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Adam Pickering

Previously International Policy Manager at CAF

Charities Aid Foundation


PHILANTHROPY INFRASTRUCTURE:

A BORING NAME FOR SOMETHING ON WHICH CIVIL SOCIETY'S FUTURE RESTS

17 March 2017

This article was included in a publication of the Worldwide Initiative for Grantmaker Support (WINGS), Infrastructure in Focus: A New Global Picture of Organisations Serving Philanthropy under the title Inflection Point for Infrastructure.

 

Philanthropy support organisations are the scaffolding on which civil society is built. Image by Bill D via Flickr

The 2016 World Giving Index (WGI), published by the Charities Aid Foundation in October 2016, reveals that the proportion of people engaging in acts of generosity around the world is rising. Moderate increases have been seen across our three measures (donating money, volunteering and helping a stranger) this year and the overall index score for the world as a whole has risen by a percentage point, largely on the back of a 2.2 per cent increase in the proportion of people who reported having helped a stranger. Indeed, for the first time since we started publishing the report, our data suggests that more than half of the world’s population recalled engaging in this informal kind of generosity (51 per cent). Given the myriad challenges in the contemporary global political economy, it is reassuring to see that communities are able to come together and be resilient in times of increased need.

 Although the proportion of people giving money to charitable organisations has increased by only 0.3 per cent overall, there has been unprecedented growth in giving in transitional economies where rapid economic development is enabling a huge and growing number of middle-class people to engage in philanthropy where it was once – in the case of western models of philanthropy at least – only possible for a tiny minority of wealthy individuals and mostly foreign companies. In these countries, the proportion of people giving to charity has grew by 2.1 percentage points in 2015 having grown by 11 percentage points in 2014.

 I chose to start my article on global trends in philanthropy infrastructure with this information because I think it lays out the scale of the opportunity for infrastructure organisations.  As more and more people are in a position to support civil society through donations, volunteering or engagement in advocacy, it is important that both they and the organisations that they give their time and money to receive the support they need to foster trust in the sector, ensure efficiency and effectiveness, and ultimately create a sustainable environment for future growth. However, in attempting to fulfil this role, infrastructure organisations face a great many barriers both old and new, and both internal and external.

 

A FINE BALANCE

 

Most readers will be aware of a trend that is being called ‘the closing space for civil society’. In 2015, CIVICUS reported that some form of repression of civil society freedom of expression and association occurred in at least 96 countries while the International Center for Not-for-p Law (ICNL) found that since 2012, more than 90 laws constraining the freedoms of association or assembly have been proposed or enacted.

 The causes of this trend are as complex and diverse as its manifestations, which include over-regulation, barriers to foreign funding, direct legal restrictions on the freedoms of speech and of association, and the even violent repression of activists. The threat of terrorism, the malign interests of foreign governments, money laundering, corruption and threats to traditional values have all been used by governments to justify regressive policies which undermine the development of a culture of giving.


In short, there is a growing trend for government policy to promote philanthropy that supports its own agenda, while discouraging philanthropy that challenges that agenda.


Running counter to this trend is the somewhat paradoxical reality that almost all governments – including those that have enacted the most restrictive policies – are actively trying to promote philanthropy. That is because governments recognise that philanthropy is capable of providing targeted resources in ways that are responsive to communities, agile in changing contexts, innovative and trusted by the public. In short, there is a growing trend for government policy to promote philanthropy that supports its own agenda, while discouraging philanthropy that challenges that agenda.

 As such, infrastructure organisations, perhaps more than any others in civil society, face a difficult balancing act. On the one hand, they might decide that trying to push back against regressive policies which limit the scope and independence of philanthropy and civil society is crucial for the long-term sustainability of the sector. On the other hand, they may feel that to do this would put their very existence and perhaps that of their members, grantees or stakeholders in jeopardy and that maintaining capacity is the priority. While the preliminary analysis of this report shows a high level of engagement in advocacy among infrastructure organisations, many are having to tread a very delicate line in balancing these two approaches. For some, this means developing trusting relationships with public officials and favouring private rather than public advocacy.

But if bringing disparate parts of the sector together in solidarity to address the closing space has proved difficult at the national level, international infrastructure organizations have been increasingly effective at joining forces at the supra-national level. As far back as the late 1990s, Margaret Keck and Kathryn Sikkink described the development of transnational advocacy networks which allow national issues to be reported through regional and national infrastructure bodies, and ultimately to collections of international organisations which, when working together, can wield significant influence, ultimately leading to improvements on the ground (the boomerang effect). A successful recent example of this was the securing by the Global NPO Coalition on FATF an amendment to Recommendation 8 of the Financial Action Task Force which had implied that not-for-profit organisations are particularly at risk of being used for terrorist financing.

 

IN SEARCH OF CLARITY

 

Infrastructure organisations are well aware of the increasing demand for transparency and this is borne out in the WINGS research, which shows this as the top-priority issue for philanthropy infrastructure organisations. The demand for philanthropic organisations to demonstrate financial openness, show effectiveness and learn from mistakes comes from both above and below, with funders and beneficiaries alike holding higher standards and seeking assurances. To some extent this is the product of stubbornly low levels of trust in CSOs and of international funders, partly as a result of government and media rhetoric. Research by CAF Global Alliance members in IndiaRussiaSouth AfricaBrazil and the UK all identify public trust as an important issue for individual donors of all levels. Indeed, this led CAF to develop a set of recommendations on how governments can (and why they should) build trust in giving. To some extent, too, philanthropy is inevitably a victim of its own success as the more people give, the higher their standards become. This in a nutshell is why infrastructure organisations are, and will remain, so important. They are a catalyst for continuous improvement in the sector, setting standards for donors and civil society organisations, championing new approaches and advocating for better policies. However, there are risks to be mitigated.


This in a nutshell is why infrastructure organisations are, and will remain, so important. They are a catalyst for continuous improvement in the sector, setting standards for donors and civil society organisations, championing new approaches and advocating for better policies.


Philanthropy infrastructure organisations are at the forefront of championing transparency in many nations and internationally – the work of the Foundation Center on the SDG Philanthropy Platform being a particularly prominent recent example. However, the rise of ‘big data’ on philanthropy and the trend among some of the wealthiest donors towards data-driven approaches (particularly among proponents of Effective Altruism) could threaten certain organisations and approaches that are either unready or lack the capacity to engage in activities that do not lend themselves to impact measurement. In such an environment, infrastructure organisations have the double task of helping members and stakeholders to meet ever higher standards of transparency, while educating donors on the value of more traditional (and innately less measurable) approaches.

 

PHIL-TECH

 

In the narrow sense, philanthropy infrastructure organisations are at the forefront of new ‘philanthropy technologies’. That is to say, they are often early adopters of, conduits for learning on, and even developers of new tools which can bring in funding, increase impact and measurement or create efficiency. Indeed, in many nations, philanthropy infrastructure bodies are engaged throughout the cycle of philanthropic technology development: undertaking research, identifying issues or opportunities, advocating for a supportive policy environment and implementing new tools, or educating others to implement them. These ‘technologies’ are not necessarily about cutting-edge scientific developments; often they are more about broadening the philanthropy toolkit. For example, Philanthropy Australia has worked with the country’s Department of Social Services to assist the work of the Prime Minister’s Community Business Partnership in exploring the potential for bringing US-style programme related investments to Australia, enabling foundations to make financial investments that count towards their minimum distribution requirement, providing that these further their charitable interests and result in below-market returns. Similarly, IDIS (part of the CAF Global Alliance) has worked with lawmakers in Brazil on a new law to incentivize the creation of cultural endowments.

 Infrastructure organisations are also beginning to break down the hegemony of European and North American traditions and models of philanthropy and recognize existing but undervalued philanthropy ‘technologies’. The failure to count what is sometimes called ‘indigenous philanthropy’, despite its enormous scale and importance in fostering community resilience, is now being addressed, particularly in Sub-Saharan Africa. Often labelled ‘informal philanthropy’, it ‘comprises local grassroots giving and care built on internally derived practices of mutual aid, reciprocity, solidarity and social obligations’ alongside a growing discourse on social justice philanthropy, which focuses on addressing the structural dynamics underlying social injustice.

 But while infrastructure organizations are rightly recognizing old ideas as being still relevant, they are also having to adapt to profound changes in the way society has been affected by the internet. In Russia, for example, the most recent developments in infrastructure are connected to support mechanisms for mass individual giving such as crowdfunding platforms, online fundraising training and innovative software packages. CAF Russia and the CAF UK are both running #GivingTuesday, for example, which illustrates the increasingly electronic nature of infrastructure and also the urgent need for infrastructure organizations to adapt. Indeed, in just a few years from now we might be talking about how blockchain technology – the decentralised, distributed public ledger technology that allows secure record-keeping without the need for traditional intermediaries – has completely transformed the concept of philanthropy.


While the blending of business and philanthropy could offer crucial new tools in certain areas, we also have a duty to ensure that these are not promoted as a panacea at the expense of approaches that have developed incrementally for generations.


But as important as it is that we keep up with developments, we must be careful not to allow new trends to drag us away from what we know is important. For example, a trend for ‘philanthro-capitalism’ is spreading through the philanthropy world. While the blending of business and philanthropy could offer crucial new tools in certain areas, we also have a duty to ensure that these are not promoted as a panacea at the expense of approaches that have developed incrementally for generations. This danger is particularly prevalent in countries and regions where institutional philanthropy is still nascent or faces barriers of low public trust or government support.

 Philanthropy infrastructure finds itself at an inflection point: should it succeed in protecting and nurturing a vibrant civil society in which donors are encouraged and empowered to support a broad range of independent organisations, it will contribute hugely to sustainable and inclusive development. We are living in a unique moment of economic development in which hundreds of millions of people are gaining access both to the economy and to political agency. It may be that this is a one-time opportunity to engage whole swathes of that population in philanthropy. Considering some of the challenges outlined above, this will not be easy but it is testament to the enduring importance of philanthropy infrastructure that for the good of everyone, failure cannot be an option.

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