Global Philanthropy, Part 1: Growing Up Global: Philanthropy Matures Around the World – Part I: Why Going Local Matters
Remarking on globalization is now akin to remarking on the rising of the sun, a self-obvious bit of commentary that is, if anything, a sure indicator of a lack of anything else to say.
But, within globalization itself, there are engines and consequences of change that themselves represent new and unique phenomena. Many are poorly understood; some are even only narrowly recognized; a few are both of these and more. They may bring such fundamental change that whole new paradigms of thinking about the future will be needed. The rise of formal, institutionalized philanthropy around the world is in this last category.
Let us first make three distinctions.
First, when we speak of philanthropy we do not speak of some new human characteristic, some recognition of a common humanity that has otherwise not been present. All peoples (or at least the vast, vast majority) have embedded in their cultures and belief systems the value of community and the importance of helping others. One need only see the almost palpable global ache that greets disasters like the tsunami, or earthquakes, or even September 11 to understand that there is nothing new about this human instinct. The rush of people and resources to alleviate suffering is both ancient and common. Thus, when we speak in this series about “philanthropy” we mean the institutionalization of that urge, the emergence of leaders (individuals and groups) who develop organizational forms that will take that urge to scale in terms of resource commitments and public recognition.
Second, when we speak of globalization in terms of “other” nations or regions we speak standing in shoes inside U.S. geopolitical borders. Part of being human is being trapped in time and space. To speak of this institutionalization outside of the U.S. is not to imply that somehow America’s philanthropic institutions are better, or higher, or even, in a startling number of cases, older. Nor is it to ignore the fact that, however unrecognized, the globalization of American philanthropy itself is a real and growing phenomenon, as this nation of immigrants sees the new wave of its citizens establishing philanthropic institutions and responding to societal needs within and outside of the U.S. Rather, we focus on the rise of philanthropy outside the U.S. simply because it is poorly recognized and understood within the U.S. That rise, its importance and its resiliency, have significant implications for global relations that must be more clearly understood in this nation. An opportunity is aborning beyond our borders that can serve the prosperity of all, and it is critical that we recognize that fact and establish policies and mechanisms for collaboration from our own institutional base.
Third, we are not naïve. There are many backward steps on forward paths. Opportunity can come with disappointment, and progress can be undone. Where chaos and corruption thrive, even amidst economic progress, the emergence of philanthropy as institutionalized commitment to community will be stunted because trust itself is fragile. To point to progress on the historical path of change is not to confuse a mile-marker with the finish line.
Now for the roots of the rise.
The economic change outside the U.S. and the rest of the industrialized world is truly startling. It is true that tremendous and totally unacceptable poverty persists in a group of nations which have not successfully grabbed even the first rung of economic growth. But for the rest indeed for the majority of what one has always thought of as developing nations change is startling. The change is of two types. The first is economic. In the period 1998 to 2006, the gross domestic product (GDP) of industrialized economies declined by an average of .03% per year. The GDP economies of developing nations grew by 4.4% per year. True, Asia dominated this pattern with 14.6% growth, but in that period Sub-Saharan Africa grew by an average of 4.8% per year. In 1998, Sub-Saharan Africa was growing at 2% per year; in 2006 that had risen to 6.8%.
Direct investment in emerging markets and developing countries has more than tripled since 1998. Savings rates have risen, while they have fallen in the industrialized world. Inflation rates have fallen in all but the Middle Eastern nations and, of course, in the West. By 2007, investments as a percent of GDP equaled or exceeded that of industrialized nations in all but Sub-Saharan Africa.
In the period 2000-2004 alone, in only five years, per capita incomes in emerging economies increased by nearly 20%.
Accompanying this economic growth has been greater economic and social freedom. While the nature and details of representative governance have played out differently in differing nations, reflecting culture and history, it is clear that the will of the people has been a growing basis for governance worldwide for the last two decades. With freedom comes the ability to re-invest in a community’s future, the ability for a community and its leaders to determine what they want the future to be, where their priorities are, and how they wish to achieve their goals. With freedom comes civil society. The presence of civil society provides the opportunity for economic and commercial leadership to respond with private initiative to the needs of their communities. Money and leadership do not need to flee to Basle (not that there is anything wrong with Basle); they can be reinvested in both economic growth and societal good. With the ability to choose on the part of communities and on the part of leaders comes the ability to create new private institutions, among them both nonprofits (whose numbers have doubled and even tripled in the last two decades in emerging economies) and formal philanthropies.
This is what is new, exciting, and, to be frank, historically hopeful. Rising institutionalized philanthropy has the promise to be the engine for the sustainability of progress because it reflects not the vicissitudes of politics, nor the negotiated (and hence fragile) annual budget decisions of government, nor the opaque, distant and largely mysterious will of multilateral and bilateral donors. Rather, local, institutionalized philanthropy can be the embodiment of the priorities of communities and their leaders. It binds commercial and economic leaders to their communities, directly and with direct and mutual accountability.
It is for this reason that we examine the rise of philanthropy outside the U.S. and remark on its potential to usher in a new era of global progress.
The author gratefully acknowledges the assistance of Ms. Jessica Chao, 2007-2008 Harvard Center for Public Interest Careers fellow sponsored by Changing Our World, Inc. and seconded to the U.S. operations of CBM International.
International Monetary Fund, World Economic Outlook database.