Global foundations are increasingly expected to use their wealth for positive social and environmental impact, but their money is not always aligned with their mission. A new framework seeks to remedy this ongoing challenge.
Global foundations with a collective $1.5 trillion in assets are increasingly expected to use their wealth for positive social and environmental impact. Yet their money is not always aligned with their mission. A new guide from Rockefeller Philanthropy Advisors (RPA), which advises foundations on a range of projects benefitting causes from the arts to education to public health, aims to remedy this challenge.
The Philanthropy Framework, its authors say, “seeks to address fundamental changes in philanthropy and the world such as generational shifts in attitudes, massive wealth creation, diversity of capital, new models for impact, and new operating environments.”
Created with input from more than 50 global foundations, the Framework is “a practical, useful guide to enable existing, new and next-generation philanthropists to create more meaningful social impact,” Olga Tarasov, director of knowledge development at Rockefeller Philanthropy, told TriplePundit.
“With growing global challenges around poverty, the environment, education, health and more, we need scalable, systemic change, and philanthropies are well placed to provide that,” Tarasov says.
Founded in 2002, RPA has grown into one of the world’s largest philanthropic service organizations, she adds, facilitating more than $3 billion in distributed grants to nearly 70 countries.
As the authors of the Framework note, philanthropy is in an era of expansion. Some of the signs pointing to this trend include:
Those critics include Anand Giridharadas, a former New York Times foreign correspondent, whose book, Winners Take All: The Elite Charade of Changing the World, claims that philanthropic foundations and “business elites . . . may believe they are changing the world when instead they may be protecting a system that is at the root of the problems they wish to solve.”
Such criticisms have prompted some inward reflection by foundations and their operators, Tarasov explains. “We developed the Framework to help us as a sector serve better and to align organizations for maximum impact.”
“Impact investing and mission-aligned investing have a huge role to play in philanthropy,” Tarasov says. Yet, according to a survey by The Chronicle of Philanthropy, of America’s 15 largest endowed foundations, which together hold $150 billion in collective assets, just two-tenths of 1 percent of their endowments are invested in line with their mission.
There are signs that corporate philanthropy foundations are recognizing that they need to move in a new direction. As 3p reported earlier this year, the organization CECP: Chief Executives for Corporate Purpose, which represents 250 of the world’s largest companies and $15 trillion in assets under management, is moving away from philanthropy and toward “purpose,” as it is currently driven by the increased interest of investors in the sustainability of long-term value creation.
“CSR is nothing new for companies, but the lens has changed a little bit,” Tarasov told 3p. “Our research and work have shown that, as opposed to philanthropy and foundations being a lubricant for the corporate brand, the focus is really on societal impact and social change. It’s about intentionally aligning your business expertise with business impact, and to make the global economy work for everyone.”
Private-sector companies and their various foundations are expected to play a key role in helping to bridge the $2.5 trillion annual funding gap to meet the U.N. Sustainable Development Goals (SDGs), as 3p has reported.
RPA, which manages the SDG Philanthropy Platform, is well aware of this need, and is partnering with foundations to align their work to the SDGs as well as collaborating with other likeminded organizations to scale impact.
“The SDGS provide a really nice framework for those engaged in philanthropy to think about outcomes and what they want to deliver,” Tarasov says. “It’s one tool available to philanthropies as they think about how to fund and accelerate scalable solutions targeting systemic changes around pressing global issues.”
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Based in southwest Florida, Amy has written about sustainability and the Triple Bottom Line for over 20 years, specializing in sustainability reporting, policy papers and research reports for multinational clients in pharmaceuticals, consumer goods, ICT, tourism and other sectors. She also writes for Ethical Corporation and is a contributor to Creating a Culture of Integrity: Business Ethics for the 21st Century. Connect with Amy on LinkedIn.