Recently, Oxfam released a new report on the world's distribution of wealth. Only eight men (and yes, they are all men – more on this below) owned as much wealth as the bottom 50 percent of the world’s population. As Malaka Gharib in an NPR blog put it: 8 men own as much as 3.6 billion people living in poverty. The concentration of wealth in a few hands has become more acute in recent years. Just last year it was estimated that it would take 62 of the super-rich to match the same proportion of the world's wealth. What should we make of this phenomenon?
While the role of capitalism in economic growth and development, and the consequences of growing inequality to development, are important issues that deserve attention, they are not the central topic of this particular blog. My message today is more narrowly focused on what wealthy individuals can and should be doing to enhance the impact of their giving.
First, it is worth noting what seems to be an increasingly globalized culture of philanthropy. While tax laws and culture in the U.S. have always prompted the very wealthy to be generous with their wealth (and the most ambitious philanthropic efforts come from the Americans in the list), this has not been universal until more recent times. A quick review of the data available publicly suggests that several of the men on Oxfam’s list have been working hard to give their money away to address important social challenges. Some are important contributors to international development programming. With the help of their investments, progress is being made in health, education, women's rights, economic empowerment, and food security. But as important as their charitable investments are, the level of transparency and accountability in these privately-funded efforts is generally low – certainly compared to the visibility we have on official development flows. We know relatively little of what is being funded, where, when, and with what results; we know little of what is working and what is not. Philanthropists can change this, by being intentional about the importance of transparency in their choice of funding organization and in their implementing partners.
The power -- the impact -- of charitable giving is multiplied when it is blended with and leverages other sources of financing. The effectiveness of private philanthropy directed to address social challenges depends in fundamental ways on investments funded by other players: public agencies, local government, and local and international civil society.
All of which brings me to my third point: transparency (by which I mean publishing timely, accurate, and detailed information about what you are funding and where) is essential. Here I will make a plug for the work of organizations like Publish What You Fund (PWYF). Full disclosure: I am on the board of Friends of Publish What You Fund, a US-based entity established to mobilize resources to support PWYF and promote foreign aid transparency. Governments have made a commitment to initiatives like publishing to the International Aid Transparency Initiative (IATI) to increase visibility of aid flows. Few private entities (including INGOs) have done so. Philanthropists and private sector companies financing development programming should make transparency one of their top priorities if they want to safeguard the effectiveness and improve the efficiency of their own investment decisions. This is why my organization is publishing to IATI.
At the same time, transparency alone is not enough to guarantee aid effectiveness - by which I mean sustainable and long-lasting impact of your donor investment dollars. Private donors should be paying attention not just to what their money does but how the funded activity will be designed, executed, and evaluated, and eventually on what outcomes were produced with those dollars or euros. Private donors need to also be concerned with local buy-in and ownership for the initiatives they are funding, making the sustainability of their efforts more likely.
Building the capacity, confidence, skills, advocacy tools, and networks of local actors, especially in underserved and traditionally marginalized groups (women and girls, youth, ethnic minorities), so they can effectively participate in the design and implementation (and even evaluation) of activities that affect them, are not nice-to-have or feel-good activities. They are essential to effective programming and long-term sustainability. This is why my organization, and organizations like mine, invests so heavily in women’s and youth leadership and local capacity building.
Equally critical to effective programming are investments in data collection and measurement. While passion, empathy, and/or anger at perceived inequality and injustice may be what prompts us to give, data and evidence must be what guides where and how donors give. Philanthropists in general need to invest not just in program delivery but in rigorous program evaluation, and ensure that every design they are funding has a clear approach to continuous learning and adaptation. There are a number of interesting resources for philanthropists on the topic of evaluation and learning. This Devex article is a good starting point; a recent article on NPR is an excellent summary of how the evaluation field has changed and must itself continue to adapt. And, what is also implied here is that if we want to learn, we have to be willing to fail. Private donors have not been particularly vocal or open about their failures and this too should change if we are to be better at learning.
One final observation: Only men populate the Oxfam list. In addition to what this might say about the unfinished business of gender equality, I wonder what this means for their giving choices. What do we know about how such a concentration of wealth and philanthropy in the hands of a few men affects their philanthropic priorities? What might this imply for other donors seeking to complement their giving? This too may be a subject worthy of study.