Philanthropy Age Issue 7

DEDICATED TO THOUGHTFUL GIVING

Middle East, North Africa and South Asia

Breaking

the chains Fighting slavery, rebuilding lives

PLUS Philanthropist Munib Masri on the long road to reconstructing Palestine UNHCR chief António Guterres: why the world is failing the victims of humanitarian crises Beyond profit: CSR and the new face of thoughtful business Gavi CEO Seth Berkley on the battle to beat preventable diseases

www.PhilanthropyAge.com

Issue 07

January – March 2015

WFP/Joelle Eid

Millions of Syrians are displaced inside Syria or in neighbouring countries. Their needs continue to grow as they face a harsh winter away from home.

The World Food Programme is helping them by providing food and vouchers.

If you would like to know how you too can help, please visit: www.wfp.org/Syria

Join us on Facebook follow us @WFP

CONTENTS

In this issue...

36 16

22

REGULARS 08 10 12 14 72 76 80

4

Need to know

16

A safe haven UN High Commissioner for Refugees António Guterres on why the global humanitarian system is ripe for change

22

Slavery: a modern trade Slavery is a criminal industry generating $150bn a year.

Meet the individuals and agencies battling to stop it

30

The long road Palestinian businessman and philanthropist Munib Masri has one dream: to see a Palestinian state and peace with Israel

The Moment Global Eye Guest Column One Day Trends Diary

30

36

Good business Firms are starting to create win-win models for corporates and communities in the Middle East’s fledgling CSR landscape

60

Design for life CEO of the IKEA Foundation Per Heggenes on bringing a fresh approach to the global delivery of humanitarian aid

66

A rural revolution Armed with just a laptop and a bike, Bangladesh’s Infoladies are bringing the world to the Asian nation’s most remote villages

CONTENTS

66

42

The rise of impact investing

72

54

60

Aiding Afghanistan’s neediest

48

Moving the needle

The Gavi Alliance is leading the global campaign against preventable diseases through vaccination.

Now, CEO Dr Seth Berkley says in an exclusive interview, Islamic states must take up the fight Banking for good

74 5

CONTRIBUTORS

With our thanks to...

Lina Hijazi

A Dubai-based freelance journalist, Lina Hijazi had previously worked with aid agencies, UN bodies and NGOs across the Middle East and North Africa. In this issue, she talks to the head of the International Committee of the Red Cross’ rehabilitation clinics in Afghanistan about helping patients on the road to recovery.

6

Soushiant Zanganehpour

Soushiant Zanganehpour is a senior member of the Skoll Centre for Social Entrepreneurship, managing the Skoll Social Venture Fund, which invests in social business start-ups, and consulting on strategic initiatives. Advising organisations on strategy, growth and impact optimisation, in this issue Soushiant argues that corporations are missing economic opportunities by overlooking their social responsibilities.

Kim Scriven

Kim Scriven is manager of the Humanitarian Innovation Fund, a grant-making facility that supports the development of innovations in international humanitarian action. In this issue, Kim writes about the vital role of creativity and adaptation in the humanitarian sector, and new initiatives being tested in Ebola-hit countries to improve aid delivery.

EDITOR’S LETTER

Philanthropy Age is published by Touchline FZ-LLC The publishers regret that they cannot accept liability for errors or omissions contained in the publication, for whatever reason, however caused. The opinions and views contained in this publication are not necessarily those of the publishers.

The publishers take no responsibility for the goods and services advertised.

All materials are protected by copyright. All rights are reserved. No part of this publication may be reproduced in any material form (including photography or storage in any medium by electronic means) without the written permission of the copyright owner, except as may be permitted by applicable laws.

Touchline FZ-LLC 4th Floor, Pink building, twofour54 media zone, Khalifa Park PO Box 77826, Abu Dhabi, UAE Tel: +971 (0)2 234 4598 www.touchline.ae www.philanthropyage.com Editorial

Digital

Studio

Editor-In-Chief Leonard Stall leonard@touchline.ae

Managing Editor Andrew White andrew@touchline.ae

Senior & Web Editor Joanne Bladd joanne@touchline.ae

Senior Editor (Content) Stuart Matthews stuart@touchline.ae

Senior Writer Tamara Walid tamara@touchline.ae

Assistant Editor Adrienne Cernigoi adrienne@touchline.ae

Arabic Editor Fawaz Jarrah fawaz@touchline.ae

Translation Zaineb Bouftas Ayat Abbasi

Director of Digital Juan Whitby

Digital Design Director Matt Walker

Digital Publisher Shaun McGuckian

Group Comms Manager James De Vile

Studio Manager Mohammed Khalafalla Touchline FZ LLC Studio Ahmad Marei; Anas Ahmad Albounni; Chris Assig; Mark Makhlouf; Faraz Qaiser; Jason Simmons; Mareena Khawar; Michel Al Asmar; Qaiser Nawaz; Sam Birouty

Touchline CEO Leonard Stall FZ-LLC

COO & Partner Waleed Gubara

Publisher & Partner Salem AlShaikh

Business Development Mona Mahmoud mona@touchline.ae

For advertising enquiries: Stefanie Morgner stefanie@touchline.ae

Account Manager Serhan Serhan

Office Manager Linda Musco

Receptionist Leofel Toledano

Contributors: Lina Hijazi; Soushiant Zanganehpour; Kim Scriven

The corporate challenge A recent survey of wealthy business owners across Asia, Africa and the Middle East found that giving in developing markets is evolving in a different direction to that in developed markets. Rather than one-time charitable donations or straightforward financial aid giving, our most successful business owners are actively engaging in projects that directly benefit their local communities. It’s a personal approach; one that posits an emotional attachment to the community as strength; and a compulsion that supersedes even the desire to accumulate further wealth.

At the same time, there has never been a more appropriate moment for businesses themselves to contribute positively to those communities within which they operate.

Even if business owners are doing good work, their impact is nothing as compared to the potential of companies as a whole to drive positive change. In recent years we’ve heard much about the capacity of corporates to corrupt and degrade, to disregard the moral and ethical constraints established by societies which otherwise consider themselves civilised, and to do so with relative impunity. The consequence of that irresponsibility – and ours, we who bought and borrowed what we could not afford – is that many governments are more poorly equipped than ever to meet the needs of their peoples.

Now it’s time to harness the financial and intellectual capacity of those same organisations, in order to ensure the survival and growth of both corporate and community. Just as giving is inherent within the society, culture and religion of the Middle East, so sustainability and responsibility must become part of the very DNA of businesses in the region. Call it corporate social responsibility, call it corporate conscience or stakeholder engagement; the semantics aren’t important when the impact not only grants developing communities a brighter future, but ensures that the company itself has a future.

Andrew White Editor, Philanthropy Age The publishers seek to broaden the knowledge and understanding of good philanthropy and do not seek to promote the interests of any one individual, organisation or agenda. Individuals and organisations are featured solely according to the merits of their philanthropic endeavours.

Go interactive with Philanthropy Age and Blippar. Just follow these simple instructions on pages 24, 41, 53, 62 and 65: (You can download the Blippar application for free from the Apple App store and Google Play)

4

Images: Getty Images; UNHCR; Legatum; DP World; WFP; TOMS; The Coca-Cola Company; Harvey Wang; Oracle Corp; Gavi Alliance; IKEA Foundation; Dnet; HIF; ICRC; James Nachtwey ISSN: 2306-0328 Distributed by: GLS Media Services Printed by: Emirates Printing Press, Dubai

LOOK FOR BLIPPAR LOGO

FILL SCREEN WITH IMAGE

BLIPP...

IMAGE JUMPS TO LIFE!

DOWNLOAD BLIPPAR

Founder Sponsors:

7

NEED TO KNOW

Nine things you should know...

1

Nutrition: too much and too little

Can’t afford to wait. Weather-related disasters have increased 233 per cent since 1980, according to a report from UK-based NGO Oxfam. The report warned that inaction on climate change is failing millions of people across Asia, the world’s most disaster-prone region. Over the past 20 years Asia has borne almost half the global economic cost of all disasters, some $53bn annually – significantly outpacing gains from GDP growth. And it’s not just one-off disasters that pose a threat; more than half of climate-related house damage is caused by gradually occurring crises known as ‘creeping’ disasters.

3 2 4 Malnutrition is the new normal all over the world, a report has found. Between 2 and 3 billion people globally are malnourished, defined as undernourished, obese due to bad diet, or lacking vital micronutrients. Few countries are untouched, and 17 have evidence of all three conditions, including Iraq, Libya and Syria, the Global Nutrition Report said. The cost of poor nutrition, especially in the first 1,000 days of a child’s life, is high, with stunting in particular taking a heavy toll.

Each extra centimetre of height boosts an adult’s wage rate by 4.5 per cent, data shows.

Eating healthily really is good for all.

8

Action on hunger Slow progress on undernourishment is being made. The annual Global Hunger Index found hunger in South Asia – one of the worst affected regions – fell 41 per cent in 24 years.

India and Bangladesh led the way, thanks to state and aid agencies’ action on underweight under-fives. Still, with India listed as ‘serious’, more needs to be done.

“Vaccines have been a miracle tool.

We are very close to making polio only the second disease in history to be eradicated” Bill Gates, co-chair, Bill & Melinda Gates Foundation, reacts to news that the second of three forms of poliovirus has been wiped out

NEED TO KNOW

A bitter pill The world’s largest pharmaceutical companies are doing more to make drugs more affordable and easier to access in poor countries, but remain too protective of patents, claims the Access to Medicine Index 2014. Moreover, progress is concentrated in just a handful of diseases. Almost half of all research is given to diseases such as HIV/AIDS. Others are under-served: neglected tropical diseases account for just 13 per cent of medicines in the pipeline.

5 6

Start-up savvy. The US development agency, USAID, is branching out into the world of start-ups. Its $28m-ayear programme, Development Innovation Ventures (DIV), awards grants of $15,000 to unproven concepts that could hold the key to solving some of development’s most pressing issues. One such investment is DIV’s $1m award to Gram Power, a start-up that sells solar-generated electricity via smart meters. If effective, it could deliver affordable energy to the 380 million rural Indians who currently go without.

10

million

The number of stateless people worldwide, according to the UN. Unrecognised as citizens of any state, these ‘legal ghosts’ have no access to healthcare, education and other benefits, and are often unable to work

8

7

$58.45million The estimated funding gap for the UN refugee agency, UNHCR. This shortfall will restrict its ability to help refugees this winter, including the 13.6 million people displaced by conflicts in Syria and Iraq, the equivalent to the entire population of London

9

“The choice before us all is clear. We either develop our region or we let others dismantle it… And that starts by investing in quality education for all” Queen Rania of Jordan, speaking at the Abu Dhabi Media Summit

9

THE MOMENT

Friday, September 16, 2014

‘Our people are dying’ C lad head-to-foot in protective yellow plastic, they go door-to-door in Liberia’s Ebola-stricken villages, seeking out the sick, the dying, and the already dead. This is the front line of defence against Ebola in West Africa, a disease that has swept through the region since March in a haze of death, killing more than 7,900 people and infecting thousands more in the worst outbreak on record.

Countries and aid players were left scrambling to contain the epidemic, declared an international public health emergency in August by the World Health Organisation (WHO). By September, WHO director general Margaret Chan warned that the “number of patients is moving far faster than the capacity to manage them”.

A call by the UN for $1bn to curb the outbreak was just 12 per cent funded

by November, though pledges to Ebolastricken states and agencies passed $400m.

The economic impact of the epidemic has been almost as striking as its death toll.

Sierra Leone estimated its economy had shrunk by almost a third, as Ebola ravaged its villages and towns. The World Bank found nearly half of Liberia’s labour force was out of work as markets and businesses closed their doors.

For now, hopes rest with the fast-track development of a vaccine to combat the virus, and mammoth efforts to shore up ailing healthcare systems in Guinea, Sierra Leone and Liberia – the worst hit countries – with funding and foreign medics.

In an October meeting in Washington, Sierra Leone’s President Koroma painted a stark picture for the world of a country falling behind in the fight to contain Ebola.

“Our people are dying,” he said. “Without you, we cannot succeed.”n

10

THE MOMENT

11

GLOBAL EYE

Eradicating poverty?

It’s work in progress They were hailed as ‘the world’s greatest promise’: eight goals to dramatically slash global poverty, hunger, preventable deaths and other key social issues by 2015. The brief was short but the targets were big – world leaders pledged to halve extreme poverty and hunger, to achieve universal primary education, and to halt and reverse the spread of HIV/AIDs, among others. As what became known as the Millennium Development Goals (MDGs) near their expiration date, what progress has been made?

T

here is much good news. The number of people worldwide living on less than $1.25 a day has been cut in half, with 700 million people lifted out of extreme poverty. Some 2.3 billion more people have access to improved water sources, and equal numbers of boys and girls are enrolled in primary school in developing countries. New HIV infections have fallen by more than a third, and intensive efforts to fight tuberculosis have saved an estimated 22 million lives worldwide.

Other goals have not fared as well. Rates of child mortality, hunger and maternal deaths are falling, but not fast enough to meet the agreed targets.

Still, 2015 does not mark the end. A new blueprint to carry on the MDG legacy, the Sustainable Development Goals (SDGs), will be unveiled at the UN General Assembly in September. The 17 successor goals will run to 2030 and include aims such as improving global public health, tackling climate change and ensuring access to energy. Is the world up to the challenge?

Ending extreme poverty and hunger The news on hunger is mixed. While extreme poverty has been cut in half – and five years ahead of schedule – too many people still go hungry.

Between 1990 and 2015, the proportion of people globally living on less than $1.25 a day fell from close to 50 per cent to 22 per cent. Progress has been strongest in East and Southeast Asia, while sub-Saharan Africa and South Asia have lagged behind.

When it comes to hunger, global levels of undernourishment are falling but not quick enough. Chronic hunger affects 173 million fewer people now than it did in 1990, but that still leaves more than 840 million people – or one in eight worldwide – hungry. At current rates, the target to halve the percentage of people suffering from hunger by 2015 will be missed.

12

Proportion of people living on less than $1.25 a day (%)

Environmental sustainability Water – having it and access to it – is everyone’s problem. Since 1990, 2.3 billion people have gained access to improved drinking water, meeting the MDG target. Still, that leaves 748 million without safe water to drink. Water abundance is also a concern: water levels in North Africa have already receded beyond sustainable levels and water scarcity is a real threat in Western Asia, including the Arabian Peninsula.

Renewable water resources withdrawn (%) North Africa 80 Western Asia 54

Sub-Saharan South Asia 1990: 51% Africa 2010: 30% 1990: 56% 2010: 48%

South Asia (ex. India) 1990: 52% 2010: 22%

China North Africa 1990: 60% 1990: 5% 2010: 12% 2010: 1%

Caucasus and Central Asia 50 South Asia 48 * The sustainable level is anything below 75 per cent.

The threshold for water scarcity is 60 per cent.

GLOBAL EYE

Universal primary education

Gender equality

More children than ever before are going to school. Some 90 per cent of children in poor countries are enrolled in primary school, up from 83 per cent in 2000. But recent falls in funding threaten gains in this area: aid to education dropped 7 per cent between 2010 and 2011.

The same numbers of boys and girls go to primary school – a mammoth achievement for the MDGs – but few countries have gender parity at higher levels of education. Girls in sub-Saharan Africa, West and South Asia still lose out when it comes to secondary school.

Total aid to education (US$)

Gender parity for enrolment in education in developing regions, 2012 $14.3bn

$14.4bn

$13.4bn

Primary 0.86

$12.2bn

Secondary 0.77 Tertiary 0.69 2008

2009

2010

2011

Parity = 1.00

Child mortality

Maternal health

The world is set to miss the MDG target of reducing by two-thirds the under-five mortality rate. Encouragingly, however, progress on this goal is accelerating in part thanks to better immunisation. In 2012, some 17,000 fewer children died each day compared to 1990.

The world is far from reaching its goal of reducing maternal deaths. In 2013, the difference between rich and poor remained stark: women in developing regions were 14 times more likely to die from pregnancy and childbirth than women in developed countries.

Under-five mortality rate: deaths per 1,000 live births

Maternal mortality ratio, 2013 (deaths per 100,000 live births)

Sub-Saharan Africa

1990: 177

2012: 98

South Asia

1990: 126

2012: 58

North Africa

1990: 73

2012: 22

Combat HIV/AIDS, malaria and other diseases Investments in medicines and preventive healthcare, such as treated bednets, have saved the lives of millions. With some 3.3 million potential malaria deaths averted – 90 per cent of which were children – since 2000, the world is on track to meet the malaria MDG. Malaria around the world in 2012

207

million cases of malaria

627,000

Sub-Saharan Africa 510 South Asia

190

Southeast Asia

140

North Africa

69

Latin America

77

East Asia

33

Global partnership for development After two years of falling contributions, 2013 witnessed the highest level ever recorded of aid from developed countries – $134.8bn in total, or 0.3 per cent of developed countries’ combined gross national income (GNI). Among these, the UAE’s aid donations hit 1.25 per cent of GNI, the highest ratio of any country that year.

$134.8 billion

Total aid donations from developed countries

deaths from malaria

*Source for all: United Nations: The Millennium Development Goals Report 2014

13

GUEST COLUMN

Doing business in a post-CSR world Corporations need to get serious about turning the social and environmental burden they contribute to creating into economic opportunity, writes Soushiant Zanganehpour

About the writer Soushiant Zanganehpour is a senior member of the Skoll Centre for Social Entrepreneurship, managing the Skoll Social Venture Fund, which invests in social business start-ups, and consulting on strategic initiatives. He advises organisations on strategy, growth and impact optimisation

14

n a ranking of the world’s 100 largest economies, 51 are corporations and 49 are countries.

This statistic, from the Institute of Policy Studies, is a stark indication of just how much power corporations command.

The world today includes more than 60,000 multinational corporations, along with more than 800,000 subsidiaries and millions of suppliers. These firms are the driving force of global economic activity and major contributors to positive and negative externalities.

I

Whether we accept it or not, science warns us that the scale of global economic activity has pushed planetary limits beyond safe replenishment thresholds. Social systems are also under immense strain.

Global wealth inequality sits at record peaks; the top 10 per cent of the globe’s richest hold 86 per cent of its wealth, while the bottom half of the world’s population own just 1 per cent of this pie.

Our economic growth of the last two centuries has relied on the neglect or the undervaluation of natural assets. We

GUEST COLUMN

cannot sustain this approach long-term without attracting serious social and environmental consequences.

At the crux of this lies the changing role of corporations and business in society.

Traditionally, corporations have preferred that their role be contained to job creation, tax contribution, skill development, and risk-taking for private and public benefit.

Contributing to natural resource management and upward social mobility are concerns for government and lawmakers, not companies.

Unfortunately, governments that were fragile before the 2008 global financial crisis have, by and large, become even more so. Public officials simply do not have the tools and capabilities to steward natural resources, while also ensuring upward social mobility for the majority. Corporations need to fill the void themselves.

This isn’t merely a moral imperative.

Given how closely corporations’ economic activities contribute to global social and environmental challenges, many are demanding that business assume greater social responsibility. The response to date has been to launch or augment Corporate Social Responsibility (CSR) activities. CSR produces limited benefits for the corporation and stakeholders alike and merely offsets a negligible proportion of the negative impact corporations produce.

It simply will not cut it.

A small minority of forward-thinking corporations, however, are taking a different approach. Leaders within these organisations realise how undeniable the critical connections are between climate change, social inequality and unrest, the functioning of the biosphere and the health of the economy. They are also

“The role of business in society is undergoing a significant rethink, and so should the concept of CSR” compelled to action by how significant the risks associated with these phenomena are to their business activities. As a result, they are identifying economic opportunities that align with their imperative to be more sustainable, instead of just redistributing a proportion of the wealth they generate.

Adidas, an apparel company, responded to this challenge by creating a corporate venturing arm, Hydra Ventures. Its investment criteria are mainly financial, but also give consideration to the environmental sustainability and social performance record of investees. The aim is to help Adidas cut its operational risk exposure and allow it to compete for market share using sustainable raw materials such as hemp, bamboo and organic cotton in fabrics.

IKEA has also followed suit. By 2020, the Swedish retailer is planning to nearly double revenues to €45-50bn ($63-$70bn), while achieving the stretch commitment of producing all home furnishing materials, including packaging, from renewable, recyclable, or recycled material, as well as making all cotton compliant with the Better Cotton Initiative. How? By making strategic investments into new companies.

IKEA and Adidas have signalled to the market that investing in sustainability will protect their future market shares, not harm their commercial interests. Nowhere is CSR even mentioned.

Naturally, not all things can be achieved through market forces. CSR has many

“CSR can be a tool of advocacy and awareness that makes the case for more enlightened corporate strategy”

benefits, the most important of which is redistributing wealth to those that are less fortunate. It also encourages decision-makers within a corporation to consider the implications of their wider economic activities for all stakeholders.

CSR, when done right, is a tool of advocacy and awareness that helps make the case for more enlightened corporate strategy.

It has a number of other benefits, including enhancing the firm’s reputation, extending its social licence to operate and helping retain key talent. But we must accept its limitations. To usher in a new era of value creation, we need to develop a cadre of professionals who are driven both by moral and commercial imperatives, and have a skillset that integrates the two. In a world where social and economic value creation is converging, communications and branding skills alone will not cut it.

A fusion of these two is beginning to emerge. As the links between economic growth and the world’s ecological limits become more apparent, investors and other stakeholders will exert greater pressure for change to the way business is done. Emerging leaders will begin acting on their realisation that our future survival and economic growth will depend on creating value in a way that does not leave either our social, or environmental systems, worse off. The role of business in society is undergoing a significant rethink, and so should the concept of CSR. CSR professionals can help leaders accelerate action, but only once they acknowledge the concept’s limitations.

Only then can they begin planning for its evolution and re-invention. In this fast moving world, predicting the future is not key, but adapting to it will be. n

15

PHILANTHROPY AGE

Guterres has been vocal about the limits of the humanitarian sector, and the need for more political effort to solve the world’s long-running conflicts

16

PHILANTHROPY AGE

A safe haven António Guterres, UN High Commissioner for Refugees, is the last port of call for some of the world’s most vulnerable people. In an exclusive interview, he tells Philanthropy Age why the global humanitarian system has reached its limits

BY Joanne Bladd efugees are barometers of conflict. When war, violence and persecution swells around the world, so too do their numbers. At last count, more than 51 million people worldwide had been forced to flee their homes, a chaotic mass of refugees, asylum seekers and displaced people large enough to rival the population of South Africa.

This nomadic army grows by the second.

In 2013, some 32,200 people abandoned their homes each day, crossing countries and borders in a frantic quest for sanctuary.

Half were children. All were desperate.

“Peace is today dangerously in deficit,” António Guterres, UN High Commissioner for Refugees (UNHCR), says directly. “What we are seeing here are the immense costs of not ending wars, of failing to resolve or prevent conflict.”

Guterres is closeted in a side room on the fringes of a UNHCR-backed conference in Sharjah, UAE. The event, headlined by Jordan’s Queen Rania, hopes to draw a spotlight to the mounting number of child refugees in the Middle East. Talk, inevitably,

R

is dominated by Syria, a country that has become a byword for brutality and mayhem.

A sustained three-year campaign of bloodshed has left more than 200,000 dead, and birthed more refugees than any other conflict of the past two decades. Its grim effects have reverberated across the region, spilling into Iraq, Lebanon, Jordan and Egypt, and show no signs of abating.

“This is now a war that everybody is losing; nobody here is winning,” he says, pausing to sip a coffee. “It has become the most dramatic humanitarian crisis of the last decade. It is not only a terrible threat for regional stability, but also a clear threat to global peace and security. It has to end.”

Guterres is concerned with the aftermath. As head of the United Nation’s refugee agency, his is the last port of call for some of the world’s most vulnerable people. The agency is a safety net, delivering protection and emergency aid to refugees and, increasingly, battling to preserve their right to seek asylum in the face of tightening border controls. Officially, 11.7 million people fall under UNHCR’s wing. In reality, millions

more are on its books, ranging from those trapped miserably within conflict zones, to the scores of stateless people worldwide, ‘legal ghosts’ whose lack of a passport leaves them stranded on the margins of society.

Behind the data lie countless personal stories. From girl brides in Afghanistan, to villagers fleeing Islamic extremists in Nigeria, UNHCR’s wards increase every day. So much so, that the agency’s attention, staff and funds are pushed to breaking point. The numbers are frightening, and still rising.

“I think the multiplication of crises everywhere, and the mega-crisis in Syria, have made clear that the humanitarian community as it exists in the world today is no longer able to cope with the challenge,” Guterres says frankly. “While I believe honestly that we are doing our best, we are doing what we can, it is very clear that what we are doing is not enough.”

Syria looms large in this picture. In just five years, the Arab state morphed from being the world’s second-largest refugee hosting country, to the second biggest producer of refugees; a stunning reversal.

17

PHILANTHROPY AGE

32,200

The number of people who fled their homes each day in 2013, up from 14,000 in 2011

Guterres has sought to build ties with Middle East governments and organisations, in order to alleviate the suffering of refugees in the region

But the tenacity of old wars is also to blame.

Simmering conflicts in Somalia, the Central African Republic and elsewhere have, for years, ensured a steady trickle of refugees, and made many more homeless within their own countries. Their persistence has consigned millions of refugees to long stints in limbo, stagnating in dusty camps and makeshift settlements, unable to return home. At the end of 2013, more than half of refugees worldwide had been in exile for five years or more.

This, for UNHCR, is the rub. Not only is the agency providing full-blown emergency aid to fresh crises, it remains stretched thinly

18

across dozens of competing situations that are unlikely to be resolved any time soon.

“It is not so much a question of money, but BELOW RIGHT More than 51 million people around the world that the needs are growing have left their homes amid so much faster than the conflict, violence or persecution financial support,” explains Guterres. In 2011, he says, 14,000 people fled per day due to conflict or persecution. In 2013, it was over 30,000. The aid system, as it stands, is broken.

“Let me be clear. There is no way with traditional humanitarian funding mechanisms that we can match this BELOW LEFT Nearing its fourth year, the conflict in Syria has birthed more refugees than any other in the past two decades

UNHCR has appealed for $6.23bn to fund its operations in 2015, its largest budget yet at the start of a year

PHILANTHROPY AGE

“The humanitarian community as it exists in the world today, is no longer able to cope with the challenge”

dramatic increase,” he says. “We cannot keep picking up the pieces. The only solution is to prevent crises and to solve them.

This is a political question. There is no humanitarian answer.”

Political will, however, is muted. Guterres has been vocal in his frustration at the apathy of global leaders, and has called openly for European governments to overhaul their policies towards refugees. In a caustic op-ed in the UK’s Guardian newspaper in July, Guterres noted Europe had given shelter to a “grand total” of 124,000 Syrians, less than 4 per cent of all those seeking asylum, and 1,000 times fewer than the cash-strapped Arab state of Lebanon.

“Europe’s response to the crisis of a generation might be summed up in a single phrase,” he wrote. “Never was so little done by so many for so few.”

Further complicating matters is the anti-immigrant sentiment riding high in the West at the moment. A wave of right-wing parties triumphed in the recent EU elections, raising fears of a pan-European backlash against migrants and asylum-seekers.

For refugees, legal routes in are already few and falling, causing many to turn to criminal gangs of traffickers or undertake perilous sea crossings on rickety boats.

At least 207,000 asylum seekers crossed the Mediterranean between January and November, three times the previous high of 70,000 in 2011, during the Libyan civil war.

Some 3,419 people died in their attempts.

Europe, argues Guterres, must realise it is faced not with a choice over whether refugees enter its borders, but rather how.

“It breaks my heart to see a Syrian family that has already suffered so much, to have lost their home and lost relatives, try to reach Europe and then drown in the Mediterranean,” he says. “We need more legal avenues. We’ve been pushing for more flexible visa regimes, more resettlement and humanitarian admission opportunities.”

Twenty-eight Western states, including Germany and Sweden, in December agreed to take in 100,000 of the most vulnerable Syrian refugees over the coming months,

19

There are over 36 million people trapped in slavery today.

Every country in the world is touched by modern slavery and human trafficking.

Learn more about the work of the Freedom Fund and our partners on the frontlines of the fight.

Join us today to end this crime against humanity. freedomfund.org Invest in Freedom

PHILANTHROPY AGE

under a resettlement deal brokered by UNHCR. The figure is well short of what many humanitarian actors had hoped for.

“There is progress, but again, we need to see more,” Guterres adds.

For all their rhetoric, rich nations host a small fraction of the world’s refugees.

Some 86 per cent live in developing economies, and 5.4 million in countries where average income is below $5,000 a year. The strain on already dilapidated infrastructure is immense.

“In Lebanon today, a quarter of the population is Syrian,” notes Guterres.

“Schools are crowded, hospitals are crowded; there are problems with water supply and electricity. There are fewer jobs; prices and rents are going up.

“But what is amazing is that with this huge pressure, with these many problems, there is still in these countries and communities an extraordinary generosity, and basic attitude of solidarity. It should be matched by the international community.”

UNHCR runs almost entirely on contributions from states and private donors, with a small yearly injection from the UN. Over the last five years, its financial requirements have more than doubled, ballooning to $6.23bn for 2015 – its largest yet at the start of a year – to aid millions of refugees, displaced and stateless people.

The agency’s annual pledging conference in December netted an initial $500m; about 25 per cent less than it received the previous year. While this will allow it to cover the most basic needs – water, shelter and healthcare – it leaves little cash for longer-term concerns, such as education. As conflicts rumble on into years, the issue of providing refugees with schools, training and a means to earn a living becomes more urgent.

“With every new crisis we get closer to the limits of how much we can do,” Guterres explains. “We are clearly no longer able to do enough.”

In December, a cash crunch saw the UN-backed World Food Programme suspend food aid to more than 1.7 million Syrian refugees. The cuts, a body blow for

families facing a fourth winter of war, were reversed after an urgent appeal raised more than $80m, but illustrated the dilemma many aid agencies face.

“These people are not only suffering dramatically because of events in their country, but they now live in exile in very dramatic circumstances,” says Guterres. “It is far from what they need and what they deserve, but it is all we can offer.”

Still, UNHCR presses on. The agency in November unveiled a bold campaign to eradicate statelessness within a decade, tackling the plight of an estimated 10 million people worldwide with no legal identity, no passport, and few rights. A largely manmade problem, entire swathes of a population can become stateless overnight when boundaries are redrawn, or through persecution. More than 20 years after the dissolution of the Soviet Union, some 600,000 people still lack a nationality.

UNHCR’s ‘I belong’ campaign calls on nations to take 10 actions to end statelessness, including stripping gender discrimination out of nationality laws, granting citizenship to ethnic minorities – such as the stateless Rohingya community in Burma – and allowing the birth of any child on its territory to be registered.

ABOVE The persistence of some conflicts has consigned millions of refugees to years in exile.

More than half live in limbo for five years or more, according to UNHCR, unable to return home

“Statelessness makes people feel like their very existence is a crime,” Guterres said at the campaign’s launch. “We cannot afford to fail this challenge.”

The constancy of forced migration in the modern world means UNHCR’s caseload is unlikely to lighten. Alongside refugee flows, displacement is increasingly driven by factors such as climate change, poverty, urbanisation and water scarcity. The debate over who qualifies for refugee status – and whether its definition should evolve – is gathering pace.

“We are challenged by the need to respond not only to refugees, but to migrants, displaced people; all kinds of people,” Guterres explains. “How can we address the gaps of protection that exist for those who don’t fit into the legal definition of a refugee? The truth is that more and more people are fleeing for reasons other than conflict or persecution.

We are extremely supportive [of a change].”

Guterres took the role of High Commissioner in 2005, almost a decade ago. In that time, he has seen the number of displaced people around the world ricochet to record heights, and, in tours of overflowing refugee camps, seen first-hand examples of mankind at its best and its worst. Is he optimistic for the future?

“I am neither optimist, nor pessimistic,” he shrugs. ‘I am just determined.” n

21

Sanjit Das, © Legatum Limited 2014

PHILANTHROPY AGE

ABOVE A day wage labourer carries a load of bricks in the brick kiln in Baruhuaa village in Chandauli district of Uttar Pradesh, India. The workers are entitled to get Rs180 (about $3) per 1,000 bricks, but the contractor only gives between Rs80-100 ($1.25 - $1.70)

22

PHILANTHROPY AGE

Slavery: a modern trade Slavery is a global, criminal industry generating $150bn a year.

Philanthropy Age takes a closer look at the individuals and agencies battling to see it abolished

BY Stuart Matthews asanti was 16 when she was sold into slavery. Returning from the fields where she and her mother worked, two men she knew approached her on a motorcycle. At gunpoint, they threatened both women, forcing Basanti to go with them. It was the second time she’d been kidnapped.

“They took me to the local police station, where the investigating officer of my case had arranged a car for these people to traffic me to some other place,” she says, through a translator. “Then they took me to Mumbai by train, where I was kept in confinement and raped. Finally,

B

they sold me to someone for Rs40,0000 [about $642].”

Basanti had been trafficked into the sex trade, joining the estimated 14.3 million people enslaved in India alone. Deprived of their liberty through violence, threats and coercion, victims are exploited for the income they can generate for criminal gangs of slavers.

Globally, the industry is vast. Some 35.8 million people are trapped in slavery worldwide, according to an index compiled by the Australian-based Walk Free Foundation. From entire villages of brick makers in northern India, to the forced

23

24

counselling and then, finally, financial support to help her rebuild her life.

For Singh, it is a familiar ABOVE LEFT Bipana Tamang, 4 story. His volunteer team years old, helps her father turn has devoted years of hard bricks to dry in the sun work – and made some ABOVE RIGHT Six kidnapped mistakes – battling slavery children, rescued during a train on the streets of Varanasi. check, sleep in a transit shelter.

Five of the boys were from Nepal “I started with education in the red light area,” explains Singh, who initially targeted the children of prostitutes, in an effort to break the vicious cycle of victimisation. After three or four years, he TOP A community meeting set up to inform women about the dangers of child trafficking and also to empower them

Alice Smeets, © Legatum Limited 2014

Alice Carfrae, © Legatum Limited 2014

cotton pickers of Uzbekistan, collectively they earn their handlers $150bn a year in illicit income.

More than two-thirds of the world’s slaves live in just 10 countries. India is the worst offender in absolute numbers, while Mauritania, where slave status is inherited, has the greatest level of slavery per capita.

An estimated 4 per cent of the country’s population remains held under the control of traditional masters, with no freedom to own land or to inherit anything from their own families.

While some forms of slavery, such as sex trafficking, are relatively obvious; others are more opaque. From forced or bonded labour, where people are trapped in work by debts against their job, to the sale of a young girl into marriage to settle a loan; slavery comes in many shades.

Basanti’s ordeal was, through luck, wit and opportunity, short-lived. She escaped her traffickers and fled to Varanasi, Uttar Pradesh by train on 20th August 2013. With one trafficker in pursuit, she managed to call her father from a phone booth at the railway station.

“In the whole journey the train and the railway station seemed the only security and the trafficker kept looking for an opportunity [to take me],” she says. “My father called up Guria Sansthan, which rescued me from the station.”

Guria Sansthan is a non-governmental organisation (NGO) fighting against human trafficking and forced prostitution in Varanasi. Headed by Ajeet Singh, the organisation has helped more than 200 women like Basanti escape from similar circumstances.

“They handed me over to the railway police and called my parents, who took over my custody, with the help of Guria,” Basanti explains. “We were then escorted

by Guria staff and hidden, since I desperately needed witness protection and could not go back home.”

Safe from her captors, Basanti and her family were guided through the legal complaint process. Basanti received

Alice Smeets, © Legatum Limited 2014

PHILANTHROPY AGE

knew something was going wrong.

“All I was doing was making educated prostitutes,” he explains. “By 12 or 13 they were being pulled into the sex trade.”

Singh realised that it would take more than education to make a difference.

Tackling individual issues, such as health care or contraception, wasn’t the solution either, as Singh saw the issue was deeper-rooted than that.

“The core of the problem is basically slavery,” he says. “You have to fight the criminal nexus: the traffickers, the brothel keepers, the pimps and the police; it’s all a big racket.

Alice Smeets, © Legatum Limited 2014

“We are all touched by slavery. If you buy a $4 t-shirt there is almost certainly an element of slavery... in the supply chain somewhere” “It was very difficult as an NGO, because social workers had to face organised crime and criminals. That is what we realised.

There is no short cut. You have to take a head-on collision with them.”

This approach has propelled Singh into a nearly 15-year battle against social stigma, organised crime, poverty and corruption; all essential ingredients in the slavery trade that spans the globe. His armoury includes education programmes, lessons about healthcare and disease, emotional support and counselling.

“Education was a tool, not a goal,” Singh explains. “It acts as a catalyst. That’s what

we do; use education, health, everything, as a tool for a change.”

With time, this shift has come. Guria’s work contributed to the creation of a child prostitution-free red light district in Varanasi, something Singh says is a first for the country. Guria has also rescued almost 500 women and girls from brothels, with some 206 going into the organisation’s own witness protection programme. A further 80 have been given a new start in life, with a grant of Rs25,000 [$404] to assist with livelihood support.

Singh’s successes attracted the attention of the Freedom Fund, a young

PHILANTHROPY AGE

private donor fund with the ambitious goal of ending modern slavery. Set up in 2013, the organisation is looking to gather $100m in investment funds, from donors, by 2020.

Backed by Humanity United, Legatum and the Walk Free Foundation – which collectively pledged $30m in investment over 10 years – the fund aims to apply strategic focus and financial resources to areas where it can have the most impact.

“We were one of the initial donors in the space,” explains Ed Marcum, vice president, investments, for Humanity United. “There was a low level of awareness when we first started working on the issue, as well as a dearth of supporting donors.

There were too few people funding what is a major egregious human rights abuse.”

The fund aims to create a platform to unite the myriad of actors in the antislavery field. Its founders believe that channelling resources and adding strategic investment will be the most effective LEFT Mohammed Salamad, 14 years old, is way to identify reunited with his father anti-slavery at a transit shelter in the intervention, border town Birganj. He was snatched on his way which can be to Mumbai on his own scaled up and to find work, because of then replicated. his family’s poor living conditions. His father “The idea is to searched everywhere and focus on driving was relieved to find out change on the that he had been rescued front lines of slavery,” says Nick Grono, president and CEO of the Freedom Fund. “There’s lots of good work being done on the ground in places like India and elsewhere, but a lot of it is not coordinated and knowledge gained is not shared.”

Like Singh, the fund is also tackling the problem head on; using what it calls hotspot projects to target areas with a high concentration of slavery. The first was established in global slavery’s ground zero: India’s northern states of Bihar and Uttar Pradesh. There, the Freedom Fund has invested $4.45m in 17 community-based organisations whose work shows strong potential to cut slavery. Already 2,500

25

PHILANTHROPY AGE

Modern slavery The Global Slavery Index 2014, published by the Walk Free Foundation, reveals the extent of the slavery industry, whose victims number in the tens of millions

The global picture

5

35.8 million 61%

Estimated number of people enslaved worldwide 4

Nearly two-thirds of those living in modern slavery reside in five countries: India, China, Pakistan, Uzbekistan and Russia

Source: The Global Slavery Index 2014

Estimated number of enslaved

1

India

14,285,700

2

China

3,241,400

3

Pakistan

2,058,200

4

Uzbekistan

1,201,400

5

Russia

1,049,700

6

Nigeria

834,200

7

D.R. Congo

762,900

8

Indonesia

714,100

9

Bangladesh

680,900

10

Thailand

475,300

und o r a er y Slav 2,8fi0c 0 4 5 , 3 2 sia Paci A

reg y b , orld w e th

9 1

8

7

0 9,30 9 5 , 2 ussia, R rasia Eu

ion 200 56ur6o,pe E

1.6% 65.8%

of the global slave trade is in Europe

of the global slave trade is in Asia Pacific

26

10

6

Countries ranked by slavery incidence Rank Country

2 3

PHILANTHROPY AGE

6.1%

of the global slave trade is in the Americas

0 5,a0s 0 8 2 , 1 meric

3.6%

A

of the global slave trade is in the Middle East and North Africa

,100 2,1id7d8le Efarsict,a M rth A No

,200 5,6b1-S9aharan Su ica Afr

Spotlight on slavery

1.2 million

122 goods

$150 billion

155,600 people

Number of those forced to harvest cotton for slavers in Uzbekistan

Modern slavery contributes to the production of at least 122 goods from 58 countries worldwide

15.7%

of the global slave trade is in Sub-Saharan Africa

7.3%

of the global slave trade is in Russia and Eurasia

The International Labour Organisation (ILO) estimates the illicit profits of forced labour to be $150bn a year

In 2014, an estimated 4 per cent of the population – approximately 155,600 people – were enslaved in Mauritania, a country with deeply entrenched hereditary slavery

27

PHILANTHROPY AGE

“Social workers had to face organised crime and criminals. There is no short cut”

Suzanne Lee, © Legatum Limited 2014

people have been rescued from slavery and reintegrated into normal life. Over time, the initiatives are expected to benefit up to 300,000. Lessons learned in India will be used as far afield as Ethiopia, to battle abuse of migrant domestic workers, or in Thailand, where forced labour in the fishing industry has already made global headlines.

The Freedom Fund is driven by an investor focus, something Grono sees as unusual in philanthropy. The fund also plans to publish its findings as programmes progress. Key to this will be a frank assessment of whether or not a particular programme has achieved its goals.

“We have investors as our founders,” Grono says. “They want to bring a very strong investor approach, which means measuring what works, how much it costs, and being rigorous about identifying what’s successful and what isn’t.”

28

It’s good to identify your failures, because that improves the allocation of your resources, he says. “We are prepared to take risks, because you have to be. You are working in some of the most difficult social change environments in the world.”

The Freedom Fund team are very deliberately not taking on the whole world, something Grono fears NGOs do too often, trying to do too much, too quickly. Still, scaling up will be essential if the fund is to make a dent in a pervasive global problem.

“We are all touched by slavery,” says Grono. “If you buy a $4 t-shirt there is almost certainly an element of slavery, or compulsion, in the supply chain somewhere, because you just can’t buy it for that price without exploitation. That’s just the way it is.”

If the work to truly abolish slavery has the potential to seem overwhelming, there is a flip side. Grono suggests that there’s probably a smaller percentage of the world’s population enslaved than ever before, and that the law is always on the side of freedom.

“It is illegal everywhere; there’s no arguing,” he says. “We’re confident that over a decade we can have a big impact on slavery. In the human rights field, you don’t always get to say that.” n

Trafficking in transit On the India-Nepal border, a huge boundary that is open for Indians and Nepalis to cross without restriction, trafficking operates under the shadow of migration.

Citizens of Nepal cross with the intention of heading to new, more prosperous lives, in cities around India. They do so to improve their lot and help their families, but too often their reason for travelling is built on a false promise.

“They receive offers of jobs and wages and hope they can give money to their family, but actually they don’t know what they are going to do,” explains Rakesh Nair, general secretary of the anti-trafficking charity Manav Seva Sansthan (SEVA). “This is how they end up in forced labour, or a brothel. It’s not being aware of what they are going to be doing.”

SEVA works on the frontline of the human trafficking issue, targeting the trade in transit across the India-Nepal border.

Based in ‘lifeguard’ centres along the border, SEVA volunteers – recruited from nearby Nepali villages – reach out to migrants as they transit through the region and identify potential victims.

“We talk to them about human trafficking and what happens when people are trafficked,” says Nair. “If we find a girl is alone and going to India, we talk to her, we explain, and suddenly she might realise that she is in a bad position.”

Volunteers seek out migrants during the two-to-three hour window of waiting time, before they get the next bus or train to a city, offering information and help. SEVA has also helped to establish a regional cross-border anti-trafficking network, connecting with other organisations working in the same field.

“There were many organisations working individually before,” says Nair. “We wanted to have a collective approach so we can help each other in addressing the issue.”

PHILANTHROPY AGE

35.8

million

The estimated number of people trapped in slavery worldwide

OPPOSITE Children of women trapped in prostitution dance with Ajeet Singh, founder of Guria, during a fun and games session before meditation in the Guria Non-Formal Education Center located in the middle of the Shivdaspur red light district, Varanasi, Uttar Pradesh, India

29

Atul Loke, © Legatum Limited 2015

MAIN Vinod Kumar and Gautam Kumar laugh in their village, Shirpur Gahar. Both children were taken to Delhi by traffickers, but rescued at Samastipur railway station. They have been reunited with their family, and are going to school

PHILANTHROPY AGE

erched atop Mount Gerizim, overlooking the West Bank, Munib R Masri’s manicured estate is impossible to miss. The domed mansion of Masri’s Beit Falasteen (or Home of Palestine) is at once a personal and national project; a private flag in the dream of an independent Palestinian state.

Some 2,500ft beneath its elegant limestone pillars, however, lies the current reality.

The ancient city of Nablus is home to one of the largest refugee camps in the occupied territories, and has for decades been a flashpoint for Israeli, Palestinian conflict.

Average income is less than $2,850 a year.

“I want to see it in my lifetime,” says Masri.

“This is the only dream. I want to see a Palestinian state. I’ve told Israelis; we’re destined to live together, so let’s do it.

Enough is enough.”

Tycoons turned activists are a rare breed, but that is precisely what Masri is. Known variously as the Godfather of Palestine, as the Palestinian Rothschild, or simply the world’s richest Palestinian, the 80-year-old is known across the Arab world as a fierce and indefatigable advocate of peace, and the Palestinian cause.

He is chairman of Palestine Development & Investment Co (Padico), the largest private investor in the West Bank and Gaza Strip.

The firm launched many of the anchors of the local economy, including the Palestinian stock exchange, which it lists on; Paltel Group, the territories’ first telecoms provider; and a line of luxury hotels, among others.

Its mandate is to drive the development of Palestine, courting investors and funnelling capital into critical economic sectors. Masri holds a 5.1 per cent stake.

P

THE LONG ROAD Palestinian businessman and philanthropist Munib Masri has made his fortune, but he has yet to realise his greatest ambition: an independent Palestinian state and peace with Israel

BY Tamara Walid

30

Just as prominent is Masri’s political legacy. A former confidante of Palestine Liberation Organisation chief Yasser Arafat, Masri has spent years shuttling between Arab and Israeli influencers in pursuit of unity and peace with Israel. Rumoured to have declined the Palestinian leadership on three occasions, he has seen many rounds of peace talks open, flounder and fail.

“They talk about peace but they are still taking the land,” he says. “They talk about peace, but at the same time they build settlements. When I leave my home, I don’t know if I’ll come back, because there are so many settlements around my home I am always harassed. My only ambition is to live in a peaceful area.”

In his eighth decade, Masri has moved to distance himself from the day-to-day challenges of his businesses. Instead, he is dedicating more time to philanthropic initiatives close to his heart – namely improving the lot of his fellow Palestinians.

“Philanthropy is the most enjoyable thing for me now since I am at this age and can afford it. I wish I could’ve started before 1970s,” he says, adding he hopes to catch up on what he’s missed.

Masri founded the eponymous Munib R Masri Development Foundation (MDF) in 1970. His family is its sole financial contributor, and the foundation backs a raft of projects to support Palestinians both at home and in the diaspora. Today, the family injects up to $5m per year in MDF, but Masri hopes to gather additional backing that will take the foundation to the next level.

“We hope to create a bigger fund.

Hopefully in future we can put in seed money and ask other donors to come in with us,” he says.

He aims to double or triple the size of the fund in the next five to 10 years by garnering interest from Arab philanthropists keen to support development in Palestine. There is “a lot of money in the Arab world”, but channelling it into infrastructure projects is challenging at times, he explains.

“I want to concentrate on Palestine because it’s very much needed. We would

PHILANTHROPY AGE

Masri is chairman of Padico, the largest private investor in the West Bank and Gaza Strip, and the engine of much of its economy

31

PHILANTHROPY AGE

32

PHILANTHROPY AGE

“I’ve told Israelis; we are destined to live together, so let’s do it.

Enough is enough” like to live like human beings,” he says.

“Palestine has suffered under terrible occupation for many years and we need to uplift this situation.”

MDF aims to shore up Palestinian communities through endowments to create a network of universities and hospitals, in addition to funding projects for initiatives that promote cultural advancement, women’s empowerment and providing care for people with special needs.

Masri set up the foundation along with his wife of 50 years Angela, during their time in Beirut, where they lived with their six children. They started small, providing educational scholarships and funding projects in the medical field. This later evolved to include different initiatives in the education, healthcare, culture and civil society sectors.

Since its establishment, MDF has provided hundreds of grants to NGOs and individuals in need in Palestine.

“We created a fund and said we will give out money to Palestinians who need scholarships in Palestine and in the diaspora.

The only condition we put – five or seven years after we established the foundation – is to let them feel they had an obligation to teach students themselves so it will snowball,” he recalls. “It worked about 50 per cent of the time because people like to take, they don’t like to give.”

Nablus-born Masri studied abroad in his youth, graduating from the University of Texas, US with a degree in Petroleum Geology. He amassed the bulk of his wealth by founding the Edgo Group, an energy conglomerate that operates in the Middle East, and was one of the first privately held engineering companies in the region.

He says it is important to him that his foundation is present in “every town, every village” in Palestine, pushing forward the advancement of Palestinians through education. Using endowment funds, Masri has helped finance projects including the construction of a new library building on the campus of Al Quds Open University in Palestine; a center for research on innovative technologies with the Munib R Masri Engineering and Geology Building at the University of Palestine in Gaza; and an IT building at Birzeit University in Palestine.

He has also lent his financial muscle to projects in Lebanon, Jordan, Yemen and Egypt, including the Munib and Angela Masri Institute of Energy and Natural Resources at the American University of Beirut, set up to serve as an incubator for undergraduate and graduate level research in the areas of petroleum, water, and energy studies. The institute also aims to encourage academic research in the area of energy resources among scientists, engineers, faculty and students in Lebanon and the region.

ABOVE Palestinians have lived under decades of occupation. One in four adults in the West Bank and Gaza are jobless

33

HELP US TO HELP OTHERS

We need you and your ideas Which stories should we be covering?

Who should we be talking to?

What can be done to ensure intelligent giving flourishes across the region?

The success of Philanthropy Age rests on the support of the extensive philanthropic community in the Middle East, North Africa and South Asia region

Email us at editor@PhilanthropyAge.com, engage with us via @PhilanthropyAge, and help us make a difference

PHILANTHROPY AGE

“I believe the Arab world needs something like this,” he says. “The Arab world is generous but we need to be more charitable. We need people who have the welfare of the world on their mind so we can make it a better world to live in.”

Operating as a businessman or philanthropist is equally challenging in Palestine.

The country has languished under nearly half a century of Israeli occupation, taking an enormous toll on its economy. A complex web of checkpoints, roadblocks, a separation wall, and countless other restrictions on movement of goods and people make daily life unbearable for many Palestinians. Almost one in RIGHT The most recent conflict four adults in the West Bank between Israel and Palestine destroyed entire communities and Gaza strip are and left more than 2,250 dead unemployed, according to data from the World Bank.

Masri is hopeful that 2015 will be the year of independence and welcomes Sweden’s recognition of the State of Palestine. In October, it became the first EU country in Western Europe to take such as step, recognising Palestinians’ right to self-determination. Other European countries have also edged towards recognising Palestine as a state. Through the Palestine Forum, an organisation Masri launched in 2007 in order to give a voice to the silent majority and bring opposing Palestinian parties Fatah and Hamas together, he hopes to see other states follow Sweden’s lead.

“We need to be equal, to spread a culture of peaceful existence and that’s why I hail and appreciate what Sweden has done and I hope France, Italy, Spain, and the EU community will follow,” he says.

“I’m 80 years old and I have seen it all.

Nobody can tell me ‘you didn’t try’”

At the time of this interview, Masri is getting ready to host a group of representatives from different EU countries at his home, Beit Falasteen. During the retreat, Masri will discuss how to encourage more European countries to recognise the State of Palestine, a development he believes would benefit Israel as broadly as it would the Palestinian people.

“I think some Israelis view it as a bad thing, but I think on the contrary,” Masri explains. “We need Israelis to feel that they are part of the region, and they will never feel they are part of the region if they don’t give us our independence and help us to build our state.”

Until then, Masri is adamant he will boycott any purchase of goods from Israel and will not conduct any business with Israeli companies. He is a vocal supporter of the Boycott, Divestment and Sanctions (BDS) movement, a global campaign aimed at pressuring Israel into ending its occupation of Palestine, and other measures.

There is a sharp disparity in income between Palestinians and Israelis and Palestinians are largely dependent on imports from international markets, notes Masri. According to Trading Economics, the gross domestic product (GDP) per capita in Palestine

stood at $1,653 in 2012. In Israel, the same measure was recorded at $22,759 that year.

“We want to decrease unemployment.

There are a lot of graduates seeking jobs and they can’t find them,” he says. “We are under occupation. We want our integrity, our dignity and our independence and then we can do business with them.”

Masri was in Gaza during the latest 50-day conflict that led to the death of at least 2,191 Palestinians, mostly civilians, and 71 Israelis, mostly soldiers. Whole neighbourhoods and key infrastructure were flattened during the offensive; damage that the World Bank said in October had helped reverse seven years of growth in the Palestinian economy.

Masri worked with various aid groups to reach stricken Gazans and plans to build an orphanage in the Strip to help children who lost their parents during the war.

“Gaza needs a lot of help and attention. I saw it and it’s what Dresden looked like after World War II. It’s inhuman,” he says. “I’m 80 years old and I have seen it all. Nobody can tell me ‘you didn’t try’. But at the end of the day, what can we do? We are the same numbers, living in the same area. Should we continue killing each other, or sit down and see what is the problem?” n

35

PHILANTHROPY AGE

36

PHILANTHROPY AGE

Good Business Philanthropy is ingrained in the fabric of Middle Eastern culture, but businesses have been slower to capitalise on the idea of giving back. Amid the region’s fledgling CSR landscape, we examine the firms starting to create win-win models for corporates and communities

BY Adrienne Cernigoi

W

hat role should business play in society? Should corporates seek more than just profits and power? In the aftermath of the 2008 global financial crash, companies in the US and Europe are wrangling anew with these questions. How firms should engage with society, and their duty to tackle the big issues, is a debate that is hotly contested around the world.

The topic of corporate social responsibility (CSR) has a different slant in the Middle East and North Africa (MENA), where the duty of giving back is woven into the region’s culture and religion. Companies in the GCC gifted $727m to charity in 2012, accounting for 18 per cent of regional donations worth more than $1m, according to a Coutts philanthropy report. This compares favourably to the US and UK, where corporations gave 13 per cent and 7 per cent of $1m gifts, respectively.

The question in the region, then, is not if businesses should do good for the community, but how. While philanthropy has a long tradition, practices labelled as CSR are still very much in their infancy in the Middle East. Where it exists, CSR’s evolution in the region parallels that seen in Europe and the US: companies are gingerly exploring ways to formalise giving, to help solve the most pressing social challenges, and to build CSR into their business blueprint.

CSR is a way for a company to balance economic, environmental and social imperatives, according to the UN agency on industrial development, UNIDO. Discussion of what CSR looks like has morphed since the term was coined in the 1930s, from being purely corporate philanthropy – charity fun runs, employee volunteering – to discussions of ‘creating shared value’ and ‘integrated CSR’, where companies act in

the interests of shareholders and society to mutual benefit: doing good is good business.

In this debate, corporate philanthropy still has a role to play where issues of poverty and acute need remain. But even ways of doing this are evolving, with some businesses in the Middle East putting structures in place to entrench giving and broaden the net.

UAE-based food chain Just Falafel – which has 42 restaurants across nine countries – is a partner of the UN World Food Programme’s (WFP) zero hunger campaign. WFP estimates some 805 million people globally do not have sufficient food.

Last year, Just Falafel announced a plan to raise $1m by 2016 for WFP by donating $500 for each new store and asking franchise holders to do the same. The company gave $25,000 to WFP in the first year and is set to give another $25,000 by the end of 2014.

The problem has been getting franchisees to match the donation, says Just Falafel founder Mohamad Bitar. So this year, the business capitalised on a company shake-up to formalise giving: from 2015, any franchise sold will require the franchisee to donate $500 to the UN agency.

“Whoever doesn’t want to sign up for [this donation] is not fit to be our franchisee,” explains Bitar. Just Falafel hopes this move will help accelerate progress towards the target: the company has 800 franchises in the pipeline.

The chain has gone one step further in embedding philanthropic values by making franchisees’ willingness to give to charity an explicit requirement. The new Just Falafel franchise questionnaire asks questions such as how much of their lottery winnings franchisees would give to charity. “I will only accept franchisees who agree to give back,” explains Bitar.

The Middle East, too, is starting to see a shift in corporate social responsibility towards creating shared value. Businesses are waking up to the fact they can use their assets and expertise to create better conditions for people and, ultimately, corporations. In MENA, no other issue

37

PHILANTHROPY AGE

is as pressing as job creation, and tackling sky-high rates of youth unemployment.

“We’re starting to see a subset of 20 to 30 per cent of businesses in the region providing greater assistance through skills development, supporting job creation or helping small- and medium-sized enterprises (SMEs) gain commercial traction,” says Ramez Shehadi, international managing director for the MENA region, with consultancy Booz Allen Hamilton (BAH).

BAH claims the Middle East must create 75 million jobs by 2020 to keep pace with its young population. Youth unemployment, one of the main drivers of the so-called Arab Spring, averages 25 per cent in the region.

One spur to the focus on job creation reflects a nuance of the Middle East’s corporate landscape: the family business.

Coming from and being part of the community, family businesses are switched on to society’s needs in a way that the non-family run enterprise isn’t quite yet, says Shehadi. “Family firms in the region have been at the forefront of CSR initiatives.”

The potential of this factor is huge in the six GCC states, where family businesses generate an estimated 80 per cent of non-oil GDP. One of the frontrunners on this issue is Abdul Latif Jameel Community Initiatives International (ALJCI), part of the family-run Saudi conglomerate. ALJCI has targeted job creation as a central part of its strategy for more than a decade.

“We felt the best thing we can do for our community is to find job opportunities for the young generation,” Ibrahim Mohammed Badawood, managing director of ALJCI,

$727

m

The amount given to charity by companies in the GCC in 2012

38

“Maybe some businesses think this is the government’s job.

But in the end, this is our country” says of their jobs initiative, Bab Rizq Jameel.

“Maybe some businesses think this is the government’s job. But in the end, this is our country. We have to give back because they give to us – increasing our business, improving it.”

ALJCI invests some SR110-150m ($29m$40m) a year into Bab Rizq Jameel, and a further SR280-312m ($75m-$83m) in loans and microfinance for entrepreneurs.

In the 10 years to 2013, ALJCI claims to have created more than 465,000 job opportunities in Saudi Arabia, Morocco, Egypt and Turkey. Its schemes include helping women from low-income families start home businesses and granting interest-free loans for young people to launch small projects.

Impact is key for ALJCI: each initiative has a target. “The best thing to make community initiatives succeed is to manage it as a business,” observes Badawood.

In 2003, Bab Rizq Jameel’s target was 2,000 job opportunities. Today, that target is 70,000 and growing by 10 per cent annually.

They also measure the sustainability of those jobs: around 78 per cent of the initiative’s youth stay in employment for more than six months.

Adopting a win-win mindset on CSR, rather than seeing it as a pleasant, but optional requirement, requires a cultural shift from many corporations. Since setting up its corporate responsibility (CR) team three years ago, Dubai state-backed ports operator DP World has worked to create a global framework ensuring each of its 65 terminals are run responsibly and reflect the

PHILANTHROPY AGE

needs of local communities, and that CR programmes benefit the broader business.

The cultural shift comes from the top: DP World’s CR advisory committee is chaired by its CEO. The firm has more than 13 CR champions at regional and unit levels tasked with rolling out initiatives across four ‘quadrants’: community, environment, marketplace, and people and safety. Each location has its own specific plan.

“The way we look at CR is there has to be business alignment,” says Kathryn Wightman-Beaven, DP World’s director of global CR. This ranges from investing in technology – small, unmanned submarines – to clean ships’ debris that ultimately reduces fuel emissions, to giving scholarships to 100 Djiboutian students to study engineering at Amet University in Chennai, India, and integrating them back in the business at the Djibouti and Doraleh container terminal.

The issue of how to measure impact is in its infancy. “At the moment, we’re measuring inputs and outputs,” Wightman-Beaven says. “The next phase – say, in education – is measuring how many people are getting out of unemployment, what that means for the local economy and for the business in terms of talent pool.”

Within the phase of integrated CSR is also the idea of aligning core business practices with responsible principles. This includes higher standards in corporate accountability, internal governance and transparency, according to the Pearl Initiative, a network of 41 businesses in the MENA region. The ultimate benefit for society is jobs, according to Imelda Dunlop, the initiative’s executive director.

“I see it as a virtuous circle,” says Dunlop.

“Higher levels of integrity and of accountability are fundamental for higher levels of economic growth and job creation.

It’s linked to the willingness to invest, to make a business more successful.”

Founded in 2010 by a nucleus of business leaders from the Gulf, the network includes corporations such as Saudi manufacturing giant Sabic, logistics giant Aramex and UAE conglomerate Crescent Group.

Putting people first In the Middle East’s incubator landscape, Dubaibased Afkar says it provides more than the usual offering of desks and money: it invests in people.

“The problem we identified in the region was that while was a lot of appetite for entrepreneurship, the skills to be successful were not yet fully developed,” says Afkar founder Juan José De La Torre.

Launched in September 2013 and focusing on digital ideas, Afkar is run by UAE-based digital agency Intigral, itself a joint venture of telecom giant Saudi Telecom Company and Malaysia’s Astro Holdings.

Afkar received applications from some 30 countries in its first year, although most are from the Middle East. Ten shortlisted teams spend a ‘bootcamp’ weekend with Afkar working on their business and financial plans. Three or five start-ups are selected for a four-month programme where the incubator invests education, training and $20,000 of seed funding in each team. Afkar partners with some of the biggest corporations in the Middle East who provide mentors in marketing, financial management or product development, among other skills.

Intigral takes a piece of the action in each product.

If it fits Intigral’s portfolio, the company will distribute the start-up’s product and share revenue.

Afkar anticipates around 40 per cent of the product ideas will fail – compared to a 80-85 per cent failure rate at other incubators – but by training entrepreneurs, it is confident its investment will not be wasted. “The idea they bring to Afkar might not be the multi-million dollar start-up,” observes De La Torre, “but we encourage them to start again.”

To date, Afkar has incubated five teams – a deliberately small number so each team gets more attention. Afkar anticipates it will help 50 start-ups in five years in its Dubai incubator and potentially 150-200 in the Middle East if it opens more locations.

There is already a second location in the pipeline for 2015. Regional banks and airlines have also expressed interest in their own ‘Afkar’.

De La Torre is adamant Afkar is not a CSR programme: “Our interest is in helping the entrepreneurs realise their ideas, turn them into products and have these products reach our clients through Intigral’s portfolio.”

39

The International Islamic Charitable Organization is an independent non-proďŹ t dedicated to helping people all over the world, regardless of their race or nationality. Since 1986 we have reached out to millions of victims of poverty, famine, ill health and more, following the noble culture of charitable giving in Islamic history. Help us to build on that history and ensure a brighter future for those who need our help.

Visit www.iico.org today

PHILANTHROPY AGE

Finding the next generation Launched in 2013, DP World’s Turn8 initiative backs entrepreneurship in the region: both as a source of potential suppliers for DP World and growth for the local economy.

“You find very few companies who invest in R&D or in innovation in the region,” says Afzal Khalfay, vice president of IT, DP World. “Most foreign companies here focus on sales.”

The programme holds pitching events around the Middle East – the UAE, Lebanon, Jordan, Egypt and Turkey – to shortlist 10 new business ideas per start-up round. Last year, Turn8 received close to 4,000 applications.

Selected start-ups go through a fourmonth accelerator phase, where each team nets $30,000 and mentoring by DP World to start-up, produce a prototype product and present to potential regional and international investors.

To date, Turn8 has held two rounds.

Of 20 start-ups, 11 have graduated from the accelerator phase and five have already attracted outside funding.

Three of the projects came from Egypt, including KinTrans, a company that converts sign language into audio.

Turn8 also hopes to create value by integrating some of the start-up ideas into DP World if they match a business need. “In round two we had an idea from Ustad Mobile, a mobile phone learning platform that works with $20 phones as well as smartphones,” says Khalfay. “We see some potential for this in our company for sending information to local staff.”

Khalfay says Turn8 is not a CSR initiative: DP World takes a 10 to 15 per cent stake in each start-up. Giving birth to new entrepreneurs also makes good business sense: “Adding to the innovation environment has a direct impact on us,” he adds. “Our business is outward facing, working with logistics and supply chain businesses.”

The start-ups don’t necessarily need the accelerator to build a business, admits Khalfay. But Turn8 presents all the information in a condensed period – a “mini-MBA” – and connects start-ups with investors.

“It is something through which we are able to bring together people from different parts of the world and help the local economy.”

The network’s aim is to share experiences and practices. Only 22 per cent of businesses in the UAE reported on corporate responsibility in 2013, compared to 86 per cent in the US and 78 per cent in Brazil, according to a KPMG study.

The lack of reporting in the Middle East is a problem because other companies simply don’t know what good practices exist, says Dunlop. Indeed, ignorance of what others are doing and a lack of data are brakes on CSR’s development in the region.

“Each company is waiting for others to be the first to report,” says Fatih Gul, founder of CSR Middle East, a regional source for CSR-related news and trends. “But every year we see the numbers of CSR reporting in the region double.”

Putting these approaches into practice will take time. “We’re almost at a tipping point where many of the companies adopting good practices are ahead of the curve,” explains Dunlop. “The bulk of the bell curve understands the business case, but struggles with implementation.”

Getting more – and, eventually, all – businesses in the Middle East to subscribe to this approach is the goal. “I hope to see community initiatives in each firm in Saudi Arabia, however large or small,” emphasises ALJCI’s Badawood. “I want business people to feel they have to do something for their communities. That is my aim.” n

ABOVE DP World’s Turn8 initiative is intended to boost innovation and entrepreneurship across the region

41

PHILANTHROPY AGE

Fresh thinking Meet the companies taking a new approach to corporate social responsibility

Digital food revolution or millions of people worldwide, the World Food Programme (WFP) is the only barrier standing between them and starvation. The UN-backed aid agency fed 80 million people in 75 countries in 2013; nearly 85 per cent of which were women and children.

It’s a mammoth task. In its bid to reach the world’s hungriest, the agency doles out hundreds of thousands of tons of food each year and, in more stable markets, cash or food vouchers.

MasterCard, the payments giant, is helping usher the aid agency into the digital era. By lending its electronic clout – and a virtual payments network that stretches around the globe – it has accelerated WFP’s use of e-cards, mobile phones, text messages and other systems in place of paper food vouchers.

F

42

WFP’s largest and most complex emergency operation is around Syria, where the brutal war has seen more than 3.2 million people flee the country. In 2013, in partnership with MasterCard, the agency began introducing preloaded e-cards for Syrian refugees in Lebanon, eventually reaching 920,000 people. The system is a boon for local economies, cheaper and faster for both WFP and retailers, and means refugee families can buy food that fits their needs, rather than receive assigned food rations.

“We believe that good partnerships can build great opportunities,” says Basel El Tell, Levant market manager, MasterCard.

“To move from physical food distribution to the distribution of ‘digital food’, empowers those in need by giving them the means to feed themselves.”

© TOMS

PHILANTHROPY AGE

Stepping up uy one, give one: it’s a simple model with a simple message.

Since 2006, US-based shoe company TOMS has used this approach to hook more of the millennial generation into giving through their consumer spending. For every pair of shoes sold, TOMS gifts a child in India, Bangladesh and Pakistan – among others – a new pair of shoes: its ‘One for One’ model.

From its start with simple canvas slip-ons, TOMS has expanded the range of gifted footwear to include winter boots and sports shoes. To date, the company has given away

© World Food Programme

B

more than 35 million pairs of shoes.

Protection from cuts and infection is not the only benefit: children with shoes to wear are more likely to attend school, as full uniforms are often a prerequisite for attendance, such as in Kenya.

The firm has honed the scheme’s approach since its launch, looking to ensure long-term impact. By the end of 2015, TOMS aims to manufacture one-third of all the shoes it donates in the countries where they are distributed. It already does so in six countries including India, Kenya and Ethiopia, creating local jobs.

As with many millennial companies, TOMS is not content to stop there. Moving into eyewear, the One for One model pays for local organisations, through the Seva Foundation, to restore an individual’s sight for each purchase of its sunglasses. The money is invested in clinics and training for local healthcare workers to provide prescription glasses, medical treatment or surgery – particularly 15-minute cataract operations. The firm says it has helped restore the sight of more than 250,000 individuals since 2011, including in the South Asian nations of India and Pakistan.

43

PHILANTHROPY AGE

Thinking outside the crate early half of people in Africa lack access to critical drugs, but almost all of them can buy a Coke. Thanks to a vast web of local suppliers, Coke is on sale in the dustiest, most remote corners of the planet. In 2009, Coca-Cola looked at its network and saw an opportunity. By packing medicines in the crates used to deliver the soda to retailers, it saw it could dispense drugs to some of Africa’s poorest communities. Piggybacking on its cold chain, it could overcome the so-called ‘last mile’ challenge, a hurdle that often stops

clinics are operating well and which are not.

Last June, Coca-Cola, its partners, and the US Agency for International Development (USAID) unveiled a $21m cash injection designed to expand Project Last Mile to eight more countries on the African continent over the next five years.

First on the list is Mozambique.

“Our business can only be as strong as the communities we serve,” says Muhtar Kent, board chairman and CEO of the Coca-Cola Company. “We’re committed to doing our part.”

© The CocaCola Company

N

innovative aid solutions reaching billions of needy people around the globe.

Project Last Mile, as it was named, rolled out in Tanzania and Ghana, bringing vital drugs to thousands of health facilities in the two states and slashing delivery times from 30 to five days – a lifesaving change.

Backed by the Global Fund to Fight Aids, Tuberculosis and Malaria, and the Bill & Melinda Gates Foundation, it has also transformed delivery planning, overhauled stock forecasting and control, and flagged up to government health officials which

44

© Harvey Wang

PHILANTHROPY AGE

The bigger picture he poorest of the poor suffer from trachoma. An infection spread by houseflies, persistent in parts of Asia and Africa, it is the world’s leading cause of preventable blindness. In Ethiopia, almost a third of the population is considered to be at risk.

Globally, trachoma results in an estimated $2.9bn in lost productivity per year, striking down adults in their working prime, and pushing already vulnerable families further into poverty. It thrives in deprived communities, where overcrowding, poor

T

hygiene and lack of clean water underpin the disease’s spread.

Pfizer’s fix is simple. It donates the antibiotic needed to treat the disease, to the people who can’t afford to buy it. Aided by the World Health Organisation’s (WHO) campaign to eradicate trachoma by 2020, and its own nonprofit International Trachoma Initiative, the US-based drug firm has given away more than 340 million doses of Zithromax in 29 countries. By 2015, it hopes to expand its reach to at least 42.

The drug is a linchpin in the

WHO-endorsed plan to eradicate trachoma. The SAFE strategy – Surgery, Antibiotics, Facial cleanliness and Environmental improvement – hinges on financial and practical support from both aid agencies and big business.

“When we developed azithromycin [Zithromax], no one had trachoma in mind,” Dr Jack Watters, Pfizer’s vice president for external medical affairs, told The Guardian. “[But] there is little point in developing medicine unless all the people who need it can access it.”

45

PHILANTHROPY AGE

Smart money orking in isolated, poverty-stricken markets is par for the course for aid agencies. But when emergencies arise, getting cash into the field safely and quickly is a huge challenge.

It can leave nonprofits at the mercy of third parties, entrusted to pass on funds or take bundles of bills in a bag.

In 2012, the global money transfer firm Western Union saw an opportunity to help.

Its NGO GlobalPay platform lets aid agencies exploit its vast grid of agents to transfer cash or mobile money in 130 currencies to 190 countries – particularly useful for places that don’t have effective banking systems, or even banks at all.

Leveraging Western Union’s financial heft, NGO GlobalPay helps them deliver money more cheaply, on time and in local currency to staff on the ground or direct recipients. The service is a boost to transparency and risk management as well, by reducing the number of hands cash has to pass through and tracking when and where it was delivered. As an initiative of Western Union’s social ventures department, the platform makes business sense too: the firm has made new customers of some 700 NGOs – including Save the Children and Oxfam – and sent $2.3bn around the world since its launch.

The company puts its money where its mouth is, too. Western Union waives transfer fees in the aftermath of disasters, so that every dollar of relief funds reach specific countries or designated NGOs, such as US-based International Medical Corps during the recent Ebola crisis in West Africa. Between 2009 and 2011, the

N

46

company estimates it waived money transfer fees totalling $7.6m.

“We believe we can be more successful as a company when we address unmet social needs,” says Jean Claude Farah, president,

Western Union, Middle East, Africa, Asia Pacific, Eastern Europe and CIS. “NGOs spend a disproportionately large amount of money managing their finances. Anything that relieves the burden has to be a good thing.”

© Oracle Corp

PHILANTHROPY AGE

Next generation learning S-based Oracle Corp is serious about technology and helping future generations understand it.

The company reaches out to more than 2 million students in 97 countries each year with education initiatives. Its goal is to help students develop key skills for work in the 21st century, and spark interest in computer science and engineering.

Through the Oracle Academy, the company donates software to secondary

U

schools, colleges and universities around the world, with the goal of driving innovation and diversity in the technology fields – its main sectors of recruitment.

In the fiscal year 2011-2012, the Oracle Academy gifted more than $4bn in software, curriculum, faculty training and certification resources to tens of thousands of educators around the world. The company also donated around $13m in cash and in-kind resources to its online

learning platform ThinkQuest, and close to $5m in cash to support other nonprofits that promote science, technology, engineering and maths education.

In the same year, the firm matched employee donations to 2,800 nonprofits and kickstarted more than 1,000 volunteer projects geared towards supporting schools, teachers, food banks, the environment, and health and human service organisations globally. n

47

PHILANTHROPY AGE

The Gavi Alliance is leading the global fight against preventable diseases, raising much-needed money while driving down vaccine prices and saving young lives. In an exclusive interview, Gavi CEO Dr Seth Berkley urges Islamic nations to contribute more to the funding of inoculation efforts, and so enable more children to achieve their full potential

Moving the needle

BY Tamara Walid

T

OPPOSITE Dr Seth Berkley, CEO of Gavi Alliance, a public-private global health partnership focused on bringing vaccines to some of the world’s poorest children

48

he Lions have taken to the streets of Tanzania.

Moving from village to village, suburb to suburb, they employ trucks with speaker systems, banners and dancers, glue brightly coloured posters to pitted walls, and hand out a mass of leaflets to residents. They are an army of some 500 volunteers, and they are dedicated to one of the most critical health campaigns their country has seen yet.

Lions Club International (LCI) is one of the many aid organisations supported by the Gavi Alliance, a global health public-private partnership focused on increasing access to lifesaving immunisations in developing countries.

This current drive is part of a nationwide campaign to protect 21 million children against the diseases measles and rubella, two potentially deadly illnesses that claimed more than 120,000 lives worldwide in 2012.

The campaign will enable the largest nation in East Africa to transition away from using a single-antigen measles vaccine in its routine programme, and replace it with a combined measles-rubella (MR) vaccine – and so stymie two diseases with one jab. Gavi aims to help countries reach more than 600 million children with the MR vaccine by 2020, vastly reducing the number of deaths from measles and

PHILANTHROPY AGE

49

PHILANTHROPY AGE

Money works Since 2006, Gavi has raised $4.55bn through its International Finance Facility For Immunisation (IFFIm), which used $6.3bn in long-term donor pledges to back the issuance of vaccine bonds. In November, IFFIm expanded its offerings and issued its inaugural sukuk, also known as Islamic or Sharia-compliant bonds, in Abu Dhabi, UAE. The three-year notes were oversubscribed and raised $500m towards immunisation in the world’s poorest nations – and the majority of it from new or Muslim investors.

The Abu Dhabi sukuk marked the first issuance of socially responsible Islamic bonds dedicated to such a cause. It was a milestone that Gavi CEO Dr Seth Berkley describes as “a very big success” for the organisation, which is seeking to tap a larger pool of donors from Organisation of Islamic Cooperation members as it eyes funding for its next phase of operations.

Another effective funding mechanism is the Gavi Matching Fund, a private sector programme created to raise $260m for immunisation by the end of 2015.

As part of this initiative, the UK Department for International Development and the Gates Foundation have together pledged around $130m to match contributions from foundations, businesses, customers, members, employees and business partners.

Contributors include the likes of JP Morgan, Vodafone and Spanish bank la Caixa.

50

the life-changing disabilities caused by the viral infection rubella.

As children aged between nine months and 14 years queue up for inoculation, LCI volunteers assist healthcare workers and pass on relevant information to parents. The success of the campaign rests in significant part on the Lions, who are able to leverage local connections to achieve their goals, engaging with influential community members including religious leaders who draw attention to campaigns and urge people to get their children vaccinated.

“Some parents might bring their children and get them vaccinated automatically, but some might not know about the campaign or say ‘I’m too busy’ and not allocate enough importance to it,” says Benjamin Futransky, assistant manager of international humanitarian programmes at US-based LCI Foundation. “These are all areas in which Lions, through social mobilisation, can add value to campaigns… [ensuring] a higher turnout, better coverage and more successful campaign – ultimately more children vaccinated, less children at risk.”

‘More children vaccinated, less children at risk’ could be a mantra at Gavi, which recently announced a partnership with Lions that will see $60m funnelled into measles and rubella programmes up to 2017. A total of $30m was mobilised by LCI, a sum then matched by Gavi, which brings together governments and institutions such as the World Health Organisation (WHO), UN children’s agency UNICEF, the World Bank, vaccine industry players, grant-makers such as the Bill & Melinda Gates Foundation, and the private sector.

“The most cost effective intervention in health is to immunise your children”

“The most cost effective intervention in health – and health leads on to development – is to immunise your children,” says Gavi CEO Dr Seth Berkley. “It keeps families from tipping into poverty, it enables children to live to their full potential.”

Gavi generates 75 per cent of its funding from direct contributions. The remaining 25 per cent is raised through the creation of innovative financing tools to secure longterm funding and adequate supply of quality vaccines to countries that may not otherwise be able to afford them. Since 2000, this approach has enabled the Gavi Alliance to contribute to the immunisation of close to half a billion children and the prevention of approximately 6 million future deaths – the equivalent of the combined annual birth rates of Afghanistan, Bangladesh, Mali and Yemen.

On the sidelines of the G7 summit in Berlin in January, chancellor Angela Merkel will host the Global Immunisation Summit, a replenishment conference that will dictate the availability of funding for Gavi through its next phase of operations, from 2016 to 2020. The organisation is asking for more money than ever before – a budget of $9.5bn – a result of the ever-increasing geographical scope of its operations. While

ABOVE Gavi mobilises partnerships with UN agencies, vaccine industry players, foundations and the private sector to procure and distribute life-saving vaccines

PHILANTHROPY AGE

it has already secured $2bn of that funding, it will look to donors from around the world to provide the other $7.5bn.

“In the period between 2016 and 2020, we aim to subsidise 2.7 billion doses of vaccines worldwide,” says Berkley. “In the period afterwards, we estimate it will drop to a little over 2 billion doses, so the requirements for financing will go down.”

While he acknowledges this is a “big ask at a time of fiscal difficulty in the world”,

Berkley says the funding will help vaccinate an additional 300 million children and prevent between 5 and 6 million deaths.

Traditionally, Gavi’s top three donors have been the EU, Norway and the Gates Foundation. However, the Alliance has been trying to ramp up support from other donors, including Germany, Italy, France, the Netherlands, Sweden and Australia, as well as governments and individuals in the Organisation of Islamic Cooperation (OIC), which currently receives a large percentage of Gavi’s funding but contributes very little to its income.

Between Gavi’s inception in 2000 and February 2014, it provided assistance to 33 OIC member states, with disbursements of more than $2.9bn representing 50 per cent of its overall $5.9bn spending across 73 countries. By contrast, support from OIC member states stood at a meagre 0.3 per cent of donated funds. Berkley calls this the “single biggest mismatch” Gavi has with any region. Given the economic woes plaguing many of its traditional supporters, it’s now crucial that OIC states step forward.

“Many of the countries that have traditionally supported us are in financial trouble so it’s unpredictable what effect that will have,” says Berkley. “This is why it is so important we engage in the OIC region.

We are spending 50 per cent of our money in the OIC countries and getting almost nothing from them, and yet still expecting countries that are so stretched to be providing support.”

Berkley believes that Gavi’s ability to show concrete, quantifiable results will attract donors to the cause.

Investing in Gavi’s 2016-2020 ABOVE Gavi hopes its ability to demonstrate results will attract plan has the potential to donors to its cause. Between save between $80bn and 2011 and 2015, Gavi estimates $100bn in costs related to its support will have averted 3.9 million deaths treating diseases and avert more than 100 million cases of illness. This will also result in a 10-fold increase – from less than 5 per cent up to 50 per cent – in the number of children immunised with the 11 vaccines advised by the UN’s health organisation.

“We are spending 50 per cent of our money in the OIC countries and getting almost nothing from them” In 2013 alone, Gavi funded 41 new vaccine introductions, campaigns and demonstration projects to help immunise millions of children and adults in developing nations. In 2014 it managed to introduce the pentavalent five-in-one vaccine across all 73 countries in which it operates. The vaccine immunises against five deadly diseases: diphtheria-tetanus-pertussis (DTP), hepatitis B, and Haemophilus influenzae type b.

“Gavi has been able to take this vaccine, which was a novel vaccine when it started, and bring it to every country,” says Berkley.

“Some of those countries such as Yemen, Pakistan and Somalia are difficult countries so it’s extraordinary to see it rolled out.”

Still, one in every five children is dying of vaccine-preventable diseases, with the fifth child denied access to the most basic vaccines. This is the reality Gavi seeks to alter in the coming years.

“The challenge now is to reach the unreached,” says Berkley. “That is going to be the focus of the next period, and that is a much more difficult challenge because the unreached may be so as a consequence of societal stigma or geography, or maybe because they are unregistered.”

In addition, he notes, the migration of human beings to urban centres means that people move more readily from place to place in search of work – making them harder to track.

Nevertheless, reaching the marginalised souls will be crucial to the alliance’s efforts to chase down polio. Cases of the highly infectious disease have dropped more than 99 per cent since 1998, from an estimated

51

PHILANTHROPY AGE

Saving lives

3.9 million 243 million 11 million

Estimated deaths that will be averted between 2011 and 2015 with Gavi’s contribution to supporting vaccines

Number of children that Gavi support will assist countries to immunise between 2011 and 2015

Funding

$7.3 billion

Amount of donor support to Gavi between 2011-2015

Number of children Gavi support had contributed to vaccinating against pneumococcal disease by the end of 2013

4 million 153 million

>

Number of children vaccinated against rotavirus diarrhoea by the end of 2013 thanks to Gavi assistance

Number of people collectively immunised against meningitis A by end-2013 across 11 African countries, with Gavi support

Vaccine price reductions TOP 10 DONORS

$2.36bn UK

PENTAVALENT VACCINE

ROTAVIRUS VACCINE

HUMAN PAPILLOMAVIRUS VACCINE

43%

67%

67%

$1.3bn Bill & Melinda Gates Foundation

$773m Norway $533m US $462m France $442m Italy $240m Netherlands All data: www.gavi.org

$268m Sweden

52

$232m Australia $189m Germany

Over the course of a decade, the weighted average price of pentavalent vaccine dropped by 43 per cent from $3.56 per dose in 2003 to $2.04 per dose in 2013, with a lowestever price of $1.19 from one supplier in 2013

Thanks to long-term supply agreements with manufacturers signed in 2012, Gavi buys the bulk of its rotavirus vaccine doses at $2.50, a two-thirds reduction on the previous lowest price ($7.50) offered to Gavi

Gavi works with manufacturers to bring down human papillomavirus (HPV) vaccine prices. In 2013, a new price of $4.50 per dose was agreed, a two-thirds reduction on the current lowest public price

PHILANTHROPY AGE

350,000 cases in more than 125 endemic countries then, to 416 reported cases in 2013. Today only parts of three countries – Nigeria, Pakistan and Afghanistan – remain endemic for polio, and Gavi’s rollout of the inactivated polio vaccine (IPV) should reduce cases still further.

Distribution of IPV began in 2013 as part of the Polio Eradication and Endgame Strategic Plan 2013-2018. The plan urges countries to phase out the use of oral polio vaccines containing a weakened but live form of the virus. Gavi has been able to negotiate a record low price of €0.75 ($0.93) per dose of the vaccine and has received applications from 66 of the 73 countries in which it operates.

The adoption of IPV may be the biggest switch in vaccine history, according to Sona Bari, spokesperson for the WHO-led Global Polio Eradication Initiative. IPV will end the use of type 2 polio in vaccinations, which is the leading cause of vaccine-derived polio and occurs when a weakened vaccine reverts back to a paralytic form in areas where routine immunisation is very low.

“This is a major logistical challenge because it requires over 120 countries simultaneously stopping the use of what we call trivalent or pro-vaccines,” she says. “It means stopping the use of one vaccine and introducing another bivalent that contains only [polio types] 1 and 3 into their routine immunisation programmes. We seem to be on track to do that.”

According to Bari, Gavi’s work helps protect children “from diseases that are

“Between 2016 and 2020, we aim to subsidise 2.7 billion doses of vaccines worldwide”

Cutting costs entirely preventable and that we take for granted in many countries”. She recalls the afternoon she spent in her hometown of Kolkata in India, in the house of the last victim of polio in the world’s second most-populated nation. Sitting with the child’s remorseful mother, Bari heard how she had vaccinated her older children but delayed inoculating the youngest as the girl was ill at the time. Consequently, the mother blamed herself for not protecting her child from the disease.

“This was not through any lack of loving her child, but it really drove home to me that parents make the choice they think is best for their children,” says Bari. “I was fortunate to have opportunities for a healthy life that we need to make sure kids like this have.”

In purely financial terms, eradicating polio entirely could save the global economy between $40bn and $50bn in reduced treatment costs and improved productivity. The alternative, a return to the days when 200,000 children every year were paralysed by the disease, would be “morally unacceptable”, she says. Thanks to the work of organisations such as Gavi and the Lions, those days should be firmly in the past. n

By driving up demand across the 73 countries in which it operates, Gavi is able to convince vaccine manufacturers and pharmaceutical companies to provide vaccines under long-term agreements at significantly reduced prices. For example, it is able to supply Gavi-eligible countries with pneumococcal vaccines at $3.50 per dose or less, more than 90 per cent cheaper than the public price in the US. “One of the reasons we can do that is because we can make long-term contracts with companies and bring new companies into supplying vaccines, knowing that they will be financed,” explains Berkley.

The organisation has expanded its supplier base from five companies in 2000 to 13 today, reshaping the marketplace and ensuring far-reaching benefits both for those children being immunised and the philanthropists or governments donating or allocating funds for vaccines. Without Gavi’s intervention, those entities would likely be forced to pay exorbitant prices for the same vaccines.

Countries are eligible for Gavi support based on their per capita incomes. Once they cross a certain threshold, they enter the graduation process and eventually lose Gavi support, at which point the prices of the vaccines rise. “We are also working to make those prices stick with countries even after they graduate for a period of time,” notes Berkley.

53

PHILANTHROPY AGE

CASH...

54

PHILANTHROPY AGE

Taking its lead from Wall Street, the corporate social responsibility landscape is changing. From Goldman Sachs to Abraaj Group, major players are piling into impact investing, in pursuit of profits and a social pay-off

WITH BENEFITS

BY Tamara Walid

I

n 2012, Goldman Sachs Group laid down a bet on young, male criminals. The Wall Street icon, which earned $8.04bn in 2013, wagered nearly $10m on a four-year plan intended to slash the rate at which convicts jailed at New York’s notorious Rikers Island prison reoffend after their release; a so-called social impact bond.

If reincarceration slides by 10 per cent, the bank stands to break even. An even bigger drop in jail time would see Goldman turn a profit, reportedly up to $1m. For New York City, each participant kept out of jail signifies a cash saving, money able to shore up other areas of its strained budget.

It is a model, say adherents, where everyone wins.

“This investment paves the way for a new type of instrument,” Lloyd Blankfein, CEO and chairman of Goldman Sachs, said at the time. “It enables the public sector to leverage upfront funding from the private sector.”

This, say some, is the future of double bottom-line investing: profits, plus a social pay-off. Being returns-driven, social impact investing has the potential to drum up the

55

PHILANTHROPY AGE

“We use an investor’s lens to manage our philanthropic portfolio” sort of attention and entrepreneurial flair usually reserved for the private sector, and the scope to leverage trillions in private capital. Banks and investors get to keep their focus on profit, only netting a return if the project works, while governments gain the capital to make shrewd, social investments.

As an asset class, this approach has gained traction in the wake of the global financial crisis, which threw a spotlight on the role of the private sector in fixing social woes. A Global Impact Investment Network and JP Morgan Chase & Co study found a 20 per cent leap in 2014 in the amount invested in sustainable investments, to $46bn: capital that can be pumped into causes as diverse as preschool education and financial services for the poor.

Goldman’s Social Impact Fund claims to be the first of its kind in the US. But similar bets are springing up elsewhere. When the Bill & Melinda Gates Foundation was looking to shore up capital for a health-focused fund, it was JP Morgan Chase & Co that rode to the rescue. The largest US bank helped raise $108m to back the development of technologies to fight killer diseases in poorer countries, through the Global Health Investment Fund. The instrument seeks a financial return for investors, by targeting highimpact technologies with public health uses in both developed and emerging markets.

The bank launched its Social Finance division in 2007, as one arm that generates positive impact alongside traditional returns.

“Increasingly, investors are seeking to invest their dollars in a way that actually creates positive change as well, so not just avoiding or divestiture,” says Amy Bell, head of principal investments, Social Finance.

Bell believes the rise of microcredit – the doling out of small sums of money to the

56

world’s poorest to help them earn a living – marked a sea change for the financial sector, proving at once that certain models could both make money, and spur change.

“The success helped further revolutionise thinking about the power of the private sector to create social and environmental good, and that it wasn’t strictly the domain of the public sector or philanthropists, but that the private sector can also play a huge role,” says Bell. “That set of circumstances, plus what I described as the evolution of corporate responsibility, is what compelled us to get involved in this business.”

Abraaj Group, the largest private equity firm in the Middle East with $7.5bn in assets under management, espouses sustainable investment as a way of doing business. The Dubai-based firm takes a five to 10-year view, screening all potential investments based on sustainability performance.

Frederic Sicre, managing director at Abraaj, says rising inequalities in the world are accelerating demand for new ways of investing, and generating questions over the private sector’s role in that change.

“There is an increasing allocation of dollars by investors looking to place their capital with companies in this space,” says Sicre. “An investor can choose among the whole variety where he wants to be. We will provide best-in-class returns in the industry, but will also leave the city and village in a better way.”

Dubai-based Legatum, an investment firm, says it has funded thousands of small, community-based players across the developing world for more than a decade.

Pairing an investors’ approach to philanthropy with almost 30 years’ know-how of investing in capital markets, the company says its aim is to generate and allocate the capital and ideas that can help people live more affluent lives.

“Our vision is to see a more prosperous world for all and we use our capital to help make that a reality,” says Alan McCormick, managing director of Legatum.

The company claims to have impacted close to 100 million people. “Banks are the

vascular system of the global economy,” says McCormick. “A well-functioning banking system should enable capital to flow to entrepreneurs best qualified to manage and multiply it.”

An investment in India’s Share Microfin several years ago is an example of social impact blending with risk capital to achieve a healthy rate of return. Share is one of India’s largest microfinance institutions, giving tiny, unsecured loans to low-income communities in 19 states. Buoyed by capital from Legatum, Share was able to grow its customer base to more than 3.5 million from around 1.18 million.

OPPOSITE Social impact “In many cases, only investing has gained traction as a modest initial grant is a new asset class in the wake of the global financial crisis, which required to build upon an raised questions over the role of existing project and to the private sector in society ensure its sustainability,” says McCormick, adding that projects are typically clustered into strategic initiatives, each lasting between three to five years. This amplifies the impact of the grant and provides enough time to produce measurable results, he says.

In recent years, the firm has launched several philanthropic investment funds that focus on tackling a global burden such as the abolition of modern day slavery through the Freedom Fund, or ending neglected tropical diseases through the END Fund.

“These philanthropic investment funds borrow ideas from the financial world in terms of their low-cost model and focus, but enable collaboration with external investors, thereby increasing impact and learning,”

“The models we have at the moment are insufficient so one has to really think outside of the box and come up with new things”

PHILANTHROPY AGE

57

PHILANTHROPY AGE

says McCormick. “We use an investor’s lens to manage our philanthropic portfolio. We… provide follow-on funding to organisations only when we see results.”

The Global Health Investment Fund, backed by JP Morgan and other investors, has given rise to projects such as an oral cholera vaccine, which enables health workers to dispense with injections for easier delivery in rural areas. The company behind the vaccine, South Korea-based EuBiologics, benefited from financing to support the production and distribution of the vaccine, which is priced at just $1 per dose. The drug is also delivered in plastic vials, replacing glass, making it easier to transport in low-income countries where demand is highest.

“If successful, this is a vaccine that will have a market in the developed world as well, providing an ability to generate a return and also deliver very high impact in terms of lives saved around the world,” says Bell.

Still, scepticism remains around the role of profit-driven actors in a space traditionally held by philanthropists, nonprofits and governments. Some argue social investing is primarily a way for financial institutes to polish their reputations, dented by the credit crunch, and to reap public relations benefits. This drift could lure muchneeded funds away from aid agencies to the more opaque channels of investment banks.

JP Morgan’s Bell argues the trend is not a shift away from non-profits and philan-

financial tools will be critical in courting fresh capital, and in scaling up existing initiatives, he argues.

“In order to really drive development, we need to look at new modalities, new ways of funding these type of initiatives that must be taken to scale in order for us to come beyond scratching the surface. The models we have at the moment are insufficient so one has to really think outside of the box and come up with new things, but carefully so.”

There is greater understanding by governments that they need support, says Sicre. “I don’t think business on its own or government on its own can solve these issues,” he says. thropists to the private sector, but rather ABOVE Middle East companies “Governments need to work towards closer ties between the two groups. are realising that current models for financing new social with the resources of the “Every fund that we’ve invested JP initiatives are insufficient, and private sector.”

Morgan capital into, the partners, and new ways of generating and attracting capital are needed Sicre believes companies co-investors in the fund, are often a mix who do this for branding of foundations, multilateral development or “feel good” reasons will banks, individual and institutional investors,” eventually fail to provide good returns to she says. “I wouldn’t want to do these kinds their investors. He argues that traditional of deals without having partners like them CSR is dead and sustainability principles because they are the ones with in-depth have to be embedded in the company’s expertise working with those underserved operations to prove effective. populations, and figuring out the potential “There is a concern that as you bring solutions for delivering the products and in profit-seeking capital to a structure that services that they really need at a price and is meant to be delivering impact, how do quality that is appropriate to them.” you as an investor ensure that impact is Bo Viktor Nylund, senior advisor on not forgotten in pursuit of these profits,” corporate social responsibility (CSR) at the observes Bell.

UN’s children’s agency, says the involvement She sees structures being developed of financial heavyweights bodes well for whereby the governance that manages how the humanitarian sector’s future. Innovative a fund or business is operated “captures explicitly those commitments to impact”.

This means failure to deliver becomes a violation of what the business has set out to do. Additionally, there should be a “rigorous” process involving metrics to ensure a mission drift doesn’t occur as responsibility is handed over to the private sector, she says.

“To me the primary challenge we face in building and scaling this market is finding The amount resting in sustainable investments ways to protect that mission, to protect the people we are trying to help in bringing in 2014, a rise of 20% on the previous capital and investors,” says Bell. “We want to year, according to Global Impact Investment ensure we are doing all the good that we set out to do.” n Network and JP Morgan

$46

bn

59

PHILANTHROPY AGE

Design for life Homeware giant IKEA shook up the furniture business with its fresh approach to design and innovation.

Now, says Per Heggenes, CEO of the IKEA Foundation, it’s taking aim at the aid industry

BY Adrienne Cernigoi

60

PHILANTHROPY AGE

T

ABOVE The UN’s refugee agency buys some 100,000 tents a year at $500 each.

With a lifespan of just six months, a more robust, betterdesigned shelter could make major savings for the agency

he earth is red, barren and flat.

Amid the dust and mud, bare branches poke listlessly out of the rocky ground, but not much else grows here. Yet Dollo Ado, in southeast Ethiopia, supports life and plenty of it: around 200,000 Somali refugees live in the five camps under these bright blue skies.

In the past year, the stark camps on Ethiopia’s border have given life to something new: a shelter that could improve the everyday lives of millions. It is here that the IKEA Foundation – the philanthropic arm of the eponymous company – and its partners tested a prototype shelter for refugees.

“The best comment came from a man in Iraq. ‘The tent was not home; I would not have welcomed you in a tent. I am able to welcome you in my shelter’,” recalls Olivier Delarue of UNHCR Innovation, which aided in the shelter’s development.

Per Heggenes, the thoughtful, measured CEO of IKEA Foundation, has visited

the camps many times. “Can you imagine the hardship of living in a tent for some 17 years?” he asks, alluding to the fact that many refugees stay in camps for more than a decade. “That’s when we said we will invest in an innovation process to look for a way to develop a better product to meet requirements, provide a better quality of living for people, and save money.”

It’s hard to mention IKEA and not think ‘flatpack’. The home furnishings giant has built its reputation on quirky, affordable designs, neatly packaged to assemble where needed. This ethos – of fresh thinking and accessibility for the masses – is what defines IKEA. It is also what drives its foundation.

The foundation was born in 1982 to support developments in architecture and design, 39 years after the company was founded. IKEA’s philanthropy has matured alongside the business, taking a broader social focus since 2009. Now, the foundation is famously generous. It gave €101m

61

PHILANTHROPY AGE

“I tried to find a niche for the IKEA Foundation that wasn’t just a copy of everyone else” ($124m) to charities and aid organisations in 2013, up 21 per cent on the previous year, and it is the largest corporate donor to the UN High Commissioner for Refugees (UNHCR). It has pledged $95m over recent years to the aid agency.

Like its sister company, the foundation has sought to do more than business as usual. “One of the things I did was to take a good look at what was being done in philanthropy,” explains Heggenes, who took over the reins in the 2009 shake-up. “I tried to find a niche for the IKEA Foundation that wasn’t just a copy of everyone else.”

That niche, as it turns out, is innovation.

The foundation funds both pioneering schemes, such as Water.org’s microloan system to increase access to water and sanitation, and invests in kickstarting new ideas.

The foundation was the founding sponsor of UNHCR Innovation in 2012, injecting $1m over two years into a small unit dedicated to developing better aid delivery for refugees. “Aid organisations need, in many ways, to think like companies: corporates have to innovate constantly or else they die,” Heggenes explains. “The structure in the development world is different, but that doesn’t mean they can’t drive efficiency and increase the quality of what they do.”

More than the start-up cash, the foundation lent the unit its expertise, explains Delarue. The unit takes a crowdsourcing approach, where ideas bubble up from UNHCR field staff. One such idea is a tablet app to help children learn a second language

62

– ideally the primary language used in the camp. IKEA Foundation has put up a grant of €2.5m ($3m) to develop the idea.

Heggenes himself is a graduate of the grassroots approach. With no prior experience in the philanthropic sector before the foundation, getting out of the Netherlands-based headquarters at least one week each month has been a priority.

“The way I learn best is by going into the field, interacting with the people we’re trying to help and talking to people on the ground,” he says.

The prototype shelter is classic IKEA. It combines the company’s business savvy, the foundation’s financial and collaborative clout, and its partners’ on-theground experience. The foundation, UNHCR and a not-for-profit design agency called Refugee Housing Unit have been working on the cabin-like shelter since 2010, and plan to put it into production in early 2015. The lightweight, clip-together unit comes – of course – flatpacked to save on transportation costs. At $1,150 each, the shelters cost twice as much as a tent; but boast six times the longevity. With a solar panel energy source, insulation, and designed with privacy in mind, they are a vast improvement on their predecessor.

Most of the components are being honed after field tests in UNHCR camps in Dollo Ado, Ethiopia and northern Iraq.

Crucially, the new shelter is fire retardant and equipped with an anchoring system. “People were very happy about this aspect because too often tents have a tendency to take off

ABOVE The prototype shelter has been tested in UNHCR camps in Ethiopia and Iraq.

Feedback from the refugees informed the modifications

PHILANTHROPY AGE

“Aid organisations need to think like companies: corporates have to innovate constantly or else they die”

ABOVE The prototype shelter is equipped with a solar panel, providing light for refugees after dark BELOW Dividers inside the shelters and specially designed outside panels provide dignity and privacy

when it’s very windy,” says Delarue. “A lot of accidents happen when a candle blows over because the whole shelter starts moving and they catch fire.”

IKEA Foundation invested more than $4m in the development of the shelters and its specialists helped find and negotiate contracts with suppliers, according to Heggenes. Tellingly, the foundation put as much thought into product viability as the idea itself, investing some $6m to set up Refugee Housing Unit AB, the social enterprise that will handle manufacturing – sourcing parts from 10 different countries – and sale of the shelters. Any profit will be ploughed back into research and development on further designs.

“If it’s a not-for-profit, then you can’t scale it,” Heggenes insists. “If you depend on charitable giving to produce each shelter, then the charitable giving would limit the number of shelters you can produce.”

The social enterprise, owned by a separate foundation called Housing For All, will pay back the capital to IKEA Foundation, but on a longer-term payment schedule than a commercial loan.

Heggenes is matter-of-fact about the risks the foundation has taken to get this far – he sees it simply as their duty. “We were willing to go into a multi-year process of trying to develop something that might not have come to anything,” he says. “It requires a combination of long-term investment and being ready to make mistakes. But we can only do this if we have good relationships to collaborate with different organisations.

That is what makes it a success.”

Investing for the long-term is what the foundation does – a legacy of its progenitor, IKEA. IKEA’s founder, Ingvar Kamprad, gave the company to the Netherlands-based Stitchting INGKA Foundation in 1982 – all profits are reinvested in the business or go to philanthropy. In 2013, 3 per cent of company profits went to the foundation.

“The important thing, as IKEA’s founder said, was to secure the eternal life of the company,” Heggenes pauses, then adds, “We’re not exposed to the next quarter-type of income generation you typically have if you’re owned by outside shareholders. “[The company’s] social responsibility activities will not go away because they have a bad year,” he continues. “It is an integrated part of the business strategy.”

The company has its own social responsibility (SR) drive and attempts to source materials – wood, cotton, water – sustainably. Its focus now is the result of a lesson learned 15 years ago, when the company found child labour was being used in its supply chain. That jolt spurred the firm to find ways to address the root of the problem, particularly in India.

“That was the basis for why we decided to work with children and families in the poorest communities today,” says Heggenes.

Since 2009, the foundation has supported Save the Children. The foundation claims to have helped 156,000 children out of the cotton growing industry in India and in to school in five years.

63

Without surgery Najwa’s cataract would have bliNded her orbis.org.uk/emea facebook.com/orbisuk twitter.com/ukorbis

saving sight, transforming lives.

PHILANTHROPY AGE

$124

m

The value of foundation donations in 2013

Heggenes is careful not to criticise other companies, but points to IKEA’s ownership structure as part of the reason the company is committed to living up to its social responsibilities. Another factor is the values – “You can be as smart as you like; if you don’t have the right value-set you won’t get hired” – that permeate the organisation.

If IKEA’s ethos is making the best products for people, then its SR ABOVE RIGHT IKEA Foundation efforts and the foundation provides in-kind contributions to are natural extensions of UNHCR. In 2013, the foundation the business. “An important gifted 50,000 mattresses part of IKEA strategy is to ABOVE LEFT IKEA Foundation’s make sure they minimise CEO Per Heggenes says getting the impact they have on out into the field is essential to guiding the foundation’s strategy the communities in which they operate,” explains Heggenes. “What we do through the foundation is, on a larger scale, develop programmes that will permanently help create a better standard of living for people who are part of those communities.”

One way to do this is to play to IKEA’s strengths, spurring innovation in process, not just products. One indisputable asset is

the company’s logistics expertise. In 2012, the foundation piloted a series of workshops with supply chain specialists from UNHCR and IKEA to swap best practice in sourcing, quality control and design, among others.

The knowledge partnership is part of the foundation’s goal to “make a difference and use our resources – including the company – in a sensible way,” says Heggenes.

One outcome is the redesign of UNHCR’s kitchen sets – a kit of pots, plates and cutlery distributed to each newly displaced family – to bring down price and increase quality and ease of production. “This was where the science of IKEA came into play,” says Delarue.

The savings that can be made from exploiting companies’ expertise is a source of real potential and has been untapped until now, according to Delarue. “We’re always talking about money, but very few are talking about creating savings from an efficiency and cost perspective,” he adds.

“That’s the new frontier for us.”

While IKEA foundation has had limited programmes in the Middle East so far, the crisis in Syria and the foundation’s close relationship with UNHCR could see this work ramp up in future. The foundation has already helped the UN agency and medical aid charity Médecins Sans Frontières provide emergency relief for Syrian refugees, including in-kind donations of IKEA mattresses and blankets – which are factored into IKEA’s production line. The foundation gifted 50,000 mattresses to UNHCR in 2013.

The foundation is currently plotting what it could do to alleviate the strains put on host countries such as Jordan and Lebanon by the influx of refugees, particularly in access to water, schools and jobs.

Among Heggenes’ proudest achievements is the foundation’s collaboration with UNHCR and local authorities in Ethiopia to integrate Somali refugees with their host communities and creating opportunities so the refugees are not seen as a burden. It is perhaps a lesson that can be applied to other refugee situations, too. Seen through its corporate lens, IKEA is innovating again – but this time bringing its brand of innovative, cost-saving solutions to truly improve the lives of millions. n

65

PHILANTHROPY AGE

66

PHILANTHROPY AGE

Bangladesh’s travelling Infoladies:

A rural revolution

BY Adrienne Cernigoi

at just 21, Soma Khatun is an entrepreneur. Her customers wait anxiously for the ring of her bicycle bell, her purple and white uniform distinct against the lush green fields. The sound heralds the arrival of high-tech equipment by low-tech means: a laptop, digital camera and medical testing kits, carried by bicycle, that connect remote, rural Bangladesh communities to the world.

Soma is the Infolady for eight villages north-east of Bangladesh’s capital, Dhaka.

She visits each village three times a week, cycling between communities. The service she provides offers a vital lifeline to many villagers, but they are not the only ones to benefit. Being an Infolady has given this housewife-turned-entrepreneur her independence, dignity and an income.

“Once I was an ordinary housewife.

Nobody knew me,” she says. “Now everyone eagerly waits every day for me. This is my proudest moment.”

Soma is one of 50 Infoladies, trained and supported by Bangladesh-based social enterprise Dnet. The programme, which was piloted over a number of years before its launch in 2010, aims to tap into rising levels of telecoms connectivity in rural

A

“Once I was an ordinary housewife. Nobody knew me. Now everyone eagerly waits every day for me. This is my proudest moment” Bangladesh. This technology has the potential to empower vulnerable and remote populations – if only poorer and marginalised communities had the equipment to make use of it. With an eye on the growing number of educated young women in these communities, executive director Ananya Raihan saw an opportunity.

“The Infolady model includes women on both the supply and demand side,” he says, explaining its ‘women for women’ approach.

“They have better access to rural households, so it’s the best approach for creating jobs and autonomy for women.” The benefit, he adds, for women living in conservative areas, and prohibited by local culture from travelling to access services, is clear.

“We hope to close the gap that exists for villagers,” says Laura Mohiuddin, head of the Infolady programme. “People living in remote villages don’t have access to

the internet and many cannot afford or operate a laptop.”

The logic behind Infolady is simple, she notes: if people cannot access technology, then technology needs to travel to them.

The women crisscross the countryside, carrying equipment able to take and send test results to medical clinics, offering prenatal checks, or setting up Skype sessions for villagers. They also carry offline content on their laptops, such as educational videos about farming. The scheme is not charity.

Instead, the women charge a small fee for each service, allowing them to earn an income and invest back into their business.

“Dnet believes that when there is no other solution, charity may work,” says Raihan. “However, for sustained improvement of the lives of marginalised people, we need to create opportunities for them through entrepreneurship.”

67

PHILANTHROPY AGE

$100-150

The typical monthly income for an Infolady starts at $100

Most Infoladies are between 18 and 35 years old, married, living with their in-laws and from very poor families. Many have never seen a laptop before. New joiners undergo at least nine days of training in basic skills, healthcare and technology, before deciding on the suite of services they want to offer to their rural customers.

Infoladies can pick from services such as blood pressure tests, priced at about $0.13, pregnancy risk assessments for $0.06, or internet browsing for $0.39, for customers who want to job-hunt or check their exam results. Infoladies also offer Skype calls at $1.30 an hour, providing a chance for families to contact male relatives who often work overseas.

“For sustained improvement, we need to create opportunities for marginalised people through entrepreneurship”

“All the health-related ABOVE Infoladies work in remote run by NGOs, which has communities, travelling villageservices are popular,” says slowed the growth of the to-village by bicycle to connect Soma, who also offers programme, says its head, people to distant family members mHealth for pregnant and vital government services Mohiuddin. Not-for-profits women, where advice is sent have been less eager to by mobile phone. “There are take up the social enterprise no well-equipped community clinics approach and reluctant to pay the franin these villages for getting proper chisee fee. Infolady hopes to court other medical treatment.” social enterprises, to persuade them to Soma earns between $100 and $125 a invest in, and help scale up, the programme. month, a typical income for an Infolady that Rolled out on a larger scale, Infolady stretches up to $150 for some. She also could reach many more rural communities. pays back $30 each month for her loan.

Now with 50 Infoladies, the scheme covers Infoladies purchase their equipment using 300 villages and has impacted more than a mix of their own savings and a bank loan 300,000 rural citizens in Bangladesh. By with preferential terms. the end of 2016, Dnet hopes to have three “Currently, the National Bank Limited, Infoladies per sub-district across Bangladesh Bangladesh provides loans where Infoladies – some 13,500 in total. pay 9 per cent interest,” explains Raihan.

For Soma, the impact on communities’ “Commercial interest rates in Bangladesh are wellbeing is tangible. When one of her usually between 15 and 17 per cent.” customers was woken up in the middle of The average set-up cost is between the night by pregnancy complications, she BDT35,000 and BDT75,000 (about $440 to gave Soma a call. Soma connected her to $945), including the cost of a bicycle. a doctor through the mHealth service she Dnet operates a franchise model, which had installed on the woman’s mobile phone. sees each Infolady buy her equipment from “Today, when I see her baby, my heart fills a local hub. To date, these hubs have been with joy,” she says. n

69

EXPERT COLUMN

Innovation, assimilation, and adaptation Change is crucial in humanitarian aid, suggests Kim Scriven, as evidenced by two new initiatives in nations stricken by the Ebola virus hen a disaster strikes – whether a natural hazard or a conflict – the focus of any humanitarian intervention is to save lives and reduce suffering. To achieve this, those responding must act quickly to mobilise what resources they can. While this can lead to great ingenuity, the temptation can be to replicate those approaches that they know.

There’s rarely the time to stop and think ‘How can we improve?’ But as the number, severity and complexity of crises increase, there is increasing need to find new ways to support those affected.

This is where innovation can play a vital role. In the context of humanitarian situations, where it is essential to build responses around those people affected, innovation is about finding new and creative ways to provide aid, often harnessing new technologies to do so.

It’s a common misconception, however, that innovation is all about that light bulb moment, or creating things that are entirely new. While creativity is essential, it can be most useful when applied to an existing technology or process that works successfully in one sector, and adapting it to the needs of another.

W

About the writer Kim Scriven is manager of the Humanitarian Innovation Fund, a grant-making facility that supports the development and testing of innovations in international humanitarian action.

Previously he worked within the secretariat of the Active Learning Network for Accountability and Performance in Humanitarian Action, where his work focused on supporting innovation in humanitarian organisations and promoting learning around innovation

70

At the Humanitarian Innovation Fund (HIF) we have supported more than 50 innovative projects since 2011. Our grantees have deployed their innovations amid some of the world’s most pressing humanitarian crises: today seven HIF projects are being used to fight the spread of Ebola in nations affected by the disease.

One such project is Translators without Borders (TWB), an initiative designed to aid in the communication of lifesaving messages about how to avoid Ebola infection. Following a crisis, one of the most immediate priorities for both relief workers and victims is disseminating and receiving information. However, in countries such as Liberia where only 20 per cent of the population speaks English, this represents a tremendous challenge as language barriers on the ground frequently complicate response and recovery efforts.

In Ebola-affected countries, untranslated posters, flyers, banners and billboards that are aimed at educating the public are, in fact, only intelligible to a small elite who speak English, rather than local languages.

TWB’s Words of Relief Crisis Response Network is a global translation and localisation initiative. Leveraging both human and technological resources, the project builds capacity to facilitate and improve communication among victims, field workers, and relief agencies during and after crises. It aims to eliminate linguistic

EXPERT COLUMN

“It’s a common misconception that innovation is all about that light bulb moment, or creating things that are entirely new” barriers that can impede vital response and relief efforts during and after a crisis by building a pool of translators and interpreters, as well as machine translation capacity, in under-resourced world languages; preparing a digital file of essential crisis response information in multiple local languages that can be accessed on demand by aid organisations, frontline relief workers, and affected communities; and maintaining a network of human and technological linguistic resources that can mobilise immediately in response to a crisis.

Although the HIF has funded TWB to pilot their service in Kenya, TWB has also responded to the Ebola crisis in West Africa to roll out its services there, where people at risk need to know how to prevent infection and what to do if someone around them catches it. Communicating this information is a key strategy to halting the epidemic – and for aid agencies and governments, prevention is far cheaper than cure.

The World Food Programme (WFP), meanwhile, is using new remote mobile phone technologies (mVAM) developed using a grant from the HIF to assess the food needs of people living in the three worst Ebola-affected countries in West Africa. A total of 850 people across Sierra Leone were questioned about their coping strategies regarding hunger – for example whether they are borrowing food or borrowing money to buy food, or whether they are cutting down on meals – but also more generally about their livelihoods. Were their income sources stable?

Were they working their farms? Was the price of foods on local markets shifting?

The results showed that purchasing power was low due to unreliable work, and that few people produced their own food,

but instead relied on markets. The problem with the latter in a health epidemic is that illness can lead to people avoiding crowded places, or food sellers not being well enough to sell – reducing the food availability to others, and possibly leading to a rise in food prices.

The Sierra Leone survey is the first in a series of assessments being conducted with remote technologies by WFP in the three countries over the coming months.

These results are helping to devise appropriate responses by aid agencies to food shortage based on evidence. In Sierra Leone, the survey was sent to cell phone subscribers randomly by location. They answered a series of 10 text messages by pressing a number. Not only is this method quicker than sending around teams to do surveys face to face, it also helps to protect the agency’s health workers by reducing their exposure to communities potentially affected by Ebola.

Both projects, although hugely encouraging, are not without risk, and the willingness of humanitarian agencies to experiment and be prepared to fail is crucial. In such cases, we hope that even when an idea turns out not to work, agencies will be able to learn from that failure so that future attempts can build on what has gone before. For the HIF, this means acknowledging that not all projects we fund will succeed, but also pushing for open and honest dialogue, encouraging conversations online and in person, to share both what has worked and what hasn’t. Balancing laborious reporting tasks with a need to manage risk is challenging; however, we ensure a mid-term review is built into all projects, so that amends to methodology – often inevitable when innovating – are thought through carefully.

What remains is to manage the risk of failure so it does not increase the dangers to which vulnerable people are exposed.

In a system faced by such stark internal and external challenges, there are few other options than to innovate, learn and adapt. n

71

ONE DAY

“People know that we work for everybody”

Alberto Cairo grew up in northern Italy, abandoning law to retrain as a physiotherapist. For more than two decades, he has led the International Committee of the Red Cross’ (ICRC) orthopaedic rehabilitation clinics in Afghanistan, helping those afflicted by war, polio and congenital disorders.

Hundreds of thousands of disabled Afghans have passed through the programme; from car crash victims to Taliban fighters. Here, he takes Lina Hijazi through his day

W

hen I first arrived in August 1990, I panicked. I’d never been in a hospital for war victims before, and it was shocking to see these young people. And the environment: Afghanistan was strange, and completely different to anywhere I’d been before. But there was some kind of chemistry between the Afghans and me, and I was impressed by the kindness and respect they showed me. What also struck me was the

72

huge need; this was a place where I could really be useful.

I’m up at 4am, and around 5.15am, I start working. The staff and patients come from 7.30am onwards, and it is a battle up to 4pm when everyone leaves. It is a very simple life.

We have seven orthopaedic centres across Afghanistan, each divided into three sections: physiotherapy, a workshop for making artificial limbs, and social reintegration, which

offers vocational training, education, microfinance and employment. At the beginning, the programme was only for war and landmine victims, but now we are open to anyone with a disability, no matter what the cause. Each year we see around 9,000 new patients, and about 1,000 to 1,500 are war victims. The rest are children affected by polio, congenital deformities or clubfoot, or people affected by work or car accidents.

© James Nachtwey/ICRC

ONE DAY

Treatment is completely free, and quite often we pay the transport cost if the patient lives far away and is poor. It is difficult if you live in a remote area, particularly for women, who can’t travel alone without a male relative accompanying then. The budget for all seven centres is $20m a year. Sometimes it’s difficult to get funding, but so far ICRC has found the money and we manage to reach the end of the year without cutting anything.

We have around 800 staff in our orthopaedic centres, and all of them are former patients. We call it positive discrimination, and it’s an incredible example that any disabled person – man or woman – can do anything, if given the proper chance and opportunity. Afghanistan needs the example of that because, while society does not reject the disabled, it tends not to give them the opportunities to rebuild a life.

Patients say: “I realised the ABOVE Cairo works with a mine victim, who has just received his from the very first moment, two prosthese. the person who opened the door was someone without an arm. The person at reception was in a wheelchair. The physiotherapist had one leg.”

They feel if these people have succeeded, then they can succeed too.

In the evenings, I usually play sports, train, or work as a referee for wheelchair basketball matches. I did not understand before that sports could be so important.

Some of the players were ashamed of their bodies just a few years ago, but now are proud of what they can achieve. This morning we had maybe 400 people here for the women’s basketball finals; there was such roaring noise from cheering and shouting. For many of them, sport was something they’d watch on television and today they play

themselves. The enthusiasm is incredible.

I’ve seen five regime changes in Afghanistan. In a way for us, nothing has changed because the patients are absolutely the same. Sometimes they come dressed in one way, sometimes in another. At times with beards or without. Uniforms, or in Western clothes. The patients are the patients. Of course, we’ve faced difficult moments, but we have never been attacked. I think people know that we work for everybody. Sometimes we have former soldiers belonging to the government sitting beside Taliban.

We expats, we come thinking that we know everything and we mean well. But often we come with our experience and don’t spend enough time to try to understand what the people who we’re supposed to be helping, really want. I remember a child called Jawad who was badly affected by polio. It was difficult to help him walk, but he and his mother were very determined and he learned.

His mother would come every day to ask for my help. She asked me to send him to school – this was in ’97 or so – and I discovered she’d asked many schools in Kabul, but the child hadn’t been accepted. She came every day, even though I explained that we couldn’t help, apart from offering physical rehabilitation. She pushed so much, that in the end we had to find a solution: homeschooling, for a three-month trial period. Of course, Jawad was so good that in three months he progressed through two classes, and we had to find another teacher. This lady, illiterate, understood things that I myself, a lawyer was not able to see: education. You cannot focus on just physical rehabilitation; you have to go further. Your job doesn’t finish by giving artificial limbs to a patient; it has only just started. I am so grateful to these people that changed my way of working.

My dream is to open 10 more orthopaedic centres in remote areas of Afghanistan. I hope to keep working for many more years, even after my work with ICRC is finished.

There is so much for me to do here still. I cannot imagine my life elsewhere. n

73

MAKING A DIFFERENCE

Thierry Lombard Thierry Lombard represents the sixth generation at the head of one of Switzerland’s best-known banking names, Lombard Odier. He is president of Fondation Philanthropia, an umbrella foundation that supports private donors in long-term philanthropy, chair of Fondation Lombard Odier, the bank’s own philanthropic arm, and a member of the Assembly of the International Committee of the Red Cross (ICRC). Here, he shares his thoughts on giving, the next generation of philanthropists, and how impact investment could be a force for change

Q

Lombard Odier oversees not only its own philanthropic interests, but also those of private donors through its Fondation Philanthropia. How would you describe your philosophy for giving?

My philosophy goes back to one rule that my grandfather had, which is that you should divide your time between three domains: family, community and work.

That is it, in a nutshell: all three are important for creating a better life. For me, I have learned that it is not just about giving money, but also about creating connections and starting dialogue, to help those on the ground be as efficient as they can be. It is also important to shape new ideas and projects. You are able to take risks as an

74

individual that you rarely can as an institution.

We have a saying in French, that the shoemaker should first make good shoes for himself, before selling to others. We have tried, as a bank, over the last 200 years to be good citizens, to prove we could do as well as possible ourselves, before moving to give advice to others.

Q

You launched Fondation Philanthropia in 2008, at the peak of the global financial crisis.

Did the downturn encourage more clients to consider investing in impact-based philanthropy?

I think the global community is at a crossroads. There is a transition between

MAKING A DIFFERENCE

generations today, and there is a failure, in a way, of public capacity to solve problems. I always cite the Al Gore documentary about climate change, ‘An Inconvenient Truth’, as an example. Though many countries failed to sign up for a more sustainable world, many cities did. We see, increasingly, it is not governments leading the way, but individuals, companies and cities.

Problems too big to be solved by countries are being solved by public-private dialogue, by top-down, bottom-up approaches.

Q

Do you feel the next generation of philanthropists has a different approach to giving, because of that?

There are many things you don’t have to teach the young generation. It is embedded in the way they think and act.

They believe that we, the global community, are approaching the wall in many aspects and they want to have a different, and potentially better world for themselves and their children. But it is also harder for them: harder to find a job, harder to see the future. Today, there are more questions and more concerns.

In terms of how they use their wealth, there are as many examples of people choosing to deploy it during their lifetimes, as there are of those choosing to leave a legacy. I think the origin of wealth has an impact. When you inherit something, you may have more intention to try to pass it on to the next generation. The Rockefellers of this world have foundations. When you create your own wealth – the Bill Gates’ of this world – you may feel more able to own and deploy it.

“The purpose of capital is to do something useful.

It is not to make bankers rich”

Q

What are your thoughts on the rise of social impact investing, and particularly the shift among financial houses such as Goldman Sachs towards this as a tool for social change?

I’m quite critical on this, in the sense that I believe the financial and banking world has lived for too long in rosy circumstances.

The purpose of capital is to do something useful. It is not to make bankers rich; it is not to make traders rich. Unfortunately, I fear the industry has perhaps lost its vision in terms of why it is here, and the purpose of capital. If you were to take 1970 as a proxy, the average remuneration for businesses, for banking and for trade, was roughly about one-to-one. In 2006, the average remuneration for banking was 4.3 more than that in other industries. What does banking bring to the world in order to warrant that?

I think impact investing, for me, is a way for the industry to try to reinvent itself.

How can we try to redeploy capital for a vision and purpose? How can we utilise capital for the betterment of the world, whether environmental, social, humanitarian or economic? Are we there yet?

No. Neither in skill, nor in the structure of impact investment, or in understanding.

It is going to be a long-term process, and

“Responsibilities are everywhere. We all have an obligation to answer, and a role to play”

there will be failures along the way. But the goal should be to readdress why capital is there, what it can do, and how it can do good for the future.

Q

You’re a long-standing supporter of the ICRC. How important are ties with corporates to the success of the aid sector?

I first met the chairman of the ICRC on a flight between Geneva and Basel. He told me that, at the time, Switzerland as a whole was giving roughly CHF300,000 (about $311,634) in private donations a year to the ICRC. Which I thought was neither right, nor enough. My thought was that we, corporate Switzerland, should not necessarily bring just money to the ICRC, but examine how we could be useful for its operations around the world. Pharmaceutical firms, such as Hoffman La Roche and Novartis, could give drugs, for example.

Swiss Re and Zurich Insurance could offer technical expertise in risk assessment.

In response, we created a corporate support group with large Swiss companies, to engage not only in financial support, but dialogue and expertise sharing. It’s been a very interesting dialogue: how we engage with the ICRC’s actors on the ground, to develop innovation and promote effectiveness in the ICRC and the wider humanitarian world.

I think we have to realise that responsibilities are everywhere – within the private sector and the public sector, within companies, within families and within individuals. We all have an obligation to answer, and a role to play. n

75

TRENDS

Syria crisis drives humanitarian funding needs to new heights he ongoing conflict in Syria helped drive global funding requirements for humanitarian assistance to new levels in 2013, according to a report by the UN’s Office for the Coordination of Humanitarian Affairs (OCHA). Response plans for the Arab country received more funding than any other inter-agency appeals over the course of 2013, accounting for $3.1bn or 38 per cent of the global total.

T

The report, World Humanitarian Data and Trends 2014, found that 2013 marked a record year in terms of requirements for consolidated inter-agency appeals (which totalled $12.84bn over the 12 months), for international humanitarian funding contributions ($22.2bn), and people targeted (73 million). It was also the most dangerous year for humanitarian workers on record, with 251 security incidents recorded, affecting more than 461 aid workers.

Trends in funding requirements and people in need

The human impact of Syria’s civil war 80

20 18

6,450,00 10,800,000

2014

70

16

Requirements (US$ billion)

Source: World Humanitarian Data and Trends 2014

12

50

11 40 10 30

8 6

20

4

People in need (at mid-2013, millions)

3,018,794 60

14

76

Around 148.2 million people were affected by natural disasters or displaced by conflict in 2013, the report said. The year saw a similar number of natural disasters as 2012, however the number of affected people decreased from 124.5 million people in 2012 to 97 million in 2013. This number has been decreasing steadily in recent years, a trend attributed partially to greater levels of preparedness among national disaster management agencies worldwide.

Meanwhile, intra-state conflicts in Syria and the Central African Republic underpinned a surge in the number of number of refugees and people forcibly displaced because of persecution, violence or human rights violations. By the end of 2013, this number totalled 51.2 million people, 33.3 million of whom were internally displaced persons (IDPs) - an increase of 16 per cent compared with the number of IDPs in 2012.

The report found that the average size of an appeal rose to $676m – a rise of more than $200m compared with 2012 – and that there was also a slight increase in funding. On average, 65 per cent of humanitarian requirements were funded in 2013, compared with 62 per cent in 2012. Globally, the average amount of funding received per person was $154.

6,500,000 2013 2,468,000 2,000,000 2012

0 2011

0

0 2002

2004

2006

2008

2010

2012

2014

4,000,000 729,000

10

2

6,800,000

0 19,900

Internally Displaced Persons (IDPs) People in need inside Syria Refugees

TRENDS

Importance of philanthropic causes, by region Asia

Very important

Africa Middle East

Income inequality hits economic growth: report

Important

I

Moderately important

Of little importance Education

Poverty

Social enterprise

Environment

Health & medicine

Gender equality

Arts & culture

Asia, Africa and MidEast wealthy focus on local giving, education new survey of high-net-worth (HNW) business owners in Asia, Africa and the Middle East (AAME) has revealed that the wealthy in these regions are increasingly adopting a form of philanthropy that demands measurable impact and favours active involvement in local communities over one-time charitable donations.

Moreover, the poll found that the importance of giving back is such that, for some HNW business owners, a commitment to ensuring that their societies or communities benefit from their success takes precedence over the accumulation of personal wealth.

The Business Before Wealth Report 2014, published by Standard Chartered Private Bank and Campden Wealth Research, suggests that without a clear process for effective giving, the rich in these regions tend to adopt an independent approach to philanthropy to directly benefit their local communities. This approach sets them apart from their peers in developed markets, where one-time donations and simple aid giving is more common.

Source: Business Before Wealth Report 2014

A

“These philanthropists believe they are best suited to delivering initiatives specific to their communities, and consider their emotional attachment to the community as a strength… Many of these philanthropists believe that giving should not be outsourced, it is a personal – and, hence, non-transferable – commitment,” the report said.

“As individuals with significant experience in managing healthy business growth, HNW business owners are also likely to desire for active involvement that delivers measurable results,” it continued. “Their approach is more likely to extend beyond financial or one-off donations, allowing them to become more deeply ingrained within the communities and causes they choose to support.”

The survey, which polled 60 HNW business owners across AAME, also found that commitment to education ranks as the highest priority among philanthropic causes.

Poverty reduction and the support of social enterprise were other leading areas of importance to respondents.

ncome inequality has a “significant impact” on economic growth research by the Organisation for Economic Co-Operation and Development (OECD) has found.

In the 34 OECD member countries, the gap between rich and poor is at its highest level for 30 years, the agency said in a report.

It warned that a widening in inequality comparable to that seen over the past two decades would slow growth by a “statistically significant” 0.35 percentage points a year, resulting in a cumulative loss of 8.5 per cent over 25 years.

The richest 10 per cent in those states, which include the US, UK, Germany and Japan, earn on average 9.5 times the poorest, compared to 7 per cent in the 1980s. The only countries in which the OECD found inequality had fallen were Greece and Turkey.

“This compelling evidence proves that addressing high and growing inequality is critical to promote strong and sustained growth and needs to be at the centre of the policy debate,” said OECD secretary general, Angel Gurría.

Changes in wages and salaries have been the biggest direct driver of inequality, the Paris-based organisation said. The study found that the earnings of the 10 per cent best-paid workers have risen relative to the 10 per cent at the bottom, who also saw a drop in annual hours worked.

The report said that income inequality undermines growth by preventing disadvantaged people from accessing education, impeding social mobility and slowing human capital accumulation. To offset the damage, policy makers should be concerned with the welfare of the bottom 40 per cent of society and not just the poverty of the lowest 10 per cent, it said.

77

Š Legatum

THE NEXT STEP

You can always make a difference‌ The stories featured on these pages are just a starting point. Many of the organisations we focus on are saving and changing lives on a daily basis, but they need support to survive. If you want to learn more about the issues, or get busy solving them, then don’t hesitate to get in touch and take the next step on your own philanthropic journey

Helping the helpless

The UNHCR represents the last hope for many victims of conflict, disaster and persecution. With the crisis in Syria ongoing, and overwhelming numbers of refugees in the region, www. unhcr.org needs your donations more desperately than ever. Reach out and save a life today.

Breaking chains

It is abominable that slavery exists in the modern world; that one person could be owned by another, denied the freedom to own land or even inherit from his or her own family. The Freedom Fund (www. freedomfund.org) is just one group striving to end this miserable trade, and it needs your support.

Moving the needle

The Gavi Alliance is leading the global fight against preventable diseases, raising much-needed money while driving down vaccine prices and saving young lives.

Take a look at www.gavi.org and see what a remarkable impact even a few dollars can make to a child’s future.

A rural revolution

Armed with a bicycle and basic mobile and internet connectivity, the Infoladies of Bangladesh are empowering vulnerable and remote populations and helping those communities to fulfil their potential. They are looking to expand their reach, and you can help by visiting dnet.org.bd.

Aiding victims

The International Committee of the Red Cross runs orthopaedic rehabilitation clinics across Afghanistan, looking to restore dignity and hope to those left scarred by war, disease and congenital disorders. Visit www.icrc. org for more details and to learn how you can help.

79

DIARY

R FO OX

W AS LT HI IM N GT OR ON E

CH IC AG O

CI SC O N FR A

AN

TI GU A

DA VO S

-K

GU AT EM

AL

LO ST

A

ER S

BA

N

SA N

A IL M

D. C.

D

Key events this quarter Antigua Guatemala January 15-18

The fourth annual Antigua Forum aims to bring together some 50 leading free market, liberal government officials, lawmakers and social entrepreneurs from around the world to discuss critical challenges to economic goals and development.

80

Davos Klosters

Chicago

San Francisco

Washington D.C.

The World Economic Forum Annual Meeting engages world leaders, and shapes international, regional and industry agendas. The fourday event will gather senior decision-makers from the public and private sectors to debate the challenges, opportunities and futures of world economies.

The one-day Triple Bottom Line Investing (TBLI) Conference targets finance professionals interested in impact investing and environmental, social and governance (ESG) issues in investments. Workshops include the role of patient capital for impact investing, and measuring impact.

The members-only International Human Rights Funders Group (IHRFG) conference offers private foundations and grantmaking organisations the chance to discuss human rights in philanthropy. The two-day conference, features sessions led by IHRFG members.

Council on Foundations’ Philanthropy Week in Washington is a US-focused conference primed for the start of the new Congress.

The five-day event aims to raise awareness among law and policymakers of the role of philanthropy in the US, and its opportunities and challenges.

January 21-24

January 23

January 27-28

March 16-20

N U SU

DU A

SI N

GA

PO

RE

M U M BA

I

DU BA

I

DIARY

Mumbai

Dubai

Baltimore

The fifth edition of the India-focused Dasra Philanthropy Week offers philanthropists and social entrepreneurs the chance to network and discuss challenges for philanthropy.

The 2014 event had more than 650 attendees from foundations, philanthropists and multilaterals.

Now in its twelfth year, the Dubai International Humanitarian Aid & Development Conference & Exhibition (DIHAD) aims to be a platform for debate and knowledge sharing among aid industry players.

The three-day event will include an exhibition, conference and workshop.

Hosted by EDGE Funders Alliance, the 15th annual Just Giving conference aims to bring together grantmakers and philanthropists to discuss opportunities and challenges for foundations. The 2014 three-day event attracted around 250 participants from around the world.

March 19-20

March 24-26

April 8-10

Coming up

next quarter

April 15-17 2015 Skoll World Forum on Social Entrepreneurship, Oxford April 15-16 Philanthropy Summit 2015: The power of strategic giving, Auckland April 20-22 AVPN Annual Conference, Singapore April 21-23 The World Economic Forum on East Asia, Nusu Dua April 22-24 2015 Global Philanthropy Forum Conference, Washington D.C. April 24-28 2015 Council on Foundations’ Annual Conference, San Francisco May 20-22 European Foundation Centre Annual Conference, Milan

81

PHILANTHROPY AGE

In the next issue…

Our wireless world ireless technology has the power to change the way we give money, how we raise it and how we spend it. From mobile apps that help people pledge their support, to crowd funding via social media, to virtual classrooms bringing the latest farming techniques to remote villages; we are restricted only by bandwidth and the limits of our own inventiveness.

In our next issue, we explore the potential of wireless technology to transform the lives of those in the underserved world. We demonstrate that geographical proximity is not a prerequisite for those looking to drive positive change, and we celebrate the marriage of state-ofthe-art technology with innovative thinking.

It’s time to log on and learn. n

W

82

PHILANTHROPY AGE

83

QCHARITY.org

MDGs-2015 Since the adoption of the UN Millenium Development Goals

Working closely with vulnerable communities. . .

QC has provided empowering economic opportunties globally to more than 30,000 families in 32 countries

COMMITTED TOWARDS ERADICATING EXTREME POVERTY AND HUNGER

ERADICATE EXTREME POVERTY AND HUNGER