PHA-Exch> The new aid giants

[Claudio Schuftan]

From: RKoppenleitner RKoppenleitner at t-online.de

The new aid giants



NAIROBI, 12 November (IRIN) - Can the entrepreneurial zeal, innovation and
super-size budgets of private foundations succeed where a sclerotic and
undisciplined international aid industry has failed? Or is the "New
Philanthropy" simply executive arrogance, vanity and naïveté - rushing in
where even the "aid experts" have failed?



Economist Jeffery Sachs believes the world's 2015 millennium development
goal (MDG) targets could be met with a budget of US$150 billion a year. "Our
governments are not acting. People are dying," he claims. Rather than
looking to the G8, Sachs points to the Forbes Rich List as the best
potential source of the cash. Just 5 percent, Sachs says, of the income of
the world's 950 dollar billionaires would easily raise the funds.



Others demur. "The problems we face in reducing poverty and disease and
other issues are not about money," warns Randolph Kent, director of the
Humanitarian Futures Programme at King's College, University of London.
"Indeed, there is a strong danger that if more money is thrown at the
problems we will see an increase of problems and not the solutions."



The hyper-rich and their supporters do not see it that way. Bono, the Irish
rock star and activist, has said: "Our generation has a unique opportunity
to make history. We have the money, we have the knowledge, we know the
people who can help Africa. We can make it happen with people like Bill
Gates."



Goodwill



The Bill and Melinda Gates Foundation has spent $13.6 billion since 2000 on
domestic and international projects. Its assets will top $60 billion when
the contribution of investor Warren Buffett is included. In a style that has
been called "venture philanthropy", the Gates Foundation tackles some of the
toughest global problems, especially in health, taking a hands-on,
innovation-friendly approach.



In one of its latest initiatives, in October 2007 the

[http://www.gatesfoundation.org/default.htm] foundation launched a $100
million, five-year programme providing small grants to "nurture unorthodox
approaches to global health". Inaugurated in Cape Town, South Africa, the [
http://www.gcgh.org/GrandChallenges/GCNewFeature/default.htm]  Grand
Challenges Explorations programme will target scientists in Africa and Asia,
offering research grants of $100,000.



The foundation has massively boosted key aspects of medical research and
intervention, especially in areas considered to be unprofitable by the
medical and pharmaceutical private sector.





The power of partnerships



Besides the hyper-rich are brokers like Bono and former US President Bill
Clinton.



Clinton's annual fundraising gatherings in New York draw 1,000 of the
world's richest and most innovative people together for three days. This
year's event, in September, included 52 former or current world leaders.
Each invitation-only participant pays $15,000 to discuss problems that were
previously the preserve of the aid sector.



The Clinton Global Initiative says it "attempts to create a composition that
matches people who have resources with those who have the most innovative
ideas". The CGI does not make grants but behaves like a matchmaker. About
$10 billion worth of "commitments" were made through the initiative, once
described as a "stock exchange for donations to worthy causes".



Social entrepreneurs



On a less glittering scale, new types of relationships between the private
and charitable sector are developing.



"Venture philanthropists", such as the UK's Impetus Trust [
http://www.impetus.org.uk/] are bringing venture capital techniques to the
voluntary sector by working with charities to improve their management and
performance. The US-based Acumen Fund [http://www.acumenfund.org/About/]
invests in pro-poor business but expects monetary success as well as
promoting worthy products and causes through enterprise.



Uneasy critics



But Nobel Prize winner and micro-credit pioneer Muhammad Yunus is sceptical:
"If someone makes $100 profit and donates $5 to a good cause, and possibly
only to save on taxes, that doesn't impress me very much."



"I am more interested in what global philanthropy looks like, not just the
individual giving of a few Anglo-American billionaires," concurs Kent of
London University.



"While it may be true that the aid sector hasn't yet successfully addressed
some of the major global problems, there is no evidence the billionaires
will be any more successful. I am not convinced that they have any greater
advantage in terms of assessment or accountability than the traditional
mechanisms available," concluded Kent.



"It's all too early to judge but I would be surprised if you find that they
come up with radical solutions to old problems."



One billionaire at least feels no doubt about his impulse to act. "If we
don't solve the problem of climate change," said American financier and
philanthropist George Soros, "we will go after each other . . . Before we
cook ourselves to death, we will kill each other."



British Virgin group entrepreneur Richard Branson epitomises the mood of the
New Philanthropy: "I refuse to believe that we can't do it."



(c) IRIN. All rights reserved. More humanitarian news and analysis:
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