Billions and billions of Danish kroner are distributed around the world in philanthropic capital. But the effect is almost invisible to the human eye. A completely different approach is needed if we are to solve the world’s biggest problems.
This is the opinion of Silvia Bastante, who advises some of the world’s wealthiest people and largest foundations.
“If we look at all the philanthropic funds that have been distributed, what do we see? Have we taken care of very basic needs such as making sure that children really learn something when they go to school?” asks Silvia Bastante rhetorically.
Her soft and melodic voice stands in stark contrast to her hard, concise messages.
“We have horrific statistics from countries where children go to school without learning anything – despite the fact that we have poured billions into education. It is one of philanthropy’s biggest causes. But where are the results?”
Silvia Bastante’s conclusion is merciless.
“Considering all the money being distributed, the impact is not significant enough. We need to think more about systemic change and create greater impact.”
Systems change according to Silvia Bastante
What does it take for us to talk about system change?
Silvia Bastante’s definition consists of three elements that must all be present.
1: A before and an after
There must be something that makes it possible to talk about a clear before and after this change occurred.
When the United States allows gay marriage, it is an example of system change. There may still be discrimination, but fundamentally there has been a shift in society.
The challenge with this point is that it can mean different things in different environments. In some countries, you can change the legislation without it making the slightest difference. So, in many cases it is a question of dynamics that play together – such as, for example, changed legislation, changed incentives and changed dynamics between organizations and institutions.
2: There needs to be scale
It is not enough to make change on a small scale. There is a need to create changes which will change the lives of millions of people.
3: The solution has to be sustainable
The solution must be sustainable. Personally, I believe there are only two ways philanthropic funds can create lasting, sustainable impact. One is to move governments and the public sector. The second is to support something that can turn into a viable commercial solution. Anything else will require philanthropic support for a very long time.
Change on a large scale
We are in the back seat of a taxi on the way from Virum to Copenhagen Airport.
Silvia Bastante has spent the day at Trygfonden’s headquarters together with people from a handful of the largest Danish foundations.
Now she is on her way home to Zurich, but has squeezed an interview into her packed calendar.
In heels and an elegant blue dress with a long coat on top, Silvia Bastante looks exactly like what she is: a woman who is at home among some of the world’s absolute peaks. A look I can’t match in any way in my winter-heavy, Danish outerwear.
Silvia Bastante is a partner in an advisory firm that assists wealthy individuals and foundations with philanthropic advice. She also provides philanthropy advisory through a wealth manager.
In addition, she is part of Co-Impact, a quite unusual constellation of large foundations that have come together to create systemic change.
Co-Impact was founded by Olivia Leland. It was she who, together with Warren Buffet and Bill and Melinda Gates, created The Giving Pledge – the promise that more than 200 of the world’s richest have now made to give the majority of their wealth to philanthropic purposes.
For five years, Silvia Bastante has been associated with Co-Impact, whose ambition is to create change on a large scale.
Short-term grants with too little impact
The large scale that Co-Impact is aiming for cannot be achieved in the way that philanthropy classically operates, argues Silvia Bastante.
She begins her analysis by praising Danish foundations for giving longer and larger grants with fewer built-in restrictions than she typically sees. But when she looks out over the world, a picture emerges of extremely sporadic philanthropic efforts.
“The majority of philanthropic funding in the world is relatively short-term and consists of small grants, which, on top of that, are subject to restrictions based on assumptions from the donors that they know best,” says Silvia Bastante.
This affects the non-profit organizations that work in the field and are dependent on the philanthropic grants. And thus limits the effect of the money that is distributed.
“The non-profit organizations find it difficult to get the money they need for their operations. And that’s partly why we don’t see the big, systemic changes we want to see,” says Silvia Bastante.
Collaborative philanthropists share the risk
At Co-Impact, the approach is different.
The organization brings together foundations, philanthropists and corporate foundations to create tangible positive change in the Global South in health, education, economic opportunity and gender equality.
The fact that it is a coalition of funders, increases efficiency.
“We avoid the fact that each fund has to carry out due diligence, sourcing, and vetting. And the organizations can report in a single document instead of having to deal with different formats, platforms and time frames,” explains Silvia Bastante.
At the same time, the collaboration enables larger grants, she points out.
“The funders reduce their risk when they do not have to pay out 25 million based on their own due diligence. It’s somewhat more likely to make larger donations when you are in the company of others, and it is only a few million of your own money at stake,” says Silvia Bastante.
Co-Impact supports coalitions
Therefore, a grant from Co-Impact is typically between 5 and 25 million dollars, corresponding to between 35 and 170 million Danish kroner.
Every grant starts with an open call where Co-Impact has defined an area they want to make a difference in. This generates between 700 and 900 applications, which after considerable sorting work result in a design grant of 500,000 dollars for a selected few.
I’m not saying that all donors should give unrestricted, long -term, big grants. But there is a need for more funding to move in that direction.Silvia Bastante, advisor for foundations and philanthropists
Co-Impact rarely supports single organizations, only coalitions. It makes more difference for the money than supporting individual organizations’ growth, says Silvia Bastante.
“If we support a program from a single organization, think about how much growth the organization needs to have internally in order to scale up the program. And how do you even make the leap to actual systemic change?” she asks.
If the organization helps one million people for a budget of five million dollars, it must spend twice as much to help two million people, argues Silvia Bastante.
“We prefer a systemic approach, where you spread your method or approach and ensure that many other organizations use it or ensure that the government incorporates the method into its programmes,” says Silvia Bastante.
There must be a proof of impact
To be considered, the coalition of organizations must have proven that their efforts are working. In other words, it is a systematic upscaling of a documented impact. And that is not standard in the social sector, points out Silvia Bastante.
“Here, there is almost an assumption among the funders that if you finance a pilot project that is successful, then money will appear from other sources, which will ensure that the project grows to the extent that is needed. But that just doesn’t happen in the social sector,” she says.
In addition to a proof of impact, the coalition of organizations must have mapped out a path towards financial sustainability. This may be a binding commitment from the public sector to take over the program when the philanthropic funds run out or a commercial business model.
“There are only two ways philanthropic funds can create lasting, sustainable impact,” says Silvia Bastante.
“One is to move governments and the public sector. The second is to support something that can turn into a viable commercial solution. Anything else will require philanthropic support for a very long time.”
The half million dollars goes to developing the approach to ensure that a systemic change is happening. For this Co-Impact also provides technical support. And only after the initial phase does the actual donation come.
High level health care in Liberia
On the winter-dark highway, the late afternoon traffic advances very slowly. Progress doesn’t happen at high speed I think as I glance at my watch before asking Silvia Bastante for an example of a system-changing effort Co-Impact has supported.
She thinks for a moment before mentioning Liberia, one of the world’s poorest countries, still suffering from the effects of a long civil war.
The child mortality rate is one of the highest in the world, so in order to alleviate it – and to raise the general state of health – aid organizations set up local health programs where health workers can provide quick help to people in remote villages, where even diarrhea can become life-threatening.
In 2014, Liberia was hit by Ebola, which claimed the lives of 5,000 people. After the epidemic, there were 47 different local community healthcare worker programs in the country.
However, the NGO Last Mile Health partnered with the country’s government on a national program and has subsequently taken the initiative for the Community Health Impact Coalition – collaborations that have made it possible to scale up and make efforts more efficient.
And with clear evidence in hand—significantly lower death rates during Ebola in areas where Last Mile Health was than in areas where they were not—combined with evidence from research, the coalition already raised close to $70 million from a target of $90 million, of which at least $20 million came from Co-Impact.
“I have seen something that is somewhat similar in other countries, but not at such a high level at all,” says Silvia Bastante. She adds:
“One of the most important things is that they understand that their role is to help the government get more scale on the program. It is not about growing their own organization. And they also know that at some point hopefully the whole program will be in the hands of the government.”
Need for different philanthropic approaches
The taxi approaches its destination and Silvia Bastante returns to the starting point for our conversation.
“I’m not saying that all donors should give unrestricted, long -term, big grants. Different philanthropic approaches are needed,” she says, continuing:
“But there is a need for more funding to move in that direction.”
We arrive at Copenhagen Airport. I am going on to Denmark’s Radio to talk about the large-scale reform of the children’s area going on in Iceland.
“I would have liked to hear about that story,” says Silvia Bastante.
She manages to emphasize that she does not speak as a representative of Co-Impact, but in her own right before I rush out of the taxi.
There is no more time.
I am going on the radio and Silvia Bastante is going on a plane, so that she can come home to Switzerland and spend the holidays with her family. After that awaits 2023. A year full of systems that need to be changed and new ones that have not yet seen the light of day.