How innovation in philanthropy is changing the face of development

At the Trialogue CSI Conference 2015, a panel of three experts looked at trends in philanthropy. The consensus was that a number of key emerging trends can be pinpointed.

Trialogue director Cathy Duff highlighted the findings of a New Philanthropy Capital report that scoured the globe for innovations in philanthropy. They consulted with experts around the world and identified 42 different initiatives, which they then put to the vote, and the public selected a first place innovator.

“The definition of ‘innovative’ was that it had to improve social impact in one of two ways – either that more money was donated or invested, or that it got money better invested. Generally, that it resulted in all around better information and sharing of knowledge,” said Duff.

She briefly touched on those that were voted into the Top Ten:

  1. Powered by Data, Canada, in the area of open data: working with funders and governments to create a whole new ecosystem for data collection, analytics and usage in the non-profit world.
  2., US, in the area of open data: an online portal with information on funding flows, analysis of need and funding successes/challenges within the water, sanitation and hygiene (WasH) sector.
  3. Glasspockets, US, in the area of transparency: advocacy around the importance of transparency and practical support for foundations to increase transparency.
  4. Shell Foundation’s Lessons Learned Report, UK, in the area of learning from failure: report tracking the foundation’s successes and failures in achieving scale or sustainability.
  5. Knight Prototype Fund, US, in the area of lean philanthropy: fund giving small grants to innovative media and journalism projects to experiment and test ideas.
  6. Dasra Giving Circles, India, in the area of collaboration: adaptation of established model of Giving Circles, conducting and publishing detailed research on specific issues and then providing capacity-building support to organisations within the portfolio.
  7. Edge Fund, UK, in the area of balancing funder power: membership body sharing grant decisions with donors, community activists and grantees.
  8. KL Felicitas Foundation, US, in the area of 100% impact investing: a foundation investing 100% of its assets for varying degrees of social/environmental return.
  9. Goodstart Deal, Australia, in the area of layered funding: a syndicate of multiple investors that converted for-profit business into highly effective social enterprise.
  10., Germany, in the area of online giving markets: an online giving platform where donors rate projects.

These ten innovative philanthropy projects highlight the very relevant themes playing out in development and funding globally.

Emerging conversations in philanthropy

Halima Mahomed, an independent philanthropy consultant, highlighted key trends observed through her work in grantmaking and research on the African continent for the last 14 years. She titled her presentation “A snapshot of the field”.

“On the African continent, philanthropy is diversifying, increasing and professionalising. Funds are coming from varied local sources and there is an emerging recognition of non-institutionalised philanthropy. The field is varied and disaggregated, resulting in a focus on progressive trends rather than generalisations,” she said. “It’s difficult to talk about trends because every sector is different. Instead, I’ve looked at what we’re seeing in terms of emerging conversations.”

These were some of the emerging conversations she witnessed:

  1. We have moved beyond learning from failure to revisiting assumptions. Are your assumptions, models and frameworks appropriate? Does our philanthropy build on and leverage local giving systems? Is our giving further marginalising the unheard voices?
  2. We are using an expanded toolbox. How do you use appropriate tools at the appropriate times? From a repertoire of tools, how do you use them appropriately? Innovation doesn’t mean discarding what works.
  3. Redefining whose agenda counts. As funders we are not the prime authorities on people’s lives. We must invest in strengthening local agency. We must rely on community philanthropy, prioritising local context and local voices. We need new strategies to balance funder power.
  4. Facing internal contradictions. The conversation here is how we move beyond transparency to accountability. There are emerging conversations on the ethics of how money is made, the links between philanthropy and resource governance and investments as the sources of funds.
  5. Recognising the value of multiple philanthropic forms. Local communities and institutions do not come to the funding transaction empty handed, but may have a different understanding of collateral.
  6. Advocacy for structural change. There is a focus on the underlying drivers of poverty, inequality and underdevelopment. These organisations are not neutral, they take a stand themselves.

Both Duff and Mahomed were pleased to see a correlation between themes that emerged from the points they both highlighted. Specific areas of similarity included the increased focus on local communities and their giving capacity, and the increased focus not just on the money donated, but how that money is made in the first place.

Creating social impact through investment mechanisms

Devang Vussonji, an associate partner at Dalberg (a strategic advisory firm dedicated to global development) highlighted three examples of the mechanisms that are bringing different types of investors and governments together to create social impact. He listed these as:

  1. Resource mobilisation: How do we raise additional money to achieve social and environmental goals.
  2. Financial intermediation: How we distribute risk, reduce volatility and timing mismatches that impede the efficiency of development programmes.
  3. Resource delivery: Creating incentives to encourage innovation and fix market failures that undermine the effective delivery of goods and services.

He raised an example of the fight against malaria in Mozambique. “The current prevalence of malaria can go as high as 60% to 70%, which is the same as five years ago, but the funding that has gone into overcoming this is quite high.”

He explained that there had been a decline in this prevalence, a good ten-year period after that, and then, because funders stopped paying attention to malaria as an issue, the prevalence began to climb again. “So how do you hold the ecosystem accountable to the final results as opposed to the input?” He asked.

This, he says, is being addressed with the African pilot of a malaria bond, which, simply put, is a combination of governments and donors committing to paying a certain amount when the problem is solved. A certain amount is allocated to each person or community that is solved, but the implementer only receives that amount if the outcome is achieved.

These three different perspectives represent three very different areas of development and research, and yet the overriding message is the same: that ongoing analysis and innovation in development ultimately result in more meaningful projects and implementations.

Written by Georgina Guedes

2017-12-04T18:38:41+00:00 May 21st, 2015|CSI|