Impact-focused philanthropists emerge from developing countries
A growing trend of impact-focused investors is emerging from developing countries, according to the recent Global Philanthropy Forum, held in California, USA. Between 2002 and 2013, the GDP of developing economies grew by an average of 6.5%. This economic growth has led to the development of a burgeoning middle class and created a rise in the number of philanthropists.
Global Philanthropy Forum President and Chief Executive, Jane Wales claimed that emerging philanthropists are acting more like investors than traditional philanthropists. They are younger, more tech-savvy and more closely connected to problems in their communities. They are more likely to make data driven investments in charities and social enterprises, using their capital in specific ways to implement their plans.
One example, Vox Capital, based in Brazil, was set up by three young social entrepreneurs. They invest in businesses that serve low-income communities and help to reduce poverty, such as a network of internet cafes that offer financial services and e-learning. Vox Capital uses impact reporting and investment standards (IRIS) to measure the impact of its investments. One of the founders, Daniel Izzo said: “People are getting ever more frustrated with the current state of affairs and with the traditional answers to trying to solve poverty.”
James Mwangi, Chief Executive of Equity Bank stressed the importance of empowering people to create their own wealth. For example, Equity Group Foundation’s Financial Knowledge for Africa project equips women and young people with financial and management skills to help them transform their lives.
The Forum noted that there is also a greater emphasis on promoting collaboration. In Latin America, the abc Foundation strengthens the culture of philanthropic engagement in the region, arranging events for leaders to brainstorm and share best practice. In November, it is organising a forum focusing on the future of social and economic innovation.
The African Philanthropy Forum has recently set up to provide a similar function. Entrepreneur Tony O. Elumelu explained: “Africans are now setting their own development agenda, and the vision behind the African Philanthropy Forum is to create a platform that aligns our collective efforts to transform the continent from within.”