Philanthropic Foundations and Philanthropic Foundations and Multilateral Aid Institutions like Multilateral Aid Institutions like the World Bank: the World Bank:

Increased Opportunities for Increased Opportunities for Collaboration in ACP Collaboration in ACP AgricultureAgriculture

Olga Sulla Olga Sulla World BankWorld Bank

OutlineOutline1.1. Global Development Finance: Private Global Development Finance: Private

and Official capital flowsand Official capital flows2.2. Philanthropic Foundations in Philanthropic Foundations in

international developmentinternational development3.3. World Bank and Agriculture in AfricaWorld Bank and Agriculture in Africa4.4. Collaboration based on relative Collaboration based on relative

advantage – existing mechanisms advantage – existing mechanisms and questions for discussionand questions for discussion

Private Net Capital Flows $590 bln to Developing Countries are Concentrated in Middle Income, with only $40 bln to Africa

0

100

200

300

400

500

600

700

2000 2001 2002 2003 2004 2005 2006 2007

EAP ECA LAC

MENA SA SSA

EAP $152 bln

ECA $172 bln

LAC $134 bln

AFR $38 bln$BLN

p

Private commercial investment in African agriculture has been largely limited to crops and higher-potential zones. A number of international

seed companies have invested in maize seed multiplication

Official Aid Net Flows Official Aid Net Flows (aid+debt) are Most (aid+debt) are Most Important for AfricaImportant for Africa

-80

-60

-40

-20

0

20

40

60

2003 2004 2005

EAP ECA LAC MENA SA SSA

Africa $30 bln

LAC $-26 bln

ECA $-32 bln

$ BLNOfficial Grants by region

Asia40%

ECA3%

LAC5%

MENA25%

Africa27%

Official Grants to Official Grants to Africa are up to Africa are up to 1/3 of total ($104 1/3 of total ($104 bln)bln)

Philanthropic Philanthropic FoundationsFoundations Foundations play Foundations play increasingly importantincreasingly important role in role in development assistance, their potential is significantdevelopment assistance, their potential is significant. . Financial capacity:Financial capacity: t total assets of the US foundations account for $950 billion; ;

~700 billionaires in the world.~700 billionaires in the world.

International development activitiesInternational development activities represent represent a small a small partpart of the foundations’ work. Of ~100,000 of the foundations’ work. Of ~100,000 foundations only 1% is currently active; foundations only 1% is currently active; total amount total amount estimated between 5-7 blnestimated between 5-7 bln ). ). How does it compare with How does it compare with officialofficial ODA grants ODA grants $104 billion $104 billion and with the total and with the total private capital flowsprivate capital flows to developing to developing countries (countries (600 billion)?600 billion)?

The phenomenon of philanthropy for development is The phenomenon of philanthropy for development is US dominated US dominated (experience since 1920s)(experience since 1920s)

The poorest countries are not yet the main direct The poorest countries are not yet the main direct recipients of aid, due to mechanisms of foundations’ recipients of aid, due to mechanisms of foundations’ operationsoperations

Foundations based in the Foundations based in the United StatesUnited States::90% of grants support Domestic activities90% of grants support Domestic activities

3,3 3,2 3,2 3,5 3,8

30,3 31,8

36,4

30,5 30,4

2001 2002 2003 2004 2005

International GrantsTotal Grants

•3,8 billion international grants•68,000 grant-making foundations•Top 12 account for 50%•Types: independent (Gates, Ford, Moore), corporate (CitiGroup, Coca-Cola), community…

•The Gates disbursed $1 bln in 2006 and plans to increase to $3 bln

Grants-Distribution Scheme, US Foundations Grants-Distribution Scheme, US Foundations

US foundations annual total grant-giving (30bln)

International giving (10%, $3 bln) Domestic giving (90%)

Foreign recipients (1/3, $1 bln)

US-based recipients, (2/3, $2 bln)

Developed countries/organizations

Developing countries (60-70%, $600-800 mln)

Main Main Direct Direct recipients of the Foundations' aid are a few recipients of the Foundations' aid are a few emerging economies, not the poorest countries…emerging economies, not the poorest countries…

50

30

22 21 2015

SouthAfrica

India Mexico Brazil IDAcountries

(est.)

Russia

Channels of Channels of Foundations’ Aid Foundations’ Aid ImplementationImplementation::• Direct work in Direct work in developing countries: developing countries: Ford, Kellogg, Ford, Kellogg, MacArthur, and Soros MacArthur, and Soros Foundations through Foundations through offices (12 foundations offices (12 foundations have offices in IDA have offices in IDA countriescountries

•Through existing Through existing organizations: organizations: Gates, Hewlett Packard Gates, Hewlett Packard Foundations and the Foundations and the Rockefeller FundRockefeller Fund•Hybrid modelsHybrid models (eBay, (eBay, Aol, Google) Aol, Google)

• European foundations developed slower: greater propensity to state over private action, a stronger welfare system. In 2003 the EFC launched Europe in the World Initiative, calling foundations to donate 5 percent outside Europe or for global projects. International grants at about $600 million annually. European Foundations Center lists about 200 foundations. Concentrated in Sweden, Denmark, Britain, Germany and Switzerland. Education, research and health care are the main sector

• Asian Foundations play an increasingly important role in their Region. International giving by Asian foundations can be estimated at $400 million. Asian foundations are in Australia, Japan, China, Korea, but also found in Vietnam, Malaysia, Philippines, Thailand

• Japan Foundations Center reports about 60 million of international grant making

European and Asian Foundations

Sectors of Foundations’ International Grants Sectors of Foundations’ International Grants and of the Official Development Grantsand of the Official Development Grants

Foundations:Foundations: HealthHealth ~50% of the total~50% of the total(Gates accounts for 1.2 of (Gates accounts for 1.2 of

1.4 billion)1.4 billion)

International developmentInternational development (11-13%)(11-13%)

Environment (Environment (6%)6%)EducationEducation (5%) (5%) Human rights, art, religionHuman rights, art, religion

Official Development Grants

Multisector7%

Production Sector

6%

Economic Infrastructur

e12%

Social Infrastructur

e34%

Emergency assistance

11%

Debt related action

30%

Foundations’ work in Agriculture Foundations’ work in Agriculture still small but increasing still small but increasing

Aga Khan FoundationAga Khan Foundation Programs typically link Programs typically link elements such as rural savings and credit, natural resource elements such as rural savings and credit, natural resource management, productive infrastructure development, management, productive infrastructure development, increased agricultural productivity and human skills increased agricultural productivity and human skills development with a central concern for community-level development with a central concern for community-level participation and decision-making. participation and decision-making.

Gates FoundationGates Foundation invests across the complete invests across the complete agricultural value chain. It focuses on small farm agricultural value chain. It focuses on small farm households, mostly headed by women. households, mostly headed by women. A particular focus A particular focus since 2006 is the foundation’s support, in a partnership with since 2006 is the foundation’s support, in a partnership with the Rockefeller Foundation, of the the Rockefeller Foundation, of the Alliance for a Green Revolution in AfricaAlliance for a Green Revolution in Africa ,, which brings a wide which brings a wide range of African partners together to spearhead new range of African partners together to spearhead new agricultural programs for small farmers.agricultural programs for small farmers.

The William and Flora Hewlett FoundationThe William and Flora Hewlett Foundation The The Global Development Program make grants that attempt Global Development Program make grants that attempt to reform to reform multilateral trade rulesmultilateral trade rules that limit market access that limit market access for agricultural products from developing countries.for agricultural products from developing countries.

Foundations work in Agriculture Foundations work in Agriculture still small but increasing (cont.) still small but increasing (cont.)

Novartis Foundation for Sustainable Novartis Foundation for Sustainable DevelopmentDevelopment The Millennium Villages Project (MVP) The Millennium Villages Project (MVP) was founded with the goal of helping impoverished was founded with the goal of helping impoverished communities in rural Africa achieve the Millennium communities in rural Africa achieve the Millennium Development Goals. The project operates in seventy-Development Goals. The project operates in seventy-eight villages, reaching around 390,000 people.eight villages, reaching around 390,000 people.

Syngenta Foundation for Sustainable Syngenta Foundation for Sustainable AgricultureAgriculture improves rural livelihoods in semiarid improves rural livelihoods in semiarid parts of the world in sustainable ways. It promotes parts of the world in sustainable ways. It promotes innovative methods and technologies to help farmers innovative methods and technologies to help farmers increase their food production and make a profit. increase their food production and make a profit.

In 2006, SFSA established the Syngenta Foundation In 2006, SFSA established the Syngenta Foundation India to develop its projects across India: agricultural India to develop its projects across India: agricultural extension services, trial/demonstration crops, seed extension services, trial/demonstration crops, seed production, development of horticulture and building production, development of horticulture and building low-cost greenhouses. low-cost greenhouses.

World Bank Agriculture in World Bank Agriculture in AfricaAfrica

Bilateral and multilateral donor aid for Bilateral and multilateral donor aid for development of Africa agriculturedevelopment of Africa agriculture declineddeclined from $1.921 mln in 1981 to $997 from $1.921 mln in 1981 to $997 mln in 2001, rebounding slightly after. mln in 2001, rebounding slightly after. OECD data show that although bilateral OECD data show that although bilateral donors together gave 52% (Japan and the donors together gave 52% (Japan and the US top), the US top), the World Bank was the single World Bank was the single largest donor to African agriculturelargest donor to African agriculture between 1990 to 2006 (20% IDA) with $2.8 between 1990 to 2006 (20% IDA) with $2.8 billion in investment lending in agriculture, billion in investment lending in agriculture,

8% of total Bank investment lending to the 8% of total Bank investment lending to the Region. Region.

World Bank World Bank Agriculture in Africa Agriculture in Africa cont. cont.

IEG report “World Bank Assistance to IEG report “World Bank Assistance to Agriculture in Sub Saharan Africa” 2007:Agriculture in Sub Saharan Africa” 2007: ““Agriculture has been neglected by both Agriculture has been neglected by both governments and the donor community. governments and the donor community. The The Bank’s strategy for agriculture subsumed Bank’s strategy for agriculture subsumed within a broader rural focus and technical within a broader rural focus and technical skills declined. The lending support from the skills declined. The lending support from the Bank “sprinkled” across various activities: Bank “sprinkled” across various activities: (research, extension, credit, seeds, transport (research, extension, credit, seeds, transport and policy reforms in rural space), but without and policy reforms in rural space), but without synergies. In partnership with others, the Bank synergies. In partnership with others, the Bank could take the lead in fostering a multifaceted could take the lead in fostering a multifaceted approach, based on its comparative advantage approach, based on its comparative advantage as multisector lending institution. “as multisector lending institution. “

WBG new focus on Agriculture:WBG new focus on Agriculture: 1. Total lending for agriculture will go up from USD 1. Total lending for agriculture will go up from USD

4 to 6 billion in the coming year4 to 6 billion in the coming year 2. President Zoellicks’ 10 points plan for food crisis 2. President Zoellicks’ 10 points plan for food crisis

(including stimulation of agricultural supply (including stimulation of agricultural supply response by immediate provision of seeds and response by immediate provision of seeds and fertilizers);fertilizers);

3. 2007 saw increase in lending for agriculture in 3. 2007 saw increase in lending for agriculture in Africa to 2.7 bln;Africa to 2.7 bln;

4. Reorganization of departments working on rural 4. Reorganization of departments working on rural and agriculture;and agriculture;

5. Regional projects expansion5. Regional projects expansion6. Diversification 6. Diversification Stimulate private sector led investment across the Stimulate private sector led investment across the

value chainvalue chain

World Bank Agriculture in Africa World Bank Agriculture in Africa cont.cont.

Foundations and the World Bank Foundations and the World Bank working togetherworking together1. Trust Funds:1. Trust Funds: The World Bank as a multilateral The World Bank as a multilateral

attracts some of the foundations through its attracts some of the foundations through its Donor Funds mechanism (more than $400,000 Donor Funds mechanism (more than $400,000 like AK, Gates, Aridius, Ford). WBG is the top like AK, Gates, Aridius, Ford). WBG is the top Trust Funds holder among all the multilaterals (7 Trust Funds holder among all the multilaterals (7 bln vs. 3.8 bln UNDP, 1.7 UNICEF, 1.1bln IADB). bln vs. 3.8 bln UNDP, 1.7 UNICEF, 1.1bln IADB).

2. 2. Co-financing arrangements:Co-financing arrangements: arrangement under arrangement under which funds form the Bank are associated with which funds form the Bank are associated with funds provided by other sources outside recipient funds provided by other sources outside recipient country for a specific lending project: parallel and country for a specific lending project: parallel and joint co-financing is available.joint co-financing is available.

3. 3. The Development Grant Facility (DGF):The Development Grant Facility (DGF): its goal is its goal is to encourage innovation through seed money for to encourage innovation through seed money for new development approaches on a global or new development approaches on a global or regional level, to catalyze partnerships. Available regional level, to catalyze partnerships. Available for new activities about 10-15 million per year.for new activities about 10-15 million per year.

Foundations and the World Bank Foundations and the World Bank working together working together cont.cont.

4. 4. CGIARCGIAR 5. New study “Evolving Aid landscape in Africa and the 5. New study “Evolving Aid landscape in Africa and the

role of Private Philanthropy”role of Private Philanthropy” WB in partnership with WB in partnership with Norway and Kellogg Foundation: mapping the aid Norway and Kellogg Foundation: mapping the aid landscape, private actors – how and where; dynamics landscape, private actors – how and where; dynamics at the country level. at the country level.

6. New Gates – World Bank Group partnership on 6. New Gates – World Bank Group partnership on agriculture (meeting in April 2008)agriculture (meeting in April 2008): :

WBG: intellectual and policy advocacy leadership; in WBG: intellectual and policy advocacy leadership; in country-relationships, processes, understanding of country-relationships, processes, understanding of public investment priorities, due diligence, financial public investment priorities, due diligence, financial rigor..rigor..

BMGF: long term commitment, ability to take BMGF: long term commitment, ability to take risks/experiment, work through partnershiprisks/experiment, work through partnership

7. WBG is deepening relationship with Aga Khan which 7. WBG is deepening relationship with Aga Khan which is active in SME development and promotion of aro is active in SME development and promotion of aro processing. Currently partner in Uganda, Mali, Cote processing. Currently partner in Uganda, Mali, Cote D’Ivoire. IFC has 300 mln exposure with AK. D’Ivoire. IFC has 300 mln exposure with AK.

Strengths of Strengths of Multilaterals that Multilaterals that Foundations find Foundations find valuable for cooperationvaluable for cooperation Presence on the groundPresence on the ground Influence/leverage with Influence/leverage with

governmentsgovernments Ability to convene multiple Ability to convene multiple

government actors across and government actors across and within countrieswithin countries

Ability to scale up innovations to Ability to scale up innovations to the level of systemic changethe level of systemic change

Topics for DiscussionTopics for DiscussionPhilanthropic foundations and Official Developm. Philanthropic foundations and Official Developm.

AidAid1.1. Sectors (production/ social sectors, Sectors (production/ social sectors,

research/projects)research/projects)2.2. Forms of aid (grants/loans)Forms of aid (grants/loans)3.3. Beneficiaries (public institutions/communities)Beneficiaries (public institutions/communities)4.4. Accountability and Governance (public/private)Accountability and Governance (public/private)5.5. Aid implementation (country-based/global funds)Aid implementation (country-based/global funds)6.6. Scale: regional vs. localScale: regional vs. local7.7. Approach: Pilot vs. MainstreamingApproach: Pilot vs. Mainstreaming8.8. Partnerships (official agencies, foundations, Partnerships (official agencies, foundations,

private sector)private sector)9.9. Aid effectiveness and results measurement Aid effectiveness and results measurement

systemssystems10.10. Monitoring and EvaluationMonitoring and Evaluation

The World Bank’s contribution to an The World Bank’s contribution to an integrated global response to Food integrated global response to Food

crisiscrisis The response is articulated around The response is articulated around 4 main 4 main

pillarspillars: : policy advicepolicy advice, , expedited financial supportexpedited financial support, , financial market insurance productsfinancial market insurance products, and , and researchresearch to address critical knowledge gaps.to address critical knowledge gaps.

1. The Bank is engaging in 1. The Bank is engaging in policy dialoguepolicy dialogue with with over 40 countries to help them address the food over 40 countries to help them address the food crisis, as well as assessing food security and trade crisis, as well as assessing food security and trade implications of the crisis at the regional level. implications of the crisis at the regional level.

InstrumentsInstruments used include: rapid country diagnostics, used include: rapid country diagnostics, high-level dialogue and public communications, as high-level dialogue and public communications, as well as in-depth analytical work. well as in-depth analytical work.

The World Bank’s contribution to an The World Bank’s contribution to an integrated global response to Food crisis integrated global response to Food crisis cont.cont.2. In 2. In expediting financial supportexpediting financial support, the Bank has launched a Global , the Bank has launched a Global

Food Crisis Response Program (GFRP), an umbrella facility that will Food Crisis Response Program (GFRP), an umbrella facility that will provide up to $1.2 billion of accelerated financial support and provide up to $1.2 billion of accelerated financial support and technical advice to countries affected by the food crisis. As part of technical advice to countries affected by the food crisis. As part of this facility $200 million dollars in additional grant funding was this facility $200 million dollars in additional grant funding was made available for the most vulnerable and fragile states. made available for the most vulnerable and fragile states.

Grants for Djibouti ($5 million), Haiti ($10 million), and Liberia ($10 Grants for Djibouti ($5 million), Haiti ($10 million), and Liberia ($10 million) were approved in May, while Tajikistan ($9 million) and million) were approved in May, while Tajikistan ($9 million) and Yemen ($10 million) were approved in May and June. In July, the Yemen ($10 million) were approved in May and June. In July, the World Bank expects to approve grant support to Togo, Sierra Leone, World Bank expects to approve grant support to Togo, Sierra Leone, Niger, Guinea Bissau, Central African Republic, and Afghanistan. Niger, Guinea Bissau, Central African Republic, and Afghanistan. Furthermore, a pipeline of low-income affected countries has Furthermore, a pipeline of low-income affected countries has already been identified for further grant support in July and August. already been identified for further grant support in July and August.

Proposals for fast-track IDA funding under GFRP have been approved Proposals for fast-track IDA funding under GFRP have been approved in Kyrgyz Republic and are moving forward for Nepal, Afghanistan, in Kyrgyz Republic and are moving forward for Nepal, Afghanistan, and Burkina Faso, and are being developed under fast-track IBRD and Burkina Faso, and are being developed under fast-track IBRD funding for The Philippines. funding for The Philippines.

In terms of creating In terms of creating financial market insurance financial market insurance productsproducts, IBRD and IDA will offer index-based , IBRD and IDA will offer index-based weather derivatives to help transfer the financial weather derivatives to help transfer the financial risk of severe weather events to financial markets. risk of severe weather events to financial markets. Malawi will be the first client – should the country Malawi will be the first client – should the country suffer a drought it would receive a payout to offset suffer a drought it would receive a payout to offset the price of imported maize.the price of imported maize.

The Bank is also collaborating with other agencies The Bank is also collaborating with other agencies and institutions on and institutions on researchresearch addressing critical addressing critical knowledge gaps. in the following areas: global knowledge gaps. in the following areas: global food markets; poverty, distributional and food markets; poverty, distributional and nutritional impacts, fiscal and macroeconomic nutritional impacts, fiscal and macroeconomic implications and responses, trade responses and implications and responses, trade responses and impacts at country and global level; facilitating an impacts at country and global level; facilitating an agricultural supply response, role of safety nets. agricultural supply response, role of safety nets.

The World Bank’s contribution to an The World Bank’s contribution to an integrated global response to Food crisis integrated global response to Food crisis

cont.cont.