While philanthropic giving for development is pretty modest when stacked up against official development assistance (ODA), this money is playing a major role in some sectors. So says a new report from the Organisation for Economic Co-operation and Development (OECD), "Private Philanthropy for Development," that analyzes charitable giving for global health and development.
The new report provides data-driven confirmation of philanthropy’s financial contributions on the development front. A sizable flow of private wealth is going to conquer some of the most intractable problems facing humanity, especially dread diseases. But the report also raises questions about how such giving can be more effective. And it spotlights the uncomfortable fact that just a handful of private funders dominate this corner of philanthropy—while most billionaires and large foundations take a pass.
As we’ve observed here, a single committed private funder can move the dial on a mountainous issue. Jimmy Carter’s successful crusade to wipe out Guinea worm disease, heavily backed by Bill Gates’ wealth, is a great example.
When you look at how Carter took on Guinea worm, a horrific parasitic disease that afflicted around 3.5 million people in Africa and Asia, you can see how the data jibe with qualitative evidence.
Starting in 1986, Carter coaxed action from government and international agencies including the World Health Organization, UNICEF and national ministries of health. While this collaboration remained central to Carter’s strategy, the game changer came in 2005, when Bill Gates made a $25 million grant to his center’s Guinea worm effort. Three years later, the Gates Foundation anted up another $63 million. As of 2017, the Carter Center reports, the incidence of Guinea worm had been slashed by more than 99.99 percent to 30 cases.
Jimmy Carter’s experience—a transformative boost to development work thanks to generous backing from a private funder—is far from unique. We've also reported on how Rotary International and the Gates Foundation have zeroed in on polio eradication. The story of the Clinton Foundation's successful efforts to reduce HIV/AIDS deaths is also well known.
So besides confirming what we’ve been seeing in the field, what else can the new OECD report tell us? Here are a few of the most interesting takeaways:
Private foundations gave $23.9 billion for development in the period 2013-2015. This chunk of money corresponded to 5 percent of the amount given through ODA.
Foundations’ philanthropic flows are especially critical on health issues: In 2013-2015, the third-largest source of financing for global health work in developing countries was private foundations, trailing only the United States government and the Global Fund to Fight AIDS, Tuberculosis and Malaria.
There is a high concentration of sources of philanthropic giving for developing countries. Of the 143 foundations included in the report’s survey sample, the Gates Foundation, unsurprisingly, provided 49 percent of total giving in support of development. Furthermore, in the 2013-2015 period, 81 percent of total philanthropic dollars came from only 20 foundations.
Mostly because of Gates’ generosity, nearly 75 percent of giving originated from U.S.-based foundations. Rounding out the list of top countries for philanthropic funding for development are the United Kingdom (7 percent), the Netherlands (5 percent), Switzerland (2 percent), Canada (2 percent) and the United Arab Emirates (2 percent).
Surprisingly, 67 percent of philanthropic giving goes to middle-income countries such as India (7 percent of the total), Nigeria, Mexico, China and South Africa. A mere third (28 percent) of the country-allocable funding flowed to the least-developed countries.
A whopping 97 percent of philanthropic giving was implemented through hefty, well-established intermediary institutions, most often international organizations and NGOs, such as the WHO, PATH International, UNICEF or Rotary International.
Foundations told the OECD researchers that they engage with governments and other donors much of the time when designing or implementing programs and projects.
Despite all the good news, more remains to be done. As OECD Chief of staff Gabriela Ramos said in a statement accompanying the report’s launch, philanthropy “is increasingly important in our efforts to achieve the SDGs, eradicate poverty and provide quality access to healthcare. But to harness its full potential, we need better data sharing, coordination and policy dialogue.”
There’s a lot of food for thought here. Why is so much money flowing to middle-income countries, as opposed to those most in need? Is it mission-critical that so much giving be implemented through giant intermediary institutions, or merely convenience? And maybe most importantly, where will the next Bill and Melinda Gates emerge from, and why aren’t we seeing more billionaires follow in their footsteps?
The world’s 2,200 billionaires now sit on combined assets of around $9 trillion in an era when millions of people in poor countries die from preventable causes. This report shows just how much new money from wealthy donors can dramatically expand the resources available to promote global health and development. Gates giving has been a game changer, but it also remains an outlier. When will that start to change?