’ featured Naina Subberwal Batra, director of Asian Venture Philanthropy Network, moderating a discussion with representatives from Twitter, Microsoft, the Bill & Melinda Gates Foundation and the Lien Centre for Social Innovation. Parminder Singh from Twitter described the power of Twitter as a platform for social change and fundraising, citing the spontaneous response to the Jammu and Kashmir floods that resulted in the creation of #JKfloodrelief (and subsequently JKfloodrelief.org). This entirely volunteer-run response, in the first week following the floods, used Twitter to coordinate the delivery of 15 tons of food and 4 tons of life-saving medicine and opened a critical communication platform for emergency relief coordination. Most of the organizers have still never met in person, but they nonetheless created a powerful volunteer team.
In a breakout session on collaboration, Veronica Colondam of the YCAB Foundation in Indonesia described the ways in which lack of a legal structure to incorporate social enterprises is limiting their ability to expand their services to at-risk youth. In the same session, Rob John of the Asia Centre for Social Entrepreneurship and Philanthropy at NUS Business School shared his research on the rise of giving circles in Asia as a means of philanthropy, donor education and community building.
As participants boarded buses to diverse themed dinners, discussions were lively and debates engaging. The gathering provided a great setting for plotting the future course of philanthropy in the region.
This post was also published in Alliance Magazine’s online edition.
Perhaps it was the unseasonably warm weather in Davos, Switzerland that caused the shift of attention at the World Economic Forum to challenges faced by the global south and increasingly by developed nations: rising income and social inequality. OxFam released a report called Working for the Few that starkly illustrated the divide quite: the number of people whose wealth equals 50% of global assets could all squeeze into a double-decker bus. International Monetary Fund leaders expressed concern about rising inequality and its effect on political stability. Clearly, the rising economic tide has failed to raise all boats. Under the circumstances, “winner takes all” may be a better catchphrase.
Another truism to be revisited is the notion that increasing wealth automatically results in increased relative or absolute amounts of philanthropic and charitable giving. More to the point is the question of whether the political and economic arrangements contributing to growing gaps can be addressed through voluntary giving or whether they require more structural approaches.
Those arguing that giving can and should play a role in contributing to gradual change, or at least in shielding the most vulnerable groups, remind us that it cannot spring from charitable impulses alone. What is needed is philanthropy, conceived as a set of socially-conscious capabilities and practices that can be encouraged and shaped by a blend of legal, fiscal, socio-cultural and economic factors. In this context, the presence of local philanthropy in new markets and emerging economies is hailed as a possible, albeit limited, answer to growing disparities and new population needs.
The Lien Centre for Social Innovation, a think-tank based at Singapore Management University, partnered with the International Development and Research Centre to study the extent of philanthropy in Southeast Asia and its link to public policy in four Southeast Asian economies (Indonesia, the Philippines, Singapore and Thailand). Our report, entitled Levers for Change: Philanthropy in Select Southeast Asian Countries sets out to answer the question: how has philanthropy developed in the region and how is public policy and practice encouraging or inhibiting its growth?
Rising Wealth, Lagging Philanthropy
The Giving Pledge now has 122 signatories in 11 countries, but only two of them are from South East Asia, despite the fact that Asia’s number of ultra high net worth (HNW) individuals (those with $30M US or more) has caught up to levels in the US and Europe and is expected to eclipse those regions within the next five to ten years. The Giving Pledge is only one marker, and there is no way to capture giving that is anonymous or unrecorded, but the available evidence suggests giving, especially by the wealthy in Asia, lags behind that of the West. Of course cultural differences should be acknowledged: giving and philanthropy will and should look different in Asia than they do in the West.
Previous surveys of HNWs in the region suggest a greater interest in preserving wealth for future generations than developing strategies for giving it away. Those studies have concluded donors are motivated to give primarily in order to pass values from one generation to the next; they fund education and religion far more than other issues, are family- and clan-oriented, prefer giving to services over causes, and like to give quietly.
So what does all this mean for those interested in increasing philanthropy to help it address social and economic inequity? The Lien Centre’s report reveals consistent evidence that thoughtful public policy can increase philanthropic giving, but it also uncovered many gaps and missed opportunities in policy and practice that hinder philanthropic growth, particularly philanthropy focused on addressing thorny social problems.
Innovations in Giving
The study found a number of approaches and innovations in giving practices–some encouraged by policies, but more frequently by civil society initiatives—that can serve as replicable models for the region and beyond:
- Singapore clearly emerged as a leader in driving increased giving through policies that encourage domestic contributions to voluntary organizations. Donors can deduct two and a half times the value of their donations to approved NGOs in their tax filings, resulting in Singapore’s charitable contributions consistently increasing.
- In Indonesia, a growing movement of nonprofit organizations collects and distributes zakat (alms) to support community development for poverty alleviation, a relatively new approach since these are funds had primarily been given to temples for relief of the needy. Given that Islam requires zakat of all able-bodied Muslims, it potentially constitutes a vast sum of money in this, the largest Muslim nation in the world.
- In the Philippines, networks of NGOs lobbied for the creation of The Foundation for the Philippine Environment, set up in 1992 through a unique debt swap that required government support and legal permission.
- The Thai Health Foundation, the nation’s largest philanthropic institution, established under the Health Promotion Act of 2001, is funded by a 2% excise tax on alcohol and tobacco products sold. The fund disburses about $100M US each year.
- Disaster relief has grown significantly in all four countries and is raising the profile of community-wide giving rather than just giving by the extremely wealthy.
- Nascent efforts to start community foundations shows promise as a way of focusing resources on community needs while also providing donor education.
Challenges for Philanthropy
Lack of Data. A number of significant challenges remain, however. Limited data on philanthropy and nonprofits inhibits growth in all four countries. This makes it difficult to accurately capture the state of giving, while resistance to data collection inhibits public faith in the sector as well as entrenching inefficiencies in funds disbursement and donor isolation.
Awareness of the need for philanthropic efforts is limited. Focus on the high average income has, until very recently, overshadowed discussions of poverty pockets in Singapore. Similarly for the region, the focus on rapid economic growth limits attention for wealth disparities and persistent poverty. Moreover, there is a perception among many HNW individuals that socio-economic issues are the responsibility of governments and international aid bodies.
Limitations of Tax Policies. Individual income tax policy (which in the US is considered a key driver of charitable giving) is underutilized in the region, with the exception of Singapore, largely because of the limited potential of individual taxes as a lever for change in emerging economies. In these countries, a small portion of the population pays income taxes and the effective tax rate is relatively low. Tax collectors face highly mobile, extremely savvy HNW individuals who will unlikely be swayed by modest deductions on taxes they may in any case be able to avoid.
Nor does this tend to be a high priority for NGO activists. Much of the wealth in the region rests with individuals and families in privately held conglomerates with close government connections. Transparency in corporate and inheritance tax policy is a critical work in progress. NGO activists, who in the West fight for the charitable deduction, may understandably choose to focus on government accountability and transparency rather than tax breaks for the wealthy.
While the possibilities of individual income tax may be limited, corporate or industry taxes may prove to be an area of opportunity for spurring institutional philanthropy. In 2007, Indonesia passed Law No 40 on limited Liability Companies requiring extractive industries to contribute 2% of profits to community benefit. Without transparency and clear reporting, it is currently impossible to measure the impact of this law, but many hope such funds could eventually be channeled into local grantmaking.
Skepticism about corporate giving. Corporate giving is increasingly viewed with skepticism by NGOs because more corporations are now fundraising for company-run programmes. In Indonesia, NGOs have developed a set of recommended ethics for media fundraising as they have watched newspapers raise millions for disaster relief, with little accountability for how funds were distributed.
Distrust of NGO’s. The fact that regulation of NGOs is either nonexistent or unenforcement creates confusion in the field and undermines public faith and support in nonprofit and philanthropic institutions. In the Philippines, a voluntary ‘accreditation’ for NGOs is being tried as a way to break through donor distrust for the sector.
The symbiotic, yet sometimes uneasy, relationship between nonprofits and donors was highlighted as a challenge in all four countries. NGOs would prefer donors to offer longer-term support to build institutional capacity, while many donors cite lack of accountability as a reason many create their own projects rather than working with NGOs. Robust networks of donors and NGOs, as evidenced in the Philippines and increasingly in Singapore, can begin to help overcome these challenges through knowledge sharing of best practice.
Some strategies to be considered. To help offset these obstacles, the study suggested a number of approaches worth exploring:
- Singapore’s tax benefits for charitable giving currently do not apply to NGOs working outside of Singapore. As an economic and policy leader in the region, expansion of those policies could significantly spur giving especially since so much of the region’s wealth sits in Singapore’s private banks.
- All four countries would benefit from concerted donor education to advance strategic philanthropy and move beyond chequebook charity. A promising sign is the nascent development of community foundations and giving circles where donors, large and small, can pool financial resources and match funds with expertise on community needs to support worthy NGOs.
- Regional collaboration could help each country align interests in maximizing revenues while also encouraging philanthropy. Could ASEAN (Association of Southeast Asian Nations) consider philanthropic policy as part of its mandate?
- Social media may be a means of increasing broad-based community fundraising. Mobile technology has a strong presence in all of the countries studied and has the potential to be a platform for change.
Ultimately, philanthropy’s singular value is its ability to be seed capital and patient capital for civil society. Governments and markets cannot build equitable societies without a vibrant civil society. And civil society needs strategic, thoughtful, educated and engaged donors as partners. The enabling environment for strategic philanthropy can be improved through policies that encourage innovation in civil society, increase non-profit and philanthropic accountability, improve data collection, and celebrate risk-taking leaders. Maybe this will be a topic for next year’s Davos.
This piece, written in collaboration with Rosalia Sciortino and Prapti Upadhay, originally appeared in March 2014 issue of Alliance magazine.
Watching my boys learn to ride bikes, I’m reminded of how hard it is to learn a new thing.
Truth be told, I don’t really enjoy learning new things. It’s hard. At least at first.
And it’s rare. Mostly we keep doing things we already know how to do. We do the same job but at a different company, with more direct reports, with a bigger budget.
Or we pretend that the new thing isn’t new at all. We say, “This is exactly like something else I already know how to do.”
Maybe it is this instinct that drives so many new philanthropists to insist they are going to do exactly what they did in business to be successful at social change. To a hammer, everything looks like a nail.
At first, they say that they want non-profits to ‘run more like business’ and they want KPI’s, elevator pitches and bottom lines. But they usually get quickly frustrated because the social change organizations are not exactly like business. A different context defines the problems and a different mind-set is required to approach the work.
I’m reminded of a breakfast I attended with Patty Stonesifer, former CEO of the Gates Foundation a few weeks after she left the post. Amongst a crowd of foundation CEOs she very honestly talked about her journey from ‘expert’ to ‘novice’ and back again.
She said that when she left Microsoft to run the Gates Foundation, she came in with all her product development skills blazing. She assumed that the failures leading to high infant mortality were exactly the same as product failures she’d seen in the past. So the solution was simply to create new products (develop new vaccines) and do better marketing.
But over the first few years, as frustration set in, she realized that the inter-play of complex, societal problems – poverty, patriarchy, religion, political gridlock, incomplete infrastructure, corrupt elites – all of these conspire and lead to unacceptably high child mortality rates. So the singular solutions she initially thought to deliver, proved to be as naïve as her initial grant timelines.
This is not to say that she retreated from her drive to create lasting change in health outcomes. Indeed many credit her leadership with setting Gates on its ambitious and innovative approach. But she had to take 10 steps back from her initial knowing state, to accept that philanthropy is not ‘just like business.’ She had to re-position herself as a novice, open to learning new context and results. Then and only then could she bring her other skills to the brew. Then and only then, could she innovate effectively.
Indeed, the novice mind — open to learning new things – when coupled with previously honed skills is where innovation thrives. Yet the term novice is not a label many highly successful, wealthy adults willingly adopt.
What steps can one take to open to the novice, innovative mind in philanthropy?
- Admit it is different. Social change work/philanthropy/nonprofit management/social enterprise is not just like business. (Though your business skills can be incredibly helpful down the road)
- Hire an experienced coach. Don’t go it alone. Every successful businessperson knows networks are essential so you know who to go to in order to get things done. The same is true in philanthropy. Don’t hire your old banker buddy or friendly lawyer. Hire staff experienced in the field to help you learn the landscape, meet the other players, and hit the ground running.
- Instead of just studying the problem, listen to the people. Many new philanthropists want to examine the data and then leap to a solution. Listen to people who experience the problem. Listen to nonprofit leaders. Ask probing questions, and then listen some more.
- Be Open to Being Surprised. Many of the most effective approaches to solving difficult social problems are counter-intuitive.
Admitting something is new and hard and frustrating requires a huge amount of humility. It requires that we embrace or at least admit our own ignorance in order to prepare for new knowledge.
But let’s face it: philanthropy needs innovation. And innovators, no matter how successful in other fields, need to find their inner-novice to lead the way.
My first time attending the Global Philanthropy Forum and I am not disappointed. The conference theme ‘Toward a New Social Contract’ was provocative from the beginning. Rousseau’s concept of the social contract was the ground from which flowered our modern notions of citizenship and nations. What can be the meaning of the social contract at a global conference?
In her opening remarks, Jane Wales makes clear her intent to expand our collective thinking about the realities of globalization and the inherent ties that now bind us all to one another, not just to those in our own country.
Rajiv Shah, who heads up USAID kicked off the conference with bold excitement about the new charge of aid agencies to partner with the private sector. While his examples glossed over the real danger of aid becoming overly linked to corporate promotion that may decrease rather than increase local control, Shah asserted a refreshing intention to re-focus USAID on listening better, partnering more, and building local capacity.
Perhaps most impressively, presenters and participants cheered the headline themes but pushed back against rhetoric to explore the nitty-gritty of making things work. Nyaradzayi Gumbonzvanda, general secretary of the World YWCA reminded Shah that women are not victims, but need to be engaged as participants in development. Srivalli Krishnan, founder and CEO of eFarm based in Chennai, India reminded everyone that ‘putting capital to work’ requires a lot of on-the-ground-preparation such as their training for small farmers to increase yields and sell for maximum profit.
Tony Blair echoed his belief in the dawn of a new era of cross-country, trans-continental links when he stated, “Globalization is a fact, not a debate. The debate is how to make it work for the many, not the few.” He too pointed out our wrongheaded obsession with what to do, when what is required is laser-like focus on how to do.
The fact that conference speakers and panelists included leading philanthropists from Africa, Asia and Latin America, disrupts the notion of “donor countries.” As outgoing president of the World Bank Robert Zoellick noted, the term ‘third world’ is no longer a meaningful descriptor. Solutions can come from anywhere.
One clear highlight was the evening panel entitled ‘The New Egypt and the Core Responsibilities of Governance’ with Hossam Bahgat, founder of Egyptian Initiative for Personal Rights and the incredible couple Barbara Lethem Ibrahim and Saad Eddin Ibrahim, all of whom are at the forefront of shaping post-Tahrir Egypt. They shared heart-wrenching stories of sacrifice and hope. Keen activists that they are, they used those stories to illustrate the challenges of building a functioning democracy and the partnership and patience they need from those of us who would be allies. Almost all of the speakers talked about the value of partnerships between corporations, foundations, and aid agencies. While this is not new, it is clearly gaining steam.
And Jacqueline Novogratz threw a firecracker into the middle of that discussion with the release of Acumen Fund’s latest report with Monitor Institute entitled ‘From Blueprint to Scale: The Case for Philanthropy in Impact Investing.’ Novogratz did something few leaders of emerging, much-hyped and adored fields are willing to do: she told the truth. Namely that investable deals are scarce and that very few are making any money in impact investing. But by being honest, the report may bring more people to the impact investing table. Rather than pitting philanthropy against impact investing (old vs. new), Novogratz recognizes the role philanthropists have played as angel investors, willing to take initial risks for enterprises that may take years before they are ready for private capital and scale. The strength of the report may be the discomfort it causes impact investors as well as philanthropists in calling for each to leave behind distrust and ideology to work together.
Key take-aways from the conference: the centrality of women as community-builders and problem-solvers; the importance of donors and grantees acting as partners; philanthropy (and development) fundamentally being focused on local capacity-building; innovation of processes and collaborations and not just products.
Overall, the conference challenged orthodoxies on all sides. It acknowledged that no sector can do it alone. Neither can any one country. And it pushed us to think about our social contract with one another, as human beings and global citizens.
This piece is cross-posted on the @Alliance Magazine website which can be found here.
Dr. Judith Rodin, President of the Rockefeller Foundation, recently visited Singapore and hosted a series of talks and meetings to stimulate and support impact investing in Asia.
Dr Rodin joined a heavy-hitting panel that included Asian Development Bank, International Finance Corporation, Rangsutra (a social enterprise), Credit Asia Capital, and Impact Investment Exchange Asia (IIX). They addressed a filled-to-capacity crowd at INSEAD business school where 100+ students, investors, philanthropists, bankers and academics listened to their call to action.
The speakers outlined what they perceive to be the many benefits of impact investing: social as well as financial returns, side-stepping inefficient or corrupt governments, unleashing entrepreneurism, and building enterprises that can be sustained without philanthropic support.
The idea that markets can be harnessed to solve social problems is not a new one, but I have observed that the concept holds particular resonance among the socially-minded wealthy here in Singapore and some parts of South & South East Asia. My conversations with current and interested impact investors and fund managers suggest some potential reasons why this might be so:
1) The power of the market is indisputable and omnipresent. Year over year double-digit growth throughout Asia has decreased the percentage of the population living in poverty (though absolute numbers remain frighteningly high) and the creation of a middle class has been achieved and appears sustainable in some countries.
2) Fewer wealthy individuals have ‘cashed out’ of the enterprises that made their money. Wealth is more likely to come from family businesses and ideally successive generations continue to run those businesses. The money feels more like ‘working capital’ than an endowment.
3) Family offices are built to manage investments. Impact investing fits better within that organizational ethos. Language matters in establishing comfort and familiarity. ‘Structuring deals’ is more compatible with those in the family office than ‘making grants.’
4) Many third generation, high net worth individuals in their 30s and 40s have a finance or investing background. The generation of ‘new philanthropists’ here in Asia are ex-bankers, MBAs, Ivy/Oxford-educated and they feel called to use that unique skill-set to make their social impact.
Of course, among the converted sat plenty of skeptics. Many traditional investors questioned the entire category of impact investing—asserting that ‘social’ is another term describing higher risk and that true investors would never pay a higher price than necessary for an investment: everything else is philanthropy.
Indeed, the feeling of philanthropy was very much in the air, despite the finance lingo. While some people pitch impact investing with assurances that investors can put money here even if they don’t care about social returns, that proposition rings hollow. The people I’ve met who are intrigued by impact investing care a lot. They are bringing their hearts and their minds to the proposition. And that impulse is very much grounded in philanthropy—from the Greek origin philanthropos: love of mankind. So while some impact investors dismiss the term philanthropy, still others believe they are redefining or adding new dimensions to it.
Impact investing—here or anywhere—is not for the faint of heart. Impact investing that achieves broad scale, is a theory that has yet to be fully proved. But it posits an exciting possibility. As such, it requires risk-taking, strategy, patience, determination, humility, and passion. Passion to make a difference and chart new territory. This is not the settled homelands of philanthropy, this may be its new frontier.
In the coming months I’ll be interviewing key philanthropists and impact investors in the region to hear, in their own words, some of their successes, challenges, and motivations. I hope you’ll join the conversation.
This piece is cross-posted on the @Alliance Magazine website which can be found here.
On this 9/11, unlike that 9/11, my attention was divided. On that 9/11 I could not escape a blinding telescopic focus on the senseless loss of lives and the pain experienced by loving survivors. On that 9/11 I could not look away from the roiling abyss of hatred that had lashed out with such a deafening roar. On that 9/11 I felt like love was like the air that gasping lungs could not regain.
On this 9/11, my attention was divided. My mind kept going back to that 9/11 as I listened to snatches of conversations sharing our “where I was” stories like beads on a rosary. I spent time with friends I love. I smiled while watching my son play soccer with his friends in a steamy tropical rain. I celebrated an incredible, brilliant, loving boy’s 10th birthday.
And I reminded myself that if that 9/11 couldn’t destroy the love in me, then this 9/11 I need to redouble my commitment to manifesting what is great about the ideals of America. To not allowing intolerance and hatred to seem bigger than love, equality and our shared humanity.
This piece, ‘A Letter to My Son on the Tenth Anniversary of September 11’ really speaks to me. Thank you Terry Keleher for writing it.
So I am glad that on this 9/11 my attention is divided between the past, the present, and the future. Because history is not destiny and though that past shapes, it does not have to define our future.
Elegant and well-heeled would be the best way to describe them. I smiled at these two women of indeterminate age who I had just met at the launch of the UBS-INSEAD Study on Family Philanthropy in Asia. As I moved to introduce them to one another, they both laughed and said, “We’ve known each other since…” putting the flat of their hands forward at small-child-height.
“ We were neighbors,” the petite Chinese woman said.
“Our apartment was here, and their apartment was there,” said the smiling Indian woman, pointing her finger in the upward diagonal.
“Didn’t you play marbles?” One asked the other with a mischievous grin.
“Oh yes, all the time. And with the boys!”
“And every day your mom—rest her soul. She was a real force of nature. She would go to the market over there on…”
“And my father, he’s not well now, but we take care of him at home…”
“Yes, we knew each other.”
“ But it’s not like that anymore.”
“ No nothing is like that anymore.”
There was silence as I imagined them thinking about all the changes—education, jobs, marriage, kids, and clearly wealth—that had happened since those long-ago days. For a brief moment I could almost see the bustling apartments these women described, in the brand-new nation Singapore was 30 or so years ago. Where families knew one another, children played in empty lots, and what bound everyone together was that they were all strivers.
We drifted apart as the 150+ person crowd wandered into the auditorium to hear the current state of family philanthropy as described by the recently completed study. Despite the fact that we are all living in the midst of Asia’s economic engine, the stats were still mind-boggling.
- China now has over 1 million US dollar millionaires.
- In recent years, Indian households have witnessed the highest absolute gains in wealth in the world.
- By the end of 2009 there were some 3 million Asian Pacific high net worth individuals, equaling the number in Europe for the first time, and their wealth totaled US $9.7 trillion.
But the rising tide has not raised all boats.
- In sheer numbers the region is still the largest locus of poverty and deprivation in the world. In 2005 there were over 660 million people in India and China alone who lived on less than US $1.25 per day.
- In India, the wealthiest 5% of the population control 40% of the country’s wealth.
All of these statistics from the report were only the prelude to the substance of the discussion. Through 200 quantitative surveys and over 100 in-depth interviews, the report’s author Mahboob Mahmood, Adjunct Professor of Entrepreneurship and Family Enterprise captured themes on motivations for giving, priorities, and philanthropic approaches.
The image that emerges is a charitable sector led by closely held family businesses with a strong entrepreneurial ethos, complex intergenerational relationships, delicate succession and legacy challenges, and a deep awareness (particularly on the part of the patriarchs and older generations) of the power of education to change the course of lives in a single generation. Philanthropy is a useful mechanism for reinforcing shared values with the goal of supporting family cohesion and harmony.
Education is by far the largest area of investment, with poverty alleviation and health distant seconds and thirds. Arts/culture (4%), the environment (4%) and civil rights (1%) were small also-rans.
Among the challenges cited was lack of experienced staff, the perception (and sometimes reality) of a limited number of high-impact NGO partners, and difficulty in finding philanthropic co-investors who are aligned in mission.
The incredibly generous families who participated in the study are to be lauded for their leadership. They are impressive fonts of giving but as yet there exist few networks of strategic philanthropy that can achieve what the authors called, “sustained transformational impact in Asia.”
I was struck by the words of panelist Laurence Lien, CEO of Singapore’s National Volunteer and Philanthropy Centre and a member of one of Singapore’s most philanthropic families when he said, “The most important use of philanthropy is social innovation and social change. Charity is important, but there is much more to do.”
His comments took me back to the conversation I’d had earlier with those two elegant, well-heeled ladies. Money provides privilege to those who possess it but it also changes everything. It can create fractures in families, as well as in societies. It can disconnect people from their broader community. And the relentless drive for economic growth can take a deep toll on cultural traditions as well as our physical environment.
The challenge ahead for philanthropists in Asia, indeed philanthropists everywhere, is to engage with communities in developing solutions. Charity is usually top-down, highly transactional and rarely transformative. It is important, but not enough. Transformational impact can be achieved by moving beyond charity with strategic analysis, community engagement, and emphasis on our shared vision and common destiny. Networks and collaboration are required. Civil society can play an essential role in reweaving the fabric of society. But it requires more than charity. It requires vision more than just money.
The title of this post was at least partially inspired by the Jesse J. song my kids adore which is on a regular loop in our house…
Storytelling is big. Our world seems alive right now with some of our best experts extolling the power of storytelling. Business schools have switched from ‘pitches’ to stories, Dan and Chip Heath’s compelling Made to Stick is required reading for NGO leaders, and politicians keep mining the power of Reagan-stories for inspiration. But let’s be clear, stories are complicated.
The reason most of us aren’t regularly regaling people with perfectly timed and eloquently described stories of our lives is because life rarely unfolds that way. It is only upon reflection that we recognize that x led to y, or that ‘this’ was the beginning and ‘that’ was the end. Yet leadership these days seems to demand that we pluck from the whorl of our past a sequence of logical facts that magically blend together into poignant lessons and an inspiring can-do tale.
But as researcher Elizabeth Loftus describes in her book Memory: Surprising New Insights into How We Remember and Why We Forget,
Memory is imperfect…The memory traces can actually undergo distortion. With the passage of time, with proper motivation, with the introduction of special kinds of interfering facts, the memory traces seem sometimes to change or become transformed. These distortions can be quite frightening, for they can cause us to have memories of things that never happened. Even in the most intelligent among us is memory thus malleable.
One particularly powerful influence in truth-bending is the desirability of outcome. People are prone to report what they believe the researchers wants to hear or report data that puts them (the subject) in a more positive light. What is critical to note is that over time, people actually believe the ‘adjusted’ facts to be true.
Greg Mortenson‘s unravelling is a cautionary tale for all leaders, especially those of us in the social sector where the self-revelatory, enlightening, ever-progressing origin story has almost become a requirement of the job. Where the desirability of outcome may tend towards exaggerated heroism.
Seems to me, this individualistic storytelling ‘heroism’ is partly the undercurrent of what distinguishes social entrepreneurs from mere executive directors? True stories are powerful and inspiring. But so are great managers.
The most discouraging thing about Mortenson was that he was too focused on being a celebrated founder and not at all focused on being a good manager. He didn’t understand that the inspiration story needs to be followed by the education story: testing one’s theories against data, research and outside expertise. He didn’t understand that the education story has to be followed by the institution story: building an organization capable of acting on the dreams he inspired. And mostly he did not understand that the job of an NGO leader is to surround yourself with staff, board, donors who can build upon AND save you from your own mythology.