Category: International Cooperation

Utilizing intermediaries to simplify international giving

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Few income tax treaties allow U.S. individuals to make deductible donations to foreign charities.

U.S. charitable organizations engaging in international philanthropy are subject to a number of restrictions on making grants to foreign organizations, some of these restrictions aimed at combating terrorism and increased enforcement of sanctions. Other challenges arise from the fact that the rules governing recognition of charities and the circumstances under which donors to charitable organizations may claim tax deductions or other benefits for their contributions is governed almost exclusively by the law of each separate jurisdiction.

A private foundation is subject to punitive excise taxes on grants to foreign organizations unless it either (i) obtains an equivalency determination that the recipient is the equivalent of a U.S. charity or (ii) exercises expenditure responsibility with respect to the grant. Obtaining an equivalency determination or exercising expenditure responsibility can be both costly and time consuming.

Hence, many U.S. private foundations, as well as individuals, choose to make grants to intermediaries that qualify as public charities rather than to foreign organizations directly.  A public charity is qualified as such because it raises its money from the general public and in turn donates funds and support to other organizations.

Next generation donors with international focus

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There is a cohort of the younger generations, particularly Generations Y and X, who stand to inherit an unprecedented amount of wealth — somewhere in the neighborhood of $40 trillion. So, what do they plan to do with it and which types of entities stand to be the recipients of their largesse?

“These generations … have the potential to be the most significant philanthropists in history and we really don’t know that much about them,” said report co-author and sociologist Michael Moody, who  also serves as the Frey Foundation chair for Family Foundations and Philanthropy at the Johnson Center.

This cohort, according to the survey, wants to get its hands dirty, prioritizing direct relationships with the entities they donate over merely writing checks. This rejection of “checkbook philanthropy” is one of two findings Moody found most surprising. “They want to get their hands dirty, to serve in meaningful ways, not just sit on boards or party planning committees,” said Moody during an e-mail exchange Thursday. “They want to be taken seriously — not only in the future but now — as talented partners with organizations, who bring skills and expertise to the table.”

Moody was also surprised by the coming generation’s unwillingness to do away with past traditions. “They are certainly enthusiastic about innovation and willing to take risks and try non-traditional approaches to philanthropy,” said Moody, “But this doesn’t mean they want to discontinue all traditional forms of giving, that they give to radically different causes or for radically different reasons, or – most notably perhaps – that they care little for the family legacies they are inheriting.”

Asked why the report was initiated now, Moody said, “They hold the future of major philanthropy in their hands. As they start to engage more in that future, we need to know more about how they think about, learn, and practice philanthropy.”

They are more likely than their families to give to civil rights/advocacy and environment/animals causes, and international organizations, as the next generations are thought to be relatively more focused on global causes versus domestic.

[Washington Post]

 

Developing countries becoming developed countries

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Which countries are classified as developing nations?

Hans Rosling, a Swedish global health expert, suggests that people incorrectly divide the world into two –developed countries, such as the U.S., and developing countries, like Ethiopia – based on the number of children a woman has and how long the children live.

“In many people’s minds the world still looks like this – developed and developing,” Mr. Rosling says in a video designed to accompany Bill Gates’s annual talk, showing a cluster of countries separated in two distinct boxes.

“But it’s a myth because the world has improved immensely in the last 50 years.” He proceeds to demonstrate how, thanks to improvements in health care and other factors, child mortality has fallen rapidly in large swaths of the world since the 1960s.

Over time, more “developing countries” have moved into the box of “developed countries,” he shows.

 

Bill Gates on the Colbert Report

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Bill Gates appeared on the Colbert Report this past Wednesday night to talk about The Bill and Melinda Gates Foundation’s recent successes in global health. Not least of all, due to the critical role of the Bill and Melinda Gates Foundation, since 1990 the number of childhood deaths has been reduced by 5 million.

“It’s good news that you wouldn’t hear,” the founder of Microsoft said of the information he shared in his annual missive. “I share what I’ve been able to see in my travels to Africa and Asia.”

But after Gates shared his good news, Colbert in typical fashion commented that Gates is just not as “cool” as Steve Jobs was.

“People say ‘what a cool guy’ … Steve Jobs was. You’re out there saving the world, yet you don’t have the ‘cool factor,’” Colbert jabbed. “Did you ever want to be the cool guy?”

Gates didn’t seemed phased, responding, “He was brilliant. He had his own style. He had his own approach. Mine is, I guess…a little geekier than his was.”

Why invest in women?

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Why do so many non-profit ventures focus on girls and women as the primary agents of change?   

  • Firstly, women and girls represent roughly half of the world’s population.
  • Secondly, women are the most marginalized, the most dominated and exploited, and without outside influence often doomed by cultural mores to remain subordinated. Those with no voice are often overlooked, and rarely given voice or power.
  • Girls across the globe do not enjoy basic human rights: freedom from violence, to education, to inherit or own land, to decide when and whether to marry or bear children, or, the right to self-determination.
  • One in three women around the globe will be beaten, raped, or otherwise abused in her lifetime. The daily threat of violence is both a cause and a consequence of a world greatly out of balance.
  • Many argue that the most undervalued and untapped forces on the planet are adolescent girls living in poverty.
  • And girls are the mothers of the next generation, and the quality of these girls’ lives will literally determine the course of their children’s lives and our collective future.

Addressing the complexities of treating disease in developing countries

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Non-pharma and pharmaceutical company employees alike have wondered: “Why don’t we just give away medicines and drugs that can save so many lives in the developing world?

Allan Pamba worked at a clinic in Kenya in the early years after HIV/AIDs was recognized and had become a big problem. He became frustrated that he was seeing patients (from teenager years through the elderly) who did not have antiretroviral drugs to help treat the HIV.

Pamba, now a director in GlaxoSmithKline’s Developing Countries Market Access Unit, relates, “Through the years, in conversations with health policy officials in countries, I learned that they have refused donations when they are not sure it’s going to last. They would say, ‘If you give this to me free today, do I have to buy it from someone else or at a higher price when your company has a bad year’.”

Pamba says problems sometimes can be solved by looking at them from a different angle or by providing information. For example, he referred to an arrangement GSK has with cell phone maker Vodafone: When women give birth at a clinic, they leave behind their phone number so they are sent text messages reminding them to get vaccines for their children.

“There are half a billion handsets in Africa,” Pamba said of the spread of cell phone use. “Some people don’t have enough food, but they have a cell phone.”

International giving by Millennials

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The Credit Suisse/Forbes Insight Report notes that global giving has a generational slant.

For millennials, youth in their 20s and younger, they were born into an era of globalization and the distinction between local and global has increasingly blurred.  This generation of global citizens and digital natives is apt to look at opportunities for giving outside the U.S. as much or even more often than within the U.S.

They are fully aware of the interrelationship between nations and their travels, real and digitally, provide a significant education about issues related to resource scarcity, global health and poverty.

They also want to get the greatest “bang for their buck” and as a result, are more apt to research and seek out ways to be most effective in bringing about social change on a global scale.

[From WealthManagement article by Betsy Brill and Michael Donovan]

Non-cash currency aids community revitalization

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What do palm trees, chestnuts, and kisses have in common? They’re all denominations of bank-issued alternative currencies that are a key community development tool in some of Brazil’s toughest neighborhoods.

Throughout the U.S., there are also community development-oriented “social currencies.” Examples of this alternative form of legal tender include “Ithaca Dollars” in Upstate New York and “Berkshares” in Western Massachusetts, alternative, non-cash currencies facilitating the exchange of local goods and services and are often connected with “buy local” campaigns and barter systems.

A network of community development banks in the United States has been quietly working to reinvest capital in poor communities in Brazil through microfinance, real estate projects and individual asset development. Community banking emerged in Brazil just fifteen years ago with the establishment of the Fortaleza-based Banco Palmas. Today, there are approximately 100 such banks in the country. Through coordinated micro-financing, technical assistance for small businesses, community facility investment and social currency systems, Brazil’s community banks are assisting some of the nation’s most notoriously dangerous and economically impoverished communities.

For example, Banco Verde Vida (Green Life Bank) of Vila Velha accepts wheelbarrows of recyclable rubbish twice a week from neighborhood residents. It pays these vendors with “moeda verde,” an alternative currency that can be spent at local businesses or, for food and cleaning materials, at a bank-owned store. The initiative has led to cleaner neighborhood streets, new small business development and improved incomes for residents.

In the nearby San Benedito neighborhood of Vitoria, a former bricklayer borrowed money twice from his local Banco Bem, first to build and then to enlarge his business. As was once the norm for U.S banks, Banco Bem’s small business lending is often character-based. According to bank manager Leonora Mol, “The neighbors decide who should get the loans. We ask them a very simple question: if this money were yours, would you lend it to this person?” Now, many of the bricklayer’s customers pay for his products with “bems,” an alternative currency also issued by the bank.

The “developed” world has already successfully borrowed key community development concepts, such as microfinance and appropriate technology, from the dynamic “developing” world. Now, with cash an increasingly scarce resource here in the U.S., it makes sense to look beyond our borders to see how cash and non-cash tools are integrated to make the impacts more than the sum of their parts.

Source: BBC News

Growing trend of Asian-American philanthropy

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An opinion held by Ms. Yoon, a former news correspondent for Fox who was born in South Korea and moved to the United States when she was 6: “In some ways for immigrants, the better off you become, the more disconnected you become from your community needs.” The community is now redefining its “idea of success,” Yoon explained. “We grew up with this idea that success is the more distance you can create between yourself and the pack. But it’s really about how much of the pack you can bring along.”

Lulu C. Wang, a money manager and philanthropist in New York, and her husband, Anthony Wang, established themselves in the vanguard of the new wave of Asian-American philanthropy when they donated $25 million to Wellesley College, her alma mater, in 2000.

Dien S. Yuen, a philanthropy consultant focusing on Asian-American giving, predicted that the surge in philanthropic activity among Asians is “only a beginning.”  Ms. Yuen adds, “I think in the next three or four years, there’s going to be huge growth, because philanthropy has become mainstream.”

“A lot of donors, when they first come through the door, don’t even know they can do all these things,” said Ms. Yuen. “They don’t even know they can get a tax deduction for giving a gift overseas.”

[New York Times]

The growth of Asian-American philanthropy

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Members of a new class of affluent Asian-Americans, many of whom have benefited from booms in finance and technology, are making their mark on philanthropy in the United States. They are donating large sums to groups focused on their own diasporas or their homelands.

The growth in philanthropy by Asian-Americans parallels a surge in the Asian population in the United States. From 2000 to 2010, according to the Census Bureau, the number of people who identified themselves as partly or wholly Asian grew by nearly 46 percent, more than four times the growth rate of the overall population, making Asian-Americans the fastest growing racial group in the nation.

Pradeep Kashyap, vice-chairman of the American India Foundation, one of the largest and most successful of the new Asian philanthropies, is an immigrant and former senior executive at Citibank. He described this shift as “the journey of becoming American. … They see their mainstream American peers giving and they say, ‘I’m going to do that.’ ”

Asian cultures have a strong tradition of philanthropy in the broadest sense, though it has usually involved donations to relatives, neighbors, churches and business associations. Many Asian immigrants have not immediately embraced the Western-style practice of giving to large philanthropic institutions, organizers said.

[New York Times]