From Financing for Development

Time for philanthropic finance targets?

Another week, another meeting closer to the Third International Conference on Financing for Development (FfD3), and maybe a possible answer on how to pay for and implement the 17 Sustainable Development Goals (SDGs). Last week that meeting was the Development Cooperation Forum (DCF) in Incheon, South Korea, where development finance was discussed in all its technical glory, some aspects more so than others, the usual suspect was of course ODA but not for the reasons you may think. The agenda certainly made way for non-traditional financial flows (philanthropy, the private sector etc.) and instruments to be discussed and debated, and to some extent, they were, but not nearly enough. In fact, there was one government delegate in particular whom I won’t name here, that actually requested a change in topic specifically away from ODA to the less traditional. Unfortunately this was hard to do though when these actors were not at the table, and certainly not for a want of trying.

The question though of what non-traditional development finance providers, and specifically in this case, philanthropy can contribute IS certainly AT, and I would go as far as to say, ON the table, as it should be. I think it is even safe to say the FfD3 Co-Chairs are looking for the answers. Philanthropy is one of the last sources of funding in the world that contributes to the global development framework that isn’t already earmarked and therefore a key tool in the toolbox to achieving the SDGs. I am a big believer in ensuring that philanthropic flows are counted as an essential component of financing for development; it is good for the provider, it is good for the implementer and it is good for the recipient. In order to show these financial flows, Foundation Center along with Rockefeller Philanthropy Advisors and UNDP are working on, a database that will indeed track these flows from origin to destination. But, how do we take this a step further?

The question, that we now need to answer, and probably pretty quickly, relates to both a ‘what’ and a ‘how’ scenario, that came to me in two ways within moments of each other in Incheon. One, I read the Development Initiatives Policy Brief for the DCF, which included a conclusion that resonated with me – it found that “development agencies with a clear mandate for poverty reduction target poorer countries most effectively”. Two, a paper by Homi Kharas and John McArthur landed in my email inbox at almost the exact same time which made the bold suggestion that “by the end of 2016, common regional standards and incentives to promote social impact investing worldwide, and agree on voluntary targets for foundations and philanthropies to allocate a common share of their balance sheets towards impact investments” should be established and that “foundations and philanthropies could determine the merits of committing themselves to fixed targets for their funding allocations over time—in terms of both their balance sheet investments and their philanthropic disbursements—in order to guide the further devel­opment of the market and to encourage more social entrepreneurs”. This led me to ask the question, is it actually possible that we may be able to get philanthropists and other non-traditional development finance providers to create clear, voluntary or formal mandates or goals to reduce poverty, how would we do this and what would this look like. I think this is one of the questions that we the global development community need to look at in attempting to answer what philanthropy can contribute to financing for development in the lead up to, and at Addis.

The role of philanthropy and social innovators in financing for development will be discussed in an ECOSOC side event hosted by the Italian, UAE and Ethiopian Missions to the UN with Foundation Center, Rockefeller Philanthropy Advisors, UNDP, UNDESA and the San Patrignano Foundation on 21 April at UN HQ where I hope this question along with others will start to be answered. It is time for us to all put our thinking caps on.

For more information or to register to attend the side event please click here

All views are my own