From devastating natural disasters in Haiti and Japan to a global economic recession, philanthropists have had plenty of worthy causes to choose from in recent years.
The world’s leading funders of good works, including Bill Gates and Warren Buffett, discussed some of the most pressing issues facing charitable givers earlier this month at the Forbes 400 Summit on Philanthropy, sponsored by Credit Suisse.
Julia Chu, Credit Suisse’s Head of Philanthropy, Private Banking, U.S. recently spoke to The Financialist about five diverse trends that are shaping modern philanthropic giving.
Workforce Development
The Issue: Young people between the ages of 15 and 24 make up about 40 percent of the world’s unemployed population, according to the World Economic Forum (WEF), so preparing the next generation for the workforce is increasingly important to philanthropists all over the world. Youth unemployment is highest in the Middle East and North Africa, where more than one in four young people lack a job. And the problem goes beyond macroeconomics: Frustration over dismal economic opportunities is commonly cited as an important catalyst for the regime-changing protests of the Arab Spring. “A high level of unemployment always poses a risk for any nation because with unemployment comes social unrest,” said Chu. “Workforce development remains critical to stanch the flow of such instability.”
On the Ground: Ron Bruder, a successful New York-based real estate developer, is working to train young and unemployed people in the Middle East for available job openings in growing industries through his foundation, Education for Employment.
The foundation’s training centers in Yemen, Tunisia, Jordan, Egypt, Palestine and Morocco cover everything from writing a resume to in-demand, industry-specific skills, such as training unemployed engineers in Gaza to manage construction projects.
Key Statistic: More than 3,300 EFE graduates have found jobs through the program since 2006, and an additional 7,000 have received entrepreneurship and employability training.
Key Idea: “If the Arab Spring is going to morph into the Arab Summer, a very critical element is that these kids have jobs.” – Ron Bruder
Transparency in Government
The Issue: The demand for greater government accountability continues to grow globally, particularly in regions with a growing middle class, such as Latin America and China, said Chu. But the focus has been most intense in Africa, where talk of the “lost continent” has been replaced by excitement about the region’s growth potential. Sub-Saharan Africa is the second-fastest growing economic region of the world, according to the International Monetary Fund, and international investors are snapping up first-time sovereign bond offerings from countries such as Zambia. But many African countries still lack the critical physical infrastructure, educational systems and other institutions needed to sustain rapid growth, and building that capacity will require great leaders.
On the Ground: Sudanese billionaire Mo Ibrahim offers a hefty prize – $5 million over 10 years, followed by $200,000 a year for life – to African leaders who distinguish themselves in office. And Fred Swaniker, a Ghanaian-born entrepreneur, is the founder and CEO of the African Leadership Academy, a private school in Johannesburg, South Africa that aims to educate the next Nelson Mandela or perhaps even the African Steve Jobs. The school offers leadership training and a rigorous academic curriculum to talented students from all over Africa.
Key Statistic: Graduates of the African Leadership Academy have earned a collective $35 million in college scholarships to schools that include Ivy League universities and top European universities such as the London School of Economics.
Key Idea: “You’re seeing a number of efforts to advance, reward and spread ethical leadership on the continent. The narrative was all about the corrupt leader – the person who ended up with all the public lands and public funds in their own pockets. I think at one point the story young people will be hearing is, you don’t succeed in this continent that way.” – Jane Wales, CEO of the Global Philanthropy Forum.
Communication Through Mobile Devices
The Issue: The proliferation of mobile phones in Africa has sparked a financial revolution. Payment systems that allow users to transfer money via text message, such as Kenya’s M-Pesa, have given even very poor people access to financial services. They have also made it easier for charitable organizations to coordinate aid and spread educational messages, said Chu.
On the Ground: The Johannesburg-based Praekelt Foundation focuses on creating digital products and information campaigns for mobile phones – even if the devices cannot access the Internet. One campaign texts medication reminders to patients suffering from chronic illnesses such as HIV or tuberculosis and allows them to reschedule doctor’s appointments via text if they cannot afford a phone call. The Mobile Alliance for Maternal Action (MAMA), developed with support from Johnson & Johnson and USAID, aims to reduce the continent’s sky-high maternal and infant mortality rates by texting educational information to pregnant women and new mothers. Gustav Praekelt, the foundation’s co-founder, told The Financialist that major donors, including the Bill and Melinda Gates Foundation, have been eager to work with the foundation because mobile campaigns get information to large numbers of people quickly and cheaply.
Key Statistic: Nearly 475 million people have mobile phone subscriptions in sub-Saharan Africa – up from 90 million seven years ago, according to the Financial Times. Praekelt Foundation initiatives have reached 50 million people in 15 Sub-Saharan countries.
Key Idea: “In Africa, for many people the only form of contact, information, communication and conversation is this small device in your pocket that can SMS and phone a friend. That’s all it can do. For many people, access to computers or landlines or television is really hard to come by, and for us, that makes the mobile device so amazing.” –Marcha Neethling, Head of Operations, Praekelt Foundation
Empowering Women and Girls
The Issue: Chu says philanthropists are increasingly interested in creating opportunities for women and girls. Even in developed countries, women hold disproportionately few seats on corporate boards, earn less than their male counterparts and often struggle to balance childcare with work outside the home. More globally, women are disproportionately impoverished, representing 70 percent of the world’s poor, according to the Global Poverty Foundation. “It’s about building a nurturing ecosystem where women and girls are encouraged to succeed and can look to others,” Chu said.
On the Ground: The NoVo Foundation, the philanthropic organization run by Warren Buffett’s son, Peter, and his wife, Jennifer, is funded by billions of dollars in Berkshire Hathaway shares that the elder Buffett gifted in 2006. The foundation prioritizes empowering adolescent girls and ending violence against women – both domestic violence and assaults on women in conflict zones.
Michelle Ozumba, President and CEO of the Women’s Funding Network, said philanthropists increasingly realize that women who are economically secure act as a linchpin in keeping families and communities strong. Both Ozumba and the NoVo Foundation stress that women are often at a financial disadvantage because they bear most of the responsibility of raising children – work that is often not considered a financial contribution either to an individual household or in broader economic thinking. Women of all classes struggle to find adequate childcare, she said, but it is particularly difficult for poor women.
Key Statistic: Women spend 90 percent of their income supporting their families, compared to 30 to 40 percent for men, according to the World Bank. This well-publicized statistic has encouraged donors and organizations to channel aid to women.
Key Idea: “How do we create work environments that acknowledge the complexity of a woman’s life because she’s a mother? How do you create access to health and services for women who are poor? These seemingly small things are the things that are most broken.” -Michelle Ozumba
Crowdsourcing Philanthropy
The Issue: Ideas have never spread faster than in the digital age, and philanthropists are increasingly leveraging the power of many to brainstorm innovative ideas. “The previous perspective reflects the position ‘I’ve discovered the answer to world poverty,’” Chu said. “Now, there’s a recognition that diversity and volume can sometimes provide the best ideas.”
On the Ground The X Prize Foundation awards millions of dollars to contest entrants with the best ideas for technological innovations that could benefit society. But crowdsourcing works on a smaller scale, too. The Minnesota Community Foundation, which funds non-profit organizations in the state, began holding an online contest called the Minnesota Idea Open in 2010. This year, the organization is looking for ideas on how to spend $1 million to improve the capital city of St. Paul, where 23 percent of people live in poverty. Residents have advocated for everything from a funicular to a free community lending library for home and garden tools to help residents fix up blighted homes.
Key Statistic: The Minnesota Idea Open received nearly 1,000 ideas in this year’s crowdsourcing effort.
Key Idea: “We work very closely with non-profits all the time, and we have great relationships with them. This is a way of getting closer to the people that the nonprofits serve. Even if the people submitting ideas aren’t clients of the non-profits, they are people who are living in the communities that we really care about. For us, that’s been really inspiring.” – Naomi Pesky, Director of Marketing and Communications for Minnesota Philanthropy Partners, an umbrella organization of foundations that includes the Minnesota Community Foundation.
Featured image of a job fair in Palestine courtesy of Education for Employment. Other photos courtesy of Education for Employment, African Leadership Academy’s Facebook page, Flickr – AdamCohn, Flickr – Ravages, Minnesota Philanthropy Partners