Crossing borders: an essential guide for philanthropists
Overseas development continues to rank amongst the most popular causes for UK donors. Last year, donations to international development charities were around £1 billion, or 9% of total UK giving¹. Historically, however, Britain’s wealthy have been less likely to give internationally: Philanthropy UK research (Why Rich People Give, 2004) found that less than one in three gave abroad and only a small minority focussed more than 10% of their giving on international causes.
Reasons for the interviewees’ reluctance to give overseas included scepticism about effectiveness and impact, with good projects being harder both to identify and to evaluate from a distance. Information and independent analysis, whilst becoming more accessible, are still largely wanting, and when these are coupled with inherent socio-political risks, they often can pose too significant a barrier for donors.
GuideStar UK Director Lewis Temple commented, “Internationally, information is always a huge barrier. We are very lucky in the UK with the Charity Commission and the principle that data held by the government should be available to the public."
However, as awareness of international causes is rising through travel and the internet, the wealthy are increasingly seeking to have an impact abroad, where they feel the need is greatest. The Charities Aid Foundation (CAF) reports that there has been a significant increase in the number of its client donors wishing to give overseas as well as in the value of their giving. And, over 70% of the 122 donors surveyed by New Philanthropy Capital in March 2007 said they would be interested in research and advice on charities in developing countries².
Philanthropy UK’s principles for effective giving (see Table 1) apply to giving whether at home or abroad, and whilst it may be more challenging to apply them internationally, fortunately there are now a range of intermediaries who can help you have an impact anywhere in the world.
Table 1: Philanthropy UK’s key principles of effective giving
Give responsibly. Be knowledgeable about the causes and organisations you are supporting.
Understand the impact you are having. Be confident that you are achieving your objectives.
Seek good advice. Seek experienced advice on your giving programme and on individual investments.
First, be clear about your objectives, based on what you want to achieve and what the needs are. You may find that there are other funders already active in your area of interest, and you may be able to build on this expertise. “A good starting point for some starting out in philanthropy may be to give to a proven model which has already demonstrated impact and efficiencies,” says Serge Raicher, a founding trustee of the European Venture Philanthropy Association (EVPA).
Examples include A Glimmer of Hope³, which supports development projects in Ethiopia, and The Funding Network (TFN), whose member donors leverage their funding to support many international causes through TFN’s quarterly events.
Finding projects to support is also becoming easier. GlobalGiving UK, the online marketplace launched this month, connects donors to over 450 grassroots projects in more than 100 countries. Chief Executive Sharath Jeevan says that GlobalGiving is “Trying to make it as easy to give to a project in Burkina Faso as it is to give to a project in Hackney”.
Donors can also search The Big Give website, which lists over 1,000 charitable projects; over one third are overseas. Jon Brooks, managing director, says, “The projects are all backed by UK registered charities. This provides donors with expert support in their home country, as well as a safety net for their donation.”
Oxfam Projects Direct allows donors to give to specific Oxfam projects in almost 20 countries, online. Oxfam’s Sarah Thomas explains, "Oxfam Projects Direct gives supporters choice and control, and helps them to see the difference they are making. For those who opt to visit, the experience can be life-changing. Our portfolio continues to grow and has so far sold out each year."
Guidestar UK provides information on 168,000 registered charities in England and Wales. Donors can search for charities using various criteria, including the geography of their operations. Its parent, GuideStar International, also has projects in Germany, Hungary, India and South Africa.
For funders wishing to support individuals, consider Ashoka, which invests in social entrepreneurs around the globe, or Microloan Foundation, which provides microfinance services in Malawi, Zambia and the Philippines.
Managing complexity and risk
Many funders can feel overwhelmed by the scale and complexity of international development issues. New Philanthropy Capital’s Cathy Langerman explains, “Language differences, time and distance gaps, unfamiliar cultural perspectives, multiple legal systems and disparate accounting practices all compound the complexity of giving internationally.”
Trust, in an organisation’s management and in its impact, is critical. According to Langerman, “Feedback is key to trust: for many donors, seeing the difference their money makes helps to develop trust”.
Warren Lancaster, International Director of Geneva Global, a donor advisory service that specialises in international giving, acknowledges that, “International philanthropy can be risk laden, but these risks can be effectively managed.” Many international charities work in social and political climates which have the potential for conflict, the possibility of corruption or the probability of complications. He says that donors must establish the risks involved with international giving, and the risks they are willing to take for the huge social returns overseas development can offer.
Donors have various options to mange this risk, such as relying on personal networks; giving through trusted intermediaries, such as religious institutions or other experienced funders; or giving to UK-based organisations which have overseas operations. Bea Devlin, Head of International Development at CAF noted, “UK-based charities operating internationally continue to dominate the league table most frequently given to by those using CAF’s services.”
There also are a number of specialist advisors, such as those mentioned above, who can help donors navigate the maze of international giving. Etienne Eichenberger, executive director of wise, a Geneva-based advisory service for philanthropists says, "Giving internationally can present more challenges in selecting organisations and following their operations. A key lesson learned in our experience is to manage expectations."
By conducting the necessary ‘due diligence’ on the donor’s behalf, these intermediaries can help you set goals, choose projects to support, and monitor impact. Natalie Pinon, director of Development Ratings, observes that, "Distance definitely was a barrier in the past, but with the emergence of intermediaries that is shifting. People who want information on what is happening to their donation can have it".
As an example, the Asian Foundation for Philanthropy (AFP), which helps British Asians to make a difference to social and economic development in India, notes that philanthropy to Indian charities remains low due to various legislative and bureaucratic regulations, as well as the difficulty of “sorting out insincere organisations from those that can make a genuine difference”. AFP’s role is to find and support these ‘genuine’ organisations, and to help develop “sustainable relationships between the donor and beneficiaries”.
Commercial advisors, such as solicitors, wealth managers and accountants, can also offer advice, as well as connect donors to other clients with similar interests. Private bank Coutts & Co, for example, recently launched a microfinance advisory service and donor-advised fund, and will next month start a similar initiative for environmental causes.
Building on success
Wherever you are in your journey, seek to build on existing experience and success. David Cutler, director of The Baring Foundation, points out that, “People in developing countries have every need that people in developed countries have, and these issues are already being addressed by many NGOs who are doing good work. It is too complicated to say that there is only one ‘high-impact’ way to do this.”
Caroline Hartnell, Editor of Alliance magazine, which explores international giving in-depth in its September issue, notes that, “This discussion has been going on for a long time. If funders can combine approaches – such as ‘new philanthropy’ and strong local NGOs in developing countries – then there is opportunity for significant impact.”
Collaboration is important, emphasises Sarah Lock of the Nuffield Foundation. Lock and Cutler co-chair the international development network at the Association of Charitable Foundations (ACF). Lock says that Nuffield and other foundations “are interested in exploring funding partnerships with other funders – with individuals as well as other trusts and foundations”. “Need is not reduced to any one issue. It is very good that there are a variety of funders,” Cutler added.
Hartnell agrees: “There is a need for a combination of approaches. The circle must be widened in the debate about who sets the agenda for international giving.”
Taking a global perspective
As part of Philanthropy UK’s efforts to help increase information and understanding about philanthropy around the world, which is a crucial factor in improving international giving, the rest of this section of the Newsletter contains profiles of developing trends in philanthropy in six parts of the world.
¹Liz Goodey et al, UK giving 2007 (London: NCVO and CAF, 2008).
²Langerman and Sylvia Rowley, Philanthropists without borders: supporting charities in developing countries (London: New Philanthropy Capital, March 2008).
³David Gold, Chair of A Glimmer of Hope UK, is Chair of the Philanthropy UK Advisory Board.
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