Category: International Cooperation

A rise of philanthropy in emerging economies

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There are increases in philanthropy documented in emerging economies outside the U.S. where wealth is rapidly growing.

In India, for example, which is one of the fastest growing economies in the world, the average contribution to charity among high net worth individuals grew to 3 percent of their total income in 2011, up from 2.3 percent in 2010, according to Bain & Co’s India Philanthropy Report 2012 and more than half of those surveyed expect to boost their donations again in 2012.

The recently released Report by Credit Suisse and Forbes Insight entitled Next Generation Philanthropy noted a burgeoning culture of giving in both Latin America—where average annual wealth growth is expected to average 12.1 percent for the next five years—and in Asia, where the population of ultra-high net worth individuals is expected to exceed the U.S. by 2025.

[Excerpted from WealthManagement article, by Betsy Brill and Michael Donovan]

International giving on the rise

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One of the most notable trends in philanthropy, according to the 2012 Giving USA Study of charitable giving, is that international giving has steadily grown despite a tumultuous economy.  For the past two years, 2009-2011, international giving has experienced a 15.2 percent growth, the largest increase across all of the subsectors the Study tracks and reports.

The growth in international giving can be attributed to many things: increasing digital access to global information, a growing number of international giving networks, and a heightened awareness of the interrelationships of global communities.

The Hudson Institute’s 2012 Index of Global  Philanthropy and Remittances shows that despite the recession, U.S. giving to developing countries actually increased to $37.5 billion in 2009, outpacing official U.S. government aid by almost $9 million.

[Excerpted from WealthManagement article, by Betsy Brill and Michael Donovan]

Ponying with Hollywood to teach about Disaster Giving

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Mike Rea, founder of Give2Asia, calls the 2004 Asian tsunami the “first global disaster of our time.” When he learned that Hollywood was producing its own retrospective (of sorts) on the tsunamis, he realized it was an opportunity for educating people about responding effectively in the wake of natural emergencies.

So Mr. Rea fast-tracked his plans for his “Tsunami Plus 10″ Project to coincide with last month’s release of The Impossible, a film starring Ewan McGregor and Naomi Watts.

His goal is to help inform disaster philanthropy. Mr. Rea’s takeaways, in broad strokes, are relatively simple:

* Make gifts not only to the Oxfams of the world but also to community groups.

* Give “when emotions are high,” he suggests, but also later—six months or a year after the disaster, when it becomes clearer which nonprofits are doing an effective job and still need cash.

* Write checks; don’t send used clothes.

The IShack betters conditions in slum settlements

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As you approach the simple dwelling, a rooftop solar panel, an outdoor security light and a roof overhang make Nosango Plaatjie’s shack stand out amid the sprawling cluster of makeshift wooden structures and rusty corrugated iron dwellings where her neighbors live.

Welcome to the iShack, or improved shack, an innovative approach to housing that’s being tested in the windswept slum of Enkanini, just outside Stellenbosch, South Africa. The dwelling, developed by researchers at the University of Stellenbosch, is intended to raise the living standards of slum residents while improving their access to electricity and protecting them from extreme temperatures in an environmentally friendly way.

The iShack prototype is occupied by Plaatje and her three young children. It is fully equipped with a photovoltaic panel capable of producing enough electricity to power three lights, a mobile phone charger and an outdoor motion detector spotlight. Its windows are strategically placed to achieve better air circulation and sunlight heating, while the roof is sloped so that rainwater can be harvested during the winter months.

Plaatjie, a domestic worker employed once a week, says her family’s life has improved a great deal after relocating to the ecologically designed iShack. Their previous home was a cold, damp shack hastily put together from disused pallets and corroded zinc sheets.

62% of the urban population in Sub-Saharan Africa lives in slums, typically characterized by deplorable living conditions, a feeling of insecurity and inadequate infrastructure for basic energy, sanitation and water services.

Excluding the solar power system, the iShack costs about 5,600 rand ($660). And thanks to a grant by the Bill and Melinda Gates Foundation, the iShack project will be trialled over the next year.

 

The Business of Giving

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With the explosion of private enterprise in many parts of the world, there are more wealthy people looking for ways to give back to their communities. Business leaders in areas like Eastern Europe, the former Soviet Union, and China are exploring ways to contribute to society.

Some may wonder where business and philanthropy intersect. I believe that a healthy public sector is absolutely essential to a capitalist economy. When more money is invested in areas such as education and public welfare, it generally strengthens the environment in which businesses operate. This can result in a virtuous cycle where a better business environment leads to better profits that can lead to increased philanthropy.

What really excites me is how business has informed the philanthropic sector. Historically, corporate philanthropy was little more than a one-time gift of money that met an immediate need, often totally unrelated to a company’s mission. Today, however, there is a new area—strategic philanthropy—involving corporations that find ways to link their philanthropy to their business strategy. Companies increasingly are finding synergies between these two areas so that both profit and philanthropic efforts are under the same strategic umbrella.

Many large corporations have embraced strategic philanthropy. Networking technology giant Cisco offers free technology courses and certifications that are taught using Cisco equipment. American Express provides travel agent training online, free of charge. Dannon sells its Danone Dahi, a nutrient-enriched yogurt tailored to the health needs of many of India’s impoverished children, at a low cost.

These philanthropic efforts help society, but they also result in profit for the company. By creating a financial return to the company they can then reinvest these funds to create a sustainable philanthropic effort.  There is an old Chinese proverb that says: “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” Strategic philanthropy is the modern equivalent of teaching someone to fish. 

–Excerpts of an article by Philip L. Cochran, associate dean Indiana University Kelley School of Business

How nonprofits convince Millennials to give

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Charity: water, Scott Harrison’s nonprofit organization, is at the fore of a tough task for the nonprofit sector: convincing the Millennial generation, underemployed and often dubbed apathetic compared to their predecessors, to give some of the little money to charity. For a sector overly reliant on generating money from an aging Baby Boomer population, getting young Millennials donating to nonprofits early is a key to long-term sustainability. That’s why many charities are working to develop a more interactive, customizable, and transparent giving experience.

“The Millennial generation is about identifying with a cause,” says Marc Chardon,the CEO of Blackbaud, a software developer for nonprofits that tracks giving trends. “[Donating] has become very personal and local.”

In charity: water’s case, that means encouraging supporters to be not only donors but also fundraisers. Half of the funds generated by the organization come from an online fundraising platform in which individuals create their own personal fundraising campaigns on behalf of the nonprofit. Often, people use the platform on their birthdays and ask others to donate their age in dollars instead of providing gifts. Sometimes the fundraisers are more inventive—in September a woman raised $30,000 by promising to swim across the San Francisco Bay naked, while an 8-year-old generated $15,000 by eating rice and beans for 25 days and promising her family would donate the savings made from buying cheaper groceries.

“Many charities go out and just ask people for money,” Harrison says. “We ask people for their voice.”

It’s an approach that seems to resonate with Millennials. The average age of mycharity: water’s users is 33. The fundraisers have generated almost $20 million total since the platform was launched in 2009, mostly through small donations of less than $100. The organization’s pledge to use all donated funds on fieldwork (private donors fund organizational costs) also assuages young people’s tendency to distrust formal institutions. In a post-recession environment where charitable giving has shrunk, charity: water has increased its donations each year since its founding.

TIME

Why millions of people choose to live in urban slums

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About one-third of the urban population in developing countries are slum dwellers.

There is something viscerally repulsive about urban poverty: the stench of open sewers, the choking smoke of smoldering trash heaps, the pools of fetid drinking water filmed with the rainbow color of chemical spills. It makes poverty in the countryside seem almost Arcadian by comparison. The rural poor may lack nutrition, health care, education, and infrastructure; still, they do the backbreaking work of tending farms in settings that not only are more bucolic, but also represent the condition of most of humanity for most of history. With life so squalid in urban slums, why would anyone want to move there?

Because slums are better than the alternative. Most people who’ve experienced both rural and urban poverty choose to stay in slums rather than move back to the countryside. For all the real horrors of slum existence today, it still usually beats staying in a village.

Start with the simple reason that most people leave the countryside: money. Moving to cities makes economic sense — rich countries are urbanized countries, and rich people are predominantly town and city dwellers. Just 600 cities worldwide account for 60 percent of global economic output, according to the McKinsey Global Institute. Slum dwellers may be at the bottom of the urban heap, but most are better off than their rural counterparts.

Although about half the world’s population is urban, only a quarter of those living on less than a dollar a day live in urban areas. In Brazil, for example, where the word “poor” conjures images of Rio’s vertiginous favelas … only 5 percent of the urban population is classified as extremely poor, compared with 25 percent of those living in rural areas.

But is it much of a life, eking out an existence in today’s urban squalor? Our image of modern slums comes from films like Slumdog Millionaire, portraits of India’s urban underclass not all that far removed from the horrifying picture of 19th-century industrialization in Charles Dickens’s novels about the misery and violence of London’s slum dwellers. But slum living today, for all its failings, is markedly better than it was in Dickens’s time.

For one thing, urban quality of life now involves a lot more actual living. Through most of history, death rates in cities were so high that urban areas only maintained population levels through constant migration from the countryside. In Dickensian Manchester, for instance, the average life expectancy was just 25 years. Across the world today, thanks to vaccines and underground sewage systems, average life expectancies in big cities are considerably higher than those in the countryside; in sub-Saharan Africa, cities with a population over 1 million have had infant mortality rates one-third lower than those in rural areas. In fact, most of today’s urban population growth comes not from waves of villagers moving to the city, but city folks having kids and living longer.

Article continues

Why millions of people choose to live in urban slums – Part 2

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In part, better quality of life in the urban slums of the developing world is because of better access to services.

Data from surveys across the developing world suggest that poor households in urban areas are more than twice as likely to have piped water as those in rural areas, and they’re nearly four times more likely to have a flush toilet. In India, very poor urban women are about as likely to get prenatal care as the non-poor in rural areas. And in 70 percent of countries surveyed by MIT economists Abhijit Banerjee and Esther Duflo, school enrollment for girls ages 7 to 12 is higher among the urban poor than the rural poor.

Banerjee and Duflo found that, among people living on less than a dollar a day, infant mortality rates in urban areas were lower than rural rates in two-thirds of the countries for which they had data. In India, the death rate for babies in the first month of life is nearly one-quarter lower in urban areas than in rural villages. So significant is the difference in outcomes that population researcher Martin Brockerhoff concludes that “millions of children’s lives may have been saved” in the 1980s alone as the result of mothers worldwide moving to urban areas.

That said, modern slum dwellers — about one-third of the urban population in developing countries — are some of the least likely to get vaccines or be connected to sewage systems. That means ill health in informal settlements is far more widespread than city averages would suggest. Slum residents are also at far greater risk from violence, outdoor air pollution, and traffic accidents than their rural counterparts.

But all things considered, slum growth is a force for good.

It could be an even stronger driver of development if leaders stopped treating slums as a problem to be cleared and started treating them as a population to be serviced, providing access to reliable land titles, security, paved roads, water and sewer lines, schools, and clinics. As Harvard University economist Edward Glaeser puts it, slums don’t make people poor — they attract poor people who want to be rich. So let’s help them help themselves.

[Excerpts of a Foreign Policy article by Charles Kenny]

 

More slaves today than any time in human history

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In the West, and particularly in the United States, slavery has long settled in the public imagination as being categorically a thing of the past.

However, the International Labor Organization (ILO) estimates the number of slaves in the world today at around 21 million.

Kevin Bales, of Free the Slaves — the U.S. affiliate of the world’s oldest human-rights organization, the U.K.-based Anti-Slavery International puts it at 27 million. Siddharth Kara of Harvard’s Carr Center for Human Rights Policy says more than 29 million.

That range represents a tightening consensus. Bales’s 27 million — which as a statistician he considers a “conservative estimate” — is derived from secondary-source analysis.

In which case, assuming even the rough accuracy of 27 million, there are likely more slaves in the world today than there have been at any other time in human history. For some quick perspective on that point: Over the entire 350 years of the transatlantic slave trade, 13.5 million people were taken out of Africa, meaning there are twice as many enslaved right now as there had been in that whole 350-year span.

The Atlantic

Philanthropy enlisting capitalists to address world needs

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Gray Ghost Ventures, an investment firm established by Bob Pattillo, a real estate developer, provides capital for projects that address the needs of low-income communities around the world.

It has invested in companies that cater to the poor, like D.light Design, which is developing low-cost lighting products for people without reliable electricity, and Babajob, a Web- and mobile-based job search and placement business aimed largely at India’s maids, gardeners and other household workers.

Gray Ghost has also set up the Indian School Finance Company to lend money to private schools, which serve more than 60 percent of the country’s students. Such schools find it hard to obtain financing for improvements and upgrades.

The company is trying to fill that gap with midsize, market rate loans. “Making those investments can help them attract more students, so they generate income to pay off the loan and more kids get an education,” said Jennifer McReynolds, head of investor relations at Gray Ghost.