alleviating global poverty catalysts of change

36 Pages·2013·2.11 MB·English

ALLEVIATING GLOBAL POVERTY
CATALYSTS OF CHANGE

Contents
Foreword ...................................................................................................................................................2
Credit Suisse Snap Poll at the Forbes 400 Summit on Philanthropy ............................... 3
Key Findings............................................................................................................................................ 4
Enormity of the Task: Understanding Global Poverty ............................................................6
Future Focus: Moving Toward Systemic Sustainability. Empowering Women. ........... 8
Case Study: A New Look at Capitalism ......................................................................................10
Systemic Giving: Creating a Self-Multiplying Dynamic .......................................................... 12
Case Study: You Have to Bring Your Heart as Well as Your Head .................................... 14
The Role of Wealth Creation in Solving Global Poverty ....................................................... 16
Case Study: Standing Tall ................................................................................................................. 18
Sidebar: Gathering Intelligence ..................................................................................................... 19
Driving Philanthropy to More Cohesion ..................................................................................20
Bolstering the Effectiveness of Philanthropy: Partnering, Collaboration, Resources .......22
Sidebar: Best Practices to Bolster Philanthropic Effectiveness ....................................... 23
Sidebar: Becoming a Venture Philanthropist ...........................................................................24
Success in Philanthropy .....................................................................................................................25
Creating Your Philanthropy Portfolio .......................................................................................... 26
Next Generation .................................................................................................................................. 28
Conclusion ............................................................................................................................................. 29
Making It Happen: A Philanthropist’s Guide ........................................................................... 30
Methodology ....................................................................................................................................... 32
FoReWoRD
The Second Annual Forbes 400 Summit on Philanthropy, supported by Credit Suisse,
brought together 150 of the world’s most actively engaged philanthropists to compare notes,
share lessons and find inspiration. The theme was Solutions for Extreme Poverty, which
served as a prism through which participants viewed the larger scope of philanthropy, looking
for applications for anyone who believes in market-based, permanent solutions to large-scale
social problems.
“This partnership speaks to Credit Suisse’s larger commitment to
corporate responsibility and, specifically, global poverty.”
—DR. PhiliP Vasan
Head of Credit Suisse Private Banking for the Americas
“The Forbes Summit is helping spur action by uni- with investable assets of $1 million or more: this was
fying the dialogue among some of the world’s most an in-depth survey of global philanthropists regarding
significant philanthropists,” said Dr. Philip Vasan, head their views on alleviating global poverty, as well as their
of Credit Suisse Private Banking for the Americas. personal philanthropic attitudes and practices.
“This year’s meeting was a breakthrough event, in In this research Credit Suisse engaged philanthro-
which leaders in philanthropy pooled their ideas and pists around the world on how they see their role in
inspired each other. We believe that initiatives like this addressing systemic issues to alleviate global poverty,
will touch many lives and ultimately help alleviate pov- as well as the part they play in local and targeted giv-
erty across the globe.” ing to their own communities. Credit Suisse sought to
In tandem with the summit, which took place at help answer the question of how best to build a philan-
the United Nations in June, Credit Suisse and Forbes thropy portfolio, and how to pass on values to the next
Insights conducted a global survey of 317 individuals generation.
Europeans see prime causes of global poverty as lack of
access to healthcare and to water (each cited by 38%).
They are less likely than those in other regions to point to abuse
54% 38% by those in power (21%).
54% of North Americans focus on local, targeted giving.
38%
They see lack of access to education as the prime cause of
poverty (cited by 47%).
38% of Latin Americans say scope of need motivates their
giving, the highest percentage of any region.
65% of them, the highest percentage of any region, believe K-12
education should be the top philanthropic priority for the next
five years.
2 | ALLEVIATING GLOBAL POVERTY: CATALYSTS OF CHANGE
CReDit suisse snaP Poll
AT THE FORBES 400 SUMMIT ON PHILANTHROPY
While the participants of the Forbes 400 Summit on Philanthropy, What percentage of your philanthropy focuses on global
supported by Credit Suisse, shared their views and exchanged ex- causes as opposed to local, domestic initiatives?
periences, Credit Suisse took the opportunity to conduct a short poll
among this unique group. The attendees answered questions about Less than 10%
23%
local versus global allocation of their philanthropic efforts, the basis
34% 10% to 24%
for their funding decisions and their thinking about the role their chil-
25% to 49%
dren will play in philanthropy.
10%
50% to 74%
“Not only do the attendees have tremendous wealth, but so much of
11% 75% or more
their wealth is dedicated to philanthropy. They are very experienced 21%
in their philanthropy and very motivated. Others will learn from them
and follow their lead,” says Bill Woodson, co-head of Credit Suisse’s
Private Banking Americas Ultra-High Net Worth Business. Which is the most critical in choosing which initiative to
fund?
While more of the wealthiest philanthropists focus on global issues,
which require international resources and experience, even at these
The idea or premise
highest levels, local causes remain a priority as well. Roughly a third 23%
of the initiative
(34%) of the attendees said that less than 10% of their philanthropy
is focused on global causes, and another third said that they focus 45% The leader in charge
of the initiative
more than 50% of their philanthropy on global causes. “This finding
may reflect the saying that like all politics, philanthropy is often lo- The organization
32% implementing the initiative
cal,” says Julia Chu, head of Credit Suisse’s Private Banking North
America Philanthropy.
In choosing which initiative to fund, the actual idea or concept was
Is it important that your children focus on the same areas
considered the most critical factor by the largest percentage of at-
of philanthropic interests as yours?
tendees (45%), followed by a third who pointed to the leader (32%)
in charge of the initiative, and 23% who cited the organization imple-
9%
menting the initiative.
Yes, very important
It is an interesting finding considering that the overall effectiveness
27% Yes, somewhat important
of philanthropy is driven by the leadership and the organization. In
No, not important at all
the case of the wealthiest philanthropists, the idea itself may matter
more, as with their resources they may be able to supply the leader- 64%
ship and staffing to successfully implement the idea. It also under-
scores that philanthropy is, at its core, based on passion.
A majority of attendees of the Forbes 400 Summit on Philanthropy What have you found to be the greatest challenge on cultivating
(64%) said that it was not important for their children to focus on the responsible wealth stewardship among your children?
same areas of philanthropy that they are focused on.
Need to develop financially
This may seem somewhat counterintuitive, considering the longtime
25%
sound judgment
tradition of family foundations and legacy. However, the findings
may have been affected by the fact that many of the attendees made Need to cultivate philanthropic
49%
their fortunes relatively early in life, and are themselves self-made. inclinations
Thus, what they wish to impart is not so much a specific cause as the Need for greater self-sufficiency
26%
general importance of philanthropic principles and values. In fact, al- and initiative
most half (49%) said that there is a desire to see their children exhibit
greater drive and initiative.
COPYRIGHT © 2013 FoRbes insights | 3
Key FinDings
In this year’s report Credit Suisse and Forbes Insights investigate how philanthropists around
the world work toward alleviating global poverty and how they balance their philanthropy
portfolios among long-term and immediate impact, as well as local and global giving:
Philanthropy can be viewed as a portfolio, with some assets devoted to global initiatives—which entail systemic
change and have longer turnarounds—and some to local initiatives, which can have a necessary, immediate impact. Of
the philanthropists surveyed, roughly equal numbers (26% and 23%, respectively) define success as long-term impact
versus alleviating physical suffering or meeting immediate needs. Global giving, which requires international exposure
and resources, is more prevalent among the wealthiest group of respondents.
tackling global poverty is a long-term undertaking. Simply finding the best methods to embark on this undertaking
requires first understanding the causes of poverty. And philanthropists from different regions tend to focus on varying
causes as fundamental: lack of access to education is perceived as the top cause by philanthropists in the Americas,
while scarcity of food and shelter is considered the top cause by those in Asia Pacific and lack of access to healthcare
and to water by those in Europe.
Women’s health issues continue to gain in importance. Family planning and contraception becomes one of the five
areas that should be a top priority over the next five years, with 33% of respondents pointing to it. Women’s health is
also the area to which the third-largest percentage of respondents (15%) say they have personally made the greatest
contribution (after children’s health and development, and nutrition and food supply).
a problem as huge as global poverty can only be alleviated by systemic change, as opposed to specific projects.
In fact, “pattern change” is an emerging focus among philanthropists Forbes Insights spoke with. Fifty-seven percent
of survey respondents agree that wealth creation, understood as economic growth that benefits most of society, is an
effective means to alleviate or eradicate poverty.
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ambitions run high, with 73% of philanthropists saying they want to see pattern changes at the highest levels, as
they seek to affect international or government policies right at the start of their giving. It is, of course, true that ulti-
mately global poverty cannot be eradicated without the right international and national policies. But is shaping those
policies too tall a task for an individual philanthropist?
Philanthropists can act as catalysts of systemic change, changing attitudes and patterns around the world. But for
an individual philanthropist, the most effective approach may be to join forces with other experienced philanthropists
or organizations. In other words, the best way to create impact may be by using funds as seed money, becoming a
venture philanthropist by backing an existing idea or organization.
the way forward lies in cooperation and consolidation of efforts. “There are two crushing weaknesses with the phil-
anthropic model today,” says Michael Porter, Harvard Business School professor and chairman of AllWorld Network,
which aims to rank all the scalable growth entrepreneurs in the developing world. “There is not enough money to give
away. And there is too much fragmentation and not enough large-scale impact. That is why we haven’t gotten a lot of
great results yet.” Forty-eight percent of survey respondents agree that there are too many overlapping organizations
within the non-profit sector.
no matter how systemic its ambitions, however, philanthropy is at its core a matter of heart and nostalgia. The
highest percentage of respondents (32%) say that they are most motivated to alleviate poverty in their own commu-
nities, towns or countries of birth. Not only can such local giving yield satisfying immediate results—while global, pat-
tern-changing philanthropy has longer time horizons—but philanthropists also understand local needs better and can
react to sudden crisis with more flexibility. In fact, just about half of wealthy donors in the Americas focus on targeted
local giving. “It is important for people in any field to do what they love. We need both local and global giving,” sums
up Bill Drayton, CEO and founder of social entrepreneur network Ashoka: Innovators for the Public.
COPYRIGHT © 2013 FoRbes insights | 5
enoRMity oF the tasK
UNDERSTANDING GLOBAL POVERTY
Global poverty can result from many different causes,
Figure 1 : What do you consider to be the primary roots
or a combination of causes, whose immediacy and gravity
of poverty?
vary by region. Our research shows fragmentation in how
philanthropists from different regions of the world view the TOTAL rESPONdENTS
causes of poverty (see Fig. 1). Their knowledge about other Lack of access to education
37%
regions of the world is based on their own travels and expe-
Scarcity of food and shelter
riences, philanthropic work or on having done business in
33%
other parts of the world. It is also enriched by how they
Abuse by those in power/weak governance
see the effectiveness of their own countries’ infrastructure
31%
in handling poverty.
Those in the Americas as a whole, for example, were far
more likely to point to lack of access to education, while NOrTH AmErICA
those in Latin America were significantly more likely to Lack of access to education
single out abuse by those in power and insufficient invest- 47%
ment in infrastructure as issues contributing to poverty. Abuse by those in power/weak governance
Respondents from Europe, however, felt lack of access to 34%
Scarcity of food and shelter
education and income inequality were far less of an issue, as
31%
well as abuse by those in power—and were far more likely
to point to lack of access to healthcare and to water as key
issues leading directly to global poverty.
LATIN AmErICA
The different emphases on abuse of power appear to Lack of access to education
reflect the relative political stability historically in the 49%
nations of each region. However, while different regions Abuse by those in power/weak governance
prioritize different causes, it is worth noting that they are 44%
all focused on the same cluster of causes as the top three Investment in infrastructure/economic development
or four. 38%
Interestingly, there is also some correlation between lev-
els of wealth and how philanthropists view the causes of
EurOPE
poverty. The wealthiest individuals—those with $10 million
Lack of access to healthcare
or more in investable assets—are much more likely to point
38%
to lack of access to healthcare and water, at 38% and 37%, Lack of access to water
respectively. That is an important observation, because the 38%
wealthiest individuals tend to have a more global approach Scarcity of food and shelter
to philanthropy, and thus play a bigger role in defining the 34%
global approach to fighting poverty. The findings may point
to their focus on the most basic issues.
ASIA-PACIFIC
“Region by region there are different constraints,” says
Scarcity of food and shelter
AllWorld’s Michael Porter. “But everywhere there is the
36%
same need for bottom-up economic activity.”
Lack of access to education
35%
Abuse by those in power/weak governance
33%
0% 50% 100%
6 | ALLEVIATING GLOBAL POVERTY: CATALYSTS OF CHANGE
Bono presents Warren Buffett with the
inaugural Forbes 400 Lifetime Achievement
Award for Philanthropy
COPYRIGHT © 2013 FoRbes insights | 7
FutuRe FoCus
MOVING TOWARD SYSTEMIC SUSTAINABILITY.
EMPOWERING WOMEN.
While the need for bottom-up economic activity may For example, family planning and contraception, the
be universal, the plethora of causes underlying poverty cause mentioned by the fourth-largest group of respon-
makes it impossible to focus on just one issue, or even a set dents as a most important priority over the next five years,
of dominant issues. No single issue is a core focus for alle- is a natural extension of women’s health and children’s
viating poverty among the philanthropists surveyed, and well-being. If women can plan their own pregnancies and
there is little difference in each region. Children’s health control the size of their own families, they can potentially
and development and children’s education are the core become better equipped to provide for the families they
focus for close to four in 10 total respondents each, fol- have and ensure improved health and possibly education
lowed by nutrition and food supply (see Fig. 2). as well.
Apart from the areas that philanthropists already focus According to the Bill & Melinda Gates Foundation:
on, some new areas are emerging as future priorities (see “More than 220 million women in developing countries
Fig. 3). These emerging areas build on current causes, who do not want to get pregnant lack access to effective
complementing them as the next logical step along the life- methods of contraception and voluntary family plan-
cycle of poverty. ning information and services. Less than 20% of women
in Sub-Saharan Africa and barely one-third of women in
South Asia use modern contraceptives. In 2012, an esti-
mated 80 million women in developing countries had an
unintended pregnancy and at least one in four resorted to
an unsafe abortion.
“Significant challenges stand in the way of mak-
ing contraceptives more widely available and accessible,
including the high cost of quality mid- to long-acting
contraceptives, unpredictable donor funding, cultural and
knowledge barriers, and lack of coordination in procure-
ment processes.”
Takahisa Takahara, second-generation head of his
family’s diaper-maker, Unicharm, also believes his com-
pany’s diaper and sanitary products will improve health in
developing markets, and has promoted education efforts as
part of Unicharm’s local outreach programs in the areas in
which it operates. “We are carrying out educational activ-
ities at hospitals, health centers and schools, teaching these
people that the use of feminine napkins and disposable dia-
pers contributes in providing a sanitary environment and,
“We create job opportunities in these thus, maintaining good health. In 2012, we provided as
many as 10,000 female students in agricultural villages in
countries. We also expand job
India with first-menstruation education. We taught them
opportunities for women.”
that having the correct knowledge about menstruation
will result in a life with less anxiety, proper understanding
—taKahisa taKahaRa
by their family members and maintenance of good health.”
President and CEO, unicharm
Philanthropists are discovering that empowering
women may be the fastest and most efficient way to further
8 | ALLEVIATING GLOBAL POVERTY: CATALYSTS OF CHANGE