March 14, at this year’s Philantrophy Summit, a range of question was discussed concerning philanthropy with an American, European and Swedish perspective. It was established that philanthropy is a key to relieving and solving societal challenges. However, Sweden and Europe have a lot to learn from the US; more cooperation between the government, the civil society and the business sector is needed.
Philantrophy – A history of individual giving
The seminar’s first keynote speaker was Una Osili, Director of Research at Indiana University and Lilly Family School of Philanthropy.
– Right now is a very exciting time to be studying philanthropy. Why? Because of all the changes happening.
Osili said that she had studied data from over a million charities. The biggest source of philanthropy, according to her data, was individual giving which represents 72 percent of all philanthropic donations.
– Philanthropy is a history of individual giving.
At the same time as donations to religious causes has declined, donations to environmental purposes has increased. Over all the share of gifts to secular causes, like education, has increased over recent years.
– The greatest challenge right now is getting donations to represent more than two percent of the US GDP, where the number has been stuck for a number of years.
Nevertheless, Warren Buffet’s and Bill Gate’s pledge to donate most of their fortunes could increase the publicity of philanthropy and thereby amassing even more donations. Osili also saw crowdfunding as a possible way of getting more funds. Lastly she said that data shows a future growth and diversification of philanthropy.
Venture philanthropy – Do good with profit
The second keynote speaker was Lisa Hehenberger, Ph.D., Research and Policy Director at the EVPA, whose speech focused on Venture Philanthropy.
– Charities are the only employers who emphasize their low wages and that they don’t recruit from the best universities.
To receive funds can be a necessity for these organizations. The exception to this rule is charities within venture philanthropy. These organizations try to make a profit whilst doing good. Potentially a time saving measure since non-profit charities spends about 40 percent of their time raising money.
Venture Philanthropy started as a way for entrepreneurs to track their investments in charities. Here, the entrepreneurs use their entrepreneurial skills to do something they are skilled at – getting investments to grow – at the same time they are doing something good, Hehenberger said.
– Growable, self-sufficient systems are preferable to classic charities because they can continuously deliver good solutions to problems, she concluded.
Be more strategic
Nina Hoas, Executive Director, Philanthropy Advisory UBS Wealth Management, was one of the discussants in the subsequent panel discussion. She established that a change has taken place, where philanthropists have become more strategic in their giving and have clearer visions of what they want to accomplish. Philanthropy has been professionalised and now takes on new forms. Not only regular charities are to be found but also venture philanthropy, social entrepreneurship and impact-investing.
– The philanthropists are younger and now pledge to give their money away whilst they are still alive; a well-known example is the 31-year-old Facebook founder Mark Zuckerberg.
Civil Society as a complement to the welfare state
Erik Ullenhag, Spokesperson for economic policy and Group leader for the Liberal Party, saw a conflict between the Swedish welfare state and philanthropy.
– The welfare state should solve the problem is the common attitude. However, civil society should complement the welfare state.
According to Ullenhag there is a growing acceptance for the civil society getting involved, for example in schools with homework help for free. We need a change of attitude he said and argued that the tax break for donations should be reinstated.
Social investment funds – Alternatives for municipalities?
Khashayar Farmanbar, Social Democratic Party in Nacka municipality, saw, based on his background as an IT contractor and system builder, the need for sustainable systems not dependent on individuals’ donations. He suggested our way of crowdfunding through taxes.
– We have had a strong tradition of social enterprises for example preschools which became part of the welfare state.
Tax incentives to encourage philanthropy are not necessarily effective. A social investment fund could be created and managed by a municipality, as the case in Norrköping, Farmanbar thought. Nina Hoas, Erik Ullenhag and Khashayar Farmanbar
Individual giving – small compared to the states social systems
Jesper Roine, Associate Professor Stockholm School of Economics, was the first speaker after a short break. He spoke about private capital in Sweden its growth over the past 200 years and its links to private initiatives and philanthropy. He asked if private giving has been able to solve any major societal challenges and determined that the question is flawed. In part due to the fact that private giving historically has been small compared to the funds the state possess.
Foundations more common
Filip Wijkström, Associate Professor Stockholm School of Economics, told the audience about his and Stefan Einarsson’s (also Stockholm School of Economics) study. Their research focuses on the Swedish foundation system between 2002 and 2012.
– The charitable foundations increased with 1 400 or 20 percent during the period. The value of these are about 271 billion SEK, an increase of 77 percent.
All types of foundations have increased in number, above all private equity funds. The largest percentage increase occurred in foundations active in cultural activities, regional development and religion. Here, the increase is between about 100-160 percent. It shows that the interest to set up foundations in these areas preceded the favourable tax legislation which was in place from 2014 to 2016. According to Philip Wijkström one conclusion to be draw from this fact is that lower taxes may not increase giving. Filip Wijkström
Entrepreneurship as a force for change
To exemplify the theoretical parts of the conference Carolina Sachs, Secretary General Axfoundation, was invited. The foundation she works for is an independent non-profit organization active within environmental and social sustainability.
Sachs told the full auditorium about three of the foundations projects; one focused on preventing antibiotic resistance by trying to lower the usage in livestock, another is reduction of palm oil thereby saving rain forest and the third centers on integration of immigrants by creating networks. Carolina Sachs
The next practical example was delivered by Anna Johansson, Social Welfare Manager at the Stockholm City Mission. She stated that the City Mission is a 163 years old non-profit organization that works with social care, social outreach, social entrepreneurship and educational activities.
Johansson picked up on today’s major societal challenge – what she calls the emergence of a shadow society. She mentioned the example of hidden and undocumented immigrants, who are not covered by any safety net and have a hard time finding accommodation.
– We help people in acute distress, Johansson said. For example, we serve 40,000 breakfasts, lunches and dinners each year. We also hand out money to families with children. Only in January and February this year we have given 600 000 SEK to these families. Anna Johansson
Investment Platform doing good (in the sun)
Last commentator of the conference with a hands-on example was Sam Manaberi, CEO and founder of Trine, whose company is an investment platform for individuals who want to invest in solar energy projects in developing countries. These projects are often situated in areas where hazardous kerosene and diesel is used to bring light and electricity.
Today we have solar electricity which is both scalable and cheaper than kerosene and diesel. Yet we use it poorly. There are lots of solar power projects around the world and there are also a lot of money that people can and want to invest in projects, Manaberi said. Trine’s mission is to connect these two. Sam Manaberi
– $ 25 is the minimum investment. At the next stage Trine provides loans to solar entrepreneurs who start a business. The solar entrepreneur will at a later point repay the amount, and Trine returns the money to the investor.
Thanks to Trine 30,000 people have gained access to solar power and thus avoid burning kerosene and diesel. This has in turn resulted in a reduction of 6,500 tons of carbon dioxide.