Global Philanthropy Forum: Toward a New Social Contract with Whom?

IMG_6769My 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.

Impact Investing: Philanthropy’s New Frontier?

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

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.

It’s Not (Just) About the Money

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…

We Always Give What We Have, Not What People Need

This post was originally published as a guest blog on the Good Intentions web site. 

The aid community has been having a healthy debate about whether gifts-in-kind (GIK) othertimes called SWEDOW (stuff we don’t want) donations are a good or bad thing. The most recent spark to the flame occurred in February 2011 when t-shirts declaring the Pittsburgh Steelers the 2010 Super Bowl Champs were donated by the NFL to World Vision International for distribution in Zambia, Romania, Nicaragua, and Romania. (follow @GoodIntents or @texasinafrica on Twitter, for the low-down)

Critics argue that these kinds of giveaways harm poor communities more than they help because they flood the markets with free goods which underprice clothing and thereby put local tailors, dressmakers or small clothing companies out of business.

But are all clothing donation programs created equal?

As an advisor to Ashoka, I was invited to meet Anshu Gupta at a coffee shop here in Singapore to learn more about this fellow’s work. He’s polite and a bit reserved until he starts talking about Goonj, the organization he founded in 1999. Goonj, which serves 21 states in India, receives donated clothing, largely from upper and middle class Indians, and then using hundreds of trained local volunteers, cleans and distributes that clothing to Indians too poor to afford even basic clothing.

But the process is far from simple. Middle class women in Mumbai donate jeans. Rural women in Tamilnadu don’t wear jeans. They wear saris. And they might not wear saris made of the same cloth that women from Delhi might donate. So Goonj volunteers have a highly developed cataloging system that allows them to identify, separate and group clothing according to where the recipients can actually use it. In addition, recipients engage in neighborhood-building work in exchange for clothing. Goonj’s community organizers have developed a variety of means of helping communities help themselves using this recycled resource as an incentive, commodity, and exchange.

Goonj sees its mission as giving people clothing to help them move toward self-esteem, skills building and self-sufficiency. So the right clothing exchanged for work or expertise in a respectful way, is critical to the model.

So I’m so impressed with Goonj and I’m asking myself how is this charitable clothing donation different than the process employed by some large aid organizations? Seems to me there are a few key points of what makes Goonj effective:

1)    Locally driven.

2)    Culturally respectful.

3)    Organized around the needs of the recipients, not the needs of the donors.

4)    Fueled by creative re-use. Their newest initiative is using clean, recycled cloth scraps to make locally produced sanitary pads for poor women. A real public health and sustainability breakthrough.

5)    And it recognizes that poor communities are looking to build markets of exchange and value, not destroy them. Those who extend the life of resource are performing an important function in the community’s ecosystem, they are not passive recipients.

When I met him, Anshu was asking for assistance in further developing his business model, training other NGOs to replicate the Goonj program, and seeking experienced volunteers to document and write case studies about their work. He was actively seeking support and critique. I was stopped in my tracks by World Vision’s statement that it has never evaluated their gifts-in-kind programs because “they are gifts, not programs.” Wow. There are so many things wrong with that statement that it’s still blowing my mind.

My point here is not to denigrate or bestow sainthood on any organization. World Vision is full of smart and dedicated people, so I have no doubt the organization will change and grow, as will Goonj.

But this discussion encourages us all to respond energetically to our charitable impulses, while also being open to learning when those impulses might need refining in order to be responsive to community needs. There is no shame in having an idea or program that needs improvement. The shame is in being too close-minded to make the improvements.

As we were parting Anshu summed it up perfectly when he said, the problem with most programs is that “we always give what we have, not what people need.”

Please share your ideas for how we might be able to change that.

Tempest in Three Teacups: Magical Storytelling

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.

How to Buy a $1 Million Watch

My $1 Million Watch?

On Christmas Day I was delighted to receive a unique gift from my husband: a watch made of an iPod Nano. (see gorgeous photo) I love this watch. It makes me look infinitely cooler than I am, it rocks my favorite songs without worrying that my dancing is going to jerk the earplugs out of my computer, and I don’t know anyone else who has one.  It was the gift trifecta. All this for about 30 bucks. (OK I forced him to tell me this)

On December 16, 2010 TikTok+LunaTik raised just shy of $1million making it the single highest fundraising success story of the incredibly compelling crowdfunding website Kickstarter. As you know, Kickstarter’s tagline “Find and Fund Creativity” pretty much sums up their approach: people can post projects/ideas/plays/films/books almost anything, and ask for financial support to get the project done. Investors pay only when sufficient funds have been raised for project completion.

And what was TikTok’s record-setting project? To manufacture a wristband that turns an iPod Nano into a wristwatch. Their original fundraising goal: $15,000. So, some might say, TikTok raised close to $1 million to produce a product that already existed on the market.

You should know that I LOVE Kickstarter. I have funded a few of their projects  – ones with knock-your-socks-off originality and potential for human connection and impact. And have no regrets.

But the story of TikTok’s incredible fundraising success raised questions for me about crowdfunding. Some of these questions may have some implications for philanthropic crowdfunding which is also experiencing a meteoric rise.

Consider:

  • Enthusiasm should not be confused with due diligence. Crowdfunding depends upon friends telling friends. So if a friend sends you a link and says, “I’m really excited about this and you should be too!” it can create a groundswell of activity. A groundswell isn’t inherently good or bad, so how do we tell whether the underlying principle is one or the other?
  • The one-at-a-time nature of a project’s presentation and consideration (often via email or Twitter) means that the ability to compare the strengths and weaknesses of one project idea against similar projects is almost non-existent. It can heighten our belief in the radical uniqueness of the project before us, which may or may not be true. Traditional philanthropy which gathers all the proposals and reviews them side-by-side skews SLOW whereas crowdfunding skews FAST. How do we take the best of both?

But it is also true that:

  • TikTok offered people a chance to feel like insiders in the creative process of a well-designed product, something more and more people value. It also gave the company a clear indication of product demand. Is there a way to harness the predictive capacities of crowdsourcing to enhance philanthropy and social innovation? Perhaps new giving sites such as Crowdrise, Groupon (with its Kiva partnership) or Philanthroper will show us the way.
  • Updates and information are critical. The fact that TikTok included photos and video from its manufacturing plant in China was probably compelling for people who are interested in being included in the whole chain of production from design to delivery.
  • Crowdfunding is fun! It’s what I like to call excited philanthropy. Ultimately, Kickstarter helps people feel a part of a community of like-minds. That feeling of community is the jet fuel in the “crowd”-engine. And maybe the crowd doesn’t have to do it perfectly every time, just better than the other alternatives.

My hat is off to Kickstarter and these other pioneering sites for being platforms for a new type of funding. They are pushing the boundaries of collective thinking and giving. And hats off to TikTok for passing a huge crowdfunding milestone. But I can’t help wonder if any of the 13,512 TikTok investors might feel a little ticked-off when they see me walking down the street in what looks like their million dollar watch.

What excites you/gives you pause in the rise of crowdfunded philanthropy?

Full Disclosure: My husband works for Apple which makes the iPod Nano. Apple does not make an iPod Nano wristwatch holder.