This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from the global public policy institute. Transforming Development? The role of foundations in international development Washington DC, 14 July 2008

1 KEY POINTS Source:GPPi

AGENDA Scope and delimiters Taking stock – Scope and nature of foundation engagement in development Transforming development? Potential and limits of the business approach Implications for the international aid architecture Open questions and points for discussion

Independent foundations. Non-partisan foundation with own endowment (frequently family foundations). Corporate Foundations. Foundations that were founded and capitalized by private companies and that are closely aligned (legally or through staff) with these companies. Incorporated and based in either Europe (geographical) or the United States. 3 WHO ARE WE TALKING ABOUT? Source:GPPi

4 Independent foundations Community foundations Corporate foundations Source:GPPi WHO ARE WE TALKING ABOUT?

AGENDA Scope and delimiters Taking stock – Scope and nature of foundation engagement in development Transforming development? Potential and limits of the business approach Implications for aid architecture Open questions and points for discussion

1.Foundation spending on development in 2005: US$ bil.); less than 1% of existing foundations focus on development at all 2.Much of foundation spending goes into emerging economies (especially BRIC) 3.US organizations drive much of the growth in foundation spending on development (2005: US$ 3.8 bil.); Europe lags behind significantly 4.On both sides of the Atlantic, foundation engagement in development primarily driven by a few large funders; smaller foundations tend not to go international 5.Foundations are disproportionately engaged in health; other important sectors are (higher) education, environment, agriculture and civil society/ governance 6.Only a small portion of funding is channeled through local intermediaries; by and large, foundations use the same implementers as official donors 6 SOME SNAPSHOTS FROM EXISTING DATA Source:GPPi

AGENDA Scope and delimiters Taking stock – Scope and nature of foundation engagement in development Transforming development? Potential and limits of the business approach Implications for aid architecture Open questions and points for discussion

TRANSFORMING DEVELOPMENT? 8 Elements of the new philanthropy Solving problems Investing in new techno- logies New approach is strategic, market-conscious, knowledge- based and high-engagement, maximizing the leverage of the donor's money. Using the media smartly Lean organi- zational structures Measuring results Source:GPPi

AGENDA Scope and delimiters Taking stock – Scope and nature of foundation engagement in development Transforming development? Potential and limits of the business approach Implications for aid architecture Open questions and points for discussion

IMPLICATIONS FOR AID ARCHITECTURE/ PARIS AGENDA Drawing broad conclusions at this stage not possible. But some issues, based on anecdotal evidence: For recipient countries: New donors = new money and other resources Parallel bureaucratic structures (proliferation of vertical programs) Foundation engagement often not integrated in national development strategies More demands on communication and coordination For official donors and multilateral development organizations: Duplication or even countervailing forces? Unwelcome competition? 10

AGENDA Scope and delimiters Taking stock – Scope and nature of foundation engagement in development Transforming development? Potential and limits of the business approach Implications for aid architecture Open questions and points for discussion

OPEN QUESTIONS AND POINTS FOR DISCUSSION Need to understand the role of foundations in development better Scope and trends (drivers and levers) Why certain countries/ sectors and not others? Models Relationships with recipient governments Relationships with intermediaries (which ones?) Role of Africa-based philanthropy Ways for recipient governments to attract and effectively manage aid channeled through foundations and other private donors Potential and limits of partnerships with official donors and multilateral development organizations 12

BACKUP 13

Foundations: Not-for-profit Not part of the public sector Command their own financial resources (distinction to NGOs and other intermediaries) Directed by an independent Board Pursue charitable purposes Active as: Funders; Implementers; both. 14 ELEMENTS OF A DEFINITION Source:GPPi

Three reasons: Reporting requirememts for foundations differ but are generally weak Small and medium-sized foundations often do not have the systems in place that would allow for comprehensive data tracking Foundations categorize their investments differently than official donors, making comparisons difficult 15 DATA ON FOUNDATION ENGAGEMENT SKETCHY AND UNRELIABLE Source:GPPi

Wesentliche Fakten*: 670 private Geber investierten 2005 etwa EUR 2.5 Mrd. Allerdings: Nur weniger als 1 Prozent aller privaten Geber engagieren sich überhaupt in der internationalen Entwicklungszusammenarbeit. Wachstum des internationalen Engagements scheint sich zu verlangsamen. Zwei Drittel aller internationalen Finanzierungen werden von nur 20 Organisationen geleistet. Das internationale Engagement US-amerikanischer Stiftungen wäre zwischen 2002 und 2004 um 4 Prozent gefallen, würde man die Bill and Melinda Gates Foundation herausrechnen. Private Geber leisten nur gut 20 Prozent ihrer Finanzierungen direkt an Partner in Entwicklungsländern, und dies mit offenbar rückläufiger Tendenz. Ein großer Teil (etwa 45 Prozent in 2004) der Zuwendungen US-amerikanischer privater Geber zielt auf Schwellenländer wie Brasilien, China oder Indien. Investitionen in den Bereich Gesundheit machen deutlich den Löwenanteil des Engagements US-amerikanischer privater Geber aus. 16 US-AMERIKANISCHE PRIVATE GEBER IN DER INTERNATIONALEN ENTWICKLUNGSZUSAMMENARBEIT * Diese und folgende Angaben basieren auf US Foundation Center (2006), International Grantmaking III: An Update on U.S Foundations Trends (New York: Foundation Center). Quelle:GPPi

Wesentliche Fakten*: Der größte Teil privater Geber ist operativ tätig. Etwa 24 Prozent der privaten Geber, die an einer EFC-Umfrage teilgenommen haben, finanzieren nach eigenen Angaben entwicklungspolitische Programme und Projekte. Das internationale Engagement umfasste 2005 insgesamt 386 Millionen Euro (2005). Unter den Top 15 (also den 15 privaten Gebern in der EU mit dem größten entwicklungspolitischen Engagement gemessen an Ausgaben) befinden sich nur zwei deutsche Organisationen (Deutsche Bank Corporate Social Responsibility mit Ausgaben von etwa EUR 53 Millionen, und die Volkswagen Stiftung mit Ausgaben von EUR 11.1 Millionen (beide Zahlen für 2005). Die Umfrage-Teilnehmer finanzierten 2005 internationale Aktivitäten in 126 Ländern. Davon fallen allerdings nur 29 unter die wenig entwickelten Länder (Definition der Vereinten Nationen). 17 EUROPÄISCHE PRIVATE GEBER IN DER INTERNATIONALEN ENTWICKLUNGSZUSAMMENARBEIT * Auf Grundlage einer vom European Foundation Center in 2007 durchgeführten Umfrage EFC (im Erscheinen), EFC Survey of European Foundations and Corporate Donors Funding for Global Development (EFC: Brüssel). Quelle:GPPi

TOP 15 US FOUNDATIONS 18 Source: Renz, Loren and Josie Atienza. International Grant-making Update 2006: A Snapshot of U.S. Foundation Trends, op. Cit, Page 6.

TOP 15 EUROPEAN FOUNDATIONS 19 Source: EFC 2007 Survey of European Foundations and Corporate Donors Funding for Global Development. Mimeo. Brussels: European Foundation Center, (Not yet published.)