Monday, November 27, 2006

The New Philanthropy

In recent times, there has been a marked shift in the nature of philanthropy. The givers are more wealthy, the goals they are pursuing are larger and their approach is much more than just throwing money at the problem. Philanthropy is no longer about bequeathing wealth to charitable organizations after death -- it has become the pursuit of massive social change in a lifetime. The new philanthropy is money, but money with the know-how that created those riches, focused on the problems of disease, poverty and making the world a safer place for future generations.

This year, the new philanthropy was exemplified by Warren Buffett's announcement that he will transfer $31B US in the coming years to the Bill and Melinda Gates' Foundation. The money isn't being doled out without a catch. The Gates', like others, are pursuing their charitable interests in person. They applying their business knowledge to ensure their charitable investments don't just solve tactical problems, but provide sound strategic returns. Take microfinancing for example. The seed money that charities provide also come with assistance on how to apply the money to build solid organizations that can be self-sustaining. As Muhammad Yunus of Grameen Bank puts it, charitable dollars "shouldn't come in a way that will discourage people from finding a local source. Otherwise, you don't discover your own strength."

The new philanthropy stand a chance of reaching some of those lofty targets they've placed before themselves. In the past, charitable investments in the poverty stricken countries have largely failed because of a lack of knowledge and execution investment. The money went into a black hole that served the self-interests of the various pockets it flowed through -- or to further the political ambitions of the donor countries. With the new giving, the accountability may be coming to ensure the corruption seen in the past don't occur again and derail the chance of success.


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