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PHILANTHROPY


access to economic inclusion – women because of discrimination, violence and vulnerability, and much lower access to education; youths because of high unemployment, the absence of mentoring and apprenticeship opportunities, and fragmented communities due to war, civil strife and illnesses such as HIV/AIDS. Philanthropists can offer effective non- financial support in a range of ways under the broad heading of capacity-building, or by campaigning to empower marginalized groups and remove the barriers to their full economic participation.


Entrepreneurial education Until recently, efforts to develop and promote education in social innovation and entrepreneurial skills have been limited in most emerging economies. Now there is a growing focus on investing in education to develop future business leaders from home-grown talent. This need for local education on business, entrepreneurship and leadership provides opportunities for strategic philanthropists. Investment is needed in all levels of education. In


higher education, the example of Dr Taddy Blecher, who created the Community and Individual Development Association, the first virtually free university in South Africa, stands out. Vocational training is equally needed to build basic skills, especially among those from rural and less educated backgrounds – the more so as traditional communities are fragmenting and established mentoring arrangements are disappearing. Extending access to digital technology and improving Internet literacy enables people to link to the global marketplace of information, knowledge, tools and resources.


Measuring performance Strategic philanthropy has clear performance expectations and aims to find the best opportunities for achieving social, environmental and financial returns. This involves a strong emphasis on impact, and should therefore include a focus on measuring performance. Measuring impact helps to focus on results; measure or estimate value (understanding the social return on investment helps in decision-making through cost- benefit analysis); ensure that resources are being used efficiently and effectively; and deliver accountability (all enterprises have stakeholders over and above the investor). Measuring impact is not necessarily easy. Many


of the existing measurement tools fail to give proper insight into the associated impact. As a result, many promising emerging market ventures with the potential for significant development impact are evaluated on emotional terms or on pure financial terms. Neither will give a genuine, rational view of the full potential. Resources are increasingly available to assist


philanthropists in obtained this balanced insight. These fall into the categories of screening (making the


Successful venture philanthropists


Dr Ir. Ciputra, who founded three large property development groups, is one of Indonesia’s wealthiest people and most generous philanthropists. He estimates that less than one per cent of his country’s 250 million people are entrepreneurs building scaleable innovative companies, compared to around 13 per cent in the US and seven per cent in Singapore. He aims to double this figure through his programs. To do so, he must overcome a national cultural value that an entrepreneur occupies a less honorable position than an employee. His programs focus strongly on entrepreneurship education and creating a conducive environment for small businesses to grow. He also offers financial stimulus for people to undertake entrepreneurship training, including through his University of Ciputra Entrepreneurship Centre. Jack Ma is the founder of China’s top business-to-business e-commerce platform, Alibaba.com. He also created Taobao, the online retail website which put eBay out of business in China. With his website, which mostly matches small suppliers with buyers around the world, he seeks to support SMEs largely ignored by financial and credit institutions. Currently they receive less than 5 per cent of bank lending although they create over three quarters of the country’s jobs. In 2009, Alibaba Group announced its partnership with Grameen Trust of Bangladesh to form a micro- lending institution called Grameen China, with initial funding of $US5 million, focusing initially on loans of approximately $US400 per person to more than 8000 people in Sichuan and Inner Mongolia.


up-front investment decision), ongoing performance tracking and periodic in-depth assessments. It is important to choose a methodology that


does not merely measure outputs, activities and contributions, but maintains a primary focus on impacts and follows the impact value chain: inputs, activities, outputs, outcomes and goal alignment. Remember too that the investment can have both an internal impact (on the health and wellbeing of its employees and the environment) and an external impact (on customers and the communities in which it operates). In 2008 the Rockefeller Foundation identified 25


approaches to impact measurement with potential philanthropic application, including the best available charitable option (BACO), social return on investment (SROI) and balanced scorecard approaches. Increasing numbers of traditional corporations are themselves employed these methodologies to measure the impact of their operations in developing countries.


The paper, Strategic philanthropy: Unlocking entrepreneurial potential, can be downloaded at https://www.credit-suisse.com/us/privatebanking/wealthservices/doc/white_paper_philanthropy.pdf


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