The power of private philanthropy in international development

By Arun Kumar and Sally Brooks

In 1959, the Ford and Rockefeller Foundations pledged seven million US$ to establish the International Rice Research Institute (IRRI) at Los Baños in the Philippines. They planted technologies originating in the US into the Philippines landscape, along with new institutions, infrastructures, and attitudes. Yet this intervention was far from unique, nor was it spectacular relative to other philanthropic ‘missions’ from the 20th century.

How did philanthropic foundations come to wield such influence over how we think about and do development, despite being so far removed from the poor and their poverty in the Global South?

In a recent paper published in the journal Economy and Society, we suggest that metaphors – bridge, leapfrog, platform, satellite, interdigitate – are useful for thinking about the machinations of philanthropic foundations. In the Philippines, for example, the Ford and Rockefeller foundations were trying to bridge what they saw as a developmental lag. In endowing new scientific institutions such as IRRI that juxtaposed spaces of modernity and underdevelopment, they saw themselves bringing so-called third world countries into present–day modernity from elsewhere by leapfrogging historical time. In so doing, they purposively bypassed actors that might otherwise have been central: such as post–colonial governments, trade unions, and peasantry, along with their respective interests and demands, while providing platforms for other – preferred – ideas, institutions, and interests to dominate.

We offer examples, below, from three developmental epochs.

Scientific development (1940s – 70s)

From the 1920s, the ‘big three’ US foundations (Ford, Rockefeller, Carnegie) moved away from traditional notions of charity towards a more systematic approach to grant-making that involved diagnosing and attacking the ‘root causes’ of poverty. These foundations went on to prescribe the transfer of models of science and development that had evolved within a US context – but were nevertheless considered universally applicable – to solve problems in diverse and distant lands. In public health, for example, ‘success against hookworm in the United States helped inspire the belief that such programs could be replicated in other parts of the world, and were indeed expanded to include malaria and yellow fever, among others’. Similarly, the Tennessee Valley Authority’s model of river–basin integrated regional development was replicated in India, Laos, Vietnam, Egypt, Lebanon, Tanzania, and Brazil.

The chosen strategy of institutional replication can be understood as the development of satellites––as new scientific institutions invested with a distinct local/regional identity remained, nonetheless, within the orbit of the ‘metropolis’. US foundations’ preference for satellite creation was exemplified by the ‘Green Revolution’—an ambitious programme of agricultural modernization in South and Southeast Asia spearheaded by the Rockefeller and Ford Foundations and implemented through international institutions for whom IRRI was the template.

Such large-scale funding was justified as essential in the fight against communism.

The Green Revolution offered a technocratic solution to the problem of food shortage in South and Southeast Asia—the frontier of the Cold War. Meanwhile, for developmentalist regimes that, in the Philippines as elsewhere, had superseded post-independence socialist governments, these programmes provided a welcome diversion from redistributive politics. In this context, institutions like IRRI and their ‘miracle seeds’ were showcased as investments in and symbols of modernity and development. Meanwhile, an increasingly transnational agribusiness sector expanded into new markets for seeds, agrichemicals, machinery, and, ultimately, land.

The turn to partnerships (1970s – 2000s)

By the 1970s, the era of large–scale investment in technical assistance to developing country governments and public bureaucracies was coming to an end. The Ford Foundation led the way in pioneering a new approach through its population programmes in South Asia. This new ‘partnership’ mode of intervention was a more arms-length form of satellite creation which emphasised the value of local experience. Rather than obstacles to progress, local communities were reimagined as ‘potential reservoirs of entrepreneurship’ that could be mobilized for economic development.

In Bangladesh, for example, the Ford Foundation partnered with NGOs such as the Bangladesh Rural Advancement Committee (BRAC) and Concerned Women for Family Planning (CWFP) to mainstream ‘economic empowerment’ programmes that co-opted local NGOs into service provision to citizens-as-consumers. This approach was epitomised by the rise of microfinance, which merged women’s empowerment with hard-headed pragmatism that saw women as reliable borrowers and opened up new areas of social life to marketization.

By the late-1990s private sector actors had begun to overshadow civil society organizations in the constitution of development partnerships, where state intervention was necessary to support the market if it was to deliver desirable outcomes. Foundations’ efforts were redirected towards brokering increasingly complex public-private partnerships (PPPs). This mode of philanthropy was exemplified by the Rockefeller Foundation’s role in establishing product development partnerships as the institutional blueprint for global vaccine development. Through a combination of interdigitating (embedding itself in the partnership) and platforming (ensuring its preferred model became the global standard), it enabled the Foundation to continue to wield ‘influence in the health sphere, despite its relative decline in assets’.

Philanthrocapitalism (2000s – present)

In the lead up to the 2015 UN Conference at which the Sustainable Development Goals (SDGs) were agreed, a consensus formed that private development financing was both desirable and necessary if the ‘trillions’ needed to close the ‘financing gap’ were to be found. For DAC donor countries, the privatization of aid was a way to maintain commitments while implementing economic austerity at home in the wake of the global finance crisis. Philanthrocapitalism emerged to transform philanthropic giving into a ‘profit–oriented investment process’, as grant-making gave way to impact investing.

The idea of impact investing was hardly new, however. The term had been coined as far back as 2007 at a meeting hosted by the Rockefeller Foundation at its Bellagio Centre. Since then, the mainstreaming of impact investing has occurred in stages, beginning with the aforementioned normalisation of PPPs along with their close relative, blended finance. These strategies served as transit platforms for the formation of networks shaped by financial logics. The final step came with the shift from blended finance as a strategy to impact investing ‘as an asset class’.

A foundation that embodies the 21st c. transition to philanthrocapitalism is the Omidyar Network, created by eBay founder Pierre Omidyar in 2004. The Network is structured both as a non–profit organization and for–profit venture that ‘invests in entities with a broad social mission’. It has successfully interdigitated with ODA agencies to further align development financing with the financial sector. In 2013, for example, the United States Agency for International Development (USAID) and UK’s Department for International Development (DFID) launched Global Development Innovation Ventures (GDIV), ‘a global investment platform, with Omidyar Network as a founding member’.

Conclusion

US foundations have achieved their power by forging development technoscapes centred in purportedly scale–neutral technologies and techniques – from vaccines to ‘miracle seeds’ to management’s ‘one best way’. They have become increasingly sophisticated in their development of ideational and institutional platforms from which to influence, not only how their assets are deployed, but how, when and where public funds are channelled and towards what ends. This is accompanied by strategies for creating dense, interdigitate connections between key actors and imaginaries of the respective epoch. In the process, foundations have been able to influence debates about development financing itself; presenting its own ‘success stories’ as evidence for preferred financing mechanisms, allocating respective roles of public and private sector actors, and representing the most cost–effective way to resource development.

Whether US foundations maintain their hegemony or are eclipsed by models of elite philanthropy in East Asia and Latin America, remains to be seen. Indications are that emerging philanthropists in these regions may be well placed to leapfrog over transitioning philanthropic sectors in Western countries by ‘aligning their philanthropic giving with the new financialized paradigm’ from the outset.

Using ‘simple’ metaphors, we have explored their potential and power to map, analyse, theorize, and interpret philanthropic organizations’ disproportionate influence in development. These provide us with a conceptual language that connects with earlier and emergent critiques of philanthropy working both within and somehow above the ‘field’ of development. Use of metaphors in this way is revealing not just of developmental inclusions but also its exclusions: ideascast aside, routes not pursued, and actors excluded.

Arun Kumar lectures at the University of York. He tweets at @draykay1.

Sally Brooks is an Honorary Fellow at the University of York.

Read the Portuguese translation of this article here. Headline photo by UN Geneva / Jean-Marc Ferr.Ž

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s