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4 March 2002Philanthropy’s Potential: Can We Grasp it?
It is a great pleasure to be here today at the National Foundation of India helping to celebrate its 10th anniversary. Starting a new organization is always difficult, and foundations are especially so. To be brutally honest, the Ford Foundation's first years were anything but smooth. Happily it now seems that all of us are learning from the growing number of foundations on the globe, and we are getting the new ones up and running more quickly and with increasing skill. The National Foundation for India has been a pioneer in this group and I salute its board and staff for the record you are building.
It is also a pleasure to be with colleagues involved in the non-profit or civil sector. We have much to celebrate together as we look back over India's recent decades. The clear advances in well-being for millions of India's formerly poor populations are noteworthy, as are the impressive contributions to world advancement we see in India's businesses such as computer software, and its vast cultural contributions to world thought and artistic expression. These advances have come from the talent of men and women striving for a better life, from public and private efforts.
But we would be negligent if we paused too long on this country's impressive accomplishments. So much remains to be done and it will require many people's efforts and persistence. The recent events in Gujarat are a powerful reminder of that unfinished business and its dangers. The only pause should be one that recommits us to solving major problems and building equitable societies. That is why we are here today. We share a vision of a more peaceful, equitable and stable world and each of us wants to help make that possible.
Foundations can play a part in this problem-solving process. We can work in partnership with grantees who bring forward compelling ideas and talented people to advance and implement them. This partnership between donor and recipient is at the heart of good philanthropy. Since we are here at the National Foundation for India, today I want to focus particularly on the grantmaker side of the partnership. And I want to talk primarily about the field of philanthropy—not specifically about the Ford Foundation. I would, of course, be happy to respond to questions about Ford if you want that in the question and answer period.
Philanthropy has grown worldwide, a byproduct of the growth in wealth in rich and poorer countries. Of course, India has a long history of philanthropy, with thousands of local charitable trusts as well as major foundations such as the Tata family's foundations and new ones such as the National Foundation for India, The India Foundation for the Arts or the Bombay Community Foundation. Here as elsewhere, in a variety of ways and institutional forms, foundations suggest that the success of one group of men and women can support the hopes and dreams of others. Such altruism seems to be a common feature of every society in the world, irrespective of religion, geography, economy or other variables. The Ford Foundation is part of this pattern. It continues to seed new grantmaking organizations, contributing to philanthropy's growth. For example, as part of our 50th anniversary in India we are supporting the launch or expansion of several more Foundations and grantmaking entities such as the Maharashtra Community Foundation in Pune, the Foundation for Educational Access and Excellence, the South Asia Fund for Women and the Dalit Fund.
Unfortunately, there still is no reliable data on the growth of these foundations and donations worldwide. But the huge growth of philanthropic resources is evident in the increase in associations of grantmakers worldwide. These associations bring together people who make grants, help them share lessons and assist them to improve the quality of their work. Barry Gaberman, from the Ford Foundation, who is here today estimated that 80 of these associations now exist on the globe, with 25 more in formation. There is even a worldwide association of these grantmaker associations called WINGS. There are several of these generic philanthropic organizations in India, including the Center for the Advancement of Philanthropy in Mumbai and the Indian Center for Philanthropy here in Delhi. So, as you can see, the sector is growing dynamically.
Such growth in numbers strongly suggests an enlargement of philanthropy's role as a catalytic problem solver in society. We all hope this will happen. We hope donors will have increasingly significant leverage on some of the world's most serious problems. But will they? Or will they remain principally focused on charity rather than change?
This is an important distinction. Charity is important and necessary, but most often it soothes and supports, helps and holds. It does not get at root causes or change basic conditions. If grantmakers want to be an important force for change, they will have to move beyond charitable care to developmental objectives. This is true wherever philanthropy is growing today.
I believe that we must alter four patterns as we shift from charity to change strategies. Let me describe each of these four and how they could dramatically increase philanthropy's power to improve our societies.
First, grantmakers need to find people taking on some of society's most intractable problems, the kind that others turn from. Donors need to be experimental in addressing those tough problems and support people with good ideas, particularly those from the margins of society who might not otherwise have a chance to be taken seriously. This means looking for and listening to people with perhaps different perspectives than our own. This doesn't occur as often as it should. Donors typically give money to programs and people with whom they have some familiarity. That should not surprise us—they want the money to be used well and trust those they know to do so. But too often, it means they shy from risk, hoping their donations will produce clear and good results.
Grantmakers will have to become braver about seeking and supporting people with unfamiliar approaches and stick with them long enough to learn about them. As donors become more strategic in tackling important and difficult problems, they will need good advice from people who know how to bring about change, including the most disadvantaged men and women who are the likely beneficiaries. We must remember the Ford Foundation is not the answer—it is a resource for people who have ideas about the answer.
Here is an example of this kind of new direction in problem solving from Ford's grantmaking in India. It is similar to strategic work of other donors who agree about taking on tough problems. Ford played an early role in helping the Society for Promotion of Area Resource Centers (or SPARC) to establish itself as a new institution. SPARC created a federation that brought together the National Slum Dwellers' Federation and the Mahila Milan Association of Pavement Dwellers in Bombay. That laid the foundation for SPARC to continue building the capacity of slum dwellers' federations and women's self-help groups in other cities and towns in India. Their work ensures that poor people themselves have a say in how housing and sanitation policies are formulated and implemented by municipal authorities—SPARC's institutional structure enables it to take risks with new ideas. It continually tests the ideas of slum dwellers themselves. It elevates the voice of the poor. It is distinctive for its fresh thinking, scale of operation, and leadership by the poor themselves.
As part of our 50th anniversary in India, the Ford Foundation recently made a $1 million grant to SPARC and its partners to enable them to scale up their work in 40 cities in six states. As a result, we anticipate that tens of thousands of poor slum dwellers will actively participate in decision making on public policy issues that impact their individual and community well being. SPARC now also operates on a world stage, as a member of a worldwide association of slum dwellers pressing for their rights.
One way to test whether a grantmaker's portfolio has at least in part been change oriented and dynamic is to ask a simple question: Have your grants enabled people to create significant social change that would not have occurred at all or as well without your support? If you cannot answer yes to that question, you will be vulnerable to critics who prefer that the money be spent by government or be tightly regulated into trusts with very traditional purposes. So let us all ask this question of ourselves, answer it honestly, and set our sights higher if need be.
Second, grantmakers need to communicate to the public how modern philanthropy fits into their country's altruistic traditions. They need to explain how these altruistic traditions are evolving into a modern philanthropic culture. Why is this connection with past history important? If grantmakers become active supporters of problem solving efforts, they are likely to encounter criticism here and there. Something they are helping change for the better may make someone else uneasy, maybe because it involves rearrangements of power. Change naturally does that. When people are uneasy about foundation supported change, often their first recourse is to attack the donor's credibility. What, they ask, gives the grantmaker the right to meddle in this matter? Isn't this outside interference or social engineering? Isn't this interfering with the natural order of things? And they usually finish with the rhetorical question, shouldn't these donors just get back to basics like feeding the poor, sheltering the homeless—in other words back to charity?
So, defending grantmaking that aims to solve problems rather than merely putting salve on them requires thought. Part of that response must be that this kind of developmental philanthropy is consistent with each country's own best traditions. It is not a departure, not a totally new construction, nor is it an unwelcome foreign import. In every culture I know around the world this is actually the case. Not all donors from past centuries or decades gave funds just to project their own names or care for people in a paternalistic manner. Many gave money to institutions they believed would bring about change and make things better.
India has many such strategic philanthropists in its history. Mahatma Gandhi—in addition to leading the national movement8212;redefined the concept of philanthropy by working for social change across community and caste lines. He was also able to motivate many others, including established industrialists like Bajaj and Birla, to strengthen secular and progressive philanthropy work, going beyond charity and religious giving.
The Tata trusts are another example of philanthropic efforts in India that have gone beyond the prevailing practice of giving to individuals in need who belong to one's own caste, community or religion. The Tata trusts have steered private wealth in an organized and strategic manner, for broader public good.
The notion of what brings about change has altered over the years. Each generation has developed new thinking about development. Philanthropic practice has evolved in parallel to changes in thought about development and reform. These parallel patterns of evolution need to be explained with examples from each country's history and culture. And these histories have to be made part of the public's common knowledge. So here again, there is a good question to ask ourselves: How well are we promoting understanding of our country's philanthropic traditions as well as understanding about ways in which past and present traditions are related?
Third, people who value philanthropy need to define good philanthropic practice and how and to whom philanthropy is accountable. One expert on philanthropy, whom I particularly admire, once reminded me that philanthropy is a "do it yourself" business. He is right. This "do it yourself" quality can be philanthropy's strength, in the sense that philanthropy is an open field—anyone can be a donor. But at the same time "do it yourself" seems to imply that philanthropy should not be professionalized—that we don't have to learn from each other or worry about setting standards for good and bad practice.
That is a naive view, and maybe even a dangerous one. Money for philanthropy is just like any other aggregation of funds in one place. It can tempt people to act badly—to put their hand in the till, to reserve the donations for family and friends not for those in need, or to resist giving the funds away at all. If people in our profession do nothing to define ethical practice, governmental regulators outside of the profession will do it for us, with perhaps more rules and rigidity than we need or want. Equally important, even when donors act correctly and use grant monies responsibly, they often act with little information about what others have tried and learned, or tried and failed at—and where the ideas for future success may lie. So there is much to be done to assemble knowledge about best practice—programmatic, operational, and ethical good practice.
This is a task for the larger field of philanthropy but also for each donor organization. To begin, each of us in a donor organization has to ask ourselves: does my foundation have a process for communicating what we believe is good grantmaking? What about communicating ethical and professional behavior? If not, how can we get started? When enough individual efforts are underway, groups of donors can begin a dialogue that can set standards for the field.
Fourth, all of us who care about philanthropy have to get a lot better at knowing our success stories and telling them well. Research done by the Council on Foundations in the United States has some interesting hints about why this is so important. I suspect the ideas would hold true across the world, not just in the U.S. When asked if they think philanthropy does well and helps the nation, people generally answer yes—in fact they are strongly positive about philanthropic giving. But when asked anything beyond that, such as "which specific donors do you admire and why?" few people can give any details. We haven't told our stories.
In the U.S. the general public is impressed by stories about philanthropy that describe the results of donations and grants—something that the public can see and value clearly. Although foundations often put out press releases about their new work, the U.S. public is less impressed because it is unclear whether the new work will succeed. This means that donors must get better at telling stories about completed rather than new work. But to do that, we first have to know the history and where success stories—and failures—lie. Then we have to get good at talking about them.
In some foundations there is an admirable tradition of modesty. It usually reflects the belief that giving is its own reward and that the grantees who do the "real" work should be those who get the credit. That is all correct, but it fails to recognize one reality. Again, if you are involved in significant change processes, you may have to defend what you are doing against critics. One of the best defenses is a good record of having contributed to change that people admire, having supported people who brought about improvements. So telling these stories is important and they can be told in ways that are consistent with a philosophy of modesty. But, of course, if you really can find no successes, it is a good hint that some institutional rethinking is in order.
At the Ford Foundation, we are proud of the many successes of our grantees in India and in neighboring countries. Just to cite a few examples:
In the natural resource management field the Foundation's long standing support for pioneers who developed concepts and practice of Joint Forestry Management, Participatory Irrigation Management and Wasteland Development. These extraordinary people have not only increased access to these vital resources for the poor but they have also enabled them to build assets for the future generations.
Decades ago, we supported people who rethought agricultural development and their institutions later helped create the "green revolution" that significantly contributed to India's food security.
Ford is particularly proud of its early support for women's organizations like SEWA or Adelthi in Bihar—organizations that changed women's lives for the better and became key players in a worldwide movement of women changing the world's attitude towards women.
Next door in Bangladesh the Foundation supported pioneers who created the Grameen Bank in micro-credit which has led to the micro-credit revolution worldwide; it has been replicated in 46 countries; and further developed in India by the Dhan Foundation, SEWA and BASIX.
So let us tell our stories and help attract others to philanthropy with these accounts of what is possible. But as we build philanthropy I believe that shifts in these four patterns of philanthropy are important and, I think, necessary. Let me note them again:
- designing innovative grantmaking programs addressing our country's toughest problems;—perhaps with risky or unfamiliar ideas
- building public understanding of philanthropic traditions and their evolution into modern practice;
- establishing ethical and professional standards for our field of philanthropy;
- communicating what philanthropy has helped to achieve so far
They are important in my country, this country, and others on the globe.
In my judgment, we do not have the luxury of working on some of them and not others. All are needed now. They address the most fundamental questions of effectiveness and accountability. The media, regulators, and the public will raise such questions if we don't raise them ourselves.
I believe this will not be a chore! It will be very satisfying work for all of us. We support remarkable people. They and their organizations accomplish remarkable change. More are eager for assistance and partnership with us. Many more donors will emerge in the years ahead eager for guidance. Exploring new, more challenging grantmaking strategies will lift our eyes and spirits from sometimes discouraging daily realities. Helping our field become more professional without becoming rigid and over regulated will help us recruit some of the brightest new talent to it. Developing ethical and work practice standards will make our professional lives easier and more transparent. And we should derive legitimate satisfaction from telling our success stories.
So I hope we can all be part of the increasingly interesting and important global force that philanthropy has become. Philanthropy stands on the shoulders of women and men who have had great financial success and it creates the possibility of new successes that build more just, stable and strong societies. We are lucky to have this opportunity and I hope we make the most of it.
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