Global Philanthropy Development Trends: Opportunities for Social Financial Innovation

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Global Philanthropy Development Trends
Opportunities for Social Financial Innovation

• Tim Draimin
• Executive Director, Social Innovation Generation
  (SiG)
• Chair, Causeway
• British Columbia Council for International
  Co-operation (BCCIC) AGM
• Vancouver, November 28, 2008

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Growing Donations But Declining Donors 1984 to
2005
Donors as a of Taxfilers
Average Donation ()
Source CRA compiled by Imagine Canada
Courtesy Michael Hall _at_ Imagine Canada
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Population aging is a worldwide phenomenon that
will affect Canada and all G-7 countries
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Global Trends

• Changing global philanthropy and financial
  architecture
• Rise of remittances
• Relative decline of ODAs importance
• Technologys impact
• disintermediation
• Rise of social entrepreneurship, social
  enterprise, social finance, and expanding hybrid
  cross-sectoral (nonprofit lt-gtfor profit) universe

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New Strategic PhilanthropistsPhilanthrocapitali
sts

• Primarily self-made entrepreneurs
• More sophisticated engaged
• Strong outcomes focus
• Bring time, treasure, talent and an
  entrepreneurial lens
• See selves as a partner
• Seeking leverage gifts plus loans, quasi-equity,
  leveraging social change strategies

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Social enterprise is

• A business with primarily social (and/or
  environmental) objectives whose surpluses are
  principally reinvested for that purpose in the
  business or in the community, rather than being
  driven by the need to maximise profit for
  shareholders and owners...

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Social finance is

• finance with a social or environmental mission
• Or,
• Social finance is a sustainable approach to
  managing money that delivers social,
  environmental dividends and economic return
  through social enterprises operating in the
  non-profit or public benefit universe.

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Social Finance Exists Across A Broad Continuum
HIGH INVOLVEMENT
Venture philanthropy
Venture capital
CHARITABLE
COMMERCIAL
Traditional grant making
Bank lending
LOW INVOLVEMENT
Adapted from Margaret Bolton, 2003
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Social finances most visible example is
MICROFINANCE
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Social finance for public benefit

• The flow of financial capital to human need uses
• Affordable Housing
• Social Enterprise
• Support for working families
• Health Home Care
• Community Development
• Social Economy
• Clean Technology
• Microfinance
• Fair Trade
• Green Building
• Education
• Bottom of the Pyramid
• (source market sector listing adapted from
  www.xigi.net)

Sources
Intermediaries
Mechanisms
Recipients
Uses
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Collaborative approaches and blended returns

• Growing social and environmental pressures
  government and market failure the conditions
  for social innovation

Projected Income
New
Social Finance
Expanding Earned Income
Existing
Earned Income
Gvrnt Gs Cs
Charitable Donations
Courtesy CAUSEWAY
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Social Finance Supports Businesses in the Public
Benefit Universe
Low Profit Limited Liability Companies (L3C)
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Future Directions

• Growing role of major donors
• Cross border giving will further open up,
  challenging monopoly of traditional players
• Growth of southern philanthropic structures, like
  Trust Africa, community foundations, etc
• Global trends towards cross-sectoral strategies,
  social entrepreneurship, social enterprise,
  hybrid social business structures (moving beyond
  tax status silos
• Deepening globalization of philanthropy

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Philanthropic Brokering Roles for International
NGOs

• Using
• Capital, financial innovation, practical
  know-how, strategic partnerships, emergent social
  innovation
• Among
• Philanthrocapitalists with shared interests
• Philanthrocapitalists and key actors in sector or
  doing
• Across
• Geographies
• Sectors (voluntary, business, government)
• Financial pathways

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Causeway New national collaboration accelerating
a social finance market place for financing
social innovation serving public benefit
SiG_at_MaRS
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Thanks to Arthur Wood (Ashoka), Michael Hall
(Imagine Canada), Michael Lewkowitz (Causeway)

• For more information about CAUSEWAY
  www.causeway.socialfinance.ca
• For more information on the charity sector visit
  www.imaginecanada.ca
• For more information of Social Innovation
  Generation visit www.sigeneration.ca