Editorial
With a total giving of USD 42 billion from 2016 to 2019, private philanthropy for development has become an integral part of the development finance landscape. Foundations are providing critical relief to communities that have lost their livelihoods; testing development innovations to address pervasive social challenges; and contributing to produce and broker knowledge that can inform effective development policy and practice. Foundations are increasingly seeking to go beyond palliative solutions to alleviate poverty, and tackle the structural barriers to economic and social development. As the priorities of the Sustainable Development Goals come face-to-face with the worst economic recession since the Great Depression, it is more urgent than ever to harness the promise of philanthropy. But are foundations on the right track to achieve their ambitions?
Drawing on an expanded and updated sample of the largest international foundations, and previously non-existent data on foundations in emerging countries, the second edition of OECD’s flagship report on Private Philanthropy for Development provides the most comprehensive overview of how philanthropy contributes to development to date. The report offers fresh evidence on philanthropy’s goals, scale and scope, including how foundations themselves perceive their contribution to development, their strategic ambitions and the limitations they face.
First, the report confirms some prevailing trends already highlighted in the first edition and identifies new ones. Private philanthropy for development continues to support health above all other sectors; primarily targets middle-income countries (still shying away from less stable, low-income countries); and its sources are heavily concentrated within the top ten largest international foundations providing more than two-thirds of total cross-border financing. Latin America has emerged as the top recipient region of cross-border flows, while COVID-19 has led some foundations to temporarily increase annual spending and support to rapid response funds, and simplify application and reporting requirements.
Second, the report provides a deeper understanding of domestic philanthropy’s role in supporting local development. More than half the foundations in the sample are based in emerging markets. They not only provide philanthropic capital to development, but also bring valuable experience and context-relevant knowledge. These foundations tend to target their support to a few specific sectors and geographic regions within their countries, and for the most part implement their own projects. In some countries like India, China and Mexico, they provide a higher volume of resources than international foundations, which is likely to change the financing for development local ecosystem in the decades to come.
Third, the report uncovers foundations’ growing ambitions to influence capital markets, and inform public policy and social norms through advocacy, research and evaluation. It also outlines a series of challenges that still limit foundations’ potential including limited investments in support of rigorous learning, limited capabilities to mobilise finance and to advocate to the extent of their ambitions, and a pervasive lack of transparency. Importantly, the report provides actionable recommendations to improve philanthropy’s role in support of a sustainable recovery from COVID-19.
The findings of this report are the result of close collaboration between the OECD Centre on Philanthropy, the OECD Development Co-operation Directorate and the OECD Development Centre. The OECD Centre on Philanthropy, launched in 2018, provides ground-breaking research and analysis on global trends of philanthropy for development in the context of the 2030 Agenda. In addition, the OECD Development Co-operation Directorate (DCD) has unparalleled experience setting statistical standards and collecting data on resource flows to developing countries, particularly of official development assistance (ODA), as the secretariat for the Development Assistance Committee, and on a sample of 41 large foundations that report regularly to the OECD. Finally, the OECD Development Centre is home to the Network of Foundations Working for Development (netFWD). As a platform for dialogue, netFWD has produced practical guidance highlighting foundations’ comparative advantages in the wider public discourse on sustainable development.
We believe this report is of practical value to policy makers, official development aid providers, private sector investors, as well as leaders from civil society organisations. It provides a comprehensive and objective overview of opportunities to work together in the philanthropy for development landscape and for the first time, comes with a user-friendly open data visualisation dashboard to help partners explore and exploit the data they need for their decision making. We invite you to explore and make full use of this resource.
