19 November 2019
The commentaries below are the amalgamation of insights into the philanthropic sector in the Gulf Region as articulated by a group of philanthropists from the Gulf region along with Bill Gates in a roundtable discussion held on 19 November 2019 at Badr Jafar and Razan Al Mubarak’s home in Dubai.
The roundtable discussions focused on various aspects of global and local philanthropy and identified specific trends, challenges and opportunities. The participants acknowledged the very significant opportunity of growing philanthropy from the region, the vast intergenerational wealth transfer expected in the coming decade and the $400bn-$1 trillion per annum of Islamic global giving. However, they also agreed that this potential is not being maximised due to a range of obstacles and restrictions, some of which are specific to the region but some of which are shared globally.
Participants were invited to offer up potential solutions to some of these challenges and to share their experiences and ideas around best practice. The discussions covered insights into governance and ways of improving impact notably through learning, collaboration and coordination. They discussed new approaches to help foster the sector and a broader community of peers who can connect regularly, share insights and help to professionalise and institutionalise the sector. Badr Jafar expressed his hope that the group would continue to share best practice and insights on an ongoing basis.
Start early and have fun
Philanthropists, especially those from family businesses with a long history of giving, learn a lot about generosity from their parents and earlier generations. Those who start their own philanthropy early can educate the next generation and build more sustainable models, greater social impact and longer lasting legacies. Philanthropy should be fun. Most people wait too long to start their philanthropy and don’t enjoy it as much when they are older.
Build team competences
The quality of team competences is critical and marrying business acumen with development expertise is powerful. Recruiting teams from both the private sector and those with experience in the field allows for a more sophisticated understanding of value creation, how to build efficient models, deploy technological innovation and build economies of scale. It also encourages philanthropists to read the market quickly, shut things down that don’t work and create alternative solutions.
Institutionalise and professionalise
There is a need to further institutionalise and professionalise the sector with more focus on strategy and evidence-based investments. Increasing the supply and use of data to understand the root causes of issues can help donors better allocate resources and drive impact which needs to be more sustainable and not just about one-time interventions. The establishment of professional associations and networks would help improve peer learning and build specialised competences.
Content development for transparency
The historical regional aversion to talking about philanthropic activities and outcomes due to religious and cultural directives can be addressed through voluntary disclosure on websites and in annual reports, as well as in general content development (eg in the form of blogs, videos etc). Better content that shares stories about impact can help attract young people and encourage further giving by inspiring rather than bragging. It also provides more transparency by developing content based on clear facts, visual reporting and feedback loops using interactive technology platforms to engage.
Giving locally as well as globally
It is important to be able to give locally to causes that are understood and resonate. This can act as a means of engaging employees and allows for businesses to offer matched giving to employees or support their volunteer time, which is a relatively easy way to encourage generosity amongst employees. It is also important to dedicate some funding to low-income countries, where impact per dollar goes much farther. Ideally philanthropists give both domestically and globally.
Take risks and partner to scale
Philanthropists have a unique opportunity to use their philanthropic (risk) capital to experiment and test new ideas and approaches with innovation and creativity that government may be unable to do sometimes. Failure to some extent is inevitable in philanthropy and taking risks is important in tackling big social problems. Once proven, philanthropists can share solutions with governments who can then adopt them at scale in a way that philanthropists may not be able to.
Building a conducive regulatory environment
A conducive regulatory environment and infrastructure with effective incentives are critical to mobilising capital. Religious perceptions sometimes discourage disclosure with large family funds often remaining completely anonymous. However, there are signs this is beginning to shift with the second generation. It is also important to ensure that valid Anti-Money Laundering/Counter-terrorist Financing initiatives don’t inadvertently discourage legitimate philanthropy. Case-by-case legislation should be replaced with system wide reform.
Building local partnerships for feedback loops
Giving in poor countries or remote destinations where philanthropists don’t necessarily have strong local knowledge is more effective when in partnership with local governments or with local philanthropists. Joining existing collaboratives like Co-Impact can help enter new markets. Building these relationships helps to build effective feedback loops, better understand real market needs and build more sustainable and scalable interventions which in turn, increase impact.
Collaboration to avoid duplication
When starting out in philanthropy, co-funding existing proven initiatives can help improve impact exponentially and ensure that new philanthropic investments build on existing successful interventions rather than duplicate them. Measurement of what works and what doesn’t is not as well developed as it is in the private sector which makes picking an effective cause difficult. Better coordination can help philanthropists move beyond emotional decisions to take a more informed approach about where to invest.
Choosing the right structure
Philanthropists should consider up front what kind of structure or legacy they want to create for their philanthropic endeavours. While some choose to spend down their wealth within their lifetime or a defined timeframe, others choose to have a foundation in perpetuity. Both have their merits. Equally board structures can vary significantly in size and composition. In both cases avoiding overly complex structures and recruiting experts to advise you can help philanthropists maximise their output and social value creation.