5 Key Areas Where Philanthropy is Providing a Path for a Better Tomorrow

“The world of philanthropy is on the verge of being flooded with cash, with an estimated $4.9 trillion in the U.S. gifted from an expected $97 trillion in wealth that will be passed down from the baby-boom generation and beyond to their children and grandchildren over the next 50 years, according to the social enterprise Locus Impact Investing and its Center for Rural Entrepreneurship.”

By Abby Schultz and Beckie Strum, Barrons, December 10, 2018

httpss://www.barrons.com/articles/5-key-areas-where-philanthropy-is-providing-a-path-for-a-better-tomorrow

To make enough money to feed herself and her baby son, Ruth Baribwa, deserted by her husband, would ask her neighbors in Bulenga, a village west of Uganda’s capital of Kampala, whether she could do their laundry.

If she earned the equivalent of just 50 U.S. cents in a day, she and her son would be able to eat. But when she couldn’t find work, “her baby would just cry and cry,” says Devin Hibbard, founder of the U.S. nonprofit Street Business School, which teaches impoverished women in Africa how to start and run a business. “She had no sense there was a future for her or her son.”

Hibbard recalls Baribwa’s story because of what the young woman was able to do once she went through Street Business School’s training.

She began by opening a small vegetable stall in her neighborhood, earning about $22 a month—still far below the international standard for extreme poverty of $1.90 per day.

But the training helped her realize that she could do better if she became a wholesaler, so she figured out a way to buy vegetables directly from farmers outside of Kampala twice a week.

A year later, she boosted her income to $177 a month.

Baribwa is one of more than 2,100 women who have been trained in Uganda by Street Business School, a nonprofit that, like Baribwa, started small, but is now growing by coaching nonprofits across Africa how to deliver the training sessions. By many measures, the school is a success. But, like nonprofits everywhere, it’s seeking to scale up its work to teach more women in more countries.

The world of philanthropy is on the verge of being flooded with cash, with an estimated $4.9 trillion in the U.S. gifted from an expected $97 trillion in wealth that will be passed down from the baby-boom generation and beyond to their children and grandchildren over the next 50 years, according to the social enterprise Locus Impact Investing and its Center for Rural Entrepreneurship.

But as Hibbard’s story shows, philanthropists have more than money to offer organizations—and today more than ever, more wealthy individuals and families want to give their time and energy to causes that matter to them.

Hibbard is working on partnerships with larger organizations and says that dollars are “absolutely” needed to expand, although Street Business School also relies on individual champions such as Marty Cordes, a New York philanthropist who has supported the organization financially, as well as with her time, and is now on the nonprofit’s advisory committee.

“The best partnerships go far beyond the financial investment; they help us grow,” Hibbard says.

Today’s philanthropists are getting younger, more entrepreneurial, and a “bit more willing to take big risks,” says Bob Pilon, chief development and partnerships officer at ONE, an advocacy group seeking to end extreme poverty and preventable disease.

As entrepreneurs, often “they understand that to get scalable results in a sustainable way takes a lot of creativity, and it takes some failure,” Pilon says.

Philanthropists today are also finding that collaborating with other donors can amplify their impact. The Plastics Solutions Fund, for instance, is an international collaborative that pools the resources of foundations and philanthropists, who collectively and individually are taking a systemic approach to rid the globe of plastics. Similarly, Artplace America draws together foundations as well as government entities and financial institutions to infuse communities with the arts.

“Partnering with the private sector unleashes
a whole new level of creativity and resources.”

—Vidya Vasu-Devan

Others are investing in social enterprises—businesses working to improve society or the environment—including community-development financial institutions, or CDFIs, such as Hope Credit Union in Jackson, Miss. CDFIs provide small low-cost loans to individuals and businesses.

What follows are the stories of how philanthropists and the nonprofits they support are making strides addressing issues in medicine, the environment, poverty, gender equality, and the arts. Change in these areas is under way and, in some cases, accelerating, but they all need momentum and increased support from individuals and foundations to further their works.

There’s no one-size-fits-all strategy for addressing society’s needs, but these stories show how philanthropy is “key to the innovation, discovery, and some of the on-the-ground programmatic work,” says Judy Monroe, president and CEO of the Atlanta-based CDC Foundation, an independent nonprofit that supports the work of the Centers for Disease Control and Prevention.

That’s often because charitable dollars give organizations room to fail, which is often the only way to learn. As Gülgün Kayim, director of arts, culture, and the creative economy with the city of Minneapolis, puts it, “It’s hard to do that with public-sector funds.”

Eradicating Malaria

Hispaniola is at war with its mosquito population, a battle aimed at eradicating malaria by 2020 from the Caribbean island that is home to Haiti and the Dominican Republic.

“In this day and age, we’re looking at what diseases we can eliminate,” the CDC Foundation’s Monroe says.

The CDC is leading the effort, called Malaria Zero, with a $29.9 million grant from the Bill and Melinda Gates Foundation and a group of public and private partners.

The Global Fund encourages a comprehensive approach to protecting children from malaria that combines education, diagnosis, and treatment.

“There’s a real critical need for philanthropy to be helping in this area of vector-borne diseases,” Monroe says. Specifically, she adds, “there’s not nearly enough funding to push innovation around controlling mosquitoes.”

While a growing number of countries are on track to be malaria-free in a few years, global eradication has encountered setbacks as mosquitos grow resistant to insecticides, the virus becomes resistant to treatment, and funding fails to meet the need for basic interventions. In 2017, the number of cases worldwide rose for the first time in 10 years, according to the latest annual report from The Global Fund, a Geneva-​based partnership that provides half of the world’s financing for fighting malaria.

“We’re at a little bit of a crossroads,” says Scott Filler, an epidemiologist and malaria team leader at The Global Fund. The fund has set a target to eradicate malaria, AIDS, and tuberculosis by 2030—a goal that the organization and its many public and private partners are not on track to meet.

The most straightforward part of the solution is to simply raise more money for organizations like The Global Fund to increase capacity in some of the worst-hit areas, such as sub-Saharan Africa, Filler says.

But drug and insecticide resistance presents a more complicated problem, which calls for biomedical innovation that some philanthropic organizations have taken on directly.

The Gates Foundation considers malaria one of its key issues, and has committed nearly $2 billion in grants to fight the disease since 2000 and another $1.6 billion in funding directly to The Global Fund since 2002.

The foundation’s more pioneering strategies, however, have included equity investments through its Strategic Investment Fund in fledgling biotech firms that have the potential to produce key innovations.

One example is a $5 million equity stake that the Gates Foundation took in 2016 in the firm Amyris, a California-based company that is exploring less expensive ways of producing artemisinin-based combination therapies, a primary treatment for malaria.

Vector-borne disease offers an example of the need for more philanthropic investment in the private sector, says Vidya Vasu-Devan, deputy director the Gates’ Strategic Investment Fund.

“There’s more acknowledgment that the problems we’re trying to solve are more and more complex, and there are so many factors that solving them is going to require well beyond the best thinking that we have now,” Vasu-Devan says. “Partnering with the private sector unleashes a whole new level of creativity and resources.” —B.S.

Ridding the Environment of Plastics

Before village workers began going door-to-door in Tacloban in the Philippines to collect waste, 128 tons of trash a day piled up in the neighborhoods. Heaps of single-use plastic products, polystyrene containers, plastic bags, and the like made their way to nearby beaches and, later, the ocean.

GAIA, a U.S.-based global alliance of nongovernmental organizations and grassroots groups focused on waste reduction and recycling, reports that a mere 30% of waste was collected in the city before GAIA began its Zero Waste Cities campaign in 2016.

Today, villagers and volunteers from Mother Earth Foundation, a GAIA member, collect plastic, food scraps to compost, and other materials to recycle, as well as “residuals”—often unrecyclable plastic—to analyze and landfill.

One of GAIA’s goals is to make these unrecyclable materials “visible” and “to build political pressure for change,” such as requiring companies to change their packaging, says Monica Wilson, associate director in GAIA’s U.S. office.

The result’s in Tacloban were amazing: 100% of the city’s waste is being collected, and the city has cut the amount of waste going to landfills because more of it—129 tons a day—is composted and recycled.

The transformation was simple, with only one education session per household, says Froilan Grate, a regional coordinator for GAIA Asia Pacific. Within a month, 90% of residents complied. “If you give people the right information and the right tools, you never encounter a problem,” Grate says.

GAIA is coordinating the Zero Waste Cities project in Southeast Asia and India with funding from the nearly three-year-old Plastic Solutions Fund, an international collaborative of foundations and philanthropists that are pooling resources to attack the problem of plastic systemically, from the time it’s created until it’s thrown out.

“Our aim is to reduce single-use plastic and plastic packaging going into the environment as far up the supply chain as possible, which means stopping a lot of the stuff—particularly the stuff that’s going to come on-line over the next couple of years—from being created in the first place,” says Nicky Davies, the fund’s program director.

While the fund is donating about $2.5 million over five years to 10 nonprofits working on the Zero Waste Cities project—which will eventually include 10 municipalities—it has also donated $1.5 million to the Rethink Plastic Alliance in Brussels, which is aiming to force corporations to reduce the amount of plastic they send out into the world.

Part of the momentum around the problem of plastics pollution today is that “through some very deliberate processes, we created a lot more alignment and momentum, both with civil society and philanthropy,” says Stephen Campbell, a campaign leader with the Geneva-based Oak Foundation. “It creates a community working together from the money side as well as the implementation/doing side.” —A.S.

How Low-Cost Financing Boosts Low-Income Communities

Few places embody extreme poverty in rural America—and the path out of poverty—like the Eastmoor subdivision of Sunflower County, Miss.

At this 1960s affordable-housing development, cheap electrical work and absentee management led to dozens of single-family homes catching fire or burning to the ground over time. Until just a few years ago, residents used old rags to keep out the rain and bugs where roofs had split and foundations had cracked in half.

“It was built with shoddy construction. There was standing sewage, there were fires, broken sidewalks,” says Bill Bynum, founder of Hope Credit Union, which operates one of its 27 branches in the nearby town of Moorhead. “When we took over that branch, people started asking us, ‘Is there anything you can do to help this community?’ ”

Hope secured a $3 million grant from Goldman Sachs to rehab 44 Eastmoor homes, pooled public and private funds to build a community center, and offered residents small, low-cost loans to buy things like furniture.

“Now the feeling of empowerment in Eastmoor is almost tangible,” Bynum says. “At this critically important point in the country’s history, when you see [income] gaps widening, one of the critical elements to closing these gaps are financial tools.”

Hope Credit Union is among the hundreds of CDFIs across rural America working as middlemen to connect donors, impact investors, and government funds with the country’s poorest and most remote areas.

CDFI’s like Hope provide small- to medium-size low-cost loans to individuals and businesses, provide basic banking services to underbanked communities, and have the local expertise that allows them to steer grants toward high-impact projects, such as Hope’s rebuild in Eastmoor.

The Mary Reynolds Babcock Foundation, established by an heiress to the R.J. Reynolds Tobacco Co. fortune, counts Hope among its many beneficiaries. The foundation has funded efforts to lift people and places out of poverty since 1953 and, over the past decade or so, has come to recognize access to finance as a key to breaking the cycle of poverty, says the foundation’s executive director, Justin Maxon.

The foundation has built a low-return, program-related investment portfolio that makes deposits in, and loans money to, community banks and credit unions. Those banks then use the funds as capital reserves and as loans to individuals and businesses.

“We believe strongly in developing a CDFI industry across the Southeast,” Maxon says. —B.S.

Teaching Impoverished Women to Run Their Own Businesses

Kesho, a nonprofit that educates impoverished children in Kenya’s coastal town of Kilifi, was one of the first organizations that Street Business School trained to coach local women to start their own small businesses.

Kesho sought the training so that it could help women earn enough money to pay their children’s school fees, which would in turn free up the nonprofit’s tight scholarship budget for other needy students. The strategy “was transformational in helping moms open small businesses,” says Street Business School founder Devin Hibbard.

By working with organizations such as Kesho, Street Business School earns income as a philanthropy (the nonprofits help pay for the training), and it expands its mission. Street Business School now has 46 partner organizations like Kesho providing business training in 11 countries across Africa, Hibbard says.

“ If we want to make the biggest impact
and really change the lives of women,
it has to be around economics. ”

—Marty Cordes

Boosting the earning potential of women in low-income countries is a key strategy for philanthropists focused on improving the lives of women and girls. That’s because donors such as New York philanthropist Marty Cordes have realized that “if we want to make the biggest impact and really change the lives of women, it has to be around economics.”

Marty and Ron, her husband, began to delve into how they could give women an opportunity to succeed financially when Hibbard attended the Opportunity Collaboration in Ixtapa, Mexico, in October 2015. The couple is on the advisory council for the collaboration, which brings together global leaders seeking solutions to poverty and injustice.

For the past two years, the Cordes Foundation gave $25,000 to Street Business School, and the couple held a 50-person event in the Cordeses home to introduce the nonprofit to potential donors. In April 2017, the Cordeses went to Uganda to sit in on a training session.

“There are women selling baked goods, and women selling clothing that they’ve made,” Marty says. “They are changing not only their life, but the lives of their family.”

Street Business School grew out of Bead for Life, a nonprofit founded by Hibbard, Torkin Wakefield, and Ginny Jordan in 2004 to sell beaded jewelry made from recycled paper by Ugandan women they met on a trip to the country.

Instead of operating solely as a Fair Trade business, the nonprofit used proceeds to train women to start microbusinesses from scratch, an approach that evolved into a six-month program that can be taken on the road to reach more women throughout Uganda.

Since then, Street Business School has trained 2,100 women to start businesses that the nonprofit estimates have affected the lives of 52,000 Ugandans, and has enabled 98% of graduates to educate their children. Graduates initially make about $1.35 a day, but their earnings rise to $4.19 a day, on average, within two years. “It’s literally lifting themselves out of poverty,” says Tifany Boyles, SBS’s global philanthropy director.

Today, the group plans to train as many as 90 partner organizations to implement the Street Business School curriculum across Africa within 12 months, with a plan to be in India by 2020. —A.S.

Social Justice Through the Arts

For city housing inspectors, discussing code violations with a tenant can be a tense experience, and the outcome isn’t always good for anyone, particularly for tenants who may be scared that they will be evicted from their home.

But inspectors and tenants in Minneapolis are learning how to have more positive interactions through creative practices like acting and “mirroring” behavior with Mankwe Ndosi and Reggie Prim, performing artists who work with the city.

At a recent workshop, for example, inspectors and tenants played out a scene of an inspector showing up at a city building with a list of code violations. Through modeling the routine situation, it became apparent to the “actors” that “all the power lay with the inspector and the checklist,” says Karen Moe, who was with the city’s regulatory services division at the time.

Inspectors figured out how to move the sense of power from themselves to one shared with the tenants through simple changes in body language, leading to a happier, productive interaction.

“You can’t start shifting if the inspector is not aware of that power dynamic,” says Moe, now the city’s deputy director of neighborhood and community relations, where she will draw on this work to ensure communities that traditionally don’t get counted by the U.S. census are counted in 2020.

Hearing Tenant Voices, a 3 ½ year program, came out of an experiment with Minneapolis’ planning department to learn how artists could help the government engage low-income residents in a range of issues.

“Cities don’t have a lot of practice or knowledge in reaching out to tenants, let alone tenants who come from underrepresented, underserved communities,” says Gülgün Kayim, the city’s director of arts, culture, and the creative economy. Projects like Hearing Tenant Voices demonstrate “that when artists of color go out into communities, they are more successful than we are.”

The initial grant to explore what the City of Minneapolis calls arts-based community development—more widely known as creative place-making—came from Artplace America, a 10-year collaboration among foundations, federal agencies, and financial institutions that ends in 2020.

The Kresge Foundation, an Artplace backer focused on projects that serve low-income urban neighborhoods, supported the city’s arts-programming ideas with a $1 million grant in 2013 and with a $1.125 million grant in 2017. The city itself now funds much of the work on its own, with a track record of effectiveness.

People tend to think that “municipal entities only work in a certain way and that they don’t care about what residents think,” says Regina Smith, director of Kresge’s arts and culture program. “Adding a layer of creativity to the process actually makes the city more relatable and contributes to buy-in from residents, and residents can see their ideas come through.” —A.S.