Creating Impact through Philanthropy: A Nordic perspective

Friday March 24 2017 the fifth edition of the annual Swedish Philanthropy Summit took  place. An interview study with 40 Nordic philanthropists and foundation representatives was launched at the conference where a specific Nordic philanthropy model was presented. It distinguishes itself by being holistic, proactive and impact driven. Perhaps Nordic citizens are seen as pale and laconic, but we turn out to be passionate – at least in philanthropic commitment!

Watch the webcast, part 1 

Johanna Palmberg, Research Director Swedish Entrepreneurship Forum and Associate Professor Södertörn University, presented Creating Impact through Philanthropy: A Nordic perspective, an interview study with 40 philanthropists and foundation representatives in Denmark, Finland, Norway and Sweden. The study is based on philanthropy as a complementing provider of public goods and innovative forms of funding. In addition, philanthropy was presented as a catalyst for societal change challenging conventional ways of thinking.

On an aggregated level motivators for philanthropy were personal connections to an issue and a tradition of philanthropy.

– Family involvement remains important despite a culture of individualism.

According to Palmberg, Nordic philanthopists have become more strategic and have developed a more professional approach, which includes collaborations with other organizations and philanthropists. This results is a very specific flavor of Nordic philanthropy that is more holistic and impact driven compared to other countries. Moreover, the study show that innovative financing methods are on the rise. Focus for Nordic philanthropy is dominated by two issues: scientific research and care for children and youth.

Ways forward are changes in tax incentives and matching of donated funds, as well as highlighting role models:

– To incentivize more philanthropists we need role models that talk about the their engagement and their impact, says Palmberg

Silvia Bastante de Unverhau, Head of Philanthropy Advisory UBS, offered an international perspective and emphasized that Nordic philanthropists are more strategic, proactive and focus more on impact than philanthropists in other parts of the world. To give is good enough for many of the philanthropists, they believe that responsibility ends when the donation is provided.

-Nordic philanthropists invests both their time, money and use their private networks for collaboration with other organizations to ensure the best impact.

The combination of entrepreneurship, philanthropy and financial resources is a powerful source to create societal change, Bastante de Unverhau concluded.

Johan Andresen, Owner and Chair Ferd, a family-owned Norwegian investment-company -extensively involved in social entrepreneurship – talked about the motivations of philanthropists.

– We understand that we need to use the advantages of Ferd, to scale businesses, for making impact beyond the value chain.

We make larger impact than we anticipated. For example the net value of getting a drop-out back to high school is 11,6 million NOK. It is good on an individual level as well as for society as a whole, Andresen concluded.

Robert af Jochnick, Founder and Board member of Oriflame, confirmed that personal connections to an issue was a key motivation for philanthropists by telling the story of how he and his brother got involved in it. They saw children searching for items at a garbage dump abroad. This made the brothers decide that they could not do business without doing good too.

– Now this is a part of the company, to show compassion. Successful entrepreneurs should give back to society.

Af Jochnick and his brother now run different foundations and their children are very involved in philanthropic projects: We speak as much of our philanthropic projects as of our business, he said.

Mikael Ahlström, Founding Partner Procuritas, Chelha and founder of Charity Rating, recounted donating money in a collecting box wondering where the money actually went. He also read about “Vagn-Olle” that collected tin cans and donated his life savings of five million SEK to an NGO. When going through annual reports from different NGOs that he supported, he found that the NGO Vagn-Olle had sponsored had lost one third of its equity. That was why he started Charity Rating – where you can compare value creation in 200 organizations based on how transparent, democratic and efficient they are, Ahlström said.

– Now NGOs contact us asking how to get the best rating.

In the following discussion Andresen meant that we cannot expect public servants to take risks. If the entrepreneurs try something new and show a better way of doing something, the public sector can embrace it. We provide new solutions to existing problems, Ahlström added. Bastante de Unverhau also thought that the main role of philanthropy is to fund social innovations. Palmberg added that measuring impact triggers the public sector. While af Jochnick thought that possibilities to deduct taxes for philanthropic initiatives should be reinstated, it sends the right signal about philanthropy.

Watch the webcast, part 2

The last session was moderated by Johanna Palmberg, a deep-dive in innovative ways of financing social entrepreneurship. Participants were: Jaume Iglésies, Sustainable Investing Advisor UBS Switzerland Wealth Management, Lena Ingelstam, Director of Partnerships and Innovations SIDA, Gisele Mwepu, CEO OKAPI Finance International, and Anna Urombi CEO and Co-funder AddTruly.

Jaume Iglésies, Sustainable Investing Advisor UBS Switzerland Wealth Management, said UBS was “testing the water” with social impact investment. Three main challenges were identified. The first one was funding. Great entrepreneurs have ideas that can change the world but lack funding to implement it. The second challenge was lack of a monitoring culture. Little effort is made to evaluate whether donations create impact. Most of the emphasis is directed towards donating in itself, not to monitor the impact, Iglésies said. A third challenge was coordination, to link social entrepreneurs with capital. Many are willing to invest capital for social impact but lack the knowledge of where to invest. In the same fashion social entrepreneurs might have great ideas but no clue how to raise the necessary funds:

– Our goal is to make both “hard core bankers” and NGOs able to understand and learn from each other.

As the Director of Partnerships and Innovations at SIDA, a governmental agency with the goal to reduce poverty in the world, Lena Ingelstam presented a change in the world affecting us all: The UN “2030 Agenda for Sustainable Development” that contains 17 goals to make a more sustainable world. The agenda includes 169 targets divided across these 17 goals. Ingelstam recognized that transformative change cannot be done by aid alone, but SIDA aims to work as a catalyst for future development of  private players. Another observation by Ingelstam was growing local engagement. In areas receiving aid local beneficiaries are given strong incentives to cooperate in challenge driven entrepreneurship.

Gisele Mwepu, CEO OKAPI Finance International, presented her company that tries to bring social entrepreneurship down to the bottom of the pyramid. By “banking the unbanked” OKAPI Finance have helped people in Africa to join the financial market. The idea does not only help people get to the financial market but also help banks get to new markets. By introducing an app to use as a virtual bank card, OKAPI helps customers who cannot reach bank offices. Mwepu believes impact measurement is incredibly important and can be used to expand financial inclusion.

– Showing direct impact of your commitment can convince more companies to be a part and help in evolving the world, Gisele Mwepu said.

– Consumers tend to prefer companies that make a difference in the world, Anna Urombi, CEO and Co-funder of AddTruly, added.

AddTruly helps companies to reach out with their commitments of social corporate responsibility. The idea is to handpick community NGOs that can help connecting and engaging both donors and recipients in a simple way. For a small or medium sized company it can be hard to both make a commitment of responsibility and to communicate this to costumers. The platform AddTruly  strengthens the brand recognition of companies. With communication kits, fundraising tools and digital updated impact reports companies can turn out more transparent and aligned with costumer demands.

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