Addressing the Power Imbalance in Global Philanthropy

Photo by Étienne Godiard on Unsplash

Philanthropy has existed in every culture for centuries, but the global foundation sector has grown rapidly in the last few years. Some of the reasons include: global economic growth and the enormous increase in private wealth accumulation; persistent economic and social inequalities; and governmental and private efforts to encourage and support philanthropic institutions and giving.

However, with this growth comes a power imbalance, that has become more apparent during COVID-19. A majority of large foundations are in the Global North, and provide funds to social purpose organizations (SPOs) in the Global South. These funds come with conditions around a long grant making process and restrictions based on metrics.

In an episode of The Do One Better! Podcast, Clare Woodcraft from the Center for Strategic Philanthropy discusses how COVID-19 has shifted the philanthropic landscape, as SPOs reel under the pandemic’s impact. Their recently released report - Philanthropy and COVID-19: Is the North-South Balance Power Finally Shifting? - highlights challenges and emphasizes opportunities that can foster the strong emergence of Global South philanthropies.

Challenges emerge starkly in the face of COVID-19

As the pandemic hit, resource-poor SPOs found themselves struggling to transition to work from home, lacking flexibility in using funds for their immediate needs and sustenance. Some SPOs have had to shift their focus to emergency response while others halt programs indefinitely on ground.

In the face of these changes, there was an increase in SPOs asking for unrestricted/core funds that could ensure staff retention, build their capacity and respond to the pandemic. SPOs often struggle with the “metrics-based” approach philanthropies push for, which values measurement over real needs on-ground. Without core funding, SPOs are limited in growing their institutional capacity.

During COVID-19, SPOs faced grave effects on their funds which could have been minimized with core funding. In India, a rapid research study by the Centre for Social Impact and Philanthropy found that one-third of Indian NGOs did not have adequate funds to survive for a further 6 months. In a survey of several African SPOs, about 55.7% had experienced a loss of funding, whilst another 66.4% were expected to lose funding in another 3 to 6 months.

The lack of core funding is compounded by foundations’ preference for focusing on education and healthcare. A study by OECD showed that from 2013 to 2015, 53% of philanthropic giving went to health and reproductive health, whilst 8.7% went to education. Though these sectors are important, their dominance in receiving grants, leaves a lack of funds for other issues.

At the onset of COVID-19, SPOs requested more unrestricted funds to respond to the pandemic. Many philanthropies reacted positively. According to Candid, the global philanthropic response to COVID-19 surpassed $10 billion USD. Grants came from Jack Dorsey (Twitter’s CEO) and Google, along with well known institutions like the Bill and Melinda Gates Foundation.

COVID-19 also brought another significant shift in SPOs turning to local philanthropies for funds. Foundations in the Global North started to focus their portfolios domestically, with a growing spotlight on racial justice and economic devastation during the pandemic. The process to apply for global grants, especially during an emergency response, also proved to be tedious with applications buried in websites or long approval processes. Eventually, some SPOs began seeking funds from individuals or local philanthropies in the Global South. For example, several SPOs in Africa stated that a majority of their funding related to COVID-19 response came from local individual donors (41.8%), the private sector (25.8%) and local foundations (20.4%).

A Dire Call for Collaboration

As the demand from local philanthropies grew, there was also an opportunity for them to begin collaborating and ramp up responses. In the past, there has been a large gap in collaboration between philanthropies that has threatened program duplication.

Findings from the Centre for Strategic Philanthropy’s report noted that Global South foundations built national and intra-regional collaboration to share knowledge, data and capabilities in the wake of the pandemic.

Some examples of local philanthropic collaboratives and their outreach to build ties with SPOs and government are:

  • Community Immunity which is an initiative brought together by the Africa Philanthropy Network, Southern Africa Trust and TrustAfrica. These local philanthropies developed “Community Immunity” as a coordinated campaign that leverages well-known celebrities like athletes, artists and musicians to fundraise for communities most impacted by COVID-19.

  • Nexus was born out of Somalia, where SPOs faced challenges in receiving global funds for fragile states. Nexus is a network of Somali NGOs that share thought leadership, humanitarian development and peacebuilding. It also started its own fundraising as an alternative to large INGO consortia.

  • COVID Action Collaborative (CAC) in India, which is anchored by the Catalyst Group, consists of more than 150 organizations focused on healthcare and livelihoods. These organizations were able to exchange initiatives and data to ensure that the most rural communities were met.

  • Other examples of local philanthropic, SPOs and government collaboration is that of A.T.E. Chandra Foundation (ATECF), which sought to distribute 70,000 food kits to families in Mumbai’s slum containment zones during the nationwide lockdown. It was able to partner with the Municipal Corporation of Greater Mumbai and the Mumbai Police to secure permissions and aid in distribution along with other SPOs. In Indonesia, the government and several SPOs developed a website “Indonesia Bergerak” (Indonesia Move) to help track and report COVID-19 cases.

By developing a collaborative, philanthropies in the Global South will have a greater share of voice than individual organizations to influence policy and investments. Their voices can then amplify and catalyze the SPOs’ work and provide a more sustainable and localized approach.

In the Centre for Social Impact and Philanthropy report, local foundations also spoke about how their approach to grantmaking had changed. The Arab Foundation Forum is now homing in on the importance of building strategies and designing programs. Other philanthropies discussed increasing community grants for SPOs and many stated that they would like for intra regional and national collaboration among philanthropies to continue.

What Does Social Media Say and Moving Forward

These calls to unite and grow local philanthropies echoes ongoing discourse on Twitter. People express the need for a longer-term approach and unrestricted funding. For example, tweets like:

  • Covid-19 is accelerating an already existing trend: the awakening of institutional philanthropy in the global south. Yet this awakening is hampered by weak philanthropy infrastructure and networks, insufficient collaboration and a lack of core funding.”

  • Capacity building as a term in the #globaldev & international #philanthropy sector is just as problematic as empowerment, if not more for me. There's seriously entrenched power dynamics. Who says people in the Global South don't have skills and knowledge and resources already?”

  • Funders in the North ánd in the South need to fund organisations not just for a few months or a year, but for many years. We encourage local philanthropy. How do we encourage them to support human rights work too? And to have organisation costs funded as well?”

Social media also proved to be a powerful platform in mobilizing individual donations to COVID-19 relief. This was a common trend across all countries where crowdfunding and SPOs increasingly tapped into local individual donors seeking to help affected communities. Whether it was distributing sanitary napkins in slums or face masks for frontline workers - citizens stepped up on a massive scale. This level of giving should be tapped into by local foundations as they fundraise.

As COVID-19 reflects the disparity in giving between the Global North to the Global South, there is also a growing recognition that it must be addressed to drive real impact. In the podcast, Clare Woodcraft reflects on why now is the opportune time to shift power dynamics with local philanthropies as they are:

  • Being led by 2nd generation philanthropists who are looking to be more innovative and entrepreneurial

  • Willing to tap into the power of digital and AI tools and;

  • Wanting to leverage their local knowledge and connections

With concerted effort and dedication collaboration, there is potential to build local foundations’ capacity that ensures the Global South is on the path to long-term and sustainable development.