OXYGEN N. 21 - Charity. A new model of development by Enel Spa

editorial board Enrico Alleva (president) Giulio Ballio Roberto Cingolani Paolo Andrea Colombo Fulvio Conti Derrick De Kerckhove Niles Eldredge Paola Girdinio Helga Nowotny Telmo Pievani Francesco Profumo Carlo Rizzuto Robert Stavins Umberto Veronesi editor in chief Gianluca Comin editorial director Vittorio Bo publishing coordination Pino Buongiorno Luca Di Nardo Paolo Iammatteo Stefano Milano Dina Zanieri managing editor Cecilia Toso editing Cristina Gallotti editorial team Simone Arcagni Elisa Barberis Luca Bosco Davide Coero Borga Michele Fossi Giuseppe Gobetti Raffaele Oriani Daniela Ovadia Francesca Pellas Donato Speroni Luca Testoni Maria Chiara Voci

translations Laura Culver Gail McDowell Alessandra Recchiuti Francesco Rende art direction and layout undesign picture editor white exclusive Italian distribution Messaggerie Libri spa t 800 804 900 promotion Libromania

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summary

Charity A new model of development

B T 10 ˜ editorial Side by side with society by Fulvio Conti

12 ˜ interview with

giuseppe guzzetti

Development is taking other routes. Today, economic growth cannot be separated from social growth, so the non-profit sector is becoming increasingly important in the global landscape, both in terms of institutional strength and as a stimulant for involving other sectors. To understand how this has happened and what the enormous potential that lies in it can be, Oxygen has analyzed the evolution of the world of philanthropy, from the theorized “love of man” to a machine of development, innovation, and investments. With case histories, observations of those who work every day in charities or who can work thanks to them, the data in hand, and concrete projects, this issue tells how social attention can become development for all: human, social, environmental, and economic.

× Charity A new model of development ×

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Foundation: civic actors by Pino Buongiorno

Every year, foundations contribute about one billion euros to philanthropic causes. They are the driving force of charity in Italy, a country where the private-social culture is still lacking, a fact which often puts it at the center of many controversies. Oxygen seeks to clarify who these foundations are, what they do, where their funds come from, and to what areas they direct their donations.

18 ˜ scenarios The non-profit sector relaunches the for-profit sector by Stefano Zamagni The transition toward a productive third sector is already taking place in Italy, where, in the light of considerable growth in a decade, the non-profit sector is increasingly conscious of its role and is affecting the for-profit sector. A reflection on the desirable directions that philanthropy must also take for the purposes of social welfare.

22 ˜ scenarios If locusts turn into bees by Geoff Mulgan Philanthropy as a symptom – and at the same time part of the solution – to the financial crisis. From the author of the book “The Locust and the Bee,” which theorizes a world divided into locusts and bees, into predators and creators, here is a look at philanthropic enterprise, from its origins to its possible developments, and about the spreading of social investment that involves ordinary citizens as much as those who are better off.

28 ˜ interview with

46 ˜ interview with

Cutting the funding for aid to Africa by Elisa Barberis

Attention to the South by Maria Chiara Voci

dambisa moyo

carlo borgomeo

The system of giving aid to Africa has failed, leaving the continent in a state of eternal economic adolescence: this is the thesis of the economist Dambisa Moyo, who hopes for a substantial change in direction. “I hope that we will put the model of aid into question, just like we are doing with capitalism. Sometimes the most generous thing you can do is simply say no.”

32 ˜ interview with

giuliano pisapia and flavio tosi

Public commitment by Giuseppe Gobetti and Luca Bosco

Governments and administrations are trying to keep pace with the changes of the non-profit sector by imagining a new role for the public sector. The initiatives, ideas, and attitudes of philanthropy in the administrations of two Italian cities, Verona and Milan, as told by their mayors.

42 ˜ interview with

The Foundation CON IL SUD (with the south), in collaboration with Enel Cuore, has developed a number of projects in four years that are aimed at the South, an area that is geographically distant from banking foundations and, therefore, excluded from most of the solidarity initiatives.

50 ˜ report the lady of the “copii strazii” by Paola Tavella Children are the first victims in a city, Bucharest, dominated by poverty: left without homes and schools, living on the streets, and taking refuge in the underground heating ducts during the cold winters. Juliana Dobrescu began teaching mathematics to these children, the “copii strazii,” and today she has become the historical memory of the Romanian street children.

Enel Cuore. Ten years of projects

cameron sinclair

The anti archistar by Raffaele Oriani Since the late Nineties, the NGO Architecture for Humanity has implemented architectural interventions that are true acts of social commitment. With a conception of architecture that is shared with the recipients of the project and as an open source project, it has distanced itself from those architects and artists who design unique pieces whose utility is often overshadowed by their beauty.

58 ˜ in-depth

56 ˜ passepartout

The heroic numbers of the non-profit sector by Elio Silva

The third sector stands as one of the most active in the Italian market, with a growth almost double that of the previous decade. According to the 2012 Istat Census, the booming number of initiatives, volunteers, and jobs created, however, is not enough to give it visibility and a political role. The sector will have to learn how to innovate in order to take full advantage of this expansion.

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62 ˜ in-depth Soldidarity as a response to the crisis by Giuseppe Frangi Given the failure of philanthropic initiatives modeled on the individual goals of foundations, the tendency to operate in local situations is becoming more widespread, and is stimulating confrontation with the government and civil society. Here is an analysis of the directions taken by the non-profit sector and the observation that, by offering new employment opportunities in the United States and Europe, it is increasingly affecting the labor market.

66 ˜ interview with

don vincenzo paglia and werner külling

Democratic donation edited by Oxygen The promotion of projects, needs, and start-ups; social networks for organizing the resources of those who defend the environment; applications that allow you to support various causes. This is mass philanthropy, the kind that, through small donations from individuals, achieves large results.

80 ˜ scenarios Donating development by Bernardino Casadei Institutional philanthropy is no longer just a redistributive tool, but rather, has a much more complex role today: it can help businesses achieve their goals and ensure their sustainability. And it is able to generate income and employment. But in order for all this to happen, Italy must take steps forward in regulatory terms.

L O p

From NGOs to PGOs: Practically governmental organizations by Michele Fossi

In the face of a widespread crisis of international governance, NGOs have experienced significant growth in the last twenty-five years: they now often have key decision-making roles because they are more agile and able to intervene in situations of difficult penetration for government officials. Oxygen speaks with two of their principle figures.

70 ˜ contexts

Social campaigns are increasingly social by Agostino Toscana

Provocative, creative, realistic, and irreverent. In a word, effective. And that is what social communication is, whose evolution has touched many forms, and which is always having to invent new ones, to reach and convince the public. Oxygen recounts the experience of Agostino Toscana, his campaigns, and a part of the history of social communications.

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De Ve

76 ˜ in-depth

84 ˜ in-depth

Getting orientated in the maze of donations by Carlo Mazzini Often, those who donate sums of money to a non-profit organization ask what the fate of their donation actually will be: a partial knowledge of their administrative system can lead to superficial responses, which may underestimate the management complexity. Here is an analysis of the structure, of costs, and of the “earnings” (and the right time to assess them), in order to learn the right questions to ask.

88 ˜ scenarios

E ng

Charities: where and why people invest by Donato Speroni

The need for solidarity in the world is being met not just by states, whose development aid has never reached its pre-set objectives, but increasingly by individuals, through charities, nonprofit organizations, or other structures and philanthropic initiatives. A fact that has ignited the debate on the best way to actualize this thrust, and one that necessarily involves the very concept of business.

92 ˜ column Tweet & quotes

94 ˜ in-depth

The duty of altruism by Philippe Kourilsky

Freedom is the fundamental right of every man. According to the philosopher Kourilsky, associated to this inalienable right is the duty of altruism, seen as a requirement that reason imposes on individuals, and that individuals impose on themselves. Can this same reasoning apply to altruism of the mass population and therefore, that of governments and nations?

98 ˜ contexts

Taking revenge on success by Adam Grant

102 ˜ passepartout World giving index 2012

104 ˜ contexts Plutocrats’ life by Enrico Pedemonte Often unknown to most people, plutocrats are holding the reins of the economic and political world. And they are the protagonists of philanthropic initiatives, especially in America. Where they come from, what is involved, and what their interests are has been told by many journalists, including Chrystia Freeland, in her book, Plutocrats, The Rise of the New Global Super Rich and the Fall of Everyone Else, which reveals their ethical and economic motivations.

108 ˜ in-depth The philanthropist’s net by Giulia Marchiori Philanthropy is now practiced at various levels. Large and small businesses have understood its importance for the development of positive relationships with the community, while the Internet has made it accessible to everyone. With unexpected progress.

112 ˜ future tech Crowdfunding: support from the Internet by Simone Arcagni and Raffaele Oriani

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S up

126 ˜ contexts The new social entrepreneurship by Francesco Perrini

114 ˜ contexts

Energetic solidarity by Eric J. Lyman

A village without energy can seem like a hopeless place. But a microloan can recast the future. This is the story of a slum in Udupi, India, and it is the story of those foundations which work to make energy the right of all, searching for the best method and innovative solutions, depending on their location.

130 ˜ focus

118 ˜ enel foundation

Teamwork by Bill Drayton

Energy poverty in Europe: A right denied by Emanuela Colombo and Tommaso Scandroglio

A changing world is redefining the relationships between the individual: how they interact, work, produce, and react to changes. Because every day we are faced with new situations and different opportunities. Opportunities that social entrepreneurship can be taught to grasp without breaking ethical rules and, indeed, promoting the common good.

Regarding a widespread problem such as energy poverty, it is necessary to cross the national borders to call first upon Europe, and then upon the world, for a debate that leads to replicable operational solutions. To deny mankind access to a tangible good is a socio-political problem as well as an issue of fairness.

r 122 ˜ focus

Enabling electricity: energy for all

124 ˜ focus

A washing machine for the community by Ansis Berzinš

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There is no doubt about the importance of social entrepreneurship in the revival of national economies today, also on a competitive level. An analysis starting from research by the SIF Chair of Social Entrepreneurship and by the Center for Research on Sustainability and Value of Bocconi University reveals how organizations are striving to acquire the tools of the traditional economy.

134 ˜ contexts Sustainable Finance for mankind by Luca Testoni Ethical funds and social impact bonds: the new forms of investment testify that finance is taking the path of sustainability. In fact, CSR investments allow you to be consistent with ethical principles and have a return that is no less than others. It could give a new face to finance.

138 ˜ oxygen vs co2 The green lamps of the Solar Sisters by Stefano Milano

In N O v a 140 ˜ interview with

150 ˜ science at

The prize that comes from outer space by Daniela Mecenate

Slinky, the spring for all budgets by Davide Coero Borga

gregg maryniak

the toystore

Low cost space travel for everyone, environmentally-friendly cars, Smartphones as pocket doctors... So many projects and one goal: to push innovation forward to overcome the limits of the impossible. This is the aim of the founders of XPrize, an American non-profit organization founded on a dream of outer space. And which gives dream prizes to those who prove that they know how to change the world.

144 ˜ contexts

Researchers searching for funding by Daniela Ovadia

148 ˜ focus

(brailleberry) by Elisa Barberis

How would a smartphone that used Braille change the lives of blind people? What kind of revolution could it be for a country like India, and its inventor Sumit Dagar? An invention, a story, and what philanthropy initiatives can do.

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contributors

Contributors to this number 05

01˜ Ansis

02˜ Carlo

03˜ Bernardino

04˜ Emanuela

05˜ Fulvio

Berzinš

Borgomeo

Casadei

Colombo

Conti

With a degree in Political Science, he has collaborated with global movements for philanthropy. He is the Executive Director of Valmiera Region Community Foundation, and the chairman of the Community Foundation Movement in Latvia.

President of the Foundation CON IL SUD, he was President of the Society for Youth Entrepreneurship, the Managing Director of Development in Italy and of Bagnolifutura, and the Managing Director of Fondosviluppo.

Currently the Secretary-General of Assifero, he previously collaborated with the Cariplo Foundation as Project Manager of the Community Foundations Project, and established the Augusto Del Noce Center for Studies.

A delegate of the Rector of the Polytechnic of Milan, she has worked as a design engineer in the energy sector, and with Fluent Inc. until 2001. She is the founder and a Board Member of Engineers Without Borders.

Chief Executive Officer and General Manager of Enel since 2005, he is on the Board of Directors of Barclays plc, AON Corporation, RCS MediaGroup, IIT, and other companies. He is the Vice President of Confindustria for the Study Center.

06˜ Giuseppe

07˜ Giuseppe

08˜ Philippe

09˜ Werner

10˜ Eric J.

Frangi

Guzzetti

Kourilsky

Külling

Lyman

A journalist, he directed the newspaper Il Sabato and was then the managing editor of L’ Informazione, and of the Milan office of La Stampa. The President of the Giovanni Testori Association, since 2001 he has been the editor of Vita.

President of the Cariplo Foundation since 1997, and of the Association of Savings Banks Foundations since 2000, he was President of the Lombardy Region and a Senator of the Italian Republic for the tenth and eleventh legislatures.

A biologist and geneticist, he is a professor at the Collège de France, a member of the Académie des Sciences, and directed the unit of genetics and immunology at the Pasteur Institute. He published The Altruism Manifesto and The Time of Altruism.

Secretary General of Helvetas Swiss Intercooperation from 1973 to 2005, he has continued to work as a collaborator, coordinating onsite activities of Helvetas in Bhutan.

He grew up in Florida with an American father and a mother from Santo Domingo, and has worked as a journalist since the Eighties. His articles have been published in the U.S., Canada, and Europe, and he has been working freelance in Italy since 2009.

11˜ Giulia

12˜ Gregg

13˜ Carlo

14˜ Dambisa

15˜ Geoff

Marchiori

Maryniak

Mazzini

Moyo

Mulgan

A consultant to organizations, companies, and individuals involved in non-profit organizations, she is part of the Grants Advisory Committee of the New York Women’s Foundation and is on the Advisory Board of the Global First Ladies Alliance.

Co-founder of the XPRIZE, he was its Executive Director and, in addition to being a Board Member, is also Director of Educational Partnerships. He also heads the Executive Office of the Space Studies Institute in Princeton.

An expert on legislation and taxation of non-profit organizations, since 1995 he has been dealing with non-profit in relation to special legislation. Since 1999, he has been the curator for quinonprofit.it and has written for Vita and Il Sole 24 Ore.

An economist who deals with macroeconomics, international affairs, and the impact of foreign aid. She has written books including Dead Aid. Why aid is not working and how there is a better way for Africa (Rizzoli, 2010).

Chief Executive of the National Endowment for Science Technology and the Arts, and visiting professor at the London School of Economics. He has held government positions in the UK and is a government advisor for many countries.

16˜ Don Vincenzo

17˜ Enrico

18˜ Francesco

19˜ Giuliano

20˜ Elio

Paglia

Pedemonte

Perrini

Pisapia

Silva

The Bishop of the diocese in Terni from 2000 until early 2013, when he was appointed President of the Pontifical Council for the Family. In 1999, he received UNESCO’s Gandhi Medal for his commitment to peace.

A journalist for the Secolo XIX, La Repubblica, and L’Espresso, where he was the managing editor for many years, and then a New York correspondent. Among other books, he published Death and resurrection of newspapers.

Professor of Economics and Business Administration at Bocconi University, he holds the SIF Chair of Social Entrepreneurship & Philanthropy and is the Director of the Research Center on Sustainability and Value, and of the Master in Sustainability.

Currently the Mayor of Milan, he is a criminal defense lawyer. He was Chairman of the Justice Committee of the Chamber of Deputies. He chaired the Prisons Committee and the Commission for the reform of the penal code.

A journalist, as well as the editor and special correspondent of the newspaper Il Sole 24 Ore: among other things, he is in charge of the non-profit sector and corporate social responsibility.

21˜ Cameron

22˜ Paola

23˜ Agostino

24˜ Flavio

25˜ Stefano

Sinclair

Tavella

Toscana

Tosi

Zamagni

The co-founder of Architecture for Humanity, an organization for the development of architectural projects for communities in need, he has directed reconstruction efforts in Japan, Haiti, and Chile.

A writer and journalist, she worked for 15 years for the newspaper Il Manifesto, dealing with the armed struggle. She wrote The Prisoner, from which Bellocchio’s movie Buongiorno notte was derived, and Gli ultimi della classe.

He has been working in advertising since 1982. After many experiences in different national and international agencies, he became Chief Executive Director of Saatchi & Saatchi Italy.

The Mayor of Verona for his second term, he has been in politics since 1994. Provincial Councilman after the 2004 elections, he was re-elected in 2005 and then headed the Veneto Region’s Department of Health until 2007.

An economist who has taught at the University of Parma, Bologna, and at Bocconi University. Since 2001, he has been the chairman of the scientific committee of AICCON, and from 2007-11 he was President of the Agency for the Non-Profit Sector.

editorial

Side by side with society by Fulvio Conti Enel Chief Executive Officer and General Manager

enry Ford declared, “The highest use of capital is not to make more money, but to make money do more for the betterment of life.” This is the essence of corporate philanthropy: a feeling of closeness and concern toward others which results in effective solidarity actions for the welfare of all. An altruistic sentiment that is seemingly in contrast to the world of business. This is demonstrated by the trends that have been affecting the “sphere of profit” for forty years, bringing it closer and closer to the non-profit universe through the socalled corporate foundations. This phenomenon is anything but recent, even in Italy, where, since the Eighties, foundations and non-profit organizations have come into being and are growing incessantly.

Today, the non-profit sector is one of the most active in the Italian market, with a growth rate over the last 10 years that has far exceeded that of private companies and public administrations. The last picture resulting from the Istat census of industry, services, and non-profit institutions has given us the image of a country with a huge potential and a great desire “to do”: there are five million people today who are active volunteers. Faced with the lack of response to the needs of people and to their discomfort, this commitment on the part of citizens clearly denotes the distance between them and a ruling class that, on the contrary, is still not doing enough, perhaps due to a lack of financial resources rather than of projects. In this context of growth, albeit with a low-

er weight in terms of numbers, the highest step of the podium belongs to philanthropy, which has quadrupled the number of active institutions in the last decade. This phenomenon arises from the convergence of two factors: an ever greater demand for “social goods” – driven by the growing economic crisis of recent years – and an increasingly widespread “social conscience.” In their role as a partner with institutions and the community, companies, too, are called to respond to these new trends. That is why today more businesses are promoting sustainable development and include respect for the environment and the needs of people in their corporate strategy, interpreted through ethical values, policies, projects, and methodologies that permeate the entire enterprise. Similarly, philanthropy ceases to be a donation for its own sake – passive and anonymous – and becomes a space of thinking and action through which resources and ideas for change can be channeled. Donations are linked to specific research projects, training, and initiatives to support growth, paraphrasing the ancient Chinese maxim that if you give a hungry man a fish you feed him for a day, but if you teach him to fish, you feed him for a lifetime. Corporate social responsibility and corporate philanthropy thus become two sides of the same coin: both define the reputation and image of a company, creating the framework for establishing a direct and transparent relationship between the company and all its stakeholders. Because a company that works better, and one in which the needs of citizens, the environment, and communities are properly considered, is a company that fosters the growth of enterprises. And a company focused on people will be able to offer better performance than its competitors. At Enel, we deeply believe in this vision, to the extent that we have integrated corporate social responsibility and charity into our corporate strategy. Therefore, ten years ago, Enel Cuore was created, with a non-profit structure, to carry out the Group’s commitment to solidarity in favor of the community, according to an ideal of cooperation that focuses on the “person.” Enel Cuore supports projects initiated by non-profit organizations, also in collaboration with institutions, working in regional activities of health and social care, education, sports, and recreation; these projects are particularly aimed at children, the sick,

people with disabilities, and the elderly, both in Italy and abroad. Over the years, Enel’s non-profit organization has extended its relationship of collaboration, addressing social needs and charitable initiatives through periodic calls for proposals, with an ever-growing following. In 2012 alone, 850 non-profit organizations joined and 55 projects were selected to be carried out in Italy, Eastern Europe, Latin America, and Africa. The donations accrued will, as usual, fund the initial stage of each project to ensure its success in a short time, and we will focus on the “hardware” components necessary to achieve the initiatives and to bring the benefits of the interventions directly to disadvantaged people and their families. In 2012, among its many initiatives, Enel Cuore promoted, together with the newspaper La Repubblica, a fundraiser for the people affected by the earthquake in Emilia; supported training projects and rehabilitation for inmates in prisons, especially minors; financed the construction of reception centers for immigrants and people with addictions in southern Italy; and contributed to the creation of a playroom in the pediatric ward of the hospital in Castellaneta. Enel Cuore’s commitment was acknowledged when it received the Sodalitas Social Award – a prize awarded annually to subjects that are actively engaged in projects for corporate sustainability – for its project in collaboration with the Italian State Railways, “A Heart at the Station.” This initiative came about through the desire to take concrete action to rescue homeless people and reinsert them into society through activities such as social listening, orientation in social services, socialization, and night shelters. In keeping with the international dimension of the Group, this year Enel Cuore, along with Architecture for Humanity, has launched a program for the creation of spaces, facilities, and equipment of social utility in rural and urban areas affected by poverty and social disadvantage. With Enel’s contribution, schools, clinics, and recreational facilities will be created in Europe and Latin America. Just as Enel Cuore has done in its ten years of activity, we will continue to commit ourselves with passion in support of the community, animated by this spirit and with the awareness of the positive results obtained alongside non-profit associations and the world of volunteering.

Philanthropy ceases to be a donation for its own sake and becomes a space of thinking and action through which resources and ideas for change can be channeled

Foundation: civic actors Interview with Giuseppe Guzzetti

President of ACRI, the Association of Foundations and Savings Banks by Pino Buongiorno Journalist and writer photographs by White

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Once upon a time there was Adriano Olivetti. And today? Where are the Italian philanthropists, the great patrons who open their heart and their wallet to help others? It seems like another Italian anomaly, but to find the benefactors of our day, you have to knock on the door of the great foundations of banking origin, which arose in the Nineties through the law that led to the privatization of the savings banks and the del Monte banks. Giuliano Amato, who spearheaded that reform, imposed the separation of lending activities from philanthropic activities. The first was attributed to the savings banks and to the del Monte banks, private commercial companies. The activities aimed at social, cultural, civil, and economic development remained with the foundations. Since 2000, the leader of the association (ACRI) that brings together the banking foundations – today there are 88 of them distributed over much of the country, especially in the northern and central regions of Italy – and the 39 savings banks, has been the lawyer Giuseppe Guzzetti, who is also the chairman of one of the main Italian foundations, the Cariplo Foundation. He is the Italian philanthropist par excellence, and here is Oxygen’s interview with him. Why are banking foundations the driving force of philanthropy in Italy? Because the foundations are non-profit organizations that are private and independent, with substantial assets whose profits are donated to organizations of the nonprofit and volunteering sector, putting into practice the principle of subsidiarity promoted by Europe and sanctioned in our Constitution. In practice, the responsibil-

ity to pursue the common good does not lie solely with the public administrations. On the contrary, it affirms the opportuneness that different subjects help address and resolve issues of public interest. With the historic judgment number 300 in 2003, the Constitutional Court placed our Foundations “among the members of the organization of civil liberties,” recognizing that they are an important driver of subsidiarity, the valuable infrastructure of a pluralistic socio-economic system. How much do your activities of philanthropy cost? The Foundations, on the whole, make philanthropic donations every year for about one billion euros. In better times, even one and a half billion euros. The beneficiaries are always subjects that pursue non-profit public interests: private non-profit organizations or public institutions. The Foundations cannot make donations to businesses, or to for-profit organizations in general. Where do the resources for philanthropy come from? They come from the profits generated by the investments of the Foundations’ assets, which, according to the financial statements closed on December 31, 2012, amounted to 42.2 billion euros. Only a portion of these assets is invested in banking activities. The rest is invested in management or other medium to long term investments, such as funds for social housing, for the innovation of small and medium-sized enterprises, for technological research, and for infrastructures, as well as for companies operating in strategic sectors such as utilities, highways, 013

oxygen | 21 — 10.2013

and, last but not least, the Bank of Deposits and Loans, which is crucial for territorial development and the revival of Italy. Why is there this very Italian peculiarity that charity is not conducted by the great entrepreneurs, like Michele Ferrero or Leonardo Del Vecchio, but by you of the Foundations? Does it have something to do with the Catholic culture as opposed to the Protestant American culture, which brings into play the likes of Bill Gates, who has even left his company Microsoft to devote himself, together with his wife, to philanthropy? I don’t think that it has anything to do with religion. What is missing in Italy is the culture of intermediate entities. Alexis de Tocqueville, returning to Europe, wrote that he was very surprised by his discovery in America of the private-social sphere – that is to say, those intermediate entities such as foundations or charities that performed an essential function in a country where the public welfare system, supported by the state, was reduced to the essentials. Instead, we come from a liberal culture, which was then followed by Fascism, in which intermediate entities were not actually expected. Fascism even suppressed them. Today, this culture of the private and social sector is still lacking. The non-profit sector has been acknowledged to play an important role only now that the state is in crisis, but the deep sedimentation of a subsidiary culture is still lacking. Many arguments that have been made against the banking foundations denote this cultural deficit. But once again, why aren’t there any great philanthropists? Probably because there are no symbolic figures. But there are many subjects who are very active in social cooperation, many small Bill Gates, who are silent but very useful in the social and territorial fields where they live and work. Two great entrepreneurs such as Giorgio Armani and Diego Della Valle have taken a thrashing in recent weeks concerning their philanthropy. Armani said that a person should donate their own money and not that of their company. The owner of Tod’s challenged him to do more for the Sforzesco Castle, just as he is doing by financing the restoration of the Coliseum. Who is right? This is clearly a controversy between two great entrepreneurs with strong personalities. The problem is not this diatribe. The real matter is the return of patrons, like there were in the Renaissance, who can effectively perform a social function. 014

foundation: civic actors

| oxygen

In fact, the Cariplo Foundation has already donated 35 million euros for the Sforzesco Castle. What sectors are the banking foundation involved in? In 2012, we funded over 22,000 projects. Among the 21 areas permitted by law, the majority of our donations are focused on seven of them. These are art and culture (31.6% of the total paid); education, schooling, and training (15%); social assistance (12.9%); research (12.3%); volunteering, philanthropy, and charity (12.1%); local development (5.7%); and public health (5.7%). It is significant that the welfare system, which includes the fields of social welfare, public health, and volunteering, was allocated almost 31% of our disbursements, amounting to 296.4 million euros, for operations that do not substitute public services. In short, today we operate where the state puts fewer resources because of the crisis of public finances.

Today, the main drama of our society is assistance for the people of all those less protected categories: the elderly, the disabled, children, drug addicts, immigrants, prisoners, and families at risk of social exclusion

How do you choose the interventions? We try to get a fairly accurate picture of the needs of our territories. And I must say that today the main drama of our society is assistance for people, that is to say, to all those less protected categories, such as the elderly, the disabled, children, drug addicts, immigrants, prisoners, and families at risk of social exclusion. The centralized welfare state is no longer adequate, nor will it return to what it once was. We believe that we must replace it with community welfare. The situation can truly change if you try to carry out specific community projects that are systematic and not fragmented, but especially innovative, in delineated territories. How? Putting together who and what? Meanwhile, the foundations of banking origin are acting as a driving factor, with funding and with the expertise of our managers and officials. Then, there is a need to invest a bit in public resources and, all around, it is necessary to involve local businesses and all those volunteer and non-profit organizations that are magnificent examples of Italy at its best. In addition â&#x20AC;&#x201C; and this is the real news â&#x20AC;&#x201C; we believe we can involve individuals, especially if the projects at the community level prove to be valid, to provide support for the most vulnerable part of the population. That is where the idea came from to experiment with community foundations which are working well and have become a model for the whole world. These are philanthropic organizations that collect funds from local 015

communities, from private enterprises, from companies, and from individuals, and that support initiatives in various sectors: from solidarity to art, from historical heritage to culture, by way of the environment. All with one goal: the common good of a circumscribed territory, province, town, or community. They are nurtured because the disbursements made available by banking foundations trigger a virtuous process of donations from citizens. In short, the common people have discovered the value of making donations. In addition to the Cariplo Foundation, so far community foundations have also been activated by the Compagnia di San Paolo, the Venice Foundation, and the Foundation with the South, which is not a banking foundation, but is nonetheless our own creation. The idea was created right here at ACRI for an alliance between the banking institutions and the world of the non-profit and volunteering sectors to promote the social infrastructures of the South. We have capitalized with approximately 350 million euros and, every year, we pour 20 million euros into supporting our disbursements. In the period of 2007-2012, the Foundation with the South funded 240 exemplary projects, 167 programs to support networks of volunteering, and the creation of the first three community foundations in Southern Italy (Salerno, Messina, and in the historic center of Naples). 016

All the projects you are implementing are being directed within Italy. Have you abandoned your projects abroad? No, we have some there as well, although to a lesser extent. Our support goes to non-governmental organizations and voluntary organizations involved primarily in Africa, southern Asia, and in Central and South America. And here too, we are changing our strategy of intervention: we are thinking of country-projects, such as those conducted in Senegal and northern Uganda, aimed at creating the conditions so that after they have been started, the local people are able to carry forward these initiatives by themselves: we create the basic conditions and skills. Another area, though less well known, is that of support for micro-credit activities. The old philanthropy was limited to making donations. Today that is not enough. What is needed to relaunch it? Foundations like ours must have their mission clearly in mind; that is, they should give immediate and concrete answers to the increasingly compelling needs of the communities in which they operate. They can do so by acting as a coordinator among the various entities in the area. But above all, they must operate with an anticipatory function concerning social needs, and with a strong capacity for innovation, enabling experimentation, creating technical and administrative culture, and encouraging networks.

Now there are many subjects who are very active in social cooperation, many small Bill Gates, who are silent but very useful in the social and territorial fields where they live and work

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The non-profit sector relaunches

the for-profit sector by Stefano Zamagni Chairman of the scientific committee of AICCON

The transition toward a productive third sector is already taking place in Italy, where, in the light of considerable growth in a decade, the non-profit sector is increasingly conscious of its role and is affecting the for-profit sector. A reflection on the desirable directions that philanthropy must also take for the purposes of social welfare.

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The new fact on which to build is the decrease during the last two decades in the traditional forms of philanthropy in all the advanced countries of the West. This applies to the United States as well, where the volume of donations now totals 2.2% of its GDP. Keep in mind that the United States never adopted the model of the welfare state – which is a European invention typically financed by general taxation. Instead, the Americans created the model of welfare capitalism (officially in 1919) based on the “refund principle”: enriched companies and individuals must be aware of their obligation of civic engagement – not a legal duty – to give back part of the income they have acquired, in part thanks to the community they belong to. That is why the percentage of 2.2% is very low. What are the reasons for such a disturbing trend? I have three issues that may provide an answer, certainly not exhaustive, but nonetheless significant. The first one is of a strictly cultural nature. We continue to believe that the only form of creativity is one that is profitable (namely, one that generates profit) and not social as well (which generates social value). In turn, this obsolete belief substantiates another one: that the only innovations worthy of receiving funds and/ or financing are industrial ones. Nor is it suspected in Italy that there are also social innovations, which, in times like now, are of strategic importance for the local development of the territories. (The empirical evidence on this is now abundant in Italy). This cultural lag is largely the fault of the class of intellectuals, starting with universities. (Just check out the academic and scientific publications for confirmation of this). The second issue calls finance into question. Social innovation postulates social entrepreneurship. It is well known that an entrepreneur – no matter whether for-profit or non-profit – is someone who is driven by a high risk tolerance and knows how to invest with courage and prudence. But how can entrepreneurs invest if they are denied access to the appropriate financial products or instruments in order to achieve what they seek to do? Of course, if you believe that the non-profit sector should carry out purely redistributive functions – as has happened so far in much of Italy – the problem that is raised disappears. But just because you have eliminated the problem, it does not mean that it is solved. In Italy, the main cause of this lack is due to the political class, which has done nothing decisive to equip the country with financial

infrastructures for social work, as is happening elsewhere. Yet, social innovation is basically a disruptive innovation, for which neither traditional fundraising nor the various forms of conventions (public or private) can provide what is needed. Although such forms may be sufficient to keep flow organizations running (those that distribute with one hand what they have achieved with the other), they are not at all sufficient for the growth of functional organizations. Then, a third issue is the “syndrome of low expectations” that quite a few non-profit organizations seem to suffer from: they almost never expect an adequate return on their investment in social terms, as if the fact of not aiming at profit would justify a certain organizational laxity and various forms of wasting resources. It is true that it is difficult to create a scale on which to measure the added social value of an intervention, but it is equally true that no systematic effort has been made to achieve this. For example, consider the indicator known as the “social multiplier,” which is defined by the ratio between the total value of activities carried out and the amount of donations collected. It is known that a social multiplier greater than two is able to stimulate philanthropic actions more than anything else. Yet this indicator is almost never made public. In light of the above, you can understand why it is urgent to implement new ideas and philanthropic practices if you want to speed up the transition to a non-profit sector that is productive, i.e., socially entrepreneurial. A plurality of signs indicate that this transition is already underway. First, it is clear to all that the Italian non-profit sector is changing – albeit sporadically – the perception that it has of itself: from being a residual entity performing ancillary functions to becoming the leading actor in the planning and implementation of welfare policies. Second, it should be changing the meaning, that is, the direction of its actions: not so much reductionism, but rather emergentism. In another way, the subjects of non-profit organizations are realizing that their specific mission is to “infect” the for-profit subjects. Some interesting results concerning corporate social responsibility are the result of precisely such a contagion effect. The recent data from the Istat Census on the non-profit sector is the most convincing confirmation of the change taking place: the 28% growth of these institutions over a period of a decade is truly extraordinary – a growth, mind you, which covers all sectors and all Italian regions, albeit in different proportions.

It is urgent to implement new ideas and philanthropic practices if you want to speed up the transition to a non-profit sector that is productive, i.e., socially entrepreneurial

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The space at my disposal allows me to make only a short list of the forms the new philanthropy should take. First, the direct financial link between citizens and non-profit organizations (social enterprises and not) should be encouraged, both in the form of participation by way of capital, and in the innovative form of a loan with the aim of strengthening its capital structure and opening the way for an “almost donation” to the productive nonprofit sector. In particular, I am thinking of two increasingly widespread tools. On the one hand, there is equity crowdfunding: Internet platforms for raising venture capital (equity) for social enterprises in the start-up phase. On the other hand, there is philanthropic brokerage which aims to promote the donation mode by democratizing philanthropy. Think of all those people – and there are many of them – who want to give unity and consistency to their disbursement, but cannot or do not want to create their own grant-making foundation. Second, there is a need to create as soon as possible social impact funds that feed into the territorial funds for planning, on the example of what is already happening in Britain. Then there is the new financial tool known as social impact bonds, that has already been successfully used in the United States and Great Britain. Basically, this product resembles the familiar bonds, in that an individual (or public) subject is

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committed to ensuring the return of a bond earmarked to fund a project of social utility, once the desired results are achieved. Finally, we must have the courage to implement the principle of circular subsidiarity, because horizontal subsidiarity is no longer sufficient. Quite simply, the idea is to put the three spheres that make up society (the public sphere, the business community, and organized civil society) into strategic interaction at both the moment of the planning of interventions and of their management. It may be of interest to recall that the principle of circular subsidiarity dates back to an exquisitely Italian idea in the era of civil humanism (15th century) and, perhaps, that is why Italians do not want to hear about it! (In 2001, Article 118 of the Constitution was amended to introduce the principle of subsidiarity, but not in the circular version). The renowned Indian anthropologist Arjun Appadurai recently coined the phrase “capability to aspire” to denote the degree of people’s participation in the construction of social, cultural, and symbolic representations that shape the future, and life projects. Civil and economic progress depends on the degree of the diffusion of this capability within society. Like any other capacity, even that of aspiring can be cultivated and encouraged to grow. If properly understood, the new philanthropy should also serve this purpose. 021

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if locusts turn into bees by Geoff Mulgan CEO of NESTA National Endowment for Science Technology and the Arts

Philanthropy as a symptom – and at the same time part of the solution – to the financial crisis. From the author of the book “The Locust and the Bee,” which theorizes a world divided into locusts and bees, into predators and creators, here is a look at philanthropic enterprise, from its origins to its possible developments, and about the spreading of social investment that involves ordinary citizens as much as those who are better off. Five years after the beginning of the financial crisis, it is now clear that one of the main causes of the crisis was a surge in the proportion between predatory and productive economic activity. Rewards for predation boomed while rewards for the creation of useful goods and services stagnated. In other words, the locusts prospered to the detriment of the bees. All over the world, work is undergoing monumentous change, from this point of view. China is seeking a more balanced model of economic development in which it can play a more decisive role in creating new technologies. In India, leading policymakers openly talk of the madness of a system which mobilizes the best brains to solve the problems of the rich, who certainly need less help than the poor do. Brazil, like many other emerging economies, is trying to create a welfare system that spreads its growing prosperity to the greatest number of people. Philanthropy is both a symptom of the problems and a part of the solution. It is a symptom in that a tiny number of people benefitted from the rising inequality of the boom years and from huge windfall gains – sometimes the result of clever technologies, more often the re022

sult of being in the right place at the right time. As in previous eras, a few of the newly enriched have started to take philanthropy seriously. Gates, Omidyar, Skoll, and others have recognized the moral responsibility to give something back, and that it is senseless for them to spend their wealth exclusively on themselves. Their engagement is now backing the new vocabulary of social change. “Social investment” is now ubiquitous, linking investment methods to social outcomes – helped by big new wholesalers like the €800 million Big Society Capital fund in the UK – and is bringing much greater attention to issues of growth and scale (which I will touch on later). “Social entrepreneurship” was pioneered for many decades by figures like Michael Young and Muhammad Yunus and has now entered the mainstream of organizations like the World Economic Fo-

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rum. More recently, the global social innovation movement has been promoted by figures like the Mayor of Seoul, Park Won-soon, and large firms like Cisco. Both movements have set down roots all across the world. One of the common features of all of this change is a different view of giving, whether by ordinary citizens or by the very rich. Although volunteer labor has been a blind spot for economists, the potential for tapping into non-paid resources matters hugely. According to the World Giving Index, 20 percent of the world’s population say that they have volunteered time in the past month, 30 percent that they have given money, and 45 percent that they have helped a stranger. It is not only the recipients of help who benefit; there is evidence of the positive effects of giving on the well-being of the benefactors as well, and at a national level, a link has been found between the amount of money given and the reported happiness of its citizens (a coefficient of 0.69 compared to 0.58 for the link between GDP and happiness). This link is almost certainly true as well for the very rich – who appear much more satisfied by their ability to concretely influence issues such as children’s health than by their ability to accumulate capital. Giving is, of course, integral to the civil economy, which combines monetary and non-monetary motives and outputs, and which has very old roots but also renewed relevance. The first mutual insurer was set up in Italy in the thirteenth century, and several of the religious orders invented new financial services for the poor, as well as forms of “social investment” that remain relevant today in the various banks that are offshoots of the Catholic Church. In some countries, civil society grew out of crises: England’s charity laws, for example, first legislated in 1601, were a response to widespread destitution and crumbling public infrastructures, and everywhere the modern civil economy grew up as the counterpart to commercial capitalism, a response to the inequalities, ill health, and human misery it brought, mobilizing altruism as well as self-interest, mutual care, and individual 024

A few of the newly enriched have started to take philanthropy seriously. Gates, Omidyar, Skoll, and others have recognized the moral responsibility to give something back 025

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material interests. In the nineteenth century, the citizens of the first industrializing nations depended on the social sector for financial services like insurance, savings schemes, and money for buying homes, as well as cooperatives providing everything from food shops to funerals. A strong and proud independent civil economy grew up, including what, a century later, came to be called microcredit, and today it includes large cooperatives in Spain and Italy, construction companies in the UK, and charities in Germany funded by tithes on income. But during the twentieth century, big government and big business often displaced sociallyowned organizations, with governments providing welfare and pensions, and business providing commodity financial products, on a larger scale and sometimes at lower cost than their notfor-profit predecessors. Civil organizations, however, can be paternalistic as well as inefficient. When small, they can be amateurish; when big, they can become bureaucratic. All civic organizations find scale difficult – and although there are some very large NGOs, like the Red Cross, Grameen, or Caritas in Germany, which employs some 400,000 people, the great majority are small, mainly because greater scale can corrode values, commitment, and their members’ sense of belonging. When these organizations do grow large, they tend to do so in ways that maintain small units of activity: for instance, with federal structures linking hundreds of local branches, or cellular structures like Alcoholics Anonymous, or many churches. Linear growth is also complicated by the values at play. One of the first charities in England was set up to raise funds to buy wood with which to burn witches; a century ago, another distributed cigarettes to wounded soldiers. Associations representing car drivers have views almost diametrically opposite to green groups, and all civil associations involved in the health sector are as much a cacophony of mutual disagreement as they are a harmony of shared beliefs. Yet for all that, the more organized parts of civil society have consistent biases that go with the grain of 21stcentury culture. They believe in equity, valuing activism rather than passivity; mutuality rather than hierarchy, and in general sharing the spirit of Ibsen’s comment that “a community is like a ship; everyone ought to be prepared to take the helm.” They draw on secu026

lar ideas of equality and liberty but are also interwoven with faith, and the persistence of religion as a social and economic force. A good metaphor is that of the “granite” from Guatemala: the idea that everyone can contribute their tiny grain of sand to making social change. The fact that civil society is strong in sectors that are likely to grow for other reasons leads many to expect its share of the GDP to rise. In the UK, for example, well over 30,000 NGOs are already contracted to provide services by the National Health Service. Some governments have encouraged this growth by contracting out a growing share of public services. Globally, there are now many (very different) examples of real scale – from BRAC and Grameen, to Pratham and Avaaz. Business schools report a high proportion of their MBA students wanting to learn about social entrepreneurship and how to find career paths that

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combine making money with doing good. There has been a healthy growth in global NGOs, increasingly providing humanitarian aid, awareness campaigns, or specialist expertise. A plausible future sees a continued expansion of the social economy helped by rising investment. Yet it is just as possible that for-profit businesses will prevail, taking over new markets that NGOs and social enterprises pioneered, as has already happened in fields as varied as organic food and social networks. Philanthropy provides the free money for many of these organizations because it has the capacity to take risks, to tackle unpopular issues, and to take a long view. Yet its very strengths are also its potential weakness. Philanthropy’s main strength is that it is not encumbered by restraints, or accountabilities. But that makes it all the more important that philanthropy not become an unaccountable institution, replicating

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power in the economic sphere in society in ways that are undemocratic both in spirit and in practice. In previous eras, public opinion turned against charity when it was seen to be too paternalistic, too much a tool for the rich to assert their own virtues, and too disempowering for the recipients of support. Some advocates for “venture philanthropy” recently repeated the mistakes of the past in this respect, claiming that the rich, without accountability, are the only ones in the ideal position to solve the problems of the poor. Wiser philanthropy will instead put itself within the broader movements of civil society – responsive to the needs and the demands of people needing help. If that happens, it can become part of a broader process of “civilization,” making business and the economy in general more civil in character, in terms of values, methods, and organizational forms.

“Social investment” is now ubiquitous, linking investment methods to social outcomes and is bringing much greater attention to issues of growth and scale

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Cutting the funding for aid to Africa interview with Dambisa Moyo Writer and economist by Elisa Barberis

The system of giving aid to Africa has failed, leaving the continent in a state of eternal economic adolescence: this is the thesis of the economist Dambisa Moyo, who hopes for a substantial change in direction and, possibly, a reasoned abolition of financing. “I hope that we will put the model of aid into question, just like we are doing with capitalism. Sometimes the most generous thing you can do is simply say no.” “History is evolving dramatically, what is needed as soon as possible is a change of mentality. On the other hand, why should the Western countries have to take responsibility for the problems of the Third World, if they are themselves in crisis?” Zambian economist Dambisa Moyo’s assertion is not a provocation in itself, but a lucid analysis of the direction the world has taken. A thesis which she explained in her best-seller Dead Aid: Why aid is not working and how there is a better way for Africa (published in Italy by Rizzoli), and is as shocking as it is powerful: the system of development aid in Africa has failed and has had the unique effect of making a country already in misery even poorer. The unlimited assistance offered to the governments of African countries – not to be confused with emergency donations, such as those for natural disasters in Haiti or after a tsunami – has proven to be a disaster in every aspect. Not only has it increased their economic dependence, but it has encouraged corruption, ultimately perpetuating poverty. And the numbers substantiate this reasoning: today, 50% of the African population, twice as much as twenty years ago, lives on less than a dollar a day. This is a situation that Dambisa knows well, and one which she managed to leave behind a long time ago. Born in 1969 and raised in the capital Lusaka, the grandaugh-

ter of a coal miner, she is the symbol of the redemption of an entire continent: she received a degree in Political Science from Harvard and a PhD in Finance from Oxford, she worked as a consultant at the World Bank, and then spent eight years in the investment bank Goldman Sachs. In 2009, her book created quite a stir, to the point that Time included her in its list of the one hundred most influential people in the world, alongside Barack Obama and the winner of the Nobel Prize for Economics, Paul Krugman. Moyo’s indictment comes from a deep concern about the authoritarian paternalism of the West. And a question she could not get out of her head: why can’t Africa stand on its own, in spite of having received more than 1,000 billion dollars disbursed for various purposes and in different ways over the past 60 years? It is estimated that between 1970 and 1998 – a period in which the transfer of capital to the Third World countries peaked – the poverty rate rose to 66%. And countries like Burkina Faso and Burundi, which three decades ago had a per capita GDP higher than that of China, have slipped to 181st and 185th position (out of 187), respectively, in the Human Development Index ranking of the United Nations Development Programme. The economist does not point her finger 029

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only at the attempts of personal enrichment that led administrators and dictators such as Mobutu Sese Seko (Zaire), Frederick Chilobu (Zambia), and Robert Mugabe (Zimbabwe) to steal billions of dollars, which they then used to invest in real estate, luxury goods, and weapons, leaving national coffers empty. The cause of the decline of Africa is to be found mainly in the policies of those governments which have created a thriving business which also benefits international foundations, the multinational food giants, and even NGOs, many of which, Moyo claims, are interested in perpetuating poverty to justify their existence. And major events organized by rock stars like Bono Vox and Bob Geldof do not help either, because instead of really increasing people’s awareness, they only play on the superficial emotions that begging can arouse. In short, she stresses, we must dispel the myth that an aid-dependent economy, anchored to the humanitarian funds as the only, but consistent and significant, form of sustenance, can alleviate the structural problems of the African continent. Everything seems to show that solidarity, instead, increases the damage by triggering a “vicious circle between international grants and endemic corruption of governments subsidized by the West, that hinders the development of civil liberties and prevents the emergence of transparent institutions.” “The only help that really helps is the aid that helps eliminate the aid,” wrote the African philosopher and historian Joseph KiZerbo. For this reason, the proposal of the economist is to abolish most of the money, of course, in a gradually phased manner, taking into account the different levels of development of various countries. The goal is to implement a sort of “Marshall Plan” to induce African States to get out of this perpetual “economic adolescence” and break free from the “drug of aid.” This is an ambitious idea: therefore, it is not surprising that it has been met with criticism from those who manage the sector. However, Africa is not being asked to develop a new system. Instead, it is a matter of applying what is happening elsewhere. “The rest of the world is already working on the model that I describe, based on the combination of free-market strategies, fairer trade, and direct foreign investments,” explains Moyo. “If they have worked for China, India, and Brazil, why shouldn’t it be the same for Africa?” This will be the year of the emerging markets: this is where almost 90% of the world population lives. “According to the forecasts of the International Monetary Fund for 2013,” continues the economist, “the African continent is among the top 030

We must dispel the myth that an aid-dependent economy, anchored to humanitarian funds, can alleviate the structural problems of the African continent

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three regions with the fastest growth. The estimates point to a growth of 6-7% by 2014. In the last twelve months alone, 60 developing countries have decided to focus on the issue of bonds for liquidity to be used for the construction of roads, bridges, power stations, and railways. As the examples of the success of South Africa and Botswana have shown, the impression that Africa is only underdevelopment, war, and famine is now outdated.” Moreover, this view fails to take into account the increasing urgency that also affects the donor countries, said Moyo. “In the Maghreb, the lack of jobs and the rise of consumer products contributed to the outbreak of clashes in the square. But it is also true that the whole world is paying the price of the global crisis. The West itself is threatened at home with serious structural problems: the sovereign debt that is increasingly growing, heavy deficits, an ageing population, and a dangerously high unemployment rate. In the future, there will not be enough money to send to Africa. Even today, no country talks about humanitarian aid in their policies, and the issue has become a ‘nonissue,’ not even dealt with anymore in the major international forums.” Instead, the focus has shifted to other fronts. “First of all,” the economist ex-

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plains, “to the efforts of African and Latin American governments to support development by using different methods among those considered more traditional. And then to investments in Africa of other emerging powers such as China.” In fact, Beijing has gone from a policy of loans repayable in exchange for natural resources to the granting of loans for the construction of infrastructures. And in 2010, the volume of the interchange had already exceeded $130 billion. Therefore, less talk, more concrete solutions. Starting with the liberalization of the market for local agricultural products, to help the nascent indigenous entrepreneurial class, the diversification of products (not just oil), by exploiting the bond markets and other forms of micro-finance, to the model advocated in Bangladesh and the brainchild of the “Banker to the Poor,” Muhammad Yunus. “Once the economy of African countries has become more reliable, it is hoped that their politics and democracy will also improve,” predicts Moyo. The real wealth of Africa lies in its land, but the motor of change will be the young, she concludes. “More than 60% of the population is under 25 years of age: this strength must be utilized in a dynamic way, by investing in skills and education.”

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Public commitment photographs by White

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The strategic direction of local authorities interview with Giuliano Pisapia Mayor of Milan

by Giuseppe Gobetti

Milanese solidarity is growing in the third millennium. The historical features of philanthropy that provides protection for the weak through charity and welfare, are now joined in a closer relationship between the local authorities and the third sector, which can promote economic development. Giuliano Pisapia spokes with Oxygen about the evolution of the relationship between the public sector and the non-profit world.

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Mayor Pisapia, is the role of non-profit institutions to ensure social cohesion, welfare, moral values, and economic development considered positive in your territory? The non-profit sector plays a strategic role in society because it helps hold it together, forming a dense network of relationships between the associations and the citizens. In the territory of Milan, in particular, the organization of the third sector acts as a fundamental glue. They create bonds, produce culture, and promote wellness, while dealing with the most fragile groups. All the subjects, from small groups up to large international organizations, are driven by great ideals and a thirst for social justice, solidarity, and altruism. For this reason, their impact on the rest of society has been, is, and will be, extremely positive. How do the local authorities interact with the sphere of non-profit organizations? What improvements could be made in the institutional relationships? Local authorities and non-profit organizations must be great allies and collaborate in compliance, each with their roles. This is what happens in Milan, where the municipal administration, through calls for proposals, entrusts the management of important activities and initiatives to the third sector. Of course, the guidelines should be outlined by the administration, as should their monitoring: but mutual trust and the exchange of experiences are essential. I firmly believe that the local authorities must listen and take on a role of strategic direction to meet the needs that arise within the territory. Non-profit organizations often denounce a willingness on the part of public agencies to “control” and orient private capital for their purpose at hand, also affecting the public funds by criteria other than those of effectiveness, efficiency, and economy. How do you respond to this criticism? In particular, is the non-profit sector able to grow independently or is it too dependent on public funding? Directing does not mean conditioning. Our goal is to develop a network to work with the administration of Milan to meet the needs of the most vulnerable and fragile subjects: common goals shared with the vast world of the non-profit organizations in Milan. However, with regard to their ability to grow, I believe that these same realities are able to move independently. They do not depend on public funding, because they are now able to raise money through fundraising and private support. The for-profit sector and non-profit organizations struggle to communicate, both for cultural reasons and a longstanding mutual distrust, and finally, for a presence in certain markets which may, in fact, take on the traits of competition. Do you foresee the possibility for the local authority to take on a role as a facilitator of such relations, with a view to the common good of the citizens and the territory? I honestly believe that the distances with respect to the dialog between for-profit and non-profit organizations have been shortened. This is because, for some years now, the for-profit sector has un035

dertaken a serious social responsibility that has led companies to be more sensitive about issues that at one time were not considered or were considered to be secondary. For example, I am thinking of the environment, of the most fragile subjects, of childhood, and inequalities in general. The local authorities can facilitate this dialog by drawing closer to the subjects and promoting joint projects. We have done so in Milan and we are doing this through various initiatives with the business community and the third sector. Important actions concerning children, women, and the promotion of culture and health have arisen from these collaborations. What practical measures can be put in place by local authorities and the central government to foster the relationship between non-profit institutions and for-profit enterprises? The local authority, or the central government, should take the responsibility to convene stakeholders to sit at the conference table, and to keep the relationships alive. For example, I remember the National Forum for International Cooperation that took place in Milan, which brought together the experiences of members of different associations also working in the same field but who, in many cases, did not directly know one another. This example could be repeated, as a moment of exchange and growth between the non-profit and for-profit enterprises. Philanthropy, corporate foundations, and charities in general are important actors for the development of the territory and the strengthening of social cohesion: what do you ask of them and what kind of relations should be guided by the dialog? They are all very important actors that obviously work independently. What we can ask of them is to think about projects that take into account the problems, needs, and awaited responses from the territory in which they operate. Not initiatives handed down from on high, but the result of listening and a relationship with those who are engaged daily in social work. What is your view on the role of former banking foundations and the current status of the relationship you have with them, referring specifically to projects in the area? I have a very positive view and will cite a few examples that have been important for Milan. Our collaboration with the Cariplo Foundation, among other things, will allow us to exploit Castello Sforzesco more and more and, in particular, the Rondanini PietĂ by Michelangelo; I am also thinking of the contribution that was donated to the city for the redevelopment of Trotter Park, not to mention the many projects of social and cultural activities that have been, and will be, made possible only with help of the Foundation. I can say the same for the Banca del Monte Foundation, which has allowed us to undertake welfare and cultural initiatives that would not have been possible to complete alone. The Cariplo Foundation has also contributed, not only economically but even with 036

The distances between for-profit and non-profit organizations have been shortened. This is because, for some years now, the for-profit sector has undertaken a serious social responsibility that has led companies to be more sensitive on issues that at one time were not considered

the active presence of their representatives, to the success of the Scala Opera House. A different but equally important example is the initiative that each year involves the collaboration of Unicredit, the Unicredit Foundation, and the Philharmonic Orchestra of the Scala, and is presented at Palazzo Marino, in the Sala dell’Orologio. The proceeds from the Philharmonic’s rehearsals which the general public can attend are donated to organizations that deal with social hardship in the territory every day. Last year, the proceeds were given to Opera Cardinal Ferrari, the Franciscan Center Beata Maria della Passione, and to the organizations Cena dell’Amicizia and Pane Quotidiano. How do you plan to exploit the enormous resource of volunteering that, also in light of recent data from the Istat census, is confirmed to be vital and dynamic in your territory? Milan is the capital of volunteering and so we have created a specific delegation within a city council department. We recently carried out a project for the promotion of youth volunteering that involved more than 1,500 young people. Our intent is to promote generational renewal in Milan’s voluntary organizations, encouraging the inclusion of young people and the creation of new associations.

How do you assess the contributions that businesses, especially large ones, are trying to offer with regard to sustainable development through social responsibility initiatives? All contributions are positive as long as they meet two conditions. The first is that the good intentions written on the sustainability reports are translated into concrete actions with an impact on the area that is effective and efficient. The second is that the core business activity of a company does not contradict in fact what has been proclaimed in terms of sustainable development. If there is no such consistency, it is not possible to speak of social responsibility. What opportunities does Expo 2015 present for growth and bringing to fruition the relationship between public institutions, non-profit organizations, and businesses? The Expo is a unique opportunity to experiment with creativity and new ways of relating, and invent new projects. There will be the great opportunity of being able to work at an international level and make a comparison with the good practices of other countries. I would also like to emphasize that volunteers will play an important role in Expo 2015. We are planning on 18,000 of them, a valuable “army” that will make us proud.

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interview

The wealth of social commitment interview with Flavio Tosi Mayor of Verona by Luca Bosco

The non-profit world provides an important function of creating a cohesive social fabric, an essential prerogative so that economic resources are created to overcome times of crisis. This is what Flavio Tosi thinks and he recounts his experience of a municipality in which more than a third of the budget goes to social and educational services for citizens.

Non-profit organizations are strategic resources of the territory, and local government should enhance its potential in the management of social services, both in programming and networking, as well as responding to the emerging needs of its citizens, and at the same time, requalifying spending according to the criteria of efficiency and economy. This is the clear and precise recipe that Flavio Tosi, the mayor of Verona, illustrates for Oxygen concerning the state of relations between the public and the non-profit world. A strategic approach supported by the fact that, in the city of Verona itself, the subsidiary role of the third sector organizations, from associations to charities, up to social enterprises, is strong and rooted, despite the difficulties triggered by the crisis. Mayor Tosi, how do you view the ability of nonprofit institutions to ensure social cohesion, welfare, values, â&#x20AC;&#x2039;â&#x20AC;&#x2039;and economic development in your territory? Our experience draws strength from this certainty: social resources generate economic resources and not vice versa, as argued by Amartya Sen, the Nobel laureate economist in 1998. The social fabric functions well to offer the possibility for economic resources, whereas economic resources, by

themselves, do not create a social fabric suitable to retain them. No business owner would gladly invest where there is social unrest, where there is uncertainty, fear, insecurity, or where people feel threatened in living, working, and, more generally, in their daily lives. Starting from this basic belief, how does the local authority interact with the sphere of non-profit organizations? What improvements in institutional relationships could be made? The non-profit world is vital for us. The city of Verona allocates approximately 90 million euros, more than a third of its budget, for social and educational services for citizens, including about 50 million euros for social services, which are provided by turning to non-profit organizations that have demonstrated their ability to adapt to problems over the years, and are able to aggregate people and resources. We manage services for the elderly, children, the homeless, and the disabled through approximately 100 associations, cooperatives, foundations, and all that refers to the volunteer sector and the third sector, a reality that so far, Verona has expressed with great vitality and which has proven to be strategic in the renewal of the welfare state. 039

Thanks to the invisible but worthy work of many volunteers, in fact, an important social safety net has been recreated, one that is able to answer to a variety of needs and new forms of poverty that are not traditionally covered. This experience, it must be said, has also helped to change methods of intervention which, starting from experiences often promoted autonomously by non-institutional actors, were then taken up by the institutions. In this respect, non-profit organizations sometimes denounce the willingness on the part of public bodies to “control” and orient private capital for their purpose at hand, also affecting public funding as to criteria other than those of effectiveness, efficiency, and economy. How do you respond to this criticism? In particular, is the non-profit sector able to grow independently or does it remain too dependent on the public purse? Frankly, I think it unlikely that a public institution can guide private capital for its own purposes, since all contractors are chosen through public procurement, the committees are set up by technicians, and the selection criteria are based on the quality of the projects, their knowledge of the territory, their organizational strength, and their financial offer. 040

The city is responsible for planning and monitoring the adequacy of the work entrusted to the third sector with maximum transparency, and not allowing anyone to waste taxpayers’ money. Whether the manager is a public agency, a private partner, or a private social organization, what counts is the quality of the services, and the competence and professionalism in managing them, based on the criteria of efficiency, equity, and cost-effectiveness. The profit and non-profit organizations struggle to communicate, for cultural reasons, for longstanding mutual distrust, and, finally, for their presence in certain markets which may, in fact, resemble the competition. Do you envision the possibility of the local authority taking on a role as a facilitator of these relationships, in view of the common good, in the interests of the citizens and the territory? Federsolidarietà, the organization of political and union representation of social cooperatives, estimates that social cooperation depends on public resources for about 60.5%: therefore, it is clear that the contraction in spending in the social sector will certainly have a negative effect on the nonprofit world. Over the years, the City of Verona has always chosen not to reduce one penny of its social spending, but it is clear that, with cuts in the state transfers operated by the government, local com-

munities will not be able to maintain for long the level of quality of services provided to date. I therefore consider that, in the future, the entrepreneurial capacity of the third sector will be increasingly important, also through the application of two winning strategies: the ability to access extraordinary liberal resources and to muster paying requests. The capacity of the third sector to establish itself in this area will depend very much on its capacity for innovation in its proposals, as well as the ability to raise resources by accessing credit to financially support its autonomous activities. However, the ability to cooperate on common goals will still be essential, even in the future. What practical measures can be put in place by local authorities and the government to foster the relationship between non-profit institutions and companies? To facilitate relationships with our partners, it is our habit to do networking, to qualify costs and avoid duplication, and to ensure that the local authority manages less and controls more. In such a complex situation, it is essential to work as a system with all the economic and social realities, and to come to some sort of agreement in which everyone helps to maintain society. Therefore, in Verona, we have tried to work synergistically with the territory; working by areas of intervention, so as to give specific answers; implementing information in order to help citizens in need to move efficiently between the different entities operating the services.

In Verona, we have tried to work synergistically with the territory; working by areas of intervention, so as to give specific answers; implementing information in order to help citizens in need to move efficiently between the different entities operating the services

What is your view on the role of charities? And on the former banking foundations, in the light of ongoing relationships, in particular with reference to local projects? In Verona, we are fortunate to have the Cariverona Foundation, which is not simply a dispenser of resources, but which works in parallel with the municipal administration right from the planning stage, and in reading the needs of our territory. In recent years, the Cariverona Foundation has allowed us to experiment with important projects such as the Alzheimer’s Project, that we have implemented, developing a system to assist families facing this terrible disease: we have created specific care at home, three daycare centers, places of relief, and special residences. Once again with Cariverona, we have experimented the project Extreme Marginality, intended for homeless people, which has enabled us to program with the third sector interventions that are not just limited to the logic of beds, but which proposes the goal of “empowering” those who are considered chronic, bringing them out of the dormitories. Finally, to help families affected by the economic crisis, we activated the New Poverty project, originally funded by the Foundation, and subsequently provided with its own budgetary resources, as well as funds from the “5 per thousand” tax contributions. 041

interview

the anti archistar Interview with Cameron Sinclair CEO for Architecture for Humanity by Raffaele Oriani

Since the late Nineties, the NGO Architecture for Humanity has implemented architectural interventions that are true acts of social commitment. With a conception of architecture that is shared with the recipients of the project and as an open source project, it has distanced itself from those architects and artists who design unique pieces where utility is often overshadowed by their beauty.

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At the last Biennial of Architecture in Venice, the watchword was “common ground.” The renowned architect David Chipperfield had chosen the theme to “encourage colleagues to react to the trends of our time that emphasize individual and isolated actions.” Thus the mainstream also rediscovers a sense of community and promotes a mixture of environmental concerns and social awareness, desire for change, and references to a tradition of good, and often anonymous, collective practice. So much the worse for those who continue to think of the architect as an artist who scatters unique pieces throughout the museum-world. And so much the better for the people like Cameron Sinclair, a forty-year-old Londoner based in San Francisco for years, who candidly said, “I have always felt like the black sheep of the category: for my colleagues, everything revolves around the beauty of the building, whereas for me, the mainstay has always been its usefulness.” Architecture as a social commitment. And as a common cause of people who know how to keep their ego in check. So, at the end of the Nineties, with $700 and two websites, Sinclair founded Architecture for Humanity, an NGO that in fifteen years has involved more than 6,000 professionals, offering a haven to families, students, doctors, and patients from 47 countries throughout the world. How did you come to know that architecture could be an instrument at the service of non-profit organizations? In ‘99, I was 25 years old and living in New York, but also following the restoration of the monumental complex of Constantin Brancusi in Romania. A few hundred kilometers from there, the war was raging in Kosovo, and facing that river of refugees, I told myself that, as an architect, I could not stand idly by, only thinking about my projects.

At the end of the Nineties, with $700 and two websites, Sinclair founded Architecture for Humanity, an NGO that in fifteen years has involved more than 6,000 professionals, offering a haven to families, students, doctors, and patients from 47 countries throughout the world

So what did you do? Well, I was young. I looked up the phone number of the High Commissioner for Refugees, I called them, and I made myself available. That still wasn’t enough for 043

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me. I had some ideas on how to design temporary shelters for refugees, but I figured I wouldn’t get very far by myself: so I launched a non-profit online competition open to all architects worldwide. Hundreds responded, sending projects and offers of money, but also letting me know that there was great energy out there to be exploited in the positive. Thus, Architecture for Humanity came into being. Can architecture really make a difference? It has always been a fixation of mine. I grew up in a London suburb full of huge concrete towers. I remember that as early as the age of six or seven, I spent hours with Lego rebuilding everything that was around me: I thought that if the buildings were different, we would all be happier. What is the strength of Architecture for Humanity? First of all, its database of 75,000 architects who are ready to work on our projects for free or at greatly reduced rates. And then, our ability to work with and not for those in need. Involving the community is a tiring process which takes time and requires our designers to live for months in conditions of great hardship, but it’s worth it. A shared project is infinitely richer than one imposed from outside. What can members of the community know more or better than the architects? They know their own tastes and needs. A sustainable building is, above all, a building that is appreciated. You can use all the technology and solar panels you want, but if a community refuses your work, you have only produced a great waste of resources. For Enel Cuore – the non-profit organization of the Italian energy multinational – you are overseeing seven projects in Europe

Involving the community is a tiring process which takes time and requires our designers to live for months in conditions of great hardship, but it’s worth it. A shared project is infinitely richer than one imposed from outside 044

The focus of our work is social, not financial, so it seems natural to cultivate an open source approach

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and Latin America. Is the involvement of the population also a priority for these? Certainly; I think that Enel turned to us precisely because of our expertise as architects â&#x20AC;&#x201C; anthropologists. The experience of Architecture for Humanity tells us that any initiative needs a community that participates, donors who give their attention, passion, and motivation as well as money, and a good architectural project. In the case of our partnership with Enel Cuore, none of these three ingredients are missing. What point have the projects reached? Having finished the study phase, we are starting up all seven sites. They will be completed in the first half of next year. What kind of interventions are they? We focus primarily on facilities for young people, women, and work. For example, in Peru we have opened the construction site of a school that benefited a great deal in its design phase from the contributions of the children and parents who will use it. Or in Chile, where we are going to create two centers that will revitalize the textile tradition of women of the Pehuenche ethnic group. The latter was a fantastic experience: our architect had presented a good, solid, sustainable, and efficient project. But the local communities did not like it: well, as an architect, I can say that the long months of confrontation we went through have definitely improved the project. At the end, does the design copyright go to the architect or the community? The focus of our work is social, not finan-

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cial, so it seems natural to cultivate an open source approach. What does that actually mean? It means putting our network of architects, calculations, drawings, and photos at everyoneâ&#x20AC;&#x2122;s disposal. And it works: in fact, it has already happened that we were copied before being able to complete the work. I know this because a few years ago I was in New York to present the clay structure that we had come up with for a school in Uganda. Well, at the same conference, before my turn came, a colleague intervened who had just completed a school in Kenya with the same technique. He candidly admitted that he had found the solution on the Architecture for Humanity website. I have never been so happy. How many houses have you built over the years? We have completed 350 projects, some for just one building, others for up to a thousand homes. In all, we have provided homes, schools, or healthcare facilities to nearly two million people. Which of your works makes you the most proud ? Perhaps the housing built in New Orleans for post-Katrina refugees; or the twenty sports and health centers set up in South Africa after the 2010 World Cup. But I am also particularly proud of the projects that we have been working on for Enel Cuore: I like it that they are intended for very specific communities. We are a global organization, but we respond to local needs. 045

Attention to the South Interview with Carlo Borgomeo President of the CON IL SUD Foundation by Maria Chiara Voci photographs by Renato Franceschin

There is a special experience in the universe of charity: in fact, the Foundation CON IL SUD is the first and only facility in Europe that, since its founding in 2006, can boast of an alliance between banking foundations and the sphere of the third sector and volunteer work. Its goal is to provide support for innovative and reproducible projects in territories of the south of Italy, aimed at creating social cohesion and development, with initiatives ranging from the education of young people to spreading the culture of legality, and from the integration of immigrants to promoting talents. The disbursements amount to about 20 million Euros per year, in addition to the funds that come through partnerships. Including the now historic one with Enel Cuore Onlus. At the helm of the CON IL SUD Foundation since September 2009, Carlo Borgomeo, its founder and the first president of the weekly publication “Vita” (Life), was the president of the Society for Youth Entrepreneurship for fourteen years, and the CEO of Italian Development until 2002. How did your collaboration with Enel Cuore come into being? Right from the beginning, we have pushed to open our foundation to partnerships with other foundations or organizations

in the social sphere. First, with the aim of bringing together experiences, and sharing networks and organizational skills. Second, to intercept new resources to be diverted for the south of Italy. Hence, our cooperation with Enel. What are the main projects that you have accomplished together? The first competition notice was in 2009 and involved services for the disabled and the elderly who were not self-sufficient. Enel Cuore co-financed five of the twelve selected projects, for an amount of €250,000. Subsequently, in 2010, for the competition “Education of young people,” Enel Cuore funded eleven of the sixteen selected projects, amounting to €400,000. The experience was very positive and has led us to develop other initiatives in several areas: the development and sustainable management of property confiscated from the ‘Ndrangheta in Polistena; support for a project of the UISP for sporting activities in some juvenile prisons in southern Italy; and the latest project, which was begun on a trial basis last year and focused on supporting women living in metropolitan areas. This trend has already produced excellent results. For example, the goal of one of the initiatives we implemented was to create some cooperatives in

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the Forcella quarter of Naples, and involved Neapolitan immigrant women in catering and food services. How is it possible for two complex structures like yours and that of Enel Cuore to work together successfully? The secret lies in sharing all phases of the projects right from the start, and in preliminary research. This way, you can organically distribute responsibilities and workloads, avoiding duplication and identifying complementary roles. By the same token, we have no agreement a priori for the division of tasks, but each project is evaluated and, depending on the different skills required and with great flexibility, the involvement of the respective organizations is identified. You have been responsible for promoting development for years. How do you assess the maturity of Italy in the field of philanthropy? Unfortunately, Italy registers a big gap in this area compared to other states. Once again, it has emerged from international comparison that the culture of charity is not developed sufficiently in Italy and the sector is not regulated in an appropriate manner. This does not mean that excellent initiatives are not being promoted, valid from the point of view of both sustainability and commitment, and of their ultimate success. But unfortunately, these are often isolated experiences, scattered throughout the territory, not homogeneous or repeatable, and lacking all synergy also in terms of research and concentration of economic resources. In addition, in our culture, rating systems do not exist that would allow us to compare the initiatives, to judge the results, and improve or repeat the successful models. The CON IL SUD Foundation targets a welldefined territory. How does philanthropy work in the South of Italy? To answer this question, it is necessary to point out that in Italy, more than in other countries, the role of banking foundations is absolutely central to initiatives of solidarity. However, these are located mainly in the northern and central part 048

of the country. It is therefore a fact that, under the aspect of the distribution of resources, the South has a problem of imbalance. In 90% of the cases, the southern regions are cut off from solidarity initiatives that are put into act. Then, added to this situation are the problems concerning our entire nation, from the economic crisis to cuts in resources for local governments. Thanks to your past experience, you have a profound understanding of the socio-economic dynamics of the South and the problems related to the development of entrepreneurship in this area. What are the main obstacles that must be taken into account by those involved in philanthropy for the South? All too often, we speak broadly of the South, without taking into account that the South has a very diversified territorial hierarchy. In the past, sometimes mistakenly, it was thought that the inland areas were the poorest and more in need of support than the coastal strip, while on the contrary, the most critical areas today are mainly the coastal and metropolitan areas, from Naples to Palermo, to the south of Calabria, where there is less social cohesion and also a less ingrained sense of respect for the rules. It is in these regions that it is most important to invest in building education for social cohesion. For each competition that is initiated, there are many proposals that come to your attention. How does the selection process work? How do you choose which projects are to be financed? Because of its vast territory of expertise, the Foundation is â&#x20AC;&#x153;doomedâ&#x20AC;? to handle a situation of substantial imbalance between available resources and potential demand. The resources are distributed only through specific calls for tender, with the exception of those involved in co-financed projects. In evaluating the proposals, first we consider the nature of the project and the credibility of the proponent. Second, due to a strategic choice, the Foundation never funds ini-

attention to the south |

oxygen

In Italy, the culture of charity is not developed sufficiently and the sector is not regulated in an appropriate manner. This does not mean that excellent initiatives are not being promoted

tiatives proposed and implemented by a single subject. In fact, we believe in the added value of collaboration. Finally, when considering applications, sustainability and the push for innovation are fundamental. In fact, our help should be to aid the start of experiences that are then able to sustain themselves on their own, develop, and also be re-proposed as models. At the same time, we reward experimental ideas that are attempting new ways and approaches. From its start to the present, the Foundation has supported the launching of over 430 initiatives. What is the success rate of the experiences you have funded? It is very high and this fills us with satisfaction. Three quarters of the initiatives we have funded have been able to sustain themselves and grow. Despite having fully implemented a projectâ&#x20AC;&#x2122;s expectations, barely a quarter of the projects were not able to continue activity at the end of the start-up phase supported by the Foundation. The sector of philanthropy involves protagonists that are mainly banking foundations. However, there are, increasingly, the experiences of large public and private companies, such as Enel, which long ago decided to become active in the field of philanthropy. In these cases, how do you reconcile an impulse toward solidarity with the protection of the brand? Many companies are opening up to philanthropy, for example, through the creation of foundations to which a specific budget is dedicated every year. Or, as in

the case of Enel Cuore, through the activation of divisions for charity within the production reality. In all these cases, the theme of the relationship with the brand is very strong and delicate. A large organization cannot afford to make mistakes when giving support to a project. This is why you need to proceed with extreme caution in the selection of initiatives to be sponsored and partnerships to be activated. This is a limit that often does not allow you to be open toward supporting smaller and less structured experiences, which offer no guarantee of success, even if they are potentially good ideas. What challenges for the future does the Foundation expect? One of our commitments is to promote a change of mentality through the projects. As I have seen in my past and present work, you must move the debate about the South onto slightly new ground. We tend to think that social cohesion, the sense of community and institutional density, is the result of a process that starts from economic growth. On the contrary, the very experience of the Foundation suggests an opposite paradigm. Investment in social and human capital is the premise for and not the consequence of economic development. Without a receptive social fabric, the resources that are spent do not produce investment. For this reason, we work on training, education on legality, and the promotion of the sharing of talent that, even in the South, as in the rest of Italy, needs to be recognized in order to grow. 049

report

The lady of the “copii strazii” by Paola Tavella Writer and journalist photographs by Renato Franceschin

Children are the first victims in a city, Bucharest, dominated by poverty: left without homes and schools, living on the streets, and taking refuge in the underground heating ducts during the cold winters. Juliana Dobrescu began teaching mathematics to these children, the “copii strazii,” and today she has become the historical memory of the Romanian street children.

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Juliana Dobrescu pulls a book from her bag and opens it up in the middle. A fifty ron bill, more or less ten euros, is tucked in the pages. Ionut, one of her “boys,” had requested a loan of one hundred euros before emigrating to Italy to work as a woodcutter; when he received his first paycheck, he sent the money to her. A year later, they met again in the slums of Bucharest. Ionut needed fifty ron, and without batting an eyelash, Juliana put the money into his hand. Her colleagues, who are all social workers, predicted that she would never see the money again. One month later, Ionut came to Parada, a non-governmental organization founded by the Franco-Algerian clown Miloud and supported by Enel Cuore, which rescues street children by taking care of them and teaching them circus arts. Juliana works there, and that is where Ionut came to repay her with ten five-ron bills: “Now I can’t bring myself to spend it,” she laughs, “I tell myself that I should use the money to buy something significant, but there is nothing that is more meaningful to me than this money.” Juliana is a chemical engineer. During the years of communism, she worked in a research institute and was in charge of wastewater. When the regime collapsed, she saw ordinary families end up in misery from one day to the next, disintegrating and losing their home, work, and food. “Offices, factories, and shops were closed. People took refuge in the countryside, but they were unable to work the land. Children were the first victims of this social catastrophe: they lost everything, even their schooling. When the money ran out, as well as the food, electricity, and water, and when their parents left one another and began to drink, to fight, and even use violence on them, then the children ran away and ended up on the streets.” Hordes of children roaming around Bucharest were all alone, lost, had run away, or escaped from the orphanages, those huge, badly heated institutions with few staff members, where more than five thousand children were malnourished and mistreated. In fact, starting in 1966, the Romanian dictator Nicolae Ceausescu had banned abortion and contraceptives. Every married woman under forty was required to have a minimum of four children. Many families could not keep them, so they relied on state-run orphanages, where the children became ill and died. After the fall of the regime, 48 orphanages were closed, but the system of foster care, adoption, and foster homes did not always work. Hundreds of minors, some of them even very young, were left on their own to live however and wherever they could by begging, stealing, prostituting themselves, getting drunk, and sniffing glue. “They were eleven or twelve years old, even younger. I cannot forget one of them, who was very angry with her mother. She said, ‘Mother sends my little sister to beg because she is so little that passersby take pity on her, but this way she doesn’t go to school anymore, and if I insist, she replies that she has to get the money to give to our mother. So I went away and took my little sister with me. We had nothing at home; instead, in the heating ducts, there is hot water, heating, electricity, and a new family, 051

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When the regime collapsed, she saw ordinary families end up in misery from one day to the next. People took refuge in the countryside, but they were unable to work the land. Children were the first victims of this social catastrophe: they lost everything, even their schooling

the lady of the “copii strazii”

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consisting of kids like me.’” Juliana believes that for some, the street is their only choice, even a good choice compared to their previous conditions. The ones who end up on the streets are the strongest and the most intelligent, those who learn the countless vagrancy laws and comply with them, and who still harbor hope for the future. In fact, threatened by the freezing winter temperatures, the more enterprising of the Romanian street children opened the manholes to gain access to the heating ducts. In Bucharest, as in many cities of the East, there is a general heating system, giant hot water pipes run under the pavement. The heating system provides access to large maintenance areas where up to thirty or even fifty kids can live. The phenomenon became a sensation abroad, and when the Romanian government created a team of ten people, Juliana decided to change jobs: “I wanted to help out, and get involved in a humanitarian endeavor. I knew that I would lose my security, money, and prestige, but I did not care. I was 38 years old, I was a well-bred young lady, I still wore skirts,” she says with a selfdeprecating smile, now that she only wears slacks, low-heeled shoes, and shoulder bags. “A colleague of mine, Lilli, accompanied me to the Gare du Nord, the main railway station of Bucharest, which housed a huge group of street children. We met three filthy boys, she embraced them, and I shook their hands as a sign of respect. At the Brancoveanu subway stop, her colleagues were playing dice with a young girl with a shaved head who looked like a man. All of them had brought the children clothes and shoes, but I did not have anything with me. The boys asked me: so why did you come? I replied that I was there visiting. The next day, I began teaching them mathematics, doing the exercises on the back of election leaflets. So that is how we met, and soon I was spending entire days with them.” The public money lasted barely a year, and the funding was never renewed. Save the Children undertook the initiative to support the project and took on the whole team, including Juliana. Thus, she has become the most long-term operator in Bucharest, the historical memory of the phenomenon of the copii strazii, the Romanian street children, an expert on glue, and somewhat of an expert on the new ethnobotanical drugs that are replacing glue, which are sold legally in the form of bath salts, incense, and fertilizers, and which burn the brain cells. The street children inject them, multiplying their risk of disease. Many of them are HIV positive, so it is easy to predict that AIDS will be the new humanitarian emergency. Paradoxically, the doctors say it was almost better when the kids were sniffing glue or just doing heroin, because heroin is hard to find, it is not hallucinogenic, and at least they know about its effects. Juliana, who still spends at least three nights

a week on the streets, is tall and strong, with shoulder-length blond hair – her only flirtatious detail – and her gruff and direct ways do not mask her deep kindness. “I remember that in Brancoveanu, as the opening move, I announced a cleanliness campaign, teaching them how to wash themselves. Then I forbade them to swear in my presence and, to my amazement, the kids stopped. I wanted to teach them to think before they open their mouth. I explained to them that if you are rich, you can swear and go everywhere, but if you are poor, you at least have to be well mannered, that way you will receive respect, and if you feel you are respected, you will behave better. I was hoping to start a virtuous circle.” A white female dog, a little unsteady on her feet, approaches Juliana and nuzzles her hand with its big pink nose, looking at her with eyes full of love. This is Jery, found in the trash when she was just a few days old, and raised by the people at Parada. The manhole kids look at Juliana the same way, and always call her Dna (Mrs.) Juliana. One night that she agreed to take me with her; I saw three boys quickly put away their bag of glue to hand her some flowers, stolen who knows where. She is calm and friendly. She embraces them, touches them, examines wounds, insect and mice bites, sprains; she sits down with them and listens to their stories, jokes with them, and dispenses advice. She never goes down into the heating ducts: “I want to bear witness that you can live in another way, that it is not right to live like them.” She never gives them money, but she goes with them to the pharmacy, distributes cigarettes, hot soup, and other food she brings on the Parada bus, bought with money donated by Enel Cuore, offered by the chefs of the Hilton and a group of philanthropic French ladies who cook every day for the copii strazii. Juliana Dobrescu has seen generations of street children grow up and grow old, destroyed by drugs, cold, fear, bad luck, and saved only a few times. “In 2000 I had a burnout, I could not take it anymore. For six months I stayed at home. I felt that nothing could really be done for the kids, I was afraid of hopelessly fighting against a system that rejects them and keeps them marginal.” Then the head of the copii strazii at the Uniri subway stop went to look for Juliana, respectfully asking to speak with her. “The Uniri group was the most numerous group, and they offered to hire me. They offered me a really high monthly salary, the highest of my life, provided that I work for them. They said they would sell copper, iron, aluminum, paper, and they would do any job just to pay me regularly. I was deeply touched, but I had suspicions about the real methods with which they would have procured the money for my famous salary. So I went back to Parada. And I’m still here.”

She never gives them any money, but she goes with them to the pharmacy, distributes cigarettes, hot soup and other food she brings on the Parada bus

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the lady of the â&#x20AC;&#x153;copii straziiâ&#x20AC;?

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Those who end up on the streets are the strongest and the most intelligent, the ones who learn the thousands of vagrancy laws and comply with them, and who still harbor hope for the future

passepartout

Enel Cuore

10 years of projects 2003 ENEL CUORE was born

To see the video of Enel Cuore Onlus focus the QR code with your cell phone or pc webcam. Otherwise, you can view the video directly at www.enel.it / enel_cuore

photographs by Renato Franceschin

2005

2007

Italy 31 projects: social assistance 12, health 9, education 7, sport 3 El Salvador 1 project: education Guatemala 1 project: education Romania 1 project: health TOTAL projects: 34

Italy 60 project: social assistance 29, health 24, education 3, sport 4 Bosnia 1 project: education Bulgaria 1 project: social assistance Romania 4 projects: social assistance 3, sport 1 TOTAL projects: 66

2004

2006

Italy 14 projects: social assistance 3, health 8, education 3 Bulgaria 1 project: social assistance Romania 1 project: social assistance TOTAL projects: 16

Italy 31 projects: social assistance 16, health 10, education 5 Congo 1 project: education Kenya 1 project: social assistance Nigeria 1 project: social assistance Panama 1 project: education Romania 2 projects: social assistance 1, education 1 Slovakia 1 project: social assistance TOTAL projects: 39

Social assistance and social services, support for education, sport, and promoting socializing for children, the elderly, and people with disabilities. These are the areas in which Enel Cuore has operated since its inception, activating projects with institutions, organizations, associations, and the world of active participation. Over time, many initiatives have grown exponentially (from 16 in 2004 to 125 in 2010) and have spread to more and more countries around the world, from Italy to Bulgaria, and from Guatemala to Panama.

2013 ENEL CUORE becomes 10 YEARS old

2009

2011

Italy 63 projects: social assistance 33, health 11, education 15, sport 4 Albania 1 project: education Bulgaria 2 project: health 1, education 1 Costarica 2 projects: health 1, education 1 El Salvador 1 project: education Guatemala 2 projects: education Mexico 1 project: education Nicaragua 1 project: health North America 1 project: education Romania 3 projects: health 2, education 1 Russia 9 projects: social assistance 5, health 4 Slovakia 1 progetto: health TOTAL projects: 87

Italy 47 projects: social assistance 22, health 2, education 20, sport 3 Brazil 3 projects: social assistance 1, education 2 Chile 1 project: education Guatemala 1 project: education Per첫 1 project: education Romania 2 projects: health 1, education 1 Russia 1 project: education Slovakia 1 project: social assistance International project 1 project: education TOTAL projects: 58

2008

2010

2012

Italy 63 projects: social assistance 26, health 21, education 11, sport 5 Bulgaria 2 projects: social assistance 1, health 1 Guatemala 2 projects: education Morocco 1 project: education Nicaragua 1 project: health Romania 3 projects: social assistance 1, health 2 TOTAL projects: 72

Italy 105 projects: social assistance 52, health 16, education 30, sport 7 Chile 1 project: health Guatemala and Mexico 1 project: social assistance Romania 1 project: education Russia 3 projects: health 2, education 1 Slovakia 2 projects: social assistance 1, sport 1 TOTAL projects: 113

Italy 45 projects: social assistance 20, health 5, education 16, sport 4 Brazil 2 projects: education Chile 1 project: education Colombia 1 project: education Morocco 1 project: education Per첫 1 project: education Romania 2 project: health Slovakia 2 project: education TOTAL projects: 55

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in-depth

Non-profit census, leading-role numbers by Elio Silva Special correspondent for â&#x20AC;&#x153;Il Sole 24 Oreâ&#x20AC;?

Istat Data The info-graphic data indicates the percentage distribution of the non-profit institutions, of volunteers, and employees in the various sectors of activity. Non-profit institutions

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Volunteers

Employees

Will the third sector, which has grown more in the last ten years than private companies and public administrations, be able to achieve a political role and a capacity of representation equal to the weight that it already actually has on the Italian economy and society? And, within the non-profit system, will philanthropy and the subjects dedicated to the promotion of the common good know how to take on the strategic leadership that is their due? These are the main issues, particularly in regard to the galaxy of non-commercial entities, that resulted from the ninth census of industry, services, and nonprofit institutions, carried out by Istat. This picture is of absolute importance, because for the first time since 2001, we are offered a common information base, not merely a sample but a universal one, which everyone can access by simply visiting the website of the Central Institute of Statistics. Preliminary data from the census, released over the summer, indicates a real numerical boom of nonprofit institutions: 301,191 were active on December 31, 2011, 28% more than in 2001. There are now nearly five million people who are volunteers: to be precise, 4,758,622, 43.5% more than in the previous decade. But it is especially in its ability to create jobs that the third sector wins the challenge with respect to businesses and the public administration. In the period between the last two censuses, institutions with full-time employees grew from 38,000 to about 42,000 (+9.5%), whereas those with co-workers linked to atypical contracts doubled (in 2001, there were just over 17,000; in 2011, 36,000). Thus, the em059

A growing sector Since 2001, the non-profit sector has experienced a boom: the graphics show some of the most important increases. ployed population numbers almost one million, to which must be added those contributing voluntary work, not measurable in monetary terms in the light of the principle of gratuitousness of performance, but fundamental overall and, where possible, in the improvement of the supply of services. The third sector is now the main production reality of the country in some fields (social, artistic, cultural, and entertainment). It is also gaining positions in the sectors of health and education, especially in light of the gradual contraction of the public sphere. The area with the largest number of employees is that of social assistance; institutions active in the field of culture, sport, and recreation are very numerous, but a much lower average size is confirmed, suggesting a non-profit system that still tends to be polarized. In this positive context, the sphere of philanthropy holds a large number of records: the number of institutions surveyed is 4,847, an increase of 289%. Among the entities, 1,107 are legally recognized associations, 3,146 are non-recognized associations (65%), and 478 are foundations (10%). Even more striking is the figure on employment, with workers having grown by 408% and volunteers by 162%. So, if this is the snapshot of what exists, in the representation of everyday reality, it is natural to wonder why the third sector, which is able to achieve, or carve out, this role, thus results so marginal and is mostly confined to a definition by exclusion with respect to what the State (no longer) does, and the private sector has not (yet) done. The same formula of subsidiarity, for years relied on as a means to introduce doses of private social welfare into a system largely steeped in bureaucratic statism, has often been used in a purely vertical manner for transferring tasks from the public power, now suffocated by debt and the ensuing rules to curb expenditure, to private operators that, in the name of a cure for the common good, have in fact taken on a role of mere substitution. 060

The feeling is that, to truly be a protagonist like the numbers indicate, the non-profit system should first of all exert greater will, transparency, efficiency, and an ability to innovate

A third sector that continues to grow only on this basis can hardly aspire to a starring role. There are extenuating circumstances. Let us place a bit of responsibility on the media system, obviously more interested in focusing on impressive individual stories of marginality than on economic and social trends in the long run. Add to this the usual cynicism of politics, which makes constant reference to values intrinsic to the third sector (social cohesion, volunteering, protecting the common good, and so on), but, in the concrete action of the government and Parliament, has never kept i t secret that it considers as residual all the reforms that would be necessary for the non-profit system, from the revision of civil law to the stabilization of the “five per thousand” tax contributions. Furthermore, let us consider that the economic crisis in 2012 and the first half of 2013 was greatly aggravated, and that the same census data just released may, in certain quantities, be scaled down as to the serious difficulties encountered particularly by non-profit production (cooperation, social enterprise). However, all of these mitigating factors are not enough to comprehensively and convincingly explain the fundamental question about the role and the specific gravity of the third sector in Italian society. The feeling is that, to truly be a protagonist like the numbers indicate, the non-profit system should first of all exert greater will, transparency, efficiency, and an ability to innovate. And the charities and philanthropic institutions accompanying its development should send clear signals in this direction, strengthening their strategic leadership where necessary. The idea of bearing the brunt of the economic difficulties by tramping along the old paths of subordination, with low expectations, cannot act as a viaticum for the sector that really wants to play a leading role in our society. The non-profit numbers encourage big ambitions, but the first who need to believe in them are precisely the third sector players. 061

in-depth

Solidarity as a response to the crisis by Giuseppe Frangi Director of â&#x20AC;&#x153;Vita non profitâ&#x20AC;?

Given the failure of philanthropic initiatives modeled on the individual goals of foundations, the tendency to operate in local situations is becoming more widespread, and is stimulating confrontation with the government and civil society. Here is an analysis of the directions taken by the non-profit sector and the observation that, by offering new employment opportunities in the United States and Europe, it is increasingly affecting the labor market.

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316.23 billion The amount of dollars donated in the United States in 2012

228 billion

The amount of dollars from donations by individuals in the United States

45 billion

The amount of dollars coming from foundations in the United States

+9.9%

The contribution of community foundations in the United States

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oxygen | 21 — 10.2013

According to the most recent data available, released by givingusareports.com, in 2012, Americans donated 316.23 billion dollars to philanthropic initiatives: 3.5% more than the previous year, 1.5% net of inflation. After analyzing this data, it turns out that the individual donations totalled 228 billion dollars, and corporate donations amounted to $18 billion. Instead, the giving generated by foundations resulted in $45 billion. It should be particularly emphasized that this figure includes a 9.9% growth of community foundations, those that by their very nature are closer to the needs generated by the crisis. At the end of 2012, there were the 11 community foundations in the U.S with assets of over one billion dollars: their growth is emblematic of the evolution that philanthropy is experiencing in the richest country in the world. Differing from the model of operating foundations that invest in their own projects along the lines dictated by their mission, community foundations aim for “social improvement”, using resources to support the situations and experiences that vitalize the territories. This is a trend that has characterized American philanthropy on the whole, given the substantial failure of an approach to search for individual solutions. According to Bernardino Casadei, Secretary of Assifero, the association that represent corporate foundations in Italy, the new trends go in two directions: “On one hand, we use resources to influence public policy, and on the other, resources are directed to fund initiatives with the aim of strengthening civil society and people’s ability to independently generate the answers they need.” The first path, which identifies with advocacy, is proving to be extremely effective. The National Committee for Responsive Philanthropy has calculated that an investment of $231 million in this sector has mobilized resources for a total of 26.6 billion dollars. In practice, every dollar given by foundations generated another 115 dollars. But however effective it may be, this path raises some concern as to what Casadei has defined the risk of a possible “philantocracy” (claiming the right to influence public policy, albeit with good intentions). The second path, instead, seems to be projected more in perspective and is also the most socially effective. Infact, foundations have now realized that their program officers are not able to find solutions to the increasingly complex social problems. This is why they choose to support those who are at the forefront and have acquired the know-how to put those solutions into practice, so strategic giving is on the rise, with those grant-making foundations that are not limited to the simple supply of financial resources, but which are committed to making the activity funded effective. Thus, there is an increase in venture philanthropy, an innovative form of social investment that is not limited to service deli-

very, but participates in the business risk and that, in addition to resources, also transfers the skills needed for growth to the beneficiaries. In fact, there is a phenomenon that is affecting the development of non-profit institutions at the global level: and this is the boom of “social enterprises”, i.e. those activities whose mission is the production of goods of social utility. These are companies that are effectively put on the market, while retaining a different identity of a non-profit matrix summarized in the principles of the non-availability of equity and redistribution of capped gains. The exponential growth of this form of enterprise is explained by the convergence of two factors: on the one hand, a growing demand for “social” goods and on the other, the maturation of many nonprofit organizations, long in the forefront of the response to new and old needs, and gifted with know-how of extraordinary value. With the crisis of the welfare state, a large market of social needs has been opened, which must be protected from speculative attempts, and on the other hand, requires evolved organizational forms. There is also a third “external” factor giving a great impetus to the development of social enterprises: the expectation of future generations. Emblematic in this regard is the research published by the American organization Net Impact, “Talent Report: What workers want in 2012”, focused on the analysis of the expectations of those facing the world of work. According to this research, in the United States the social enterprise sector is among the most coveted by the generation born between the Eighties and Nineties, to the extent that the majority of university students (65%) said they had decided to look for a job with a high social impact, and 53% said they would accept a 15% cut in salary while working for an organization that reflected their ethical values. Britain is also experiencing a similar, rapid growth of “social entrepreneurship”. According to the report by Social Enterprise UK published in August, about a third of the British social enterprises was created in the last two years. The report has photographed a panorama that is extremely encouraging not only for new businesses but for the entire British social business sector. There are about a million people employed in the 70,000 social enterprises in the UK. And the number of social start-ups is three times higher than that of new enterprises created in other sectors. 38% of social enterprises has increased its turnover in the last year, compared to 29% of small and medium-sized enterprises in other sectors. In short, not only does the non-profit sector seem to be able withstand the crisis better, but it has also been identified by many people as an opportunity for recovery. In Britain, this phenomenon has also been aided by

Community foundation, strategic giving, venture philanthropy: these are some of the new roads being explored by philanthropy. Trends and prospects for an evolving world

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70,000

The number of social enterprises in the United Kingdom

1 million

The number of people employed in social enterprises in the United Kingdom

65%

The percentage of American university students who want to look for a job with a social impact

an important law passed in 2012 and in force since January of this year, the Social Value Act, according to which the concept of social value has become a mandatory criterion for the allocation of public services. The Social Value Act does not replace the other rules, but rather, complements them, and therefore does not erase the concept of cost-effectiveness, an overriding factor that determines all decisions in the field of public procurement. However, the Social Value Act introduces new criteria for calculating this convenience, including the calculation also of the social impact. Among other things, the Act takes into account the EU legislation on public procurement, which established that social needs can be fully included in the practice of supplies, and also defined what criteria must be met. In fact, a major impetus has just arrived from Europe, so that member states are activated in the promotion of â&#x20AC;&#x153;social entrepreneurshipâ&#x20AC;? as a means to overcome the crisis and to support employment. Following the Social Business Initiative of the European Commission, came the launch of investment funds for the social sector (the EuSEF, European Social Entrepreneurship Funds), made fully available to those investors who are looking for vehicles where to put resources on social projects that are capable of staying on the market. This is the high road for philanthropy in the near future. 065

From NGOs to PGOs: Practically governmental organizations Interview with Don Vincenzo Paglia

President of the Pontifical Council for the Family

and Werner K端lling International Collaborator by Michele Fossi

In the face of a widespread crisis of international governance, NGOs have registered significant growth in the last twentyfive years: they now often have key decisionmaking roles because they are more agile and able to intervene in situations which would be difficult for government officials. Oxygen speaks with two of their principle figures.

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A growing number of citizens in the industrialized Western world have moved away from traditional mass politics over the last fifty years, no longer militating among the ranks of a party or a trade union, or even going to cast a vote. At the same time, a growing number of non-governmental organizations, such as Greenpeace, Oxfam, and Shelter, have succeeded in establishing themselves as alternatives to traditional policy, in order to pursue specific policy objectives. The picture that emerges from the final analysis by the authors of The Politics of Expertise, a recent publication of the University of Birmingham, is that of an international governance in deep turmoil: “We can say that, thanks to NGOs, lately policy has been going through a phase of privatization.” In the last twenty-five years, the growth of the non-profit sector has occurred at a dizzying pace, to say the least: according to the Union of International Associations, the number of NGOs active at the international level in 2012 was 38,000, or more than double those reviewed in the 1998 annual. Instead, the number of NGOs at the national level is now on the order of millions, including 1.5 million in the U.S. and 3.3 million in India alone. Thanks to countless timely targeted, and often spectacular, actions, their credibility has grown tremendously: many of these organizations now sit at the tables of the most important international summits and garner more confidence and respect among the general public than private international giants like Microsoft or Ford, which invest millions of dollars annually for the good of their brands’ reputation. “What we are seeing is a real ‘global associational revolution,’” remarked Lester M. Salomon, Director of the Center for Civil Society Studies at Johns Hopkins University – a research center devoted to the study of the non-profit sector around the world – to be ascribed to the “crisis of the state” as it is traditionally understood: “Over the last twentyfive years, confidence in the ability of state action has been undermined almost everywhere. This has been helped by the failure of the social policies of Western governments and the development policies promoted by the governments in the southern countries of

the world, the collapse of the experiment of socialism in Central and Eastern Europe and, of course, the manifest inability of states to rise to the challenge of the current climate impasse.” According to Fariborz Ghadar, Senior Advisor and Founding Director at the Smeal Center for Global Business Studies at Penn State University, over the last few decades, we have been witnessing a gradual redistribution of global governance, once solely the preserve of governments, to the benefit of others: on the one hand, the large multinational companies organized, as we all know, into powerful lobbies that are often able to keep entire parliaments in check; on the other hand, the non-governmental organizations that have carved out the role of “conscience of the world” and are a counterweight to the power of governments and the greed of the free market. “Despite the name, they also play an increasingly active role in the governance process,” he states. “The time has come to find a new definition for this term, which in many texts is still defined as ‘the art of guiding societies and organizations.’ By now this is an outdated definition, one that suggests a straightforward process, such as the act of steering the helm of a ship, and which does not do justice to its complexity today. It now involves a plurality of subjects, and its exercise proceeds by trial and error in an unpredictable and often chaotic manner, as is normal that the logic of the dialectic between more powers would be. And, mind you, the role of NGOs is not limited to that of being the watchdog, or that of a passive spectator who merely denounces injustice and abuse by governments and corporations,” Ghadar continues. “They have proven to be very active and proactive subjects, able to propose original solutions to problems and to shape the society in which we live in a profound way. For example, in the field of humanitarian aid, many of the protocols for aid followed by the States and now considered ‘best practices,’ had been previously developed and tested over decades by the NGOs active in the field.” Also, the collaborations between NGOs and corporations have gradually become tighter: “Thanks to the action of NGOs, in recent years we are witnessing a re-

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definition of the meaning of ‘corporate social responsibility’ (CSR): this term no longer means doing something good with the company’s profits, but rather, first rethinking the practices with which those profits are made,” says Jem Bendell, Director of the Institute for Leadership and Sustainability at the University of Cumbria. “The nature of this collaboration is radically changing, and goes far beyond the ‘corporate philanthropy’ we were used to in the past. Today, we are witnessing the emergence of strategic partnerships that end up profoundly affecting business practices, leading to a substantial restructuring of the business model and effective reductions of the external impact, both social and environmental, of the company.” NGOs have proven to be a dynamic force also in terms of the environment, capable of proposing effective solutions to problems independently, without awaiting the elephantine time periods necessary for governments to legislate or sign international agreements: for example, promoting the introduction of the FSC certification mark by stating that a wood product did not contribute to deforestation, the environmental NGO WWF has succeeded in a relatively short time to exert strong pressure on industries and positively orient their practices in the direction of greater sustainability. “In a world that is more and more complex to govern, the role of NGOs is increasingly important and indispensable,” remarked Bishop Paglia, spiritual adviser of the Community of Sant’Egidio, as well as president of the International Catholic Biblical Federation and the Pontifical Council for the Family. “I think the project DREAM to fight AIDS is an example of international collaboration between several governments and institutions, where the presence of our NGO has been crucial to overcome any personal interests, and to avert the risk, not at all far-fetched in Africa, of corrupt governments siphoning humanitarian funds toward less noble purposes. Or I think of the peace processes in Mozambique, the Balkans, and more recently in Darfur, which, similarly, could not have been a success without the active mediation of the Community of Sant’Egidio.” Paglia reminds us that NGOs

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have often been rightfully described as detaining a “soft power”: a force far more agile than that of large institutions, able to move with greater ease in the field, and achieve goals that would be unthinkable for them. “How could a government ever get in touch with forces that are, let’s say, ‘out of order,’ such as rebel militias and fringes of resistance, without compromise?” As pointed out by Pope Benedict XVI in a recent encyclical, we need to conceive of a “polyarchy society,” where the power is appropriately divided between several parties. A “governance of globalization” made of many voices that averts the risk of “a dangerous universal power of a tyrannical type.” A society where the principle of subsidiarity – that is, the regulatory principle that if a “lower” entity is capable of doing something, the entity which is “higher” must leave this task to it, possibly also supporting their action – must become the norm and not the exception. Therefore, the era of globalization promises to be charged with extraordinary opportunities for NGOs, but “be careful,” Paglia warns: “they mustn’t let it go to their head, but bear in mind that only well within a triangle action with governments and other major international institutions can they hope to achieve the humanitarian, environmental, and diplomatic objectives that are more ambitious and have longer-lasting effects.” According to Werner Külling, the historical founder of Helvetas, one of the most important Swiss NGOs active in the humanitarian field, “With the growth of the power and capacity of NGOs’ influence, in the coming years, it will be increasingly important for them to create systems of certification by third-party organizations.” But it is the social networks that Külling expects will bring the biggest news for the sector. “Following the Arab Spring, there is a growing interest in social networks to generate funds and support for NGOs from below by means of crowdfunding. However, there are those who fear that social networks, on balance, will eventually erode power, promoting the assembly of scattered and unstructured groups of citizens united by a common cause, who do not feel the need to rely on an NGO to achieve a goal. What their predominant effect may be, only time will tell.”

Paglia reminds us that NGOs have often been rightfully described as detaining a â&#x20AC;&#x153;soft powerâ&#x20AC;?: a force far more agile than that of large institutions, able to move on the field with greater ease, and achieve goals that would be unthinkable for them

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contexts

Social campaigns are increasingly social by Agostino Toscana Executive Creative Director of Saatchi & Saatchi Italy

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“Read this you piece of sh**.” Do you find the sentence quoted above rather rude? Do you think that it must be from some graffiti on an inner city wall or a banner displayed by ultras groups during the last championship game? Then you are way off base. If you were in London, on any day in 1995, you could easily have read it, written in large letters, in one of those newspapers that distinguished gentlemen of the City

carry under their arm. It was actually the title of a campaign against slavery (yes, it still exists in many countries around the world, didn’t you know?), and it was created by Saatchi & Saatchi on behalf of Anti-Slavery International. The title was surrounded by a dense text that began: “If you’re offended by this ad, you should be. No one should be treated like this. But, unfortunately, there are millions of people around the

world who are. And for many of them, a verbal lashing is the very least they have to worry about...” Do you understand the mechanism? I catch your attention with a strong sentence. I induce you to read a text that you would otherwise ignore and that makes you discover that what you felt for a second is only a small part of what millions of human beings experience for their entire life. I have involved you in an experience. And now maybe you are more willing to support a cause. I have sold something, I admit it. On the other hand, that is what advertising does. However, in spite of John Updike, according to whom truth in advertising is an oxymoron, I was being sincere. I have revealed true, documented facts, which most of us did not know. Indeed, I have omitted some of them in the announcement because they were too crude. Too real, so real that they could have seemed fake. I am not joking. Those who do advertising always document things before they create. And when dealing with a social campaign, they come across things that are so horrible they cannot even be published. So rather than soften them, they exclude them, because they know that a watereddown version of a fact will not be effective. Effectiveness is an important word in advertising. Social campaigns are often much more effective than commercial ones because they are more to the point, more focused. They are certainly less penalized by smoothing “policies,” by revisions dictated by research and focus groups, by a trivialization of the language requested by those who think the message must still primarily be sent to couch potatoes embedded in front of their TVs (by far the least reactive group). When looking at the evolution of social messages, we often see how well they represent the changing concerns of people over time. And Jones points out, for example, that in the campaigns that deal with gender issues related to public health, we are talking less and less about contraception and more and more about AIDS. The

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shock effect, a weapon used for years, is now considered an approach to be handled with caution and it is preferred to use a method that leads the audience in a deductive and participatory manner to adhere voluntarily to a cause. The epochal changes that have accompanied the digital revolution are also reflected in social communication. Therefore, less press and TV, and more media-neutral ideas, events, installations, and social media initiatives. The advertising techniques involved are not “ideological.” They reflect the culture, they do not invent it. And we live in a culture where social causes, just like commercial products, require effective communication. If it is true that the chronic problem of social advertising has always been the money, now it is worthwhile to remember what Bob Isherwood, the famous creative director, said, namely that “ideas are the currency of the future,” and that, therefore, it is better to invest in ideas than in media space. Also because, today, the media are all around us and they are all accessible. Today, everything is media, from Smartphones to detergent labels, from your T-shirt to Facebook, from videogames to town squares (anyone for a nice flashmob?). A few years ago, the creative director of Saatchi & Saatchi Tel Aviv got the crazy idea of campaigning about his country’s biggest problem: the relations between Israelis and Palestinians. He decided that the topic deserved an international effort and organized a competition launched during the Cannes Festival with the explicit title The Impossible Brief. The idea that won was not a commercial, nor even a printed campaign or a poster. It was an event, a hitherto unimaginable day during which Palestinians and Israelis found themselves in hospitals to donate their blood to one another. Brilliant. Huge. Advertising succeeded where 60 years of world politics had failed. It achieved the maximum of the goals that a social campaign can have: first transform the attitude and then the perception of an audience, 072

regarding a subject that they previously preferred not to think about. And in Italy? Before the Nineties, social communication was primarily Public Information, common sense stuff that had to be hosted in the media free of charge and therefore was not supposed to disturb anyone. And then there were ministerial initiatives, campaigns on drugs that were certainly not speaking to the drug addicts, most of whom were still underage and therefore did not vote, but to an indefinite adult audience, moreover using a generic and moralistic language. This was like making a campaign on mad cow disease addressed to vegetarians. All this waste of time, money, and opportunity was swept away by the cyclonic Oliviero Toscani and his campaigns for Benetton. Remember? Nuns kissing priests, AIDS victims on the point of death, horses mating, hearts (in the sense of the human organ) lying on a table, blood-soaked clothing, etc. The effect was wild. Suddenly, there was an open competition to see who could be the most surprising. But we had forgotten one thing: Toscani was not doing social campaigns. He was advertising a clothing line by using deliberately provocative images. And getting a huge and undeniable echo in the media. But he was not doing social communication. Or at least he was not doing effective social communication. In any case, the Toscani effect did not last long, in part because the photographer sharpened his tone toward the world of advertising. And once the binge was over, communicators went back to doing their job, but they were faced with a new path: doing social communication, for the first time in Italy, using all the tools and strategies that are used for commercial campaigns. In those years, I found myself doing the campaign for the first Italian edition of the Telethon, an extremely long transmission that serves as a fundraiser for research into muscular dystrophy. We decided to do ethnographic research based more on observa-

social campaigns are increasingly social |

An effective way to deal with uncomfortable topics is to aim to undermine the alibis for indifference or cultural excuses

oxygen

tion and empathy than on query. Through the association, we met many children suffering from this disease and we were impressed by the growing number of difficulties they encountered in carrying out the simplest daily activities. We were particularly touched by a small handcrafted lectern which, thanks to a simple electric mechanism, allowed the children to turn the pages of a book. We decided to use it for the commercial, which became an extremely long fixed shot of book pages being turned mechanically by this whirring rod. Printed on the pages was the text of the message we wanted to convey, and only at the end was it revealed that the pages were being turned by a person suffering from muscular dystrophy. The audience personally felt the strain of being able to read those few words and experienced the effects of the disease. No fictitious narrative could have been more effective than that bare reality. We avoided the emotional approach even when we were struggling with a campaign about the problems of the blind. During a chat at the Institute for the Blind, one of them told us that their lives were quite similar to ours and that in reality the most troublesome problems were caused by the bad behavior of those of us who can see. Cars and motorcycles parked on sidewalks or dog droppings are very dangerous for those who do not have the gift of sight. We made an ironic commercial showing these small everyday incivilities, accompanied by a special version of the song Quelli che... (Those who...), re-written and sung for us by the great Enzo Jannacci, and closed it all with the slogan “The biggest problem of people who can’t see is to live in a world of the blind.” An effective way to deal with uncomfortable topics is to aim to undermine the alibis for indifference or cultural excuses. The issue of child sex tourism is certainly one of the most delicate, and one of the recurring phrases people said in interviews was: “A grown man with a ten-year-old girl? But that is a custom of their culture!” We realized immedi073

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social campaigns are increasingly social |

ately that the exoticism of tourist sites made everything seem very far away and we decided to tell a similar story but set in Italy, reversing the situation. The commercial was filmed in Piazza del Popolo in Rome, using a hidden camera, documentary-style. A distinguished Italian holding a little girl by the hand approached an Asian tourist and began a whispered bargaining (the dialog was based on true testimony of events that occurred in Cambodia). “Pretty girl, eh?” “Is she a virgin?” “Of course, she’s my daughter.” “How much?” “Just 100 dollars.” “What can I do to her?” “Everything, but don’t kill her.” At that point, the tourist walked away with the girl, who turned to give a frightened look at the father and a voiceover stated: “If this happened to your daughter you’d be terrified, right? Remember that when you are abroad. A child is a child, all over the world.” The press reinforced the concept with an ad that showed two photographs. In the first, a smiling family man was portrayed in his living room cuddling with his daughter and the caption said “Doctor Jekyll.” In the second image, the same man was on vacation and was embracing a little Asian girl accompanied by the writing “Mr. Hyde.” One of the clearest examples I can give is of significant insight that dates back to a decade ago, in a series of advertisements for MTV in support of social causes sponsored by the channel; the first briefing we received was on the death penalty. This is a difficult task in a country that does not have the death penalty. If we had set it up as a moral issue, it would have been useless: those who were for it, would remain favorable, and those against it, would remain so. But we wanted to be able to convert some people, or at least, instill doubt. What came to our aid was a book by Amnesty International, a collection of miscarriages of justice and doubtful cases of capital punishment. Here is the idea. We shot a three-minute docu-drama on the case of a death row inmate

who was cleared of the charges by a voluntary confession made only after his death. The film was a huge success, it was broadcast by MTV and abroad and won many prestigious awards. Still today I receive e-mails and messages on YouTube that feed the debate sparked by that movie. Of course, part of the success of that film was due to the fact that the customer was a famous international television channel and so the film was widely circulated, as opposed to social advertising, which usually has to beg the media for free space. And this allows me to introduce the last point: how social advertising is done today. In 2013, there is no longer any difference between commercial campaigns and social marketing campaigns, and the clients behave similarly. The social clients require results that are clearly measurable through audience response, government data, the amount of money collected through fundraising, or the size of the debate generated by the media, politics, or society. In short, the same needs as the business clients. And in fact, both are active on markets full of competitors, they must overcome skepticism, they want people to talk about them, and they need ideas that can transform people’s lives. The only difference is that the social clients often do not have large budgets for their media investments. Until a few years ago, this was a tragedy, but not today. It is my opinion that, in the era in which we live, a social campaign must not only be creative and effective but must also be capable of generating free media. An application of this theory was the work that Saatchi & Saatchi Italy has done for CoorDown with its campaign for the 2012 Integration Day. The purpose of the campaign was to promote the full integration of people with Down syndrome in the workplace. We decided to ask all our customers if we could shoot alternative scenes in the commercials that we produced for them in the six months preceding the World Day for Integration. The alterna-

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tive scenes were like the original in every respect, except that the protagonist was replaced with an actor who had Down syndrome. These versions of the commercials were then aired all together on the designated day and the same thing happened with the “modified” printed pages in the major Italian newspapers. Over the same period of time, we asked – and were permitted – to replace or flank the presenter or journalist on the most popular television news shows (“The Hyenas,” “The Cook-off,” etc.) with someone with Down syndrome. On March 21, 2012, the commercials appeared 334 times on television, reaching a media coverage equal to 5.5 million euros, with 18 million people (about onethird of all Italians) having seen the campaign. Above all, in the following week, CoorDown registered a 600% increase in requests from companies interested in hiring people with Down syndrome. In 2013, to stimulate the collection of donations to the same association, a campaign was held throughout the social media which involved the recruitment of 50 famous and unaware testimonials; we reached about 30 million people, half of the Italian population. And CoorDown has had a 700% increase in donations compared to their previous fundraising. Both cases were made possible thanks to a creative idea that also contained the same mechanism for its diffusion. The prearranged involvement of clients, production companies, television stations, newspapers, media centers, photographers, filmmakers, and testimonials, and their playing as a team along with the advertising agency and the audience members, have shown that inviting users to donate funds is as important as inviting them to donate free media space to the cause. The visibility produced through sharing, through people’s posts, their tweets, and their online conversations has become crucial. Being social in 2013, therefore, means spreading a message that not only goes to the heart but also results in people’s “clicks.” 075

in-depth

Democratic donation edited by Oxygen photographs by White

The promotion of projects, needs, and start-ups; social networks for organizing the resources of those who defend the environment; applications that allow you to support various causes. This is mass philanthropy, the kind that, through small donations from individuals, achieves large results.

Kiva

Wiser

A $25 loan to create opportunities. This is the model of Kiva, a non-profit organization that connects people through small loans (a minimum of $25, in fact) to alleviate poverty. Through the Kiva website, you can choose a borrower, read their story and learn about their project or needs (ranging from start-ups to emergency situations), make a donation, and then constantly follow the situation of the loan and, when possible, its repayment. And then, start all over again.

Networking among the resources of communication and cooperation: this is the goal of Wiser, an online community that brings together organizations and individuals interested in issues of social justice and the environment. It is a social network for people who are working in these often fragmentary fields, to increase their skills and facilitate the exchange of ideas and collaborations. The organization is non-profit and brings together 77,550 people from all over the world, and exists thanks to the support of donations that can be made through the website.

www.kiva.org

wiser.org

DonorsChoose

Acumen

American public schools often do not have the financial ability to support educational projects or purchase materials for their students. Thus, the website DonorsChoose. org was created, which collects projects written by teachers from every corner of America. These projects are then published and evaluated by users interested in making a contribution. Even just a dollar can be contributed to the cause and, whether the project will achieve the necessary sum for its actualization or not, each donor will receive documentation and a message of thanks from the students.

This is a non-profit organization that collects long-term investments to support companies that are changing the way the world is relating to poverty. The team at Acumen supports newly-created enterprises that are attempting to enter the market and whose goal is to provide goods and services to fight poverty, and it does so with an entrepreneurial approach, tailored to the purposes of the non-profit sector. Founded in 2001, so far it has allowed more than one hundred million people to benefit from their investments. acumen.org

DonorsChoose.org

Causes Even Facebook wants to open up to social issues and has done so through Causes, an internal application to the social network developed by the start-up Project Agape. Directly from their personal profile, users can launch or support a cause, thus creating or becoming part of an online community; thanks to the “invite” tool, they will be able to involve their friends or even donate money. To date, 180 million people have supported a cause for a total of 142 countries represented. apps.facebook.com/causes/

“This is a moment in history when the average person has more power than at any time.” Katherine Fulton

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We are warriors with our eyes on the future. We are warriors with boundless energy. We are warriors with ambitions and dreams. We are warriors for change. We are

WARRIORS POWERED BY OUR TOMORROWS

These are the warriors we have faith in. No matter how big or small their battles might be. The fact is, weâ&#x20AC;&#x2122;re not just a leading integrated player in the power and gas markets of Europe and Latin America. We supply energy to millions of people to meet their everyday challenges. Making their lives brighter and their futures come sooner.

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enel.com 079

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Donating development by Bernardino Casadei General Secretary of Assifero

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Institutional philanthropy is no longer just a redistributive tool, but rather, has a much more complex role today: it can help businesses achieve their goals and ensure their sustainability. And it is able to generate income and employment. But in order for all this to happen, Italy must take steps forward in regulatory terms.

Many people are still convinced that institutional philanthropy has an essentially redistributive role. In fact, most of the disbursements are thought of as real investments that, in addition to social benefits, can also generate income, employment, and even tax revenues. Thus, according to a recently published report by “The Philanthropic Collaborative” (Porter & Kramer, Creating Shared Value, 2011), the $37.85 billion disbursed in 2010 by foundations in the U.S. generated 8,888,624 jobs, $570.56 billion of the GDP, and $117.96 billion in tax revenues. This synthetic data already shows that this area has great potential in promoting growth and development. In particular, it can mobilize those resources, which are very large and that neither the free market nor public intervention seem to be able to exploit to the full. And this is without considering the benefits to the economy related to the growth of social capital and the trust that, as a rule, is one of the most significant consequences of the foundations’ interventions. In other words, perhaps it is time to overcome the unfruitful public-private dichotomy of selfishness-altruism that still dominates the public debate, and to which the relevant regulations conform. All the problems that the concept of a business entity places on the management of non-profit organizations are examples, as are the difficulties that the legislation on social enterprise encounters when it is applied in Italy, in spite of the fact that our society is

full of organizations that embody this idea. We have to admit that the common good and private interest are not necessarily in opposition: on the contrary, it is the synergy between these two aspects that, as a rule, turns out to be the most fruitful condition for the development of a society worthy of the name. Therefore, today there are fewer and fewer people who donate out of social duty, almost as if they had to pay off a debt of gratitude or felt the need to silence their conscience. Instead, there are many more people who are finding that donation is a way to try to meet some basic human needs which our society does not seem capable of responding to adequately. Just think of people’s need to give meaning to their life, to live in relationships that are not manipulative, or even to feel authentic emotions; needs which a society based on mutual exploitation and commodification cannot answer, but which can be satisfied by the experience of donation, no longer felt as a sacrifice but, instead, as an opportunity to fully live their humanity. Now this gift, which some might call egotistic, not only never ceases to produce benefits to the community, but, compared to what comes down to a mere act of renunciation, is usually much more fruitful. And in this gift, which the Catholic tradition identifies as charity, people invest all of themselves. They do not just open their wallet or write a check, but mobilize all their best efforts, concretely experiencing

Many people who are finding that donation is a way to try to meet some basic human needs which our society does not seem capable of responding to adequately

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Philanthropy has ceased to be a mere form of responsibility, a kind of duty imposed by social conventions or by the pressure of the community in which it operates. It has become a strategic lever to achieve their objectives and, in particular, to ensure their sustainability that they are actually rewarded a hundredfold. Moreover, there is no donor who does not admit to receiving much more than they have given. A similar process is occurring in the world of business. Philanthropy has ceased to be a mere form of responsibility, a kind of duty imposed by social conventions, or by the pressure of the community in which it operates; it has become a strategic lever to achieve their objectives and, in particular, to ensure their sustainability. Since Michael Porter published his article on shared value, an increasing number of companies have recognized that there are large areas of intersection between their interests and the common good. Moreover, in the face of globalization and the strong international competition that ensues, it should be obvious to everyone that the success of an enterprise strongly depends not only on its skills and internal abilities, but also on the environment in which it operates. External economies are no longer simply given the possibility to unload their own costs onto others, as happens with pollution and other negative behaviors that are rightfully repressed, but also arise from the presence of viable infrastructures, the existence of a judicial system that operates in certain times and with fairness, and the education system’s capacity to properly train the new generations. Without all that, and without widespread social cohesion that will turn into trust and tranquility for all, it becomes extremely difficult to maintain adequate levels of productivity, especially in sectors with high added value. Faced with this evidence, companies that do not want to remain passive and await a resolutive public intervention – an expectation that, in this historical moment, is likely to last until the cows come home – have an alternative: either create everything internally, trying to protect their key public of reference from external pressures as much as possible, or embrace the 082

The ratio of dollars donated and benefits received

8,888,624 Jobs provided

principle of subsidiarity and thus decide to play an active role in creating a better society and one that is therefore also more suitable for their own development For those who want to pursue the second strategy, institutional philanthropy can be an extremely versatile and powerful tool. On the one hand, it facilitates forms of cooperation with other categories of entities, both public and private, as well as among its competitors, which, as a rule, share the same needs. Secondly, it is able to mobilize different types of human, physical, or financial resources coming from different environments. In addition, through institutional philanthropy, you can minimize and diversify risk, not burdening your organization with new infrastructures dedicated to the pursuit of the objectives identified, and maintain maximum flexibility in the allocation of resources, which would be impossible to do if you were to decide to directly operate the services and activities that you want to promote. Finally, to allow even small and medium-sized businesses to enjoy the benefits of institutional philanthropy, a Giving Committee, which has recently been established in Italy, allows any donor to take advantage through outsourcing of all the legal, tax, and administrative infrastructures needed for carrying out these activities, thus reducing both the financial and human costs but maintaining complete control over the allocation of funding. Although institutional philanthropy has long been seen only as a tool to improve oneâ&#x20AC;&#x2122;s reputation and manage relationships, today it is proving to be a highly effective means, not only to motivate employees, but also to pursue those objectives with a dimension of utility that would be too onerous to achieve independently, but that is still necessary for their development. Recognizing this opportunity is therefore important not only for businesses, which thus have one more tool, but also for the entire country which, after having included the principle of subsidiarity in its constitution, has yet to take the necessary measures so that it can express all of its potential.

9.7%

The percentage of the workforce in the United States related to the nonprofit sector

37.85 billion

The amount provided by U.S. foundations in 2010

Institutional philanthropy can be an extremely versatile and powerful tool: it facilitates forms of cooperation and mobilizes different types of human, physical, or financial resources coming from different environments 083

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Getting orientated in the maze of donations by Carlo Mazzini Jounalist and editor of quinonprofit.it

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Often, those who donate sums of money to a non-profit organization ask what the fate of their donation actually will be: a partial knowledge of their administrative system can lead to superficial responses, which may underestimate the management complexity. Here is an analysis of the structure, of costs and “earnings” – and of the right timing to assess them – to learn the right questions to ask.

Where does my money donated to a non-profit organization go? The most common question posed to administrators of institutions is paradoxically also the most wrong and misleading one. Let us see why. Let us start with the reasons of those who say that an institution is judged by economic data, and then with the investment of the money received from supporters, the government, and organizations of grant makers. For example, a budget that presents high overhead costs and high costs of fundraising sparks absolutely legitimate questions in everyone. But it is not legitimate for those who are outside of the organization to provide answers if the person who administers it has not yet explained the reasons for what appears to be a discordant note. The question that the external person raises is why the true mission of the organization – one that they believe is identifiable in the so-called institutional duties – has been sacrificed with respect to the other, high costs of overhead and fundraising. The administrator has several possible answers, provided that the applicant is willing to listen and learn, almost identifying with the difficult role of the manager of a non-profit organization. The first answer is that, in a year of crisis, it is not possible to save much on costs, since many of them are absolutely necessary for running the activity. The organization pays a rent, which means the cost of the structure; of course, it can always look for cheaper rents, but that is not immediate, even from the contractual point of view. And then, what would changing location and saving a few hundred euros a month solve? It would be more difficult to be reached by supporters and the people it assists, a series of relationships with the territory that had been acquired over the years would have to be recreated, the move comes at a cost … If there are no other reasons or if the rent is not really disproportionate to the objectives and needs of the organization, saving the few euros will not necessarily bring any real benefit to the organization and its recipients. A second answer is that certain costs in companies are called “investments” and it is not understood, after years in which major universities have competed to teach organizations how to become companies (an objective that is only partly shared), why the organization should contract the investments, going against the dictates of the major corporatists. Is investing in fundraising compatible with a period of decline in donations, caused by the reduction in disposable income and by a continuing economic crisis? It is clear that the momentum has to be exploited –

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with the risks involved, of course – in periods of economic stagnation or depression, also so as to gain visibility and be more present in the minds of donors, those already acquired and those to be acquired. Otherwise, the risk is twofold: no new donors are obtained and the old ones are diminishing. A person who skimps on communication and saves money from the funds raised, even if not a huge amount, and the following year finds the collection “naturally” diminished by the previous year’s decision to disinvest, would not be judged a good administrator of a non-profit organization. However, if the administrator increases investments in a crisis year and the effects of major donations are revealed in the following years, the performance of the year of the crisis (the ratio of fundraising costs and total costs) will be very bad, and some people will be scandalized by the fact that, for example, 30 cents of every euro given by the donor goes to consulting firms, professionals, and the inhouse staff that has the task of looking for money. Whoever wants to kick up a fuss because they are seeking a scandal, may go right ahead and do so, there is nothing that can be done about it. Instead, those who are trying to understand something of the non-profit system and how it is administered should follow the facts and not the sensationalism. How do you explain to those looking for a scandal that some entities that perform scientific research, among other things, deliberate every three years on the destination of large sums of money for this activity – which, moreover, is particularly burdensome – and, for reasons of financial reporting, the sums thus allocated are reported once every three years, making them appear almost useless entities for two of the three years? Therefore, there is a diachronic effect for investments, a time lag between what is used in the first year and how much is returned – the amount in economic terms – in the following years. Those not looking for scandal but knowledge therefore understand that non-profit organizations can also be judged in part for the purely economic decisions of its management, but these also need to be placed in the context of the most appropriate time. In a company for profit, the profit is the measure of the company’s management since that is one of its purposes (creating added value for its shareholders). So, even though we can analyze it over several years, basically the state of health of a

company finds a significant annual confirmation in the presence and consistency of its profits. That is not possible in a non-profit organization because the profit is not its end, and its purpose is not normally measurable in traditional forms that are derived from balance sheet data. Nevertheless, the balance sheet values are very interesting and can say a lot about the organization, as long as you know how to read them. In addition, we need to understand financial ratios, and how and when to use them. All this requires further knowledge of the matter which must be undertaken even by the non-specialist (the donor), but who should not be left alone. In June of this year, the three major U.S. credit rating organizations of the non-profit world (BBB Wise Giving Alliance, Guidestar, and Charity Navigator) wrote a public letter in which they warned Americans donors about the “myth of the support costs.” Endorsing their thesis with concrete data and studies of third-party entities, these organizations have sought to emphasize that the individual ratios, the relationship between economic variables of the budget, are not indicators of significant value when taken on their own, and that “focusing on overhead costs without considering other critical dimensions relating to the financial and organizational performance of an organization, does more harm than good.” Keep in mind that these three American organizations based their analysis on the tax returns that the IRS (Internal Revenue Service) requires annually of non-profit organizations, obliging them to fill out – even if there is no taxable income – the 990 form, in which a lot of information useful to the donor and the analyst can be found, such as: the remuneration of the management and possibly that of the members of the board, the family relations – if any – between the board and suppliers, the names of the major suppliers, as well as an outline of the budget that allows anyone willing to study the sector know the real economic dimensions. The three organizations – which are clearly competitors with one another – periodically draw up a ranking of the U.S. non-profit organizations, dividing them into sectors, selling detailed analyses of the economic variables, and making comparisons of performance between organizations. Therefore, the complaint made by the three organizations should not be read as an excusatio non petita (an unprovoked excuse as a sign of guilt)… with what follows. It is not a way of saying that

Non-profit organizations can also be judged in part for the purely economic decisions of its management, but these also need to be placed in the context of the most appropriate time

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many years of publications of data, charts, ranking of the American non-profit organizations are to be thrown out the window, but, on the contrary, it is a very Anglo-Saxon way to focus the attention of the general public (“To the Donors of America” is how the letter was addressed) on a necessary complexity, on the impossibility of using a single figure as a basis upon which to give a certification as to the good/bad running of non-profit organizations. As we said before, the initial question “where does my money donated to a non-profit organization go” is a misleading question, because the answer is necessarily limiting for the organization. In the years of plenty, it will smugly perform marvelously without having to give any reasons if the credit is due to a structure rendered solid and competent in previous years through wise investments, or to a single spontaneous donation, one that perhaps was even unsolicited. In lean years, the administrator instead must do everything possible to highlight the internal and external causes (a 500% increase in postal rates in 2010, non-payment of “5 per thousand” tax contribu-

tions by the Ministries) of an economic performance deemed unsatisfactory by the majority. So the question that the public must ask the directors of non-profit organizations is: what have the donations you received produced over the years in terms of improving the quality of life of the people and communities that you have assisted?

The state of health of a company is confirmed by the presence and consistency of its profits. That is not possible in a non-profit organization because the profit is not its end, and its purpose is not normally measurable in traditional forms that are derived from balance sheet data 087

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Charities: where and why people invest by Donato Speroni Economics journalist and writer

The need for solidarity in the world is being met not just by states, whose development aid has never reached its pre-set objectives, but increasingly by individuals, through charities, non-profit organizations, or other structures and philanthropic initiatives. A fact that has ignited the debate on the best way to actualize this thrust, and one that necessarily involves the very concept of business.

There is a great need for solidarity in the world, and there are increasingly numerous and important initiatives intended to help those in need. Poverty, education, health, and the environment: the global challenges are becoming more pressing and require a mobilization that cannot be limited to governmental aid. Businesses and entrepreneurs with substantial personal assets are investing significant wealth in humanitarian initiatives. What are the prospects? What will be the outcome of this race between those who are trying to improve overall conditions and the factors that are pulling the world toward a progressive deterioration? There are people who say that the very nature of the economic system is changing: we are dealing not only with an expansion of philanthropic initiatives, but also a change in the capitalist system which, after having won its competition with communism in the last century, is now being forced to help save the world, to shed its skin, and

to make its companies welcome other objectives besides profit, or even replace it. It is useful to begin by examining the factors that in recent years have resulted in the growth of private aid in the form of charities, non-profit organizations, and other philanthropic initiatives. Here are some overall figures to put the phenomenon into focus. State aid for development has almost never achieved the goal, proclaimed several times at the international level, of 0.7% of the gross domestic product (GDP) of donor countries. Only the Nordic countries exceed this threshold with figures close to 1%. Italy has fallen from 0.30 in 1990-91 to 0.17 in 2010-11, but the United States is not a shining example, either (0.21% in 20102011). In 2010-11, on the average, donor countries gave 127 billion dollars, equivalent to 0.32% of their GDP: very little, but still an improvement compared to 0.22 in 2000-01. The amount of private aid is being studied by the CECP (Committee

Encouraging Corporate Philanthropy), based in New York. In 2012, a sample of 214 companies (including 62 of the first hundred nations in the world ranking of “Fortune”) donated nearly $20 billion in cash and products. 60% of the companies surveyed increased their donations from 2009 to 2011, despite the economic crisis. Remember that the analysis of the CECP concerns only a sample of enterprises. If extended globally, it is easy to understand that the work of charities now has a magnitude that is comparable to that of governmental aid. Health and education enjoy the lion’s share of private initiatives, in line with the objectives set by the United Nations. In fact, in 2000, the UN established the Millennium Development Goals with the development objectives, which are now being redefined for the period after 2015. In the meantime, some aspects have become more dramatic. For example, the demographic dynamics. Although the experts’ forecasts

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are becoming ever more alarming (the world’s population could rise from the current 7 billion to about 11 billion in 2100, mainly due to growth in Sub-Saharan Africa), the issue has been largely ignored by the international organizations for political and religious reasons. The last international conference of the United Nations on family planning took place in 1994 and since then, the term “family planning” has fallen into disuse, replaced by more neutral statements such as “sexual and reproductive health.” However, in July 2012, the British government organized a meeting with the Gates Foundation that marked a return of attention to the issue by political authorities but also by charities. This led to a commitment to add another zero to the allocated figure by 2020, amounting to 4.6 billion dollars for the diffusion in developing countries of modern means of contraception. But it should be added that the battle for responsible procreation is also being fought on other fronts, such as the fight against child marriage, and the education of puberty-age girls, because it is estimated that the postponement of the time of marriage and the raising of women’s awareness are instrumental in family planning. In this way, the demographic commitment is also linked with the other important battles of aid policies: education and gender equality. The fight against poverty is another open front for philanthropic activity. In this regard, the signals are a mosaic that is difficult to reconstruct. The most positive one is the success in the fight against extreme poverty, which is characterized by an income that does not exceed $1.25 per day, or about 30 euros per month. In 1990, 43% of the population of the countries in the developing world lived in these conditions. In 2010, the figure had more than halved, to 21%. According to the ‘“Economist,” by 2030 poverty measured with the same parameters could disappear from the face of the Earth. We can only rejoice in part, because in the early years of the new millennium, the percentage of people with problems of malnutrition 090

remained almost constant, from 16.5 to 2000-2002 to 15.5 in 20062008. The rising cost of food has created new stress, increasing the need for aid and also for new strategies in order to protect the poorest populations. The challenge is obvious. On the one hand, there is the increasing magnitude of the problems that must be faced by humanity concerning population growth, plagued by mounting imbalances in living conditions and negative environmental dynamics. On the other hand, there is a growing commitment of businesses and private capitalists to develop actions that address this challenge. With what strategies? How should this flow of money be directed to get the best results? The problem has given rise to a debate on the so-called “strategic philanthropy,” reported by the U.S. magazine “Nonprofit Quarterly” (NPQ). The basic concept is that any beneficial effect should be subjected to a strict cost/benefit analysis. For example, the criticism expressed by William Schambra, Director of the Bradley Center for Philanthropy and Civic Renewal in Washington, is that a lot of time is lost “writing numbers on the blackboard and sipping herbal tea” rather than dealing with the problems that require an immediate commitment. Paul Brest, President of the Hewlett Foundation, in reply to Schambra stated: statistics and social surveys should certainly be corroborated by field experience, but it is only right to allocate funds on the basis of all the knowledge that can be acquired on the problem at hand. The debate actually masks a major concern: in many cases, the financial commitment of the charities have not produced adequate results. The debate is ongoing, especially in the U.S., partly because private donations are not without a cost to taxpayers, considering the tax benefits that can be collected. An article in the “New York Times” in 2007 noted the conflicting views, even among the superrich of America. For the billionaire Eli Broad, “the investments of philanthropic entrepreneurs have a greater multiplier effect than the

money spent by the government.” Instead, this was disputed by William Gross, another member of the super-rich, who distinguishes different types of philanthropy: “When millions of people in Africa die of AIDS or malaria, a gala for an art center or a donation to a concert hall is not philanthropy, but a Napoleonic coronation.” However, positions have changed over the years. In 1970, the liberal economist Milton Friedman wrote that the only social responsibility of companies was to increase their profits. Since then, history has taken a different course, also because, over time, the companies have increasingly been held accountable for their responsibilities toward stakeholders: not just the employees and shareholders, but also the consumers or citizens who are somehow conditioned by the production centers. Social responsibility has also increased because there is a growing strategic concern for the global conditions and, above all, also because the younger generations are looking at business in a new way: as the “Economist” wrote, the courses on social responsibilities are among the most popular in business schools.

charities: where and why people invest |

Health and education enjoy the lion’s share of the private initiatives, in line with the objectives set by the United Nations, the Millennium Development Goals defined in 2000 Health and social services 31% Education 24% Economic and community development 17% Culture and the arts 14%

oxygen

× The needs the private sector contributes to most:

Civic development and public affairs 7% Environment 6% Initiatives after environmental disasters 2% Source: CEPS Report

Some people have come to speculate that the very foundations of capitalism are changing. A group of researchers of the Post Growth Institute in Sydney is preparing a report on the hypothesis of a world, “in which the Not for profit enterprise becomes the main model of business locally, nationally, and internationally.” This assumption is far from the usual discourse on degrowth, because it is not in opposition to the corporate world; instead it hypothesizes a transformation. We do not know if it will come to that, because the time horizon proposed by the Sydney group is quite far in the future, in 2050. But it is certain that corporate social responsibility, the philosophy behind the business of philanthropy, is less and less a mere facade of public relations and, on the contrary, is trying more and more to go to the heart of the problems to be addressed to improve the fate of mankind. 091

tweet tweet & & quotes quotes

Edited by Oxygen

“Enterprise must once again be centered on social value. Profit is also a means for improving the well-being of the population.” (@lauraboldrini)

“Google has added statistics on the non-profit sector to its Knowledge Graph.” (@NonProfitDaily)

“The Istat Census on non-profit organizations confirms the importance and impact of the sector for the economic stability and social development of Italy.” (@VITAnonprofit)

“Did you know that 600,000 not-for-profit contribute around $43 billion to the Australian economy? That makes us larger than the communications, agriculture or tourism industries ” (Connecting Up Inc.)

“Our HIV prevention project in South Africa was funded entirely by the concert #ChimeforChang.” (@OxfamItalia)

“The Foundation involves partners of the places wherever we operate to ensure that the projects are genuinely responsive to local needs.” (@ClintonFdn – Clinton Foundation)

“European philanthropy is robust, has a long history, is widely varied, and it is not a copy of American philanthropy.” (Gerry Salole)

“True charity requires courage: let us overcome the fear of getting our hands dirty so as to help those in need” (@Pontifex_it)

“When you see the term ‘global health,’ think ‘saving lives.’ That’s what it means” (@BillGates)

“Charity organizations have begun to be emancipated from the habit of drawing up annual reports, and have begun experimenting with social media.” (@GdnVoluntary – Guardian Voluntary)

“Why do I believe in the power of an educated girl? Because she gains in health, and can give a better future to her family and to the community.” (@melindagates)

“Many countries believe education is an expense. However, we want to say that it is the best investment strategy you can make.” (@georgesoros)

“Social enterprise is less “public”: today 80% has relations with the private sector.” (@ETIcaNews)

“Creating a business that actually has a social purpose attracts and motivates those who work there more than if that business did not have a social purpose.” (The Wall Street Journal)

“Eight years ago, hurricane Katrina hit the Gulf Coast. Thanks to @archforhumanity, thousands of families have returned to their homes.” (@casinclair)

scenarios

The duty of altruism by Philippe Kourilsky Philosopher and professor at Collège de France

The saying “one man’s liberty ends where another’s begins” shows the relationship of the mutual dependence of individual freedoms, but does not clarify an essential point. Our individual freedoms are indeed limited by those of others (and therefore dependent on them), but they are also constructed thanks to them. This relationship of mutual dependence is not passive, but derives from an active process and requires the action of our fellow beings and, therefore, ours. The concept of cooperation, inherent to individual freedoms, implies a reciprocity at both the theoretical and practical levels. This consideration is important: it logically implies that it is up to us, as individuals, to evaluate what we receive and what we should give to others. For us, altruism and individual freedoms are connected in a necessary

and inseparable manner, and are two complementary aspects of the same concept. For us, altruism is the deliberate attention paid by an individual to another individual’s liberties, with the deliberate intention to further defend and develop them. […] For us, in fact, altruism stems from a highly individual way of proceeding, in which, through exercising self-reflection, the person identifies with their duty and chooses the mode with which to fulfill it. This approach is dependent on neither a hidden hope of reciprocity, nor affection. Therefore, in our opinion, altruism is radically different from generosity, whatever the moral value behind it may be. For as we know, it is entirely neutral: it does not imply any expectation of reciprocity or non-reciprocity because it is based on a course of action that is completely indepen-

For us, altruism is the deliberate attention paid by an individual to another individual’s liberties, with the deliberate intention to further defend and develop them

dent of similar matters. In the meaning that we have chosen, altruism is a duty that intellectual reason imposes on the individual and that the latter, in turn, imposes upon themselves. Affirming the existence of an unbreakable bond between individual freedoms and the duty of altruism raises the latter, like liberty, to a universal imperative. To say that there is a relationship of proportionality between the two, for which substantially variable individual liberties correspond to a duty of likewise variable altruism, presupposes a certain conception of human justice, including an inter-generational justice, since the time dimension is taken into consideration in any analysis. How do we go from individual to collective responsibilities? It is not enough just to add up the individual responsibilities. The whole cannot be reduced only to the sum of its elements, just as a social group is not strictly the result of the sum of the

individuals that belong to it. The union of the single individual characteristics provides indications about these same characteristics stated at the group level, but such a description would be incomplete. Why does the extension of the concept of individual freedom to a social group create special problems? Because its adaptation presupposes the correspondence between individual freedoms and freedom tout court. Many social groups arise from the liberty strongly affirmed by their members who decide to join a union, to become part of a community network, or to engage in a non-governmental organization. This free will implies that there is a capacity for discussion and exchange within the group that allows for the research and development of a consensus produced through the comparison of the various points of view of free individuals. But that is not always the case. There are social groups that do not have this autonomy, preventing any type of process, in 095

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There are many situations where individual freedoms and civil liberties clash. In some Western democracies, public freedoms are guaranteed, but the unemployment and poverty of a large part of the population produce a serious loss of individual freedom

principle but also in practice, and thus leading to a common stance. Consider the example of inmates of a prison: they form a social group with strong restrictions on individual freedom, but from a theoretical point of view, it is impossible to determine whether or not they agree with this assessment because they do not have the ability to communicate, while the prison authorities can claim to speak for them and feel their situation on the whole to be satisfactory (their individual liberties). This example is extreme, but it gives us a good idea of the difficulties we encounter in dealing with the most important social groups: nations. In an ideal and healthy democracy, freedom, individual liberties, and those of the general public are in harmony, just as in the worst dictatorship, freedom, individual liberties, and those of the public are almost non-existent. There are many less extreme situations where individual freedoms and civil liberties clash. For example, in some Western democracies, public freedoms are guaranteed, but the unemployment and poverty of a large part of the population produce a serious loss of individual freedom.

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In other cases, a democracy can be strong at the political level, but the corruption of the government may significantly limit the freedom of the individual, but without formally hindering public freedoms. Finally, there are countries where democracy is absent and dictatorship reigns supreme, but the economic progress leads to a considerable increase in individual liberties. This is to make it clear that not all regimes, democratic or not, are equivalent. Different â&#x20AC;&#x153;indicesâ&#x20AC;? of democracy have also been developed, but none of these have been accepted unanimously as valid. These aim to provide a more accurate assessment, integrating data concerning health or education while always taking the individual and public liberties into consideration. This does not erase the tension that can exist among the same freedoms, and the simple acceptance of the aggregation creates problems, because it somehow makes the attacks on one or the other negotiable. This way, it may happen that the deficit of public freedoms does not appear to be such, and that, instead, the balance is judged to be positive, thanks to the compensating elements due to economic prosperity. Therefore, we can concretely see that the assessment of the overall well-being of a nation (or of a particular social group) is adequately in accordance with that of a duty of altruism (national and supranational) proportionate to the national welfare. In theory, a nation with a program of such intent would be able to produce an autonomous assessment of their duty of altruism toward others.

But what kind of process would lead to a similar evaluation? Would a method of national reflection be plausible, patterned on the model of exercising selfreflection that we have recommended for the individual? Why not? A nation can undergo self-analysis and refine the knowledge it has of itself, something, after all, that many intellectuals and politicians have already been doing. Instead, the problem concerns being able to involve a large number of individuals in this activity and promote dialog. This requires freedom of communication â&#x20AC;&#x201C; which again raises the question of civil liberties and democracy â&#x20AC;&#x201C; and the existence of specific mechanisms for exchanging and searching for consensus. There are numerous tools and mechanisms for communicating and exchanging ideas. In think tanks, where intellectuals hold an important priority, in organs of the state and the different communities, and in the media, mechanisms for sharing, obtaining feedback, and spreading ideas and information abound. In democratic regimes, consensus building can be derived from the free expression of citizens. However, it is necessary to keep in mind that the decision made by a majority is distinctly different from the acquisition of consensus that, when possible, requires specific processes that our democracies might want to improve. We insist on a crucial point: consent must be based on a process of safe and rational reasoning. The reflection simply needs to focus on a method of knowledge and construction of the reality.

The assessment of the overall well-being of a nation (or of a particular social group) is adequately in accordance with that of a duty of altruism (national and supranational) proportionate to the national welfare 097

contexts

Turning the Tables on Success by Adam Grant Professor of management at Wharton and author of “Give and Take”

In the current world of work, altruism is rewarded more quickly than in the past, which has left the selfish reeling and is leading the unselfish to thrive. Thanks to social networking websites such as Linkedin and Facebook-based references, even the selection of personnel is taking place in a different way and favors those who show an aptitude for teamwork and empathy. In the old world of work, good guys finished last. “Takers” (those in organizations who put their own interests first) were able to climb to the top of hierarchies and achieve success on the shoulders of “givers” (those who prefer to contribute more than they receive). Throughout much of the 20th century, many organizations were made up of independent silos, where takers could exploit givers without suffering substantial consequences. But the nature of work has shifted dramatically. Today, more than half of U.S. and European companies organize employees into teams. The rise of matrix structures has required employees to coordinate with a wider range of managers and direct reports. The advent of project-based work means that employees collaborate with an expanded network of colleagues. And high-speed communication and transportation technologies connect people

across the globe who would have been strangers in the past. In these collaborative situations, takers stick out. They avoid doing unpleasant tasks and responding to requests for help. Givers, in contrast, are the teammates who volunteer for unpopular projects, share their knowledge and skills, and help out by arriving early or staying late. After studying workplace dynamics for the past decade, I have found that these changes have set the stage for takers to flounder and givers to flourish. In a wide range of fields that span manufacturing, service, and knowledge work, recent research has shown that employees with the highest rates of promotion to supervisory and leadership roles exhibit the characteristics of givers – helping colleagues solve problems and manage heavy workloads. Takers, who put their own agenda first, are far less likely to climb the corporate ladder.

Givers are aided by the fact that the anonymity of professional life is vanishing

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The fall of takers and the rise of givers hinges on a third group, whom I call “matchers.” Matchers hover in the middle of the give-and-take spectrum, motivated by a deep-seated desire for fairness and reciprocity. They keep track of exchanges and trade favors back and forth to keep their balance sheet at zero, believing that what goes around ought to come around. Because of their fervent belief in an eye for an eye, matchers become the engine that sinks takers to the bottom and propels givers to the top. Takers violate matchers’ belief in a just world. When matchers witness takers exploiting others, they aim to even the score by imposing a tax. For example, matchers spread negative reputational information to colleagues who might otherwise be vulnerable, preventing takers from getting away with self-serving actions in the future. On the flip side, most matchers cannot stand to see generous acts go unrewarded. When they see a giver putting others first, matchers go out of their way to dole out a bonus, in the form of compensation, recognition, or recommendations for promotions. At Google, for example, an engineer named Brian received eight bonuses in the span of a single year, including three in just one month. He volunteered his time to train new hires and help members of multiple cross-functional teams learn new technologies, and his peers and managers responded like matchers, granting him additional pay and recognition. Consistent with Brian’s experience at Google, a wealth of research shows that in teams, givers earn more respect and rewards than do takers and matchers. As Stanford University sociologist Robb Willer notes, “Groups reward individual sacrifice.” Interdependent work also means that employees will be evaluated and promoted not only on the basis of their individual results, but also in terms of their contributions to others. In fact, when givers become leaders, their groups are better off. Research led by Rotterdam School of Management professor Daan van Knippenberg has shown that employees work harder and more effectively for leaders who put others’ interests first. This, again, is a matching response. As van Knippenberg and Claremont Graduate University Professor Michael Hogg found, “going the extra mile for the group, making personal sacrifices or taking personal risks on behalf of the group” motivates group members to give back to the leader and contribute to the group’s interests. And a thorough analysis led by Nathan Podsakoff, a professor at the University of Arizona, of more than 3,600 business units across numerous industries showed that the more frequently employees give help and share knowledge, the higher their units’ profits, productivity, customer satisfaction, and employee retention rates. By contributing to groups, givers are also able to signal their skills. In a study led by researcher Shimul Melwani of UNC’s Kenan-Fla100

Today, more than half of U.S. and European companies organize employees into teams

gler Business School, members of five dozen teams working on strategic analysis projects rated one another on a range of characteristics and behaviors. At the end of the project, team members reported which of their colleagues had emerged as leaders. The single strongest predictor of leadership was the amount of compassion that members expressed toward others in need. Interestingly, compassionate people were not only viewed as caring; they were also judged as more knowledgeable and intelligent. By expressing concern for others, they sent a message that they had the resources and capabilities to help others. Today, these signals are ever more visible. Givers are aided by the fact that the anonymity of professional life is vanishing. In the past, when we encountered a job applicant, a potential business partner, or a prospective service provider, we had to rely on references selected by that candidate. When takers burned bridges with one contact, they could eliminate that person from their reference list. But now, online social networks offer a much richer database of references. Odds are that through a quick search of our LinkedIn or Facebook networks, we can find a common connection with knowledge of that person’s reputation. By reaching out to the mutual contact to obtain an independent reference on the candidate’s past behavior, decision makers can screen out takers and favor givers. Of the billion Facebook users around the world, 92 percent are within four degrees of separation – and in most countries the majority of people are just three degrees apart. At Groupon, for example, Howard Lee was heading the South China office, and received a slew of applications for sales jobs. He searched his LinkedIn network for common connections, and located quite a number of them. When he discovered that certain candidates had a history of self-serving behavior, he quickly moved on, focusing his time and energy on candidates with track records as givers. Taken together, these trends are changing the characteristics that we value in people. Two of the defining qualities of great leaders are the ability to make others better and the willingness to put the group’s interests first. Along with investing in people who are already disposed toward operating like givers, it will be of paramount importance to create practices that nudge employees in the giver direction. In many organizations, owing to their tendencies to claim credit and promote themselves, successful takers are more visible than successful givers. To make sure that employees are aware that it’s possible to be a giver and achieve success, it may be necessary to locate and recognize respected role models who embody an orientation toward others. That way, when what goes around comes around faster than it used to, it will be for the benefit of employees and their organizations. Original article published in “Strategy+Business”, summer 2013

Employees with the highest rates of promotion to supervisory and leadership roles exhibit the characteristics of givers: helping colleagues solve problems and manage heavy workloads

passepartout

canada

Donations: 64% Time spent volunteering: 42% Help to strangers: 67% Score in the world ranking: 58%

United States of America Donations: 57% Time spent volunteering: 42% Help to strangers: 71% Score in the world ranking: 57%

Paraguay

Donations: 48% Time spent volunteering: 42% Help to strangers: 61% Score in the world ranking: 50%

World giving index 2012 According to the 2012 World Giving Index, the most generous country in the world is Australia; instead, the country that can afford to be least so is Greece, ranking 145th and tying for last place with Montenegro. Based on data collected in 2011 through questionnaires distributed to more than 155,000 people from 146 countries, the report by the CAF, an international organization founded in Britain with the aim of stimulating humanitarian aid, shows how many people in the world have helped others by donating money, or spent time volunteering or carrying out concrete actions for strangers. The score was measured

by the percentage of the population involved in this type of activity in a month and not the amount of money, or the number of hours or of strangers helped. This is why the first 20 countries have extremely different geographic, political, and economic profiles: eight of them are Asian, five are European, four are American, and one is African. Italy is ranked in 57th place, with 33% of the population involved. However, donating is an activity that has decreased when compared to the 2007 data (the percentage of people who are dedicated to volunteering has fallen from 21.4% to 18.4%).

infographic by Undesign

United Kingdom

Donations: 72% Time spent volunteering: 26% Help to strangers: 56% Score in the world ranking: 51%

Denmark

Donations: 70% Time spent volunteering: 23% Help to strangers: 54% Score in the world ranking: 49%

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Ireland

Donations: 79% Time spent volunteering: 34% Help to strangers: 67% Score in the world ranking: 60%

Netherlands

Donations: 73% Time spent volunteering: 34% Help to strangers: 51% Score in the world ranking: 53%

7 indonesia

Donations: 71% Time spent volunteering: 41% Help to strangers: 43% Score in the world ranking: 52%

New Zealand

Donations: 66% Time spent volunteering: 38% Help to strangers: 58% Score in the world ranking: 57%

australia

Donations: 76% Time spent volunteering: 37% Help to strangers: 67% Score in the world ranking: 60%

contexts

Plutocratsâ&#x20AC;&#x2122; life

by Enrico Pedemonte Journalist and writer

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Often unknows to most people, plutocrats are holding the reins of the economic and political world. And they are the protagonists of philanthropic initiatives, especially in America. Where they come from, what is involved, and what their interests are has been told by many journalists, including Chrystia Freeland, in her book, “Plutocrats”, which reveals their ethical and economic motivations.

As of July 2013, one hundred and thirteen billionaires had adhered to the “Giving Pledge” launched in 2010 by Microsoft founder Bill Gates and financier Warren Buffett, in second and fourth place, respectively, in the “Forbes” listing of the richest people in the world. One of the last to embrace the initiative was the nickel magnate Vladimir Potanin, the first Russian on Gates and Buffett’s list. A few months ago, Potanin promised to devote half of his wealth, which according to Bloomberg Billionaires Index amounts to 12.3 billion dollars, to philanthropy. After committing himself, Potanin invited Gates to seek to persuade other billionaires in the world, especially the Russian ones, to devote themselves to philanthropy. In fact, the map of the 113 super-rich engaged to date by Gates (for a total of nearly $200 billion) is very biased in favor of the United States, whereas in the world, Asia now leads the ranking with 608 billionaires, according to the Hurun Research Institute of Shanghai, against 440 in America and 324 in Europe. Potanin’s reasoning is simple: while the number of billionaires is increasing, social inequality in the world is exploding, the gap widening between the rich and the poor has become palpable, and there is the risk of violent social unrest. And so Bill Gates travels the world and always recruits new followers to what seems to have become the new religion of this small army of the privileged. In her recent book (Plutocrats, The Rise of the New Global Super Rich and the Fall of Everyone Else, Penguin Books, 2012), Chrystia Freeland, a journalist for many years for the Financial Times and Reuters, writes that among the new masters of the economy “the most coveted status symbol is no longer, as it was until yesterday, a yacht, a racehorse, or honor, but a philanthropic foundation.” Freeland sometimes uses irony in describing the culture of the super-rich, 0.1% of the popula105

Chrystia Freeland explains that the new plutocrats hold the belief that the world can be changed for the better on the strength of their ideas, maybe thanks to a simple algorithm

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tion, which in recent decades has been enriched beyond measure and today is a supranational super-class that meets in Davos, uses the same tax havens for (not) paying taxes, sends their children to the same universities, and is dedicated more and more often to humanitarian activities, especially in the United States. It must be said, not to seem naive, that philanthropy has always been an integral part of American culture. Just think of Alfred Nobel, who in 1895 financed the award that bears his name in order to be remembered not only as the inventor of dynamite; or Andrew Carnegie, champion of the robber barons at the turn of the last century, who donated much of his fortune to build hospitals, theaters, libraries, and universities. What inspired Nobel and Carnegie was a culture founded on deeply rooted anti-state sentiment, and they considered philanthropy a tool for community cohesion. With their donations, the rich of the past seemed to be telling the state not to meddle too much in social issues: the duty of the luckiest was to look after the weakest part of the community. The philanthropy of the 21st century has very different characteristics than the ones of the past. It is culturally dominated by high-tech billionaires, who have delighted in building new narratives on the revolutionary potential of technology for over thirty years, and are now focusing their spotlight on humanitarian activities. Bill Gates, the eloquent symbol of this generation, spent the Eighties and Nineties evangelizing to consumers on the positively subversive role of the PC and the Internet. Then, after the millennium, he made up his mind to redesign the world of charities by applying the strict rules of corporate organization and scientifically measuring the actual effects of any single investment so that not a penny is wasted. In her book, Chrystia Freeland convincingly explains that the new plutocrats (especially those who have amassed their fortunes in the competitive high tech environment) hold the belief (sometimes the presumption) that the world can be changed for the better on the strength of their ideas, maybe thanks to a simple algorithm. When they invest their money in philanthropic initiatives, the billionaires of the latest generation use the same methods they used in their businesses. And when there is a conference in their exclusive symposia, they discuss how to effect similarly fundamental changes in the governments, the structures of the States, in the world. When I was working in New York, I often found confirmation of the behavior, along with the generosity and arrogance, that characterizes the new high-tech and finance billionaires. When I asked what spurred them to donate a substantial part of their wealth to charity, they would all give the same answer: “In this country, anyone who has been lucky and refuses to give back to society part of what they have had in life, rightly becomes a social pariah.” This thinking, that Chrystia Freeland superbly describes in her book, stems from an anti-

aristocratic and collective tradition that has its roots in American history. But it is not only the ethics that explain this behavior. Admission to the golden world of philanthropy has its advantages. If you scroll through the list of names on the boards of directors of major museums, charities, hospitals, universities, and all organizations based largely on donations (and very little on public funding), you will encounter the greatest names in American society. These institutions, entrance into which is permitted by signing checks with lots of zeros, give access to the most exclusive salons, where profitable networks of relationships are created and the foundations are laid for the development of new businesses. Years ago, Daniel Golden, a journalist for Bloomberg News, wrote an enlightening book (The Price of Admission, Crown Publishers, 2006) to describe the reasons that drive the new aristocracy to dole out fat donations to the most prestigious universities. These generous donors give dozens, often hundreds of millions of dollars, so that the doors of these elite universities will be opened to their children, ensuring their access to privileged relations that constitute an invisible but extraordinary asset for a lifetime. The academic elite, in fact, reserve a quota of places available to its munificent patrons. The system is engineered in such a way as to maximize the benefits for society and for business. Thanks to their donations, billionaires contribute to hospitals of excellence, elite universities, extraordinary museums, and extremely efficient charitable organizations. But this is only half of the story. In exchange, the new plutocrats obtain benefits for their children, creating safety nets and winning access to influential lobbies, thanks to which they can give their view of the world by making culture. It is the strength of numbers that gives them this power. Gates and Buffett alone, who have decided to invest 95% of their wealth in charitable activities, are contributing 115 billion dollars, a sum which equals the GDP of Angola.

Very few and very rich they are holding the reins of the economic and political world 107

the philanthropy’s net by Giulia Marchiori Grants advisory committee in New York

Philanthropy is now practiced at various levels. Large and small businesses have understood its importance for the development of positive relationships with the community, while the Internet has made it accessible to everyone. With unexpected progress. 108

Trying to make a difference in the world is inarguably one of the most commendable endeavors a person can take on. It requires sacrifice, dedication, and prioritizing others’ well-being above one’s own. In my own career, I have long admired and looked to the examples set by visionaries like Aung San Suu Kyi or Desmond Tutu, who made difficult choices – and paid a high personal price – that have shifted the course of history. Aspiring to anything close to what these heroes have accomplished is daunting, but, luckily, the path of giving and altruism has become a much more accessible one. Non-profits continue to proliferate and grow, and societal stakeholders from around the world – from politicians to celebrities to Fortune 500 companies – are increasingly choosing to do good. When I decided to work in the non-profit sector, I chose to make giving back a priority for myself and for the organizations I was part of. However, my professional experiences have taught me that some simple guidelines can help anyone, regardless of sector or professional goals, contribute to a better world. It seems that everywhere we turn we face yet another global challenge, as unique and as important as the last: from our changing climate to poverty, from disease to financial instability. While the world is vast, complicated, and increasingly interconnected, it is inhabited by pockets of individuals and communities who work to make things better. Each day, a farmer learns a new method of sustainable farming; a young girl seeks an education; and a new mobile phone technology delivers literacy programs to millions. These are small, individual miracles that collectively turn the tide toward a collective experience of a better world. There are also big miracles. We witness them on the floor of the UN General Assembly when a 16-year-old girl looks the world’s leaders, the global audience, and her attackers in the eye and affirms the power of education over violence. And when a 15-year-old boy discovers a promising early detection test for pancreatic cancer that is both affordable and noninvasive. Progress is all around us, all we have to do is realize it. The financial outlook is catching up, too. According to the annual Giving USA report released in June, charitable giving in the United States rose 3.5 percent to $316.23 billion in 2012, surpassing the record of $311 billion in 2007, before the financial crisis. Undoubtedly a lot remains to be done, but it is important to appreciate the progress that has been made. In the world of philanthropy, we are often confronted with disturbing examples of abuses that seem unstoppable. Yet solutions and hope can lie in existing programs that operate locally or in a different context altogether. We can work together to bring these stories to light and share them with the world. Through technology, social media, or word of mouth, 109

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we need to use any and all accessible channels to promote the work of innovative and effective programs. Get the word out. Stay positive. It is important to show the world what is working. While charitable giving has always been part of our social fabric, understanding how the culture of giving back has evolved is crucial. Monetary donations and other traditional forms of giving continue to grow but, more and more, giving means rolling up your sleeves and doing something. When many of us first heard about corporate social responsibility (CSR) over 10 years ago, it was in the context of crisis communications. Case studies showed how companies increased their charitable donations in relation to their PR strategies, and more so when something threatened their reputation. In the past ten years, CSR has come a long way, and both companies and foundations have found creative and meaningful ways to work together. Across all industries and in most countries, the world’s leading corporations and successful small businesses have made giving back a priority. In fact, it has been proven that a company’s commitment to transparent and healthy social and environmental practices, and positive community relations, play an important role not only in how it is perceived by the public but also in increasing employee job satisfaction, motivation, and overall happiness. “Doing business by doing good is the way of the future.” Nobody takes this slogan more seriously than “benefit corporations,” also known as “B Corps.” To prove their commitment to social good, these businesses are required to meet a rigorous set of social and environmental standards, while maintaining their for-profit goals. B Corps are growing, 760 of them from 27 countries and across 60 industries, according to the B Corp website, and there are more to come. Increasingly, the business community is committed to getting involved in programs that impact society in ways that also impact companies and the corporate ecosystem. For this, directing energy and funds to existing initiatives and seeking partnerships with reliable organizations or individuals on the ground are the keys to philanthropic success. There are incredible people all around us, and teaming up with them to catalyze change can only be an added strength. Whether someone is championing girls’ education, developing tools to support financial inclusion, or creating more efficient recycling practices, there are always opportunities to contribute and learn. Positive movements and stories of progress are everywhere – if you stop to look. They can be led by high-profile individuals such as former President Bill Clinton, an actor like Matt Damon, or an artist like Peter Gabriel; a person who inspires you in your everyday life; or Malala, the young girl who stood up for what she believed in. Changemakers are no longer in short supply, and organizations like Asho110

the philanthropy’s net |

ka, the Skoll Foundation, the Omidyar Network, the Schwab Foundation for Social Entrepreneurship, and Echoing Green focus their efforts on finding these agents of change scattered around the world, promoting their work, and growing their ideas and businesses. These philanthropic networks prove that the more we work together by matching local expertise with top-level support, the closer we are to a healthier, happier global community. What makes things easier, is that today’s world of doing good has grown into a sophisticated, global network of companies, entrepreneurs, and individuals dedicated to making impressive strides in moving the needle on critical issues. International forums like the Clinton Global Initiative, where members have made more than 2,300 commitments; TED, with over 1,500 inspirational and viral TedTalks; and the World Economic Forum’s signature annual gathering in Davos, bring together a community of leaders and visionaries who believe in collaborative power. Furthermore, advances in technology have helped to amplify efforts by making these conversations and ideas accessible to wider audiences. There have never been more channels to collaborate and contribute. Online platforms, crowdfunding, digital movements, and campaigns continue to revolutionize the world of giving. And it is not about to stop now. “Helping” or “giving” can take countless forms, but the business of doing good is evolving and proving that there are effective ways to multiply what works and make a deeper impact. Looking to proven successes, adding to existing work rather than duplicating efforts, and collaborating through meaningful partnerships make changing the world a goal within reach.

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Today’s world of doing good has grown into a sophisticated, global network of companies, entrepreneurs, and individuals dedicated to making impressive strides in moving the needle on critical issues

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future tech

Crowdfunding: support from the Internet by Simone Arcagni

Crowdfunding, as defined by Wikipedia, “is a collaborative process of a group of people who are using their own money to support the efforts of people and organizations.” This is one of the most characteristic expressions of a cultural, social, and economic system that has been profoundly revolutionized by digital technology. Crowdfunding, closely related to crowdsourcing (a project based on a sharing of ideas from below, facilitated by the Internet), exists on the Internet and acquires its most important characteristics from the Internet. In essence, it is a matter of asking for funding for a project, preparing an actual appeal by setting out the details of what you want to accomplish, and then asking those who are passionate about your idea to participate in making a donation at their discretion. This creates an online community of a sort of small shareholder base spreading “from below.” A real “social” community that follows all the stages, from fundraising to the development of the project, coming into contact with the inventors, and commenting and interacting with the other “shareholders.” Kickstarter is definitely the most popular crowdfunding platform, featuring all kinds of fundraisers, from the very small to those generating millions. This platform has the great advantage of

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creating a community that talks about the product even before it is made, and that spreads it virally, also allowing the author unique freedom in its creation and realization. It is no coincidence that American filmmakers are interested in this model: for example, a campaign was just concluded (which yielded the abundant sum of $5,103,150) that will permit the making of a film based on the popular televi-

This is one of the most characteristic expressions of a cultural, social, and economic system that has been profoundly revolutionized by digital technology sion series Veronica Mars. In this case, what worked was a community of fans (the socalled Fandom) willing to do anything to experience their object of desire in ever new forms. The same is true for Zach Braff, best known for portraying John Dorian on the television series Scrubs and now an appreciated actor and independent filmmaker. For his upcoming film, Wish I Was Here, he obtained $3,105,473 through

his campaign on the Kickstarter platform. Crowdfunding is a universe that is mainly related to the industry of creativity and in particular, technological innovation: objects of technological design, applications, etc. A kind of new high-tech craftsmanship that has found its land of adoption in the Startups, sometimes linked to the Fab Labs that have popped just about everywhere and are often characterized by futuristic 3D printers. A universe that, in addition to wanting to be independent, is often also proudly an open source and utilizes Creative Commons. This is a widespread business model, and though it is difficult to contextualize from the point of view of its economic impact, it is now being relied upon more and more. There are several other crowdfunding platforms, in addition to Kickstarter, some of which are generalist, and others vertical (i.e., specialized); some ask for a percentage of the amount collected, others want to participate in the proposed project. For the “shareholders,” there is no economic compensation and participation requires a meager sum, which allows you to follow a project, its development, and its implementation: in short, donors participate in witnessing an idea become reality. And this, too, is a small miracle of a new economic model on the Internet.

New economic models by Raffaele Oriani

Jason Best is one of the founders of Jobs Act, the law that in April 2012 brought crowdfunding to the political and legal forefront of America during the Obama administration. In his speeches, he loves to talk about Web 3.0, the new era that combines an old idea (the need for money) with a young technological Golem (the Internet crowd). Best has moved to the sunny West Coast, but his website hailed the publication in Italy of the Consob Regulation on financing enterprises through crowdfunding as “a day to remember.” This is unusual attention: for once, Italy is not lagging behind, but is leading the way. In these times of credit crunch, many people are counting on it. In the world of crowdfunding, there is obviously the financing of artistic, journalistic, or in any case, creative undertakings: from the documentary about Piergiorgio Welby, which will be made thanks to the €15,000 collected from 155 supporters on Eppela.com, to Spike Lee, who raised over a million dollars on Kickstarter for his mysterious next movie. Similar stories in different spheres: the Italian website has financed seventy projects in nearly two years, and the American giant has distributed $760 million since 2009, thanks to its more than four million subscribers. And then there is the so-called civic crowdfunding, which effortlessly mixes the Internet and institutions: in England, the city of Mansfield has free Wi-Fi for launching a collection on Space-

hive.com; the exhibition Viceversa was recently acquired by the Venice Biennale, thanks to €178,562 collected on the Internet. The crowd gathers and the money follows: last year, Daniela Castrataro, the young president of the Italian Crowdfunding Network, resorted to the Internet to collect the €4,000 needed to organize “Crowdfuture,” which has aroused so much attention this year that the event – a reflection on money and the Internet – has found two sponsors ready to cover all the expenses. But how much will the resources of crowds actually amount to? For the consulting firm Deloitte, 2013 will bring the total of online collection to three billion dollars; for the Crowdfunding Industry Report, by the end of the year, in fact, the billions of dollars collected will be 5.1, up 90% from 2012. It is a huge crowd, which remains valuable even when it is pulverized into tiny circles: in America, on Indiegogo.com, 13,000 supporters and 12 million dollars were not enough to reach the target of the campaign to produce the Formula 1 of Smartphones; in Germany, the young Arabist Johann Esau must thank the 24 subscribers to Sciencestarter. de if he has managed to collect the €1,200 needed for his research in Cairo. In the crowdfunding cauldron, business plans and personal projects, write off donations, and investments that need to yield, all mingle. In Italy, the website Smartika.it has 5,300 subscribers who have loaned nearly four million euros

to 600 people in need in little more than a year. In this case, commissions are paid, deposits are made, and interest is collected. What is the difference compared to a normal financial plan? “We cost much less and we allow you to monitor how much you earn and where your assets end up,” says the CEO of Smartika, Maurizio Sella. This social lending is the latest frontier of crowdfunding: by going from crowd to crowd, an American giant like Lendingclub.com will raise up to two billion dollars in 2013, whereas Italy is just starting out, but Sella said he is confident that “in 2014, Smartika will reach ten million euros of loans.” At the end of 2010, there were 283 crowdfunding platforms in the world, 536 in late 2012, so it is easy to predict that they will double again by the end of 2013. In the world of the old-new online collections, the snapshot is always blurred, the latest trend is already outdated. Yet in Italy there is at least one certain fact: as of June 26, 2013, there is the Consob Regulation, which is enforced all the way to San Francisco. For the first time, the flow of online money has found a sluice pouring it into the entrepreneurial world. Will it be the turning point for the so-called equity crowdfunding? According to Daniela Castrataro, the “evangelist” of crowdfunding in Italy, this model “is capable of revolutionizing the market of capital: if it works with start-ups, it will be easier to extend it to thousands of small and medium-sized enterprises looking for resources.”

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Energetic solidarity by Eric J. Lyman Journalist and columnist for â&#x20AC;&#x153;The Americanâ&#x20AC;? photographs by White

The charitable energy projects must know the energy needs of a specific community, the resources available, infrastructure, local expertise, government rules, and possible partnerships

Less than two years ago, in a slum outside of the southern Indian city of Udupi, life must have looked hopeless. The community of around 200 houses was made up of residents from the northern part of the Indian state of Karnataka, a region with about the same population of Italy and twothirds as large. But Udupi was in southern Karnataka, which meant the residents of the slum had no social capital, and no real assets, living in a place with no electricity, no running water, and in a low area away from the main roads and subject to floods. And there was no reason to expect things to improve in the near term. “Bankers wouldn’t come into a place like that because the risks were too high,” explained Arunabha Ghosh, chief executive of the Council on Energy, Environment, and Water in New Delhi. “They thought there was too much of a risk that the people might just pack up and leave. Without resources or access to capital, the chances of improving their lot were very long indeed.” But one of the men in the community, a poliostricken worker named Shankar, wanted a solar panel for his ramshackle hut, and he refused to take no for an answer. He pushed and pushed until Selco, the Indian solar energy utility found a solution: they would help Shankar secure a loan for the $400 (€300) he needed to set up the solar installation, and the other 199 homes in the slum would open bank accounts and collectively secure the loan. The initiative would give power to Shankar’s small cellular phone repair shop and a credit history to the town’s other residents, opening new economic doors for them as well. Shankar paid off the loan in ten months, and the future of the Udupi slum had been recast. Anand Sarin, an engineer and project director who has worked with Selco in Bangalore, agreed: “There is probably no way to make a bigger impact on the very poor than to bring them power,” he said. Estimates on value of charity worldwide – or what percentage of it is tied to energy – are nearly impossible to calculate. But experts in the field say the charity-related development projects related to energy are becoming increasingly common. “Bringing energy to a community that doesn’t have it is an important early step to aiding that community’s development,” said Richie Ahuja, the regional director for Asia for the Environmental Defense Fund, a U.S.-based advocacy group. “The problem is, it is not as easy as it might seem at first glance. There’s a lot of local expertise necessary.” Nick Virr, the Nepal-based global program director with Renewable World (formerly known as the Koru Foundation), a U.K.-based development organization, agreed. “Any organization working on energy-projects and development needs a long-term scale-up in order to increase demand,” Virr said. “It’s not the kind of project a group can just come in and do. If it seems as simple as coming in and putting up a few solar panels and then leaving, it’s not.” 115

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According to experts, the charitable energy projects must know the energy needs of a specific community, the resources available (i.e., proximity to existing power grids, the natural sunlight or wind in the area), infrastructure, local expertise, government rules, and possible partnerships, among other factors. John Constable, from the Renewable Energy Foundation in London, for example, said that circumstances must be right – usually on islands or in extremely remote areas – in order for renewable energy to be the sole focus of charitable energy and development projects. “If the goal is to put a renewable energy target on the ground, then that is one thing, but if the goal is development then it’s often the case that traditional fuel sources can be the main power source with renewables used around the edges,” Constable said. “We believe the main thing is to look for innovative solutions,” he continued. “If you put some subsidized system in and that’s it, it can slow innovation because now the economic factors have changed. You have to strike a balance. It’s a kind of tough love.” Virr agreed about the economic complexities involved: “You can have a supply-led approach or a demand-led approach,” he said. “But it’s obviously best if you can push both ends.” EDF’s Ahuja talked about the need to create what he called an “operating system” when it comes to charitable energy and development projects. Like on a computer, the operating system is in the background providing a context that allows specific programs to work. In the case of development projects, the programs can be solar, biofuel, or whatever solution works best in that particular case. He also said a key role of charitable groups is to leverage their investment to give it the greatest impact. “There is no one-size-fits all solution,” Ahuja said. “You need the right mix of social capital, charity money, and conventional sources of money like state backers or local banks. The goal is to leverage the investment. Charity picks up the high end of the risk, which makes a project more attractive for the private sources of capital to get involved. And is also assures that the project will eventually stand on its own.” Raymond Wallace, a researcher and development expert in the University of California system, made a similar point. He said that while the growth in the number of energy-related development projects from charity and the amount of local knowledge the charitable groups are accumulating are what he called “extraordinarily positive developments” that the impact of the projects would be greater if there was more public-private integration. “For many charity groups, the reliance on the private sector is to solicit donations,” he said. “That has to be part of the equation. But they’d be much better off to involve the private on the ground as well. Too many projects try to go it alone, without getting local financial institu116

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tion involved, or the local energy providers. Tie development together with helping these companies expand their markets into the areas being developed and everyone benefits: the community, the charity, the companies. “I think too many charities see for-profit organizations as their opposite when they should be working together,” Wallace said. Virr addressed the topic in a different way: “The good thing about non-governmental groups is that they’re philanthropic,” he said. “And the bad thing about them is that they’re philanthropic.” Meanwhile, back in the slum near Udupi, that is a lesson Shankar, the disabled man with the community’s first solar panel has learned from experience. After paying back his first $400 loan, he is looking for a second loan to find a kind of expansion. His slum is down a muddy trail and not visible from the main road. He wants to set up a new cellular phone repair shop on the road, one that can still service his community but also attract customers who happen to be passing by. Ghosh, from Council on Energy, Environment, and Water in New Delhi, said he wouldn’t bet against him succeeding. “It’s a compelling story of how a single individual, disabled, with no credit, no assets, and poor prospects for the future made a big difference,” Ghosh said.

Estimates on value of charity worldwide – or what percentage of it is tied to energy – are nearly impossible to calculate, but the charity-related development projects related to energy are becoming increasingly common 117

enel foundation

Energy poverty in Europe: A right denied by Emanuela Colombo UNESCO Chair in Energy for Sustainable Development and by Tommaso Scandroglio Right to Energy, European University of Rome

There is an inextricable link between energy and development. We can sense it in our lives, pervaded by the daily consumption of different energy sources, for personal use, transportation, work, leisure, health, personal care, education, and culture. The history of mankind has proven that the most significant evolutionary steps and major socio-economic changes have always been associated with the discovery, or rather, the acquired ability to make use, of energy sources. This is confirmed by the great attention that the theme of energy is gaining in international debates on sustainable development, that focus on the common goal of identifying and promoting a “sustainable energy system for everyone.” Today, energy, which is recognized as an essential tool for promoting human progress and the development of society, should be available, accessible, and safe for everyone. But we know that this is not the case. Not in the countries of the so-called Global South, where the issue of energy poverty is widely debated in the international arena and is declined in detail in its main aspects (access to electricity and to modern fuels). Nor in the northern countries of the world, where the issue of energy poverty, studied less in depth from the theoretical and empirical point of view, is defined as

inadequate energetic well-being in the home, and is profoundly interrelated to issues of social inclusion and equity. Although there is still no clear definition, the scientific community generally agrees that energy poverty can be identified as the condition in which a family is unable to access an appropriate level of domestic energy services for material uses and social needs. This definition extends the problem beyond just the domain of domestic heating and identifies a condition in which the family must rely on a number of saving strategies which include illumination, and the energy used for cooking, transportation, and in their social life. It is estimated that there are about 50 million people in Europe who are unable to pay their bills or maintain acceptable levels of well-being in their homes. The size of the problem is quite significant, as is evident from the data of a recent study (Harriet Thomson, Carolyn Snell, 2013, see fig. 1, fig. 2, and fig. 3). This data, when compared with the economic conditions in the respective countries that set the threshold of domestic poverty at 60% of the median wage of the country (the EU average is about 15% of the population), allows us to understand how energy poverty is not only one of the faces

of economic poverty, but is also a socio-political problem in its own right. Energy poverty has entered Europe’s vocabulary thanks to the directive of the liberalization of gas and electricity which sparked debate in the following years (see Table 1). The political debate, only recently supported by a proper scientific debate (such as the article by Christine Liddell, “Fuel poverty comes of age: Commemorating 21 years of research and policy”), has highlighted some shared criticism with respect to how the issue is being dealt with today: the tendency to buffer the consequences by favoring direct subsidies for bills, causal relationships that are not well identified, institutions often lacking management skills for multi-dimensional issues, scientific research that must investigate the problem and help to formulate solutions, and recommendations that are too general and impractical. The elderly are no longer the only vulnerable group; studies on children living in households afflicted by energy poverty show that they suffer repercussions in both physical and psychological terms. As a result of evolving social and economic conditions, now there are the additions of singleincome families, young people waiting for employment, the unemployed, and immigrants.

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fig 1 households not able to keep their home adequately heated

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The main causes are related to a complex interaction between low income, poor energy efficiency in homes, and energy costs. The categories concerned see their quality of life reduced below an “acceptable” threshold and the main consequences have an impact on health: heart disease, heart attacks, and the risk of asthma; families show a greater tendency to consult their local health centers. For children, there is the additional difficulty in gaining weight and achieving adequate levels of nutrition, obvious effects of the dichotomy between “eating or getting warm.” Moreover, energy poverty can induce psychological consequences of a depressive nature which undermine the ability to develop and consolidate social

relations. The most extreme consequence of energy poverty is linked to the phenomenon of the “growth of mortality” in critical conditions, meaning the number of additional deaths that may occur in the cold season or during exceptional heat waves in the summer. The strategies adopted by the vulnerable groups to mitigate the problem of energy poverty range from the sale of personal items of value, to the use of television as a source of illumination and the living room as the only heated room, thus often using the sofas as beds. In addition, where families are involved, parents try to hide these compromises from the children and any visitors, and this effort can affect the emotional stability of the family.

Therefore, in addressing the issue of energy poverty, a situation appears in which a right is being denied. The resources that humans use as energy, water, and food cannot be classified as “rights,” whereas “a condition of access” to these material goods can be. The right of access to energy for vulnerable households is part of a political perspective of a state which complies with the principle of subsidiarity. Those who govern (both at the national level and, if present, at the supranational level) must create the conditions so that everyone can freely orient themselves toward their own good and thus, improve their lot in life. Private individuals should enhance their respective

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fig. 2 Percentage of households with bills left unpaid in last 12 months

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fig. 3 Percentage of households reporting broken doors, windows, roofs, or floors

energy poverty in europe: a right denied |

expertise and, where necessary, ask for support from other actors in society. Hence the value of intermediate bodies (such as actors of civil society, foundations, but also private companies). The principle of subsidiarity, in fact, teaches that when in need, the immediate society, the one closest to the subject in need, should intervene. In the specific case of energy poverty, support to vulnerable clients must be ensured by different actors. With its expertise in government, the state, in its supervisory action, should provide policy guidelines to regulate and discipline the market with rules; in its action of control, it must introduce corrective measures where there are imbalances.

tab Key steps in the adoption of European policies on energy poverty (Stefan Bouzarovski, Saska Petrova, Robert Sarlamanov, 2012)

Energy companies, with their technical expertise, are called on to intervene by proposing solutions aligned with government policies, to sustain the market, promote energy efficiency, reduce environmental impact, and promote the fair treatment of vulnerable customers. Furthermore, as a supranational body, Europe also plays a key role and must act as a guide to promote synergy between the actors, including civil society, to promote crosssectoral, multi-dimensional, and cross-cutting coordination, and to prevent causes that have not yet been intercepted from continuing to fuel the problem of energy poverty affecting an everincreasing number of European households.

oxygen

Finally, since the issue of energy poverty affects the global world, there is a strong need to encourage international dialog platforms and partnerships. In fact, it would be desirable if, in a spirit of global technological cooperation (NorthSouth and South-North), we engaged in a virtual principle of mutual learning, and if a number of technological solutions, economic models, policies, and strategies â&#x20AC;&#x201C; successfully tested in context â&#x20AC;&#x201C; could then be adapted and replicated. The integrated systems (minigrids) of renewable energy sources for decentralized generation, designed and built with different business models in many rural areas of developing countries, could already today be case studies that are able provide interesting insights.

July 2009

July 2010

November 2010

Directive for the liberalization of gas and electricity

Opinion of the European Economic and Social Committee on energy liberalization

European Commission

The governments of member states are asked to formulate appropriate policies on the issue of energy poverty, including the development of a national plan of action

It is emphasized that the existing statistics should be harmonized to allow a more rigorous identification of the situation of energy poverty in Europe

The member states are encouraged to adopt long-term policies and not temporary remedies, with the aim of replacing subsidies for bills with support to improve the energy efficiency of homes

The proposition of an integrated action plan between social policies and those of energy efficiency in order to aid vulnerable customers

Emphasis is placed on the need to activate a monitoring center of energy poverty at the European level that can be added to an existing body, such as the Agency for the Cooperation of Regulatory Agencies

Less subjective methods than interviews are suggested for quantifying energy poverty, such as those based on predefined thresholds of expenditure in relation to the family income

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Enabling Electricity: energy for all edited by Enel

Energy is the crucial common thread that connects economic growth, social equity, and environmental conservation, as stated by the UN Secretary General Ban Ki-moon. However, it is a thread that must be able to reach everyone. Enel has launched the program Enabling Electricity precisely to facilitate access to energy and make it become a widespread right.

Energy is the engine for growth, social development, and for a dignified life; and for Enel, Corporate Social Responsibility is a driver of industrial strategy that integrates the business model of the countries and the communities where the Group operates. Combining these two ideas, Enel launched the program Enabling Electricity as part of the initiative “Decade of Sustainable Energy for All” (2014-2024) of the General Assembly of the United Nations, dedicated to the fight against energy poverty. As a member of the UN’s Global Compact LEAD, Enel offers its expertise and knowledge to remote and peripheral zones of large urban, suburban, and rural areas. Today, more than one million people around the world benefit from these innovative projects to promote access to energy, a number that Enel intends to double by 2014. Among its projects, there is Luz para todos (Light for All), whose very name sums up the meaning of the many initiatives of the program. In fact, if it now seems impossible to imagine a world without electricity – all the more so in a time of economic recession, during which it could be a part of the engine of development – in 2011, the International Energy Agency (IEA), had a different story to tell. In its annual report, World Energy Outlook estimated that about 1.3 billion people worldwide did not have access to energy, while 2.7 billion people still cooked using traditional bio-

mass with potentially negative effects on their health. In this context, providing electricity is much more than a mere service. The obstacles to energy development in the world are of many different types, just as the areas involved are also different (rural and remote areas, or suburbs of large cities). Brazil, Chile, Haiti, Congo, El Salvador, Guatemala, Mexico, Peru, Colombia, and Panama are the many countries in which Enel has initiated development projects. In order to answer all the needs, the program proceeds along three lines: from projects that ensure accessibility to technology and infrastructures, to those that break down economic barriers in lowincome areas, and through development initiatives and the sharing of knowledge and skills in the energy sector. To reach isolated areas in which, for reasons of physical or economic feasibility, energy is not widespread, the Enel research center has created TOB, a system capable of providing essential services off-grid, a wooden gazebo equipped with photovoltaic panels and an accumulator. Inexpensive, easy to assemble, and portable, as well as adaptable to the exploitation of other renewable sources (according to the specific characteristics of the place), it produces electricity and then accumulates it to make it available in times of need. Instead, waste collection in exchange for discounts on one’s electricity bill is the strategy implemented in some of the

poorest urban areas of South America, characterized by the presence of open dumps, harmful to human health and the environment, as well as by the illegal exploitation of the electricity grid. Thus, the projects Ecoelce, Ecoampla (Brazil), and Ecochilectra (Chile) are based on a “simple” but effective exchange: those who take their waste to specific collection areas are assigned proportional discounts on energy. This is an educational project which is useful for society, for the environment, and for the economy, and makes access to electricity cheaper and legal. Education is also the protagonist of the capacity-building projects started in countries like Guatemala, Chile, Colombia, and El Salvador, where Enel has decided to export the Indian model of the Barefoot College, which instructs women (in the case of India, grandmothers, whose family burden is not as heavy as that of mothers) so that they can become “solar engineers.” Training courses teach them how to install and maintain small photovoltaic systems, an activity that allows them to work in their villages and communicate with other women about their own experiences and the contributions of the heads of families to be paid for the services offered. In 2012, thousands of homes received a photovoltaic system thanks to the work of 16 women. These are projects that go beyond philanthropy and contribute to the ongoing creation of value.

The International Energy Agency estimated that about 1.3 billion people worldwide did not have access to energy, while 2.7 billion people still cooked using traditional biomass. In this context, providing electricity is much more than a mere service

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A washing machine for the community by Ansis Berzinš Executive Director of the Valmiera Region Community Foundation, Latvia

We are accustomed to thinking of foundations as organizations that are fighting for causes that involve large amounts of money, but sometimes even a few hundred euros can make a difference. In a small Latvian village with serious economic and social problems, the purchase of a washing machine was able to allow the development of one of the most important things for mankind: a sense of community.

The Community Foundation Movement in Latvia celebrates its 10th anniversary in 2013. Five active community foundations, covering about 10% of the nation’s population, have spent more than 600,000 euros on supporting local initiatives throughout the country. Almost 700 grants have been given since 2003. Although the numbers do not seem too large, for Latvia, a northeastern European country with a very recent democracy and an emerging philanthropic culture, it has been a great success. The Valmiera Region Community Foundation is one of five community foundations. Founded eight years ago, it is based in Valmiera, a town of 25 thousand inhabitants, but covers a wide rural area numbering an additional 30 thousand people on the edge of the Estonian border. The foundation raises around 20,000 euros annually from local donors, and most of this money is given to grass-roots organizations as small grants for local initiatives. The story of the washing machine comes from a small village in the greater area of Valmiera. Zilaiskalns (literally it means “Blue Hill”) has a population of only 700 people. It is the only Russian-speaking settlement in this part of country, which adds ethnic integration issues as well. The village was built on open ground, next to a swamp, in the 1950s and the population was imported from other Soviet Union republics to work in the new peat factory.

After Latvia regained its independence in 1991, peat production decreased rapidly and hundreds of villagers remained unemployed because of language and cultural barriers which kept them from finding new jobs. In 2006, a group of retired people from Zilaiskalns approached our foundation with the idea of buying a washing machine for social purposes. The public washing machine would be very useful for those villagers who do not have running water in their apartments, said the initiators. My personal attitude was rather skeptical, given the fact that all our grants must be accompanied by some activities, such as gatherings of people or voluntary engagement. The pensioners applied for a grant under the call funded by the major enterprise in our town, the joint stock company “Valmiera Glass Fibre.” They asked for 370 euros to purchase a washing machine for public use and the local municipality promised to give them space and support with utilities – water and electricity. The selection committee, including the donor’s representative, believed that the “Washing machine project” in Zilaiskalns should be supported, and the foundation gave the requested grant. In the autumn of 2006 the washing machine was installed in a first floor apartment in a block of houses and became open for public use. Since then, over the space of seven years, this

washing machine has become a community center and a catalyst for change. The utilities are still paid by the local municipality, but service and repair costs are covered by a small participation fee collected from the “customers.” The group of retired people manages the persons on duty and takes care of working schedules, bringing the laundry in, washing it, and later returning it to the families. But above all, people meet here and this is an important achievement in itself. Last but not least, thanks to the dialog, they think of new ideas and start more initiatives for the local community. And all this for only 370 euros. Over the years, local pensioners and families have decided to start Nordic walking activities, skateboard facilities have been built, and last year they got another grant from the Valmiera Region Community Foundation for a gas stove. It has been installed in a room next to the washing machine and is now another place for meeting and sharing culinary topics. The complex issues of the village have not disappeared, but the daily life of many has been significantly improved. I truly believe that Zilaiskalns is not the only place where this story could become true; and all this thanks to a few active people who take the lead, and thanks to philanthropy conducted by openminded people who are ready to share what they have for the community’s benefit.

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The new social entrepreneurship by Francesco Perrini Director of the CReSV, Center for Research on Sustainability and Value

There has been a growing interest in philanthropy in the last decade, as evidenced by the proliferation of international initiatives of individuals and companies, in terms of quantity, the volume of resources provided, and the qualitative effectiveness of interventions. The multiplication of philanthropic activity is a reflection of the changes taking place in the global socio-economic system: crises of the welfare state models, withdrawal of public intervention, aggravation of situations of poverty both in developed countries, due to the economic crisis, and in Third World countries, and progressive concentration of global wealth. A more conscious approach to philanthropy is becoming widespread, with a greater focus on its outcomes and social impacts, and an integration of philanthropic activity with the life and entrepreneurial activity of individuals in terms of “giving while living.” It is not easy to take a census of philanthropy because the phenomenon affects the activities of both companies and “traditional” philanthropic foundations, and the activities of foundations, individuals, and funds specifically devoted to philanthropic initiatives that combine Venture Philanthropy, or even “active philanthropy.” with traditional philanthropy. We can definitely say that VP is a rapidly growing phenomenon, but which, at the same time, remains small in comparison to the size of the traditional philanthropic organizations. The data is fragmented and the knowledge of the subject passes through the research and promotion by individual organizations, networks, and associations of operators. As a whole, global philanthropy presents significant growth trends, consistent with the trends of concentration of wealth and growth in the number of high net worth individuals worldwide. The development of social entrepreneurship is closely linked to the availability of the tools and funding opportunities specific to social enterprises. The creation of a union between finance and social entrepreneurship is more necessary than ever and could be both a driving force for the development of social businesses and an opportunity for local communities that have increasing social needs with a government that is unable to satisfy them, for lack of resources and planning. In recent years, the interest in “social finance” tools has grown exponentially, and some European countries have already begun some very interesting endeavors, such as the Social Impact Bonds, a “product” similar to bonds but which is valid for social initiatives, that has already been successful in the UK. There are, in

fact, tools used by public entities to raise private funds to benefit projects of public utility, such as the interesting experiences of the UBI Banca and of the BCC in Cherasco, and others in Italy. Actually, in Italy the use of the funds as a means of financing the social economy is still strongly limited, partly because of the legislation. Many foundations are beginning to introduce the logic of VP in their modus operandi, but at the present, the phenomenon is not being surveyed, while the only experiences of social investment funds are currently those of Oltre Venture (founded in 2007, which invests in social entrepreneurship initiatives in Italy), and Impact-Finance (created in 2010, which operates as a debt fund that invests in social business in line with the “bottom of the pyramid” model). Also noteworthy is the establishment in January 2013 of the Opes Impact Fund, the first Italian vehicle for impact investing, a mode of investment that combines economic objectives and social impact, putting it in a position somewhere between traditional investments that are intended to maximize the financial return on investments, and philanthropy. Investments in enterprises for social change are emerging as a new asset class for investors. The 3rd JP Morgan report on impact investing indicates a growth of the sector in 2013, with planned investments on the order of $9 billion compared to $8 billion in 2012, and with performance in line with the results expected in social, environmental, and financial terms (two thirds of respondents stated that they also have market-rate financial returns). Italy is taking its first timid steps. There are few specialized actors and the total of the resources mobilized does not exceed a few dozen million euros. More than half of these resources are invested in the micro-finance sector. Then, a few major banks have promoted initiatives specifically for non-profit organizations. I am thinking of the Banca Prossima enterprise of the IntesaSanpaolo group, or the Universo non Profit of the Unicredit group. So today, those who want to do social business in Italy can access specific forms of financing provided by these subjects, and not only resort to philanthropy. On the other hand, with regard to the measurement of expected or created social value, practice and theory now agree on identifying the possibility of non-profit organizations and social enterprises to give credibility to their projects by providing a synthetic indication in monetary terms of the impact they have had on the people, territories, or communities that have benefited from them. In this sense, its measure127

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ment helps to communicate the strength of a social project to potential investors – be they donors, banks in the process of granting credits, or institutional investors in the strict sense – by using a familiar language: the monetary one. For example, social venture capital funds such as the Robert Enterprise Development Fund or Acumen Fund have developed and distributed models for measuring social value with the objective of improving their ability to make an impact, immediacy of communication, and the propensity of the promoters of social business initiatives for transparency in the evaluation and dissemination of their results. In addition to having an external function of the alignment of expectations on results obtained or expected from the implementation of a social project, if used in the planning phase, its measurement may also facilitate the design of a specific system for monitoring and overseeing, through the identification of operational areas, critical factors, and drivers of success. A final balance, a process of evaluation of the social impacts generated, can support the definition of corrective activities, as well as the reasons for a particular outcome. This is very important for those who need such an accounting of assets – like the investors described above, naturally – and the destination choices of corporate philanthropy. The most widely used approach to address the need to assess the impact differential generated by social entrepreneurial projects, and the ability of these to effectively pursue their mission, is the calculation of the Social Return on Investment, SROI. It is an attempt to quantify in economic terms, the non-financial environmental or social value generated by a project, an initiative, or a social enterprise, given a certain capital investment. The response of social organizations in this area is promising. In less than a year, the SROI Network globally has 700 non-profit organizations actively involved in the calculation of their social return. The process that leads to the calculation of the SROI consists of several stages, based on the centrality of the people – or the beneficiaries of the social initiatives promoted – in the identification of areas of impact, data collection, and verification of the results obtained. The route starts from the explication of a theory of social impact that details the differential contribution of the project in a given area or for certain categories of persons. Then there is the mapping of the subjects who experience change as a result of the implemented activities, identifying the causal relationships between the resources deployed and the results obtained for each category of subjects, the definition of indicators which give a monetary value representative of the impacts obtained (for example, cost savings or 128

increases in value), and the calculation of synthetic indicators that relate the investment and the social benefits obtained to the net amount of costs incurred (please refer to La misurazione degli impatti sociali – The measurement of social impacts, Perrini-Vurro, Egea, Milan, 2013). In conclusion, to better promote the development of philanthropy in Italy, it would be necessary to: create a learning culture, because the innovative nature of the subject makes it necessary to share and disseminate experiences and know-how among donors, social workers, academics, businesses, etc.; promote and create networks of financiers, given the aim of encouraging the greatest possible impact of social initiatives; provide the system with innovative legal tools and hybrid legal forms to promote the attention seeking of philanthropists and civil society in general; and introduce rules that encourage philanthropic activity.

the new social entrepreneurship |

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6 Some European countries have already begun some very interesting endeavors, such as the Social Impact Bonds, a tool used by public entities to raise private funds to benefit projects of public utility

in-depth

Teamwork by Bill Drayton CEO of ASHOKA

A changing world is redefining the relationships between individuals: how they interact, work, produce, and react to changes. Because every day we are faced with new situations and different opportunities. Opportunities that social entrepreneurship can be taught to grasp without breaking ethical rules and, indeed, promoting the common good.

The rate of change has been accelerating exponentially since 1700 at least. So has the number of people causing change. This acceleration also applies (and I believe this is especially important) to the number of combinations, and combinations of combinations, of changemakers collaborating. The combined effect of these accelerating historical forces is profoundly changing how people work together. And nothing is more explosive than changes in how people interact â&#x20AC;&#x201C; because they change everything. At least since Homo sapiens first crossed the mouth of the Red Sea 50,000 years ago, human organization has focused on achieving efficiency in repetition. Think of the law firm or the assembly line. Consider our traditional goals for education: to give students a body of knowledge and mastery of the associated rules so that they can go forth and be a potter or a banker for life. Of course, the world has always seen some change, at least evolutionary change. But the practical day-to-day work of an organization was marked by increasingly 130

specialized repetition. A few people told everyone else how to repeat actions together, efficiently, in structures with vertical nervous systems and walls. Although this organizational model still dominates, it is failing. The half-life of a Fortune 500 company gets shorter and shorter â&#x20AC;&#x201C; that is, the death rate of these slow-to change giants is accelerating. We are moving rapidly into a world defined by change, which is the opposite of repetition. Whereas repeating parts fit together with repetition reinforcing repetition, we are now tipping into an equally coherent world where change begets and accelerates change. When one system changes, it bumps all those around it, and then they bump all those around them. Value in this world comes not from providing the same thing over and over to a client, but from managing kaleidoscopic change processes that are busily bumping one another. Because one now needs to see and seize ever-changing opportunities, the new organizational model must be a fluid, open team of teams. A team is not a team unless everyone is

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an initiatory player, and in this world you cannot afford to have anyone on your team who is not a changemaker. Yes, there is still repetition (although automation, artificial intelligence, and the World Wide Web are fast shrinking its scope); but you cannot afford to have anyone without the skills to spot and help develop change opportunities. That is where the value lies. This world requires a new paradigm for growing up and, therefore, also for education. Just as 50 to 100 years ago society took the radical step of saying that every person must master written language, now we must insist that every person have the social skills necessary to be an effective, confident changemaker before age 21. These core skills are empathy, teamwork, a new type of leadership (leading teams of teams where everyone is a powerful changemaker), and changemaking. (Ashoka’s global collaborative entrepreneurship teams for “Every Child Must Master Empathy” and “Youth Venture” are focused precisely here). In a world of escalating change, the rules cover less and less. Anyone who tries to be a good person by diligently following the rules will, inevitably if unintentionally, hurt people and disrupt groups. They (and quite likely their group with them) will be marginalized, thrown out. That is one of the reasons that the skill of empathy is essential now. How does this world, in which all the systems are changing and bumping one another, stay on a safe, fair, and beneficial-for-all path? There has to be a powerful force constantly pulling society back to the center. That is why social entrepreneurs are critical (and no doubt why the field has grown explosively over the last three decades). Because the challenge is at the level of systems, it requires entrepreneurs. That is what entrepreneurs do. Time and time again, however, entrepreneurs with narrow objectives (including self-interest, shareholders’ interests, or a religious or ideological end) pull the world astray. The environment suffers. Privacy fades away. Social entrepreneurs are the essential corrective force. They are system-changing entrepreneurs. And from deep within, they (and therefore their work) are committed to the good of all. Whenever the world needs to turn in a better direction, they emerge to ensure that it does so.

We must insist that every person have the social skills necessary to be an effective, confident changemaker: empathy, teamwork, and a new type of leadership

Original article published in the “Stanford Social Innovation Review”, spring 2013

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Sustainable finance for mankind by Luca Testoni Director of ETIcaNews.it

Ethical funds and social impact bonds: the new forms of investment testify that finance is taking the path of sustainability. In fact, CSR investments allow you to be consistent with ethical principles and have a return that is no less than others. It could give a new face to finance.

While just a few years ago ethical finance was still mocked as something “that you do in church,” today those ethics are vigorously knocking at the door of the financial world. There is a desire for ethical investments; the problem is understanding what they are, how to handle them, how to make them, how to report them, and how to make them accessible. Therefore, it is necessary to brush up on the original role of banks: to be the link between the supply of resources otherwise immobilized and a demand for resources with development capacity. The thesis of this analysis is that today, finance needs philanthropy, understood as “love for mankind,” i.e., to put the goal of social growth back at the center of their work. And this is not a matter of a moralistic, value-based approach, but of a chance for survival and business opportunities. Think of the crisis of the European Monetary Union, whose serious “oversights” in terms of real imbalances clearly remained in second place compared to the financial objectives which were well described in the recent essay by Luca Fantacci and Andrea Papetti, Europe’s debt with itself. Analysis and reform of European governance in the face of crisis. But “philanthropic” finance is, firstly, a key to survival and business at the micro level of ethical investment. The term “ethical investment” has the breadth of an Aristotelian category. With an extreme, analytically useful simplification, a distinction can be drawn here between a purely financial investment and a direct investment aimed at social impact.

The first may be recognizable in the universe of ethical funds, or those products manufactured by the SGRs (asset management companies, usually found within the orbit of banking groups) whose shares can be bought. These funds are, in turn, invested in other securities (stocks or bonds) of issuers that meet a set of “responsible” or “sustainable” requirements (hence the financial term SRI, socially responsible investment or sustainable and responsible investment). SRI investments go beyond those made in ethical funds. The selfsame responsible stocks or bonds can be for direct purchase by individuals or other entities. Unprecedented data was presented in November 2012 by Eurosif in collaboration with Bank Sarasin, according to which, compared to two years ago, sustainable investments of HNWIs (high net worth individuals, or individuals with large estates) had increased by 60%, reaching staggering numbers: the money used in sustainable assets reached 1,150 billion euros. It is clear that there is a broad concept of sustainable investment in this “treasure,” but it is also clear that these figures indicate a general willingness to wager on sustainability. In fact, sustainable and responsible investment has begun to be a category of financial allocation that may allow for investments consistent with the principles of sustainability and that, in addition, appears to provide a return no smaller than that of other allocations not bound to responsibility. However, the problem of the SRI is that it has not yet become a cultural phenomenon, at least not as much as social 135

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mores seem to suggest. “The goal for businesses,” the sociologist Francesco Morace wrote in his recent book What is the future, “remains that of the profit to be made, but by setting their sights on the collective interest rather than on an individual one, applying the rules of cooperative capitalism, reconciling profit and socio-environmental values, allowing a redistribution of the wealth created, and imagining new business models that will accompany the new working models that people are spontaneously developing.” Take the example of Italy. With a simple search in databases specialized in funds, the adjective “ethical” leads to twenty mutual funds (managed by Etica SGR, Eurizon, Pioneer, Sella Gestioni SGR, Raiffeisen, and UBI Pramerica) and seven pension funds. This is a fairly meager list. However, by widening the search to include the UCITS (undertakings for collective investment) with the term “sustainability” – the term is not standardized by any institution – you reach over 107 mutual funds and ten ETFs registered in iShares. Well, this is not the representation of a model but of chaos. The second type of ethical investment, for the use of direct social impact, is a universe that is even more varied than the previous one. It can be defined as the investment in support of activities, enterprises, or initiatives that place the goal of a social return alongside that of an economic re136

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turn: this is the sphere of impact investing. With an analysis conducted in 2010 that made quite a stir, J.P. Morgan calculated that such investment with a social impact in the medium term would come to a value of one trillion dollars. Technically, today one of the tools that typifies this kind of initiative is the Anglo-Saxon social impact bond, i.e., bonds whose yield to the subscribers is linked to the social results achieved with the use of the money collected (for example, the degree of reduction of youth problems, the clinical improvements for certain categories of patients, the reintegration of ex-prisoners, or even modifications in traffic conditions). But the scope of impact investing is far more extensive than social bonds. For example, in Italy the precursor of investments with social impact is the Oltre Venture fund, which has already been very successful in micro-credit with Permicro, and in social housing. In these cases, there are no yields directly tied to the social results, but it is evident that it is the social activity which also allows for a financial return. It is interesting to note that two other Italian subjects of impact were created in the last year: the Uman Foundation and the Opes Fund. Impact investing leads to the even broader concept of social enterprises: real businesses whose mission is to act in areas that, in addition to economic sustainability, provide a concrete social return. In Italy, there is a law that indicates the scope of activities (law 155 of 2006), whose limitations include the non-distribution of profits. In reality, social business has begun to be a concept that goes beyond the dichotomy between profit and non-profit organizations: just think that to overcome this opposition, in July the “New York Times” took the field by opening a debate with its readers. Moreover, a new type of company has come into being in the U.S., the Certified Benefit Corporation, legally registered as a company governed by the law of profit, but bound to specific statutory commitments of a collective nature. As of 2012, Italy, too, has its first B Corp., Nativa. According to some people, this world of social enterprise is the best representation of the economic model of the future. Italy can count on a business structure, on a territorial spirit, and on a social DNA that already historically includes an idea of social business. There are small businesses that are emerging (see the mission of companies like Equilibrium, D-Orbit, and Near) and financial players who are courageously in the game (in addition to the aforementioned Oltre Venture, just think of the gamble of Main Street Partners, made up of young Italians who were formerly bankers at Goldman Sachs, whose aim is to encourage “the combination of financial returns with a positive impact on society and the environment”). Still, a great patrimony remains hidden: according to Iris Network (the national network of the Institutes of Research on Social Enterprise), Italy has a single basin in terms of investment opportunities to impact, relying on some 100,000 hidden social enterprises, that is to say,

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those with a business and a mission that makes them socially useful. Where is finance on this front? It is clear that, in order to capitalize on these opportunities, the financial system must be reset in the direction of a model in which, as the economist Stefano Zamagni said, “the creation of value today returns to needing people, relationships, and meanings, as in the era of civil humanism. In the current season, value is produced by generating meaning with actions that, by not separating economic value and social value, form bonds.” It is through this injection of philanthropy that an integrated system can be created which allows finance to access and share the wealth of ethical investment. In this way, sustainable and responsible investment, which is chaotic today, will also become a means for taking advantage of the enormous development that the new socio-economic model could offer to a new finance.

It is necessary to brush up on the original role of banks: to be the link between the supply of resources otherwise immobilized and a demand for resources with development capacity

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The green lamps of Solar Sister by Stefano Milano photographs by White

Women selling solar lamps to other women, often in villages without electricity, to create light and run the economy. This is Solar Sister, an organization that came into being in Uganda, on the model of micro-credit, and which has created an all-female business network, generating emancipation, education, economic independence, and clean energy.

Ever since the concept of microcredit was tested and became a model for others to follow, first in India and then in other countries in the developing world, the focus of many economic interventions has been put precisely on the ability to access small amounts of borrowed money, which can help revolutionize people’s lives. A similar concept is also at the basis of Solar Sister, an organization founded in Uganda on the simple idea that goes by the name of MicroConsignment ... a little like the Avon model (so to speak), in which small associated entrepreneurs sell solar lamps to other women of their village: it is truly a matter of autonomous, entrepreneurial work that allows women to decide how much time to devote to their enterprise. Each member of Solar Sister receives the lamps, a complete set of instructions on the product, sales, and marketing, and entrepreneurial and logistic

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support. What characterizes Solar Sister is that the recipients of this enterprise are women, especially those from small villages, and thus represent an economic force that is often underestimated or definitely not taken into account. But beyond that, its focus on light and energy by means of “green” solar lamps is also revolutionary. Yes, because since it is very difficult to have electricity in many parts of sub-Saharan Africa (it is estimated that over 70% of the population lives without electricity), here is a simple lamp that can open up a world of possibilities. Solar Sister’s motto is “Light, hope, opportunity” because a solar lamp means many things, such as, for example, finally no longer having to resort to illumination generated by candles or kerosene, which are among the major causes of accidents in the home. Furthermore, in Africa a solar lamp has excellent performance and is able to last many

Micro Consignment Ă&#x2014; A model that small associated entrepreneurs follow, selling solar lamps to other women of their village: it is truly a matter of autonomous, entrepreneurial work that allows women to decide how much time to devote to their enterprise.

years and, therefore, proves to be a useful object to accompany the life of many women who, this way, can work in the evening or, better yet, study. Or they can divide their day in the most appropriate and effective manner, taking into account their own activities and those of their children who, in the vast majority of cases, are the ones who have to sustain and support them. Here then, is where light takes on important meanings and can really change the lives of many through the opportunity to come together, to create social gatherings, doing politics and doing business. Solar Sister sells the kind of lamp that feeds on itself, which can last more than ten years, and costs $20, a substantial figure in the economy of a village, but one that can be easily amortized over time. Indeed, with the savings, many families have been able to receive better health care, give birth in assistance centers, or send their children to school. The idea came to Katherine Lucey, a former employee of a bank in New York and an expert in the energy field, who decided to deal with the problem of poverty in the developing world, with particular attention given to women. Started as a small project in a little village in Uganda, Solar Sister is now present in three African countries and has 401 associated entrepreneurs who, it is estimated, have reached a good 53,995 people with their lamps. For these reasons, in addition to developing a culture of sustainability, Solar Sister has received a number of awards in recent years, including selection by the United Nations Framework Convention on Climate Change (UNFCCC) as one of the Momentum for Change Lighthouse Activities in 2012. Solar Sister is truly an interesting model that highlights an aspect that is often overlooked: a simple technology (like that of a solar lamp), if used effectively and intelligently, can trigger mechanisms of transformation and economic improvement, starting from small things like the everyday life of villages, work for women, the importance of education, micro-credit, and microenterprise. 139

interview

The prize that comes from outer space interview with Gregg Maryniak Co-founder of XPrize

by Daniela Mecenate

Human beings are incredibly good at innovating, and they also do something else: they socialize, discussing with one another

A great passion: the exploration of the cosmos. And one certainty: mankind can do it. This is the belief that led a group of American managers and scholars (but above all, fans of “impossible challenges”) to establish a rich cash prize for those who make the best and fastest use of the most prized weapon of the human race: their talent, and the thirst for new discoveries. So it was not exactly charity, and not even pure “philanthropy,” that drove Peter Diamandis and Gregg Maryniak to create the XPrize Foundation, a non-profit organization that aims to stimulate innovative breakthroughs: perhaps, above all, it was their curiosity. How much can human talent achieve when stimulated with a good incentive and if put into competition with other talented people? How far is it able to innovate, taking on seemingly impossible challenges? Thus, the many XPrize competitions came into being, dedicated to private individuals or non-governmental organizations

that wish to aim for goals that many consider unattainable. The most famous one, stemming from the founders’ great passion for Space Studies, is the Ansari XPrize, the famous competition among several teams for the creation of a private spacecraft: the $10 million reward was awarded in 2004 to a non-govermental organization that was able to launch a manned spacecraft that is reusable – and therefore low cost – twice within a fortnight. And by 2015, the Google Lunar Xprize, a competition between private competitors – sponsored by Google – to send a robot to the moon, will have been awarded. It is not only about space exploration, though: over time, XPrize has turned its attention to other major objectives, from the human genome to portable medical devices, and from pollutionfree oceans to environmentally-friendly cars. Here to explain it all to us is Gregg Maryniak, one of the founders of this organization that 141

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was founded in 1995 and developed with two big buzz words: innovation and competition. A very Made in the USA leitmotif for a project with a global scope. How did your Foundation come to be created? What is the “philosophy” that prompted you to bring it to life? To be able to give mankind access to material and virtually unlimited energy resources that surround our earth: Peter Diamandis and I have been engaged in this for a long time with various companies that deal with these challenges. But every time, we noticed that many very promising private “efforts” were frustrated by the almost universal belief that only governments, and only the richest governments, are able to send people into space or to carry out research activities in this area. We decided to change this belief by demonstrating that everyone can do something great, and we did it through a prize for the first manned spaceflight created and organized by private citizens. It all started with that. Spacecrafts, the human genome, eco-friendly cars... The fields of interest of your projects today are very different from each other, but two elements distinguish them all: innovation and competition. Why this choice? All of our awards have one goal: to inspire people facing great challenges that are considered impossible. Human beings are incredibly good at innovating, and they also do something else: they socialize, discussing with one another. We learn and we are motivated by looking at others: in this way, we communicate. Our contests offer a very powerful channel for this type of communication. The participants learn from the other teams and are highly motivated by the competition. Paradoxically, we have also noticed great cooperation in our contests among teams who help each other when the going gets tough. Anyone who has ever followed the Olympics or any sporting competition can feel the energy of those being challenged and understand the way in which it is the competition that encourages the most difficult tasks, which otherwise would not have been attempted. According to some observers, every dollar invested in philanthropy has the potential to generate 12 more in terms of economic growth. Do you think that is realistic? What are the possible economic and social benefits for the community? We think that the economic benefit generated by what we call “effective philanthropy” is actually much higher. The concept of “effective philanthropy” is not new. Everyone has heard the old saying: “Give a man a fish and you feed him for a day, teach him to fish and you feed him for a lifetime.” In the United States, well-designed sweepstakes have demonstrated their ability to create entire new fields for a value of billions 142

of dollars, compared to an initial premium of $10 million. But there is an even greater benefit to society than the economic one. This additional advantage is time. Time is the only true raw material that is scarce in all of our lives: by massively encouraging research into parallel experimentation, an XPrize can cause unimaginable results to be obtained in a very short time. The Foundation was created in 1995, in a period of economic expansion. In these recent years of crisis, how has the propensity to participate in your initiatives and projects changed? Private donors have always tried to achieve the best results with their contributions, and governments seek the maximum benefit from their investment of public funds, too. So, in times of economic crisis, this search for “productivity” of the investment benefits is even more important. We have found that private organizations and governments are now even more attentive to the powerful leverage that an XPrize provides, because they seek to do more with fewer resources. A good example of this is the incentive award with which XPrize helps NASA. Based on the very research that we conducted in 2003 for NASA, the space agency has developed and launched the Centennial Challenges program, which has helped to generate innovation in many fields. What are the concrete results achieved so far and what are the next projects you are focusing on? There are many past and future projects. Among the former, there is the start of the revolution of private space travel (the Ansari XPrize) and the reusability of vertical takeoff and landing systems for rockets, which also allows for a large cost savings. Another result is to have demonstrated the feasibility of an ultra-efficient car, and also having studied systems that are three times more efficient at cleaning oil spills in the ocean. Through our contests, we are currently trying to expand the sphere of space exploration thanks to the initiative of individuals, especially lunar exploration (the Google Lunar XPrize), and we are trying to achieve results in supply-

ing medical services through Smartphones. Our future efforts will be directed especially to the environment and could include the development of new energy storage systems in order to better exploit the abundant flow of energy from the sun, as well as aiming at the drastic reduction of the costs of monitoring the health of the oceans in the world, and the method to benefit from carbon dioxide, to date only considered a pollutant. In short, XPrize has many projects, and only one goal: to encourage innovators of all ages to truly change the world.

We have found that private organizations and governments are now even more attentive to the powerful leverage that an XPrize provides, because they seek to do more with fewer resources

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Researchers searching for funding by Daniela Ovadia

There is no single type of funding and a researcher cannot rely only on those coming from universities, those of private enterprises, or from governments. But does the quality of their research depend on the type of funding they receive? The stories of those who, on their scientific path to innovate or make important discoveries, every day encounter bureaucracy, competitions, grants, and philanthropic structures. According to an estimate made by the Organization for Economic Co-operation and Development (OECD), about two thirds of the funds available in the world for research and development come from industries, 20% from universities (in cases where they are independent from government funds), and only 10% from governments. The more economically weak the country (for example, in Europe, Portugal and Greece), the smaller the private share and the greater the public subsidy to both basic and applied science. A small proportion of the funds referred to as “private” actually comes from charities or other entities that collect money directly from the public or patrons, even if this part of the funding to science can grow and become the majority in niche areas where there is a strong and recognizable presence of a financier, as in the case of cancer research (an area in which large organizations are active in almost all European countries) or that of rare diseases, in which the Telethon has come to have a sort of “monopoly.” What changes in researchers’ lives, based on the source of their funds for research? A lot can change: from the manner of obtaining the funding to the manner of accounting for expenditures, and even up to the objectives of the grant. “By now, there are researchers who can 144

rely on a single type of funding, except in some very special cases,” explains Pier Paolo Di Fiore, molecular oncologist who, in its first years, directed the FIRC Institute of Molecular Oncology of Milan, one of the few Italian research structures created directly by a charity. “Even when the core funding comes from a private non-profit organization, as in the case of the IFOM, individual researchers participate in public tenders, European competitions, or work together with the industry to develop one of their discoveries. This requires a good expertise in the development of the projects to be presented and the management of funds.” Administrative practices and accounting for the money received is, in fact, the black beast of project leaders throughout Europe. It is only in the richest and most organized countries that scientists can count on the professionals to be involved in the administration: in all others, the work of accounting is part of the researcher’s tasks and absorbs a large number of working hours. “Standardizing the bureaucratic aspects of the grant would be good for science,” confirms Di Fiore. “Currently, each source of financing establishes its own rules and limitations.” Whether public or private, all requests

for grants are now submitted to the consideration of referee committees that evaluate their innovativeness and their possibility of success. And to avoid conflicts of interest, some governments, such as the Italian government, have contracted the review process abroad. For example, in the biological and health sector, the U.S. National Institutes of Health is considered to have set the “gold standard” of evaluation that many countries now rely on. Some individuals, however, such as nonprofit foundations (from the British Wellcome Trust to Cancer Research UK, and to Telethon and AIRC in Italy) have decided to rely on their own system of internal refereeing, often borrowed in form and purpose, from the public kind. “Over the years, as the amount of funds disbursed has increased, the evaluation systems of private entities have also become very efficient and selective,” explains Adrian Bird, a member of the Steering Committee of Cancer Research UK, and a geneticist, who for many years was the director of the Center for Cell Biology at the University of Edinburgh, funded by the Wellcome Trust. So what changes for researchers, based on the source of their funding? There is no single valid answer for the whole of 145

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Europe. Much depends on the organization of each country and the reliability of both the private and public structures. For example, in Italy and Portugal (where the Gulbenkian Foundation, one of the most generous institutions in Europe, is active), public tenders have unpredictable delivery times and, above all, it is not a given that the entire amount to be granted is then actually delivered. Changes in the state budget, horizontal cuts, and co-financing by local authorities provided on paper but never available are some of the problems that plague public funding. Even the funds provided by the tenders of the European Community may be subject to cuts in the national or local share, which is converted from cash (which the researcher desperately needs in order to buy the research material, and, above all, to pay for scholarships and salaries) into virtual contributions in the form of the provision of services and goods. And, in case of a crisis, the government may decide to reclaim some of the money (regardless of the source) through the overhead, the share of funds that structures deduct from any research funding for administrative assistance given to researchers and the use of facilities. At the end of 2012, the Italian National Research Council made a controversial decision to increase deductions from 10% to 15% (as already happens in other European countries), even on projects that were already funded. This means that the scientist suddenly sees the proportion of money available reduced by 5% and, since some non-profit organizations do not provide for the possibility of increasing the share in favor of the structure, some scientists have risked losing their funding, at times conspicuous, in its entirety. So, is private funding better? Not really; sometimes public funding is the only kind that allows you to do research in very theoretical areas, on basic issues, or of little immediate practical application. And, in general, the public sector takes more risks than the private or non-profit organizations. The U.S. National Institutes of Health was the first to launch the “risky grant” model: tenders to fund potentially revolutionary ideas but which are also innovative enough to be worth risking failure. “After seeing the results of the public tender of the NIH, we, too, decided to invest in a program like this,” said Margaret Foti, chief executive officer of the American Association for Cancer Research. “Besides, one of the problems of charities is to have to give its financiers 146

results that are concrete and immediately useful to obtain new contributions. But science cannot really innovate if you do not also aim for visionary projects.” Therefore, industries and charities impose their own agenda on scientists, while public funding answers (or at least should) to a need for knowledge that is not necessarily aimed at a practical purpose. For example, many biologists believe that investments in oncology are excessive in relation to the total investment for biological research in general, but the share of money available is determined by the needs of the population, which wants solutions for a disease that affects everyone. Conversely, projects such as the particle accelerator of the CNR in Geneva, and the identification of the Higgs boson particle, although largely financed by the industry interested in technological innovation related to the project, exist essentially on public contributions.

researchers searching for funding |

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“After years of working at a London-based research center funded entirely by Cancer Research UK, I recently moved to Italy to work at the IFOM, which is a similar structure,” explains Vincenzo Costanzo, a biologist who studies the mechanisms of cell replication. “I think that even more than the source of the money, what counts is the mode of management of the institution where you conduct your research. Institutions run by charities can enjoy some freedom in choosing the researchers to finance, they have very stringent internal audit systems that allow them to close inefficient laboratories, and, above all, in some countries, they guarantee higher wages than those available in public centers. Thus, you can breathe an international atmosphere: research projects are highly focused on basic research but without ever losing sight of the ultimate goal, which in our case, is the treatment of cancer.”

Sometimes public funding is the only kind that allows you to do research in very theoretical areas, on basic issues, or of little immediate practical application 147

focus

Brailleberry ( Brailleberry ) by Elisa Barberis

How would a Smartphone that uses Braille change the lives of blind people? What kind of revolution could it be for a country like India, and its inventor Sumit Dagar? An invention, a story, and what philanthropy initiatives can do.

Imagine a phone tailored to the needs of people with seeing disabilities. A device that, at the most basic level, can be used as a translator to convert text into Braille, but which also offers the tools of any Smartphone. Including a touch screen with a sort of tactile memory, which enables you to “see” images and information. This is a technological utopia in which the Indian designer Sumit Dagar, 29, has invested everything: his work, time, and savings. His project is one of five to which Rolex, the Swiss company of luxury watches, has decided to donate 40,000 euros: some initial help to transform the rudimentary prototype into a reality. This is just the beginning for a project that attracted attention at the conference of TED (Technology Entertainment Design) – which aims to spread the ideas of a community of influential and famous people, from Bill Clinton to the astrophysicist Stephen Hawking, to the founder of Google, Larry Page – but which so far had not been able to find financing. Even though it might be a turning point in the lives of over 285 million people who are cut off from technological progress because they are blind. 22% of whom are living in India, nearly all of them in rural areas. Dagar actually came up with the idea during a trip to the poorest communities: for this reason his brailleberry, developed in

collaboration with the Indian Institute of Technology in Delhi, must have a low price tag, no more than 8,000 rupees (about €110). Sumit says, “If it is true that scientific advances are giving everyone ‘super powers,’ technology, on the other hand, is making the blind and handicapped even more isolated, instead of being at the service of society and adapting to the context and to the people.” But in times of crisis, funds for research dwindle with every passing day. But having few resources available forces us to find alternative solutions and, alongside the traditional investors, to strengthen the network of donations. Not only those from tycoons devoted to philanthropy: above all, from those on the Internet, through crowdfunding that allows anyone to contribute a few euros to the budget of a project that lacks other financing. According to estimates by the analysis agency Massolution, in 2012 the turnover reached $3 billion throughout the world. But if most of the projects on the best-known platform, Kickstarter, are of an artistic nature, scientific projects still struggle to find space. From mobile devices for more secure credit card payments to the Smartphone application that screens for skin cancer, from a webcam with satellite connections to monitor every point of the Earth to “smart homes” for the earthquake victims

of Haiti threatened by malaria: these are just some of the projects seeking support. Which they have found on websites such as FundaGeek, TechMoola and # SciFund, created to help inventors and visionaries give life to their ideas. And their success – still small, but which bodes well – is showing a turnaround. To the point that, according to Nabatiyan Solomon, founder of TechMoola, crowdfunding “is an alternative that offers greater opportunities than traditional venture capital, which is more costly and short-term oriented.” Telematic collections, he explains, “instead, offer the possibility to activate a process of lasting innovation, while escaping the ‘earn a lot quick’ mentality, so typical of the American business culture.” This is an outdated attitude that even the President of the United States, Barack Obama, is trying to overcome. In April 2012, he ratified the Jobs Act (Jumpstart Our Business Startups), a series of laws with the aim of improving access to capital, particularly in the initial stages of the lifecycle of an enterprise. The main novelty is precisely the possibility – if you have no support from venture capitalist professionals – to do fundraising (also on the Internet), collecting up to a million dollars in one year from an unlimited number of small investors. A true industrial revolution.

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science at the toystore

Slinky, the spring for all budgets by Davide Coero Borga photographs by White

In 1945, naval engineer Richard James sold the first 400 copies of the spring called Slinky, one of the best selling toys of all time, and also an example of a toy that is accessible to everyone, thanks to its low cost, maintained during the sixty-plus years of its history. A democratic object that is also used for studying waves.

Philadelphia, 1943. Richard James, a naval engineer, shuts himself up in his laboratory for weeks. His neurons are working hard to find a solution to the difficult (if not impossible) stabilization of naval equipment in rough sea conditions. He is developing a spring system able to soften the sharp blows received by the ship’s hull during a storm. His desk is a battlefield: sheets of paper, designs, and prototypes are everywhere. His elbow accidentally bumps one of the dozens of springs on the shelves that he is observing in religious silence. The spring falls onto a lower shelf, recomposes itself, and unwinds, bouncing onto a glass, a stack of books, the table, and finally ending up on the floor, where it recoils and stops on its vertical axis. Thus, the Slinky, the elegant spring that can go down stairs, came into being. Forgetful of tools, storms, floods, and prospects of marine engineering, James runs out of the lab. As he runs, he measures the meters that separate him from his home. He opens the door to his apartment – or at least that is

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how we like to imagine it – and proudly shows the spring to his wife, Betty. He says to her: “Using steel with the perfect properties, I could even make it walk.” With scientific method and a toymaker’s inspiration, in less than a year, he manages to create an icon of entertainment. With a loan of $500, he is launched in self-entrepreneurship and in November 1945, his small warehouse is opened to the public: the 400 springs made of black and blue Swedish steel that he has in stock sell out like hot cakes in less than two hours. It is a success. He also convinces Betty, who at first must have believed her husband was mad as a hatter. Thus James Industries arose, a family business of toys with the spring: there is also the Slinky Worm, Suzie, and the legendary Slinky Dog, the Dachshund with a body made of the spring, that many will remember for its famous role in Toy Story and Toy Story 2 – Buzz Lightyear to the Rescue. In this film, it recovers Woody’s hat that had mysteriously disappeared; it helps Buzz Lightyear and a small platoon of

toys to escape from Andy’s room, transforming its spring into a rudimentary but highly efficient bungee jumping device; it crosses the city center disguised as a construction cone, causing an accident involving a dozen cars and a semi-trailer truck. For some, this pastime beloved by generations of children will bring to mind the hilarious scene of Ace Ventura – When Nature Calls, where Jim Carrey tries to find the perfect push so that his Slinky can traverse the infinite series of steps of a temple – something that duly does not happen (despite the protagonist’s cheering and auspicious gyrations). The spring stops on the last step, coming short of the impossible feat. But back to the important stuff: the toys. Along with the Frisbee, the hula hoop, and the ball, the Slinky is to be fully included in the concept of popular toy: it was initially sold at the price of one dollar, at the behest of James’ wife, who wanted a toy for all budgets, and it is made at low cost and with simple materials in the belief that a toy is a right of all children and not a luxury for the few. Over the years, the Slinky has kept its very low cost, and in its sixty years of history, about 300 million have been sold. A record that earned its inclusion in the Toy Hall of Fame in 2000. But the science of the spring toy does not stop there: the elegant spring that goes down the stairs is also liked by colleges and universities. It was and is being used by researchers and teachers to simulate the properties of waves. As can be easily observed, when the spring goes down a stair, it collects itself on every step, pauses, and then proceeds to the next, tipping itself upside-down. While the step is a fixed point which responds with equal and opposite force. If the floor absorbs a little of the spring’s energy, the resulting impulse, with the aid of gravity in the descent, is in any case (nearly) identical to the initial one. So? The Slinky behaves like what a physicist would call an inelastic wave. In short, almost elastic – since the reduction is very small and the spring can even travel dozens of meters. It just goes to show!

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Testata registrata presso il tribunale di Torino Autorizzazione n. 76 del 16 luglio 2007 Iscrizione al Roc n. 16116