Category: Alumni

Philanthropy’s global footprint creates new opportunities

Sarat Pratapchandran1 Comment

An American concept is growing rapidly in different parts of the world, innovating itself and finding new meaning in new markets. The art and science of philanthropy is now growing faster in regions outside the United States.  According to Penelope Cagney, international fundraising consultant and president of  The Cagney Company, a few trends that are shaping global philanthropy include:

  1. An affluent middle class in emerging markets is now greatly involved in philanthropic giving.  According to monthly giving data tracked by the Big Mac Philanthropy Index, the top three countries engaged in giving the most were Singapore, Hong Kong and India. The Charities Aid Foundation (CAF) World Giving Index 2012 now ranks Australia as the #1 country in giving, including both monetary gifts and volunteer hours.
  2. The surge in philanthropy in foreign markets is creating a new wave of innovation in method and practice.  A newly published book on Indian philanthropy “Revealing Indian Philanthropy,”  describes how the new Indian rich are taking sophisticated approaches to giving. Planned giving is hot in Japan, Chile raises more than 10% of it’s donations through door to door giving and direct mail is doing well in Australia. Microfinance and telefacing(telephone call and face to face meeting) are widely used in India, while social impact bonds in the UK and fair trade networks in Africa are enriching philanthropic practice in foreign markets.
  3. Alongside, huge NGOs are growing in emerging markets and some like the Bangladesh Rehabilitation Assistance Committee (BRAC) are more creative than counterparts in Western societies.

As the world adapts to more advanced fundraising  here are a few things to watch for:

  1. India’s Companies Bill of 2011 expected to be passed later this year will make India the first country  in the world to introduce a 2% Corporate Social Responsibility (CSR) policy. A major proposal seeks to have businesses spend 2 percent of their net profits in CSR initiatives. This will have a profound impact on corporate giving and will also affect the bottom line of multinational companies doing business in India.
  2. More and more emerging markets are now collecting data on philanthropy.
  3. A formal culture of philanthropy is yet to evolve, but giving is taking different forms and shapes in outside countries. These innovations could enrich the practice of philanthropy.
  4. Tactics like the “Giving Pledge” might work in Western markets, but in emerging markets, the super rich may not easily part with their wealth. They will seek newer ways of parting with their wealth.

As newer markets expand their philanthropic initiatives, thought leaders like Cagney have provided their perspectives in books like Global Fundraising: How the World is Changing the Rules of Fundraising. Overall, there is no better time for philanthropy to emerge as an important topic of discussion in international markets.

 

Transparency in Cause Marketing

Sarat PratapchandranLeave a comment

How transparent is cause related marketing? Do you really know if the $5 that you spend on a Starbucks bracelet will actually help create jobs in America? Or, is the role of Starbucks to create jobs or sell good coffee?

Mara Einstein , an associate professor at Queens College enters this debate with an article titled “Charities shouldn’t let corporate marketers set the agenda,” in the May 3 edition of the Chronicle of Philanthropy. Einstein argues that when businesses sell products by touting social causes, they begin to pollute the sacred territory of charities. This creates a power imbalance causing product manufacturers to focus on the bottom line rather than on the charitable intent.

In a sagging economy where neither governments nor nonprofits alone can create jobs, why can’t for-profit businesses sell more products and do good for society? The more we spend, the economy performs better. Einstein counters this argument stating that when businesses start helping charitable causes, government will cut spending on critical areas.

Einstein suggests that businesses could  be more transparent and let donors know how the money is used. What if Starbucks could explain where the $5 donations went? Will all funds go towards creating jobs?  A transparent, online site that tracks  cause-marketing initiatives and societal benefits will be useful.