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EIGHT-YEAR LONG FIGHT FOR NEW LAW IN BRAZIL

During a time of political and civil unrest, IDIS is able to advocate for new legislation in Brazil

Working towards a legal environment that enables good

Seeing a piece of legislation pass can be a long and arduous process, but success can still come, even if it takes nearly a decade.

Our partner in Brazil, IDIS, started promoting the debate around endowment fund regulation in 2011, advocating for its benefits and building relationships with government and non-profit organisations to see it come to fruition. But the path to the approval of the legislation was full of surprises - and with the election of the country’s new president Jair Bolsonaro this year, there were uncertainties whether or not the legislation would see the light of day. Despite a controversial campaign, Bolsonaro officially approved the relevant Provisional Measure on his fourth day in government, officially transforming it into the ‘Endowments Law’.

This creates, for the first time in Brazil, the legal financial instrument of endowment funds that can support institutions and projects focused on topics of public interest (e.g. education, science, culture, health, environment and other). Following a tragic fire that wiped out 90% of the collection at the Brazilian National Museum and uncertainty surrounding funding for non-profit organisations, this piece of legislation is more important than ever.

Paula Fabiani CEO of IDIS

Paula Fabiani, CEO of IDIS.

“We are very optimist about the effects of the new legislation, it reflects how Brazilian society is realizing how important it is to give long term sustainability to the social, cultural and environmental organizations and initiatives.”

Paula Fabiani, CEO of IDIS.

Building Momentum

Endowment funds are a commonly used mechanism for philanthropists and civil society organisations across the world, but there was previously no legislation regulating endowments in Brazil, which in turn created uncertainty for donors.

To rally support across Brazil, IDIS developed an advocacy strategy and promoted research to show how the piece of legislation could benefit a variety of causes and non-profits. The team organised several meetings with congressional representatives and relevant authorities in the Ministry of Culture, Education, Chamber of Representatives and Senate to build meaningful relationships within government. Moreover, IDIS and their partners hosted a myriad of events to raise awareness and maintain engagement in the debate. 

Eventually the team at IDIS were able to create a movement, bringing all its main supporters together to form an advocacy group, the ‘Coalition for Endowments’. Consisting of over 60 organisations, including the Brazilian National Museum, the Coalition was launched in the National Congress and was crucial in the approval process of the legislation.

The new legislation enforces transparency of how the funds are used, and establishes a concept similar with a “Trust”, a separate entity created with the sole purpose of managing and protecting the funds from potential liabilities. With such rules in place, endowment donations are better protected in the long term and donors can count on a better legal environment for endowment grants.

TIMELINE

IDIS Endowments timeline

2012

IDIS launches the book Endowment Funds, Creation and Management in Brazil with the support of the Vale Foundation and Ford Foundation. This was the first book to address the topic in Brazil. To this day, the book serves as a reference for organisations, philanthropists, academy, fund managers and regulators.

2012 & 2013

IDIS establishes the Endowment Study Group. During this time, four meetings are held with the association of Brazilian Foundations, GIFE, as well as the group Endowments do Brasil, and JP Morgan. The Endowment Study Group brought together 90 members (including lawyers, non profit sector executives, public prosecutors, academics, among others) with the objective of writing a bill proposal for the subject.

2016

IDIS develops three guides on concepts and implementation of Endowment Funds. This body of work is produced in partnership with Levisky Negócios & Cultura, PLKC Advogados, BNDES (Brazilian National Development Bank), Petrobras and Caixa Econômica Federal.

IDIS translates the book Philanthropication through Privatization (PtP)’ (written by Professor Lester M. Salamon). PtP is a process that involves capturing all or part of the proceeds from privatisation operations and other asset transfer processes (fines, corruption, etc.) to create or expand philanthropic foundations and/or endowment funds and thus bring new significant long-term resources for solving social, economic and environmental problems.

2018

A fire destroys over 90% of the Brazilian National Museum’s collection – the building was not insured, adding to the loss. This incident was the catalyst that led to Michel Temer, the president at that time, signing a Provisional Measure to ensure that museums, and other non-profits, benefit from the endowment mechanism to ensure their long-term sustainability. The ‘Coalition for Endowments’ is established.

Endowments around the world

Some of the largest endowments in the world can be found in the US and the UK. Some examples of are the Bill & Melinda Gates Foundation (an endowment valued at over $38 billion), Harvard University’s endowment (valued at over $37 billion), and the Wellcome Trust endowment (valued at over £25 billion).

In emerging economies, some examples include the United Arab Emirates, with the Mohammed Bin Rashid Al Maktoum Foundation, and India, with the Azim Premji Foundation – both of which are valued at $10billion.

IDIS and CAF Global Alliance

Based in São Paulo, IDIS provides consultancy and technical support to companies, families and communities who wish to invest in social projects and programmes.

IDIS is a partner of the CAF Global Alliance, a network of nine locally-led, independent organisations that work across six continents.

Over the last 25 years, the Global Alliance and its international presence has led to breakthroughs and social change that’s had a positive effect on the lives of millions of vulnerable and disadvantaged people and communities.

At its core, the Global Alliance works to help strengthen civil society worldwide as part of the Charities Aid Foundation, a champion for giving that works to help donors, companies and charities make a bigger impact.

CAF Global Alliance

By working with donors, the CAF Global Alliance has helped make a real difference to charities of all sizes around the world.

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