22 November 2011

DFID x 0.02 = ?

Just what can a foundation achieve with a budget between 1-2% of DFID's? Well, this is the spend size of relatively large foundations such as the Rockefeller Foundation.

As one of the participants of the Bellagio Initiative Summit on Wellbeing, Philanthropy and Development pointed out, television programmes like the UK’s “The Secret Millionaire” remind us, small amounts of money can transform lives so annual giving of $100m-$200m can have substantial transformative power. The question is how to maximise that power.

The obvious thing for Foundations to do is to work with those with deep knowledge of the context in question to unearth, develop and test innovations (technological, organisational, social), and to link up early in the process with those who might scale the innovations (e.g. National Governments and development agencies).

It is clear from the 2 days I have been at this summit that these kinds of partnerships are the exception rather than the norm. Listening to voices and constituencies on the ground and linking up with partners who have the capacity to scale does not happen nearly often enough. Why? My hunches:

(a) there are few incentives for foundations to do this. It is much easier to develop a pilot that shows a temporary positive effect but has weak origins in the context and little legacy in terms of what it leaves behind, and

(b) power gets in the way. Public development agencies (at least the bilateral ones) are directly accountable to taxpayers in ways that Foundations are not. The former are custodians of everyone’s money, the latter are custodians of one family’s money.

Without the right checks and balances Foundations can get carried away with their own sense of power and this can make linking with communities and development agencies seem like unnecessary exertions.

But my sense is that the appetite for change is growing, perhaps pushed by the transparency and accountability agenda.

One response to accountability and transparency is “just make sure we do good things” by, say, improving standard M&E. Another response is “make sure we do the best we can”. While the first response is a minimum, the second surely has to be the goal of visionary philanthropists.

If done right, this way of working promises more sustainable and transformative action.

But it will require a greater acceptance of the need to invest more in relationship building, a greater willingness to work with others’ agendas, a greater preparedness to be seemingly sidetracked and a willingness to develop and use the tools to redefine and assess impact in these new contexts.

Working with others from different cultures is hard and risky. But the potential benefits are enormous—much greater than 1-2% of what DFID can achieve.

Foundations are well placed to calculate those risks--and then to bear them.


yvonne pinto said...


For those of us who have been involved in Foundations for 15 years, your
points are very relevant and something that on the positive and negative
side have predominated. However, I think that Foundations generally can
bridge the relationships between public development agencies in ways that
bilaterals cannot.

Sustainability is the uncomfortable bedfellow of most in the Foundation world and the
elusive nature of it causes much brainstorming. It would be good to have some perspectives on how best
to support this, which in many cases could lead to innovation and scale and
replication or adaptation of useful and meaningful solutions.

How can Foundations better engage the LOCAL private sector if they are
conditioned only to support Charities or 501c3s? Is this a means of ensuring
local ownership, control and ultimate success?

Divirian said...

Yvonne Pinto asks, "How can Foundations better engage the LOCAL private sector if they are

Well, 1) change the causes of the conditioning by presenting evidence of the opportunity cost of capital, and 2) invest in the increasing number of fund management agencies based in poor countries, taking a seat on their board if possible (eg: PIND in Nigeria). The world of Impact Investing (GIIN) is already doing this.