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Greater wealth accumulation across the world has produced expanding levels and types of philanthropy. In recent years, the growth of formal philanthropic activity in developing countries has been significant, marked by homegrown philanthropists, and new institutions and initiatives that are well attuned to local development needs. Some are supported by private international foundations based in developed countries or by an expanding community foundation network, while others are set up by wealthy families, businessmen, or as corporate foundations linked to large local businesses.
Limited data on philanthropic activities in countries makes it tough to understand the scope and behavior of philanthropic entities. In her paper “Philanthropy as an Emerging Contributor to Development Cooperation,” Heather Grady broadly defines the key trends in global philanthropy:
- Expansion of philanthropy in the Global South marked by the emergence of a variety of philanthropic expressions ranging from institutional actors such as corporate and community foundations, to High Net Worth Individuals to social investors.
- A shift from funding to financing which encapsulates relying not on the old north-south paradigm of aid, but relying more on impact investing and supporting socially minded organizations that generate their own social and financial revenue. Impact investing and impact economy initiatives are ways for those with investment capital to generate social and environmental impact as well as earning a financial return. While traditional aid is associated with grants, impact investing broadly covers a range of new instruments between subsidized loans to impact bonds. Impact investing is already making contributions to development outcomes, and increasingly more has connected with development processes.
- A growing interest among foundations to engage in development collaborations including in the global development frameworks such as the Sustainable Development Goals (SDGs). This trend is driven by a growing volume of philanthropies interested in contributing to the large and complex social challenges such as poverty, humanitarian crises or climate change which requires systems innovation as opposed to standalone interventions.