Whatever About the World: Top Donors Move Slowly to Engage Global Issues
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Indian forces in kashmir, a flashpoint that’s increasing tensions between two nuclear armed powers. photo: Faizan Ahmad sheikh/shutterstock
Australia is on fire and the Middle East is in chaos. Fears are rising about the coronavirus. Venezuela has collapsed.
Welcome to the new decade!
Regardless of where you stand on these issues, it’s clear that global threats are occupying significant real estate in the average American’s psyche. But what about the not-so-average Americans who make up the billionaire class? Given the sobering reality of ongoing climate change, refugee crises, chronic food and water insecurity, nuclear proliferation and many other global issues, it’s worth asking how many of today’s emerging major donors are tackling these challenges. Is a new age of big philanthropy translating into a flood of new funding to make the world a more peaceful, prosperous and sustainable place?
Some top donors are worried that the answer is “no,” and that their peers don’t look much beyond national borders with their giving. The Scottish billionaire Sir Ian Wood is among those alarmed by the lack of international engagement by leading philanthropists. “I don’t feel any real strong sense of global responsibility,” Wood told me last year when he received a Carnegie Medal of Philanthropy. “People say that charity begins at home. Well, maybe charity begins at home, but it needs to develop into something with a significantly wider sense of responsibility across the world.”
In addition to its native Scotland, Wood’s foundation operates in sub-Saharan Africa, where it helps tea farmers optimize their harvest and improve their crop yield through sustainable methods. Wood is keen to promote global giving to his fellow billionaires, looking to move life-and-death causes into the mainstream of philanthropy. “We’ve still got a billion people around the world seriously hungry. Eight-thousand children die each day from malnutrition, 15,000 die each day from diseases we can cure.”
Wood isn’t alone in promoting greater global giving. Bill and Melinda Gates have pushed the same message for years, pointing out the huge bang for the buck that donors can get in the world’s poorest countries.
Yet seemingly few top philanthropists are heeding these calls. While the names of some leading global givers come to mind—the Gateses, George Soros, Michael Bloomberg, Jeff Skoll and Pierre Omidyar among them—the list of well-known donors who are engaging international issues at a large scale starts to trail off pretty quickly. Scroll through a tally of the top 50 donors in 2019, for example, and you’ll only find a few philanthropists who gave big beyond America’s borders last year.
We recently reported that Home Depot co-founder Arthur Blank is tipping his toe into global giving for the first time with a $6.8 million donation to CARE’s Pennies to Power program, which aims to expand economic opportunities for women in poverty-stricken regions. But when a seven-figure gift from a billionaire makes news, you know something is awry. Blank’s move is notable in that it stands in stark contrast to the seeming indifference to global issues among most of his peers.
What’s going on here? In an era when many of America’s uber-wealthy have made their fortunes in globalized industries like tech and hobnob overseas at confabs like Davos, you’d think plenty of top donors would be looking to address the world’s many problems. What’s holding them back? And what might it take to catalyze greater global giving by the nation’s richest donors?
A Few Big Givers
One challenge to answering these questions is nailing down basic data about international giving by ultra-high-net-worth Americans.
According to Giving USA’s 2019 annual report, total U.S. charitable giving by individuals, foundations and corporations for international affairs in 2018 was $22.9 billion, or about 5.5 percent of total giving that year of $427.7 billion. This figure underscores the low priority of global issues within U.S. philanthropy overall, but it doesn’t tell us much about the specific behavior of top donors, a growing number of whom operate through donor-advised funds, making it difficult to track their giving.
The way gifts are recorded makes the data picture even hazier. Eric Kessler, the founder of Arabella Advisors, notes that donations that go to U.S.-based organizations, but which are aimed at solving problems overseas or influencing American foreign policy, may not be classified as international giving. He also says that charitable stats don’t capture a rising flow of impact investments from wealthy donors keen to solve key global problems. “The reality is, the sector would benefit from a new methodology for tracking all of these capital flows,” he says. “The available data masks the true global impact of U.S. giving.”
In its State of Global Giving report from 2011 to 2015 released last year, the Foundation Center reported that global giving by U.S. foundations rose 29 percent, from $7.2 billion to $9.3 billion, with international giving by U.S. community foundations more than tripling over that time. These increases came after a period of dramatic growth in global philanthropy by U.S. grantmakers starting in the 1990s. According to a 2010 study by Joan Spero for the Foundation Center, international grants by U.S. foundations grew nearly ten-fold between 1994 and 2008.
That huge increase, and the more recent uptick in international giving, might suggest that many new donors with foundations have prioritized global issues. But a closer look reveals that the creation of the Bill and Melinda Gates Foundation accounts for much of this shift. During the 2011–2015 period, its grantmaking made up 51 percent of all U.S. foundation giving to global causes
This picture hasn’t changed much over the last few years. Foundation Center’s latest data shows over $2.7 billion gifted globally by U.S. foundations in 2018. The Gates Foundation accounted for nearly half of that total, giving just under $1.2 billion in international grants.
These numbers are incomplete because they don’t fully account for gifts to U.S. organizations working on global issues or major giving by certain top donors. According to Gates’s own data, the foundation made more than $4 billion in grants through its global programs in 2018. Meanwhile, the Open Society Foundations’ total budget that year was just over $1 billion, with the lion’s share of that spending going to support OSF offices in over 30 countries around the world; just $154.7 million went for work in the U.S. Likewise, some of the biggest program initiatives of Bloomberg Philanthropies, which gave out $767 million in 2018, are focused overseas. The foundation says that its work improved lives in 129 countries that year.
Again, though, it’s hardly news that Gates, Soros and Bloomberg are big global givers. What’s striking is how little company they seem to have, according to the data. Much of the other global giving by foundations in recent years has been from legacy institutions like Ford, Carnegie, Rockefeller, Hewlett and MacArthur, which continue to think and act globally.
We’ve written before about the need for funders to step up on issues like nuclear proliferation and refugees at a moment when many of these problems are getting worse. Why are so many donors reluctant to take up global giving?
Plenty of Hurdles
William Foster, a partner at the Bridgespan Group, answers this question by pointing to the larger challenges of engaging America’s super-rich in high-impact philanthropy. Over the past four years, Bridgespan has worked to understand why few donors make “big bets” for social change and how to change that. This research has zeroed in on the lack of clear pathways that donors can follow to invest large sums confidently in nonprofits that aim to change the world—as opposed to funding safe places like Harvard or the Met.
Foster says that this challenge is all the greater when it comes to international giving: “Many of the barriers that inhibit giving between major donors and incredible organizations or initiatives seem to be even more pronounced in the global context—lack of relationships and the difficulty of doing diligence, notably.”
Meanwhile, it’s hard for any donor not to be intimidated by the scope of today’s global challenges. The dire statistics that Sir Ian Wood cited in calling for greater international giving are enough to make some donors feel overwhelmed. They may believe that the likelihood of moving the needle on such large-scale challenges as the abysmal state of African health systems or the plight of the world’s 65 million refugees is slim to none. In addition, they may worry that it will be hard even to know if their money is doing good in far-off places with internal dynamics that are difficult to grasp.
Alexandra Toma, who leads the Peace and Security Funders Group, said that measuring impact is one of the obstacles her organization faces when trying to convince donors to act globally. Others who work in this space say something similar, pointing to the growing pressure on funders at every level to show results. Stephen Del Rosso, a director at the Carnegie Corporation, told us a while back that some foundations steer clear of international issues because they simply don’t know how to evaluate the efficacy of such funding. The “results are often intangible,” he said, and funding “requires a tolerance for complexity and ambiguity, and a lot of patience.”
A more prosaic explanation for why more donors don’t give globally is that these issues simply aren’t top of mind for most Americans, including those with a lot of money. Melissa Berman, president and CEO of Rockefeller Philanthropy Advisors, said that “people’s philanthropy is an expression of their mental maps.” Much giving is driven by “a sense of affiliation and responsibility.” For most of us, such ties don’t extend beyond the United States, an insularity that may be growing more pronounced as the news media steadily reduces its coverage of international issues. The world’s suffering is increasingly out of sight—and out of mind.
Notably, one of the few billionaire donors who has taken up global giving in recent years—Facebook co-founder Dustin Moskovitz—has done so because he and his wife Cari Tuna don’t look to their personal preferences to guide their philanthropy. Instead, working through the Open Philanthropy Project, they’re guided by the principles of effective altruism to decide where to allocate funding. That approach has led the couple to give tens of millions of dollars to take on diseases like malaria that plague the poorest countries and to focus on catastrophic global risks, like the possibility of a pandemic.
But nearly a decade after they embarked on their philosophically driven giving, Moskovitz and Tuna largely remain outliers within elite philanthropy.
Getting Donors Engaged
The good news is that some progress is being made to help donors engage globally.
A great example is GiveWell, a San Francisco-based charity evaluator. Founded in 2007 by Holden Karnofsky and Elie Hassenfeld, GiveWell received a huge boost when it hooked up with Moskovitz and Tuna to help them chart their giving, motivated by a shared embrace of effective altruism. Looking to maximize impact per dollar given, GiveWell solely recommends international nonprofits to donors. It has now directed $500 million to key global charities from a donor base that has swelled to over 50,000.
A key reason for its success is that it engages in exhaustive due diligence on nonprofits, enabling donors to give with confidence to address faraway problems that they know little about. Catherine Hollander, a senior research analyst at Givewell, told me that GiveWell’s recommended charities are rigorously researched for evidence-backed results.
Hollander highlighted the organization’s work with Against Malaria, which distributes insecticide nets to prevent the spread of the infectious disease. Before committing to Against Malaria, GiveWell took a deep dive into the nonprofit’s operations, the mechanisms by which its program is implemented, how well the organization follows up with recipients on the ground, and other operational and managerial metrics. GiveWell shares all of that information with every donor on their platform, so donors can feel confident regarding the impact of their grants.
All of GiveWell’s top charities are pursuing highly focused goals—mainly related to global health—that lend themselves to clear metrics, so it’s far easier to know how well a nonprofit is doing. But on other challenges, like preventing conflict, it’s harder to gauge whether a grantee is making headway.
The Peace and Security Funders Group has thought a lot about how to engage funders who want to make a difference on peace and security issues and yet are worried about tracking their impact. Toma advises donors to manage these concerns by “thinking and investing long-term, and partnering with locals who actually know how to meet the challenge you’re trying to address.” The way to solve any large problem, she said, is by breaking it down into its component parts and working with leaders on the ground who understand the steps needed to make long-term progress.
One example Toma pointed to is Catalyst for Peace, an organization that’s drawn funder support for its work with local leaders in Sierra Leone to establish a foundation of peace and transform communities from the inside out. Not a small goal, by any stretch, given that nation’s recent violent history and complicated ethnic dynamics. Yet Catalyst for Peace’s approach has been so successful that the Sierra Leone government is now integrating their piloted methods into its own operational framework. Those include a decades-long strategy of frontline partnerships with community leaders, peacebuilders, healers and other agents of change.
Co-Impact is another organization looking to instill confidence in major donors that money given for global issues will be well-spent. We highlighted Co-Impact’s work earlier this year. It’s backed by funders that include Richard Chandler, Bill and Melinda Gates, Jeff Skoll, the Rockefeller Foundation, and Rohini and Nandan Nilekani.
Co-Impact is the first large funder collaborative focused solely on global giving, and the organization plans to make hundreds of millions of dollars in grants over the coming years, with an eye on targeting the structural underpinnings of large, global problems. By the start of 2019, Co-Impact had committed $80 million to support a handful of system-change initiatives aimed at improving education, health and economic outcomes for millions of people across Africa, South Asia and Latin America.
The Audacious Project, developed by TED, is another example of a new effort to galvanize greater global giving by top donors. Among the organizations it has supported since it started in 2018 are the END Fund, which focuses on combating parasitic worms in poor countries; One Acre Fund, which supports small-plot farmers in Africa; and Educate Girls, which is working to advance girls’ education in India. The Audacious Project’s backers include Dalio Philanthropies, which is the philanthropy of hedge fund billionaire Ray Dalio and his family. The Dalios are among the relatively small number of new givers coming to global issues from the world of finance.
Eric Kessler of Arabella says that the emergence of efforts like the Audacious Project and Co-Impact has been super-important. “Making it easy for big donors to write big checks, while also giving them an opportunity to learn and engage as these groups do, is critical.”
Rising Stakes in a Dangerous World
When David Rockefeller died in 2017, we noted that among his many contributions as a philanthropist was his patient, long-term focus on building a stable international order. Other top donors of his generation embraced this same priority and it’s no big mystery why: They had lived through the collapse of the world economy in the 1930s and a world war in the 1940s.
Today, there’s little evidence of a similar determination among elite philanthropists to ensure global peace and prosperity. Even some of the biggest international givers tend to focus their grantmaking narrowly, on tackling health and development challenges in the poorest countries, with little attention to the larger international system. Meanwhile, though, evidence keeps piling up that the post-war global order is fraying, and that thanks to a range of developments—climate change, rising nationalism, growing risks of pandemics, ongoing nuclear proliferation, and China’s rise—the world is entering a new era of instability.
How history unfolds will be influenced, at least in part, by the choices made by elite U.S. philanthropists set to give away hundreds of billions of dollars in coming decades. These donors have considerable power—too much, many agree—to shape the issues that get attention from civil society and government alike.
As things now stand, there’s a real risk that the new givers will keep turning away from a metastasizing array of global problems. For David Rockefeller’s generation, it took back-to-back catastrophes to prioritize world affairs. What will it take for today’s top members of America’s far upper class to think globally?
