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

OutlineOutline

Global Development Finance: Global Development Finance: Private and Official capital flowsPrivate and Official capital flows

Philanthropic Foundations in Philanthropic Foundations in international developmentinternational development

World Bank and Agriculture in World Bank and Agriculture in AfricaAfrica

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

Philanthropic Philanthropic FoundationsFoundations Foundations play Foundations play increasingly importantincreasingly important role in role in development assistance, their potential is development assistance, their potential is significantsignificant. . 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 a small partsmall part 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 total amount estimated between 5-7 blnamount estimated between 5-7 bln ). ). How does it How does it compare with compare with officialofficial ODA grants ODA grants $104 billion $104 billion and with the total and with the total private private capital flowscapital flows to developing countries ( to developing countries (600 billion)?600 billion)?

The phenomenon of philanthropy for The phenomenon of philanthropy for development is development is US dominated US dominated (experience since (experience since 1920s)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 recipients of aid, due to mechanisms of foundations’ operationsfoundations’ operations

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

30,331,8

36,4

30,5 30,4

2001 2002 2003 2004 2005

International Grants

Total 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) US foundations annual

) total grant-giving30bln(

International giving (10%, $3 bln)

International giving ,10%)bln $3(

Domestic giving (90%)Domestic giving (90%)

Foreign recipients (1/3, $1 bln)

,Foreign recipients (1/3bln $1(

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

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

Developed countries/organizations

Developed countries/organizations

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

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

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 20

15

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 since 2006 is the foundation’s support, in a partnership with the Rockefeller Foundation, of the with 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 The Millennium Villages Project (MVP) was founded with the goal of helping (MVP) was founded with the goal of helping impoverished communities in rural Africa achieve impoverished communities in rural Africa achieve the Millennium Development Goals. The project the Millennium Development Goals. The project operates in seventy-eight villages, reaching around operates in seventy-eight villages, reaching around 390,000 people.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 innovative methods and technologies to help farmers increase their food production and make a farmers increase their food production and make a profit. profit.

In 2006, SFSA established the Syngenta Foundation In 2006, SFSA established the Syngenta Foundation India to develop its projects across India: India to develop its projects across India: agricultural extension services, trial/demonstration agricultural extension services, trial/demonstration crops, seed production, development of horticulture crops, seed production, development of horticulture and building low-cost greenhouses. and building 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” Agriculture in Sub Saharan Africa” 2007:2007: “ “Agriculture has been neglected by Agriculture has been neglected by both governments and the donor both governments and the donor community. community. The Bank’s strategy for The Bank’s strategy for agriculture subsumed within a broader rural agriculture subsumed within a broader rural focus and technical skills declined. The focus and technical skills declined. The lending support from the Bank “sprinkled” lending support from the Bank “sprinkled” across various activities: (research, across various activities: (research, extension, credit, seeds, transport and extension, credit, seeds, transport and policy reforms in rural space), but without policy reforms in rural space), but without synergies. In partnership with others, the synergies. In partnership with others, the Bank could take the lead in fostering a Bank could take the lead in fostering a multifaceted approach, based on its multifaceted approach, based on its comparative advantage as multisector comparative advantage as multisector lending institution. “lending institution. “

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

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

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

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

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

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

the value chainthe value 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 together

1. 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 funds provided by other sources outside recipient country for a specific lending project: recipient country for a specific lending project: parallel and joint co-financing is available.parallel and 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 5. New study “Evolving Aid landscape in Africa

and the role of Private Philanthropy”and the role of Private Philanthropy” WB in WB in partnership with Norway and Kellogg partnership with Norway and Kellogg Foundation: mapping the aid landscape, private Foundation: mapping the aid landscape, private actors – how and where; dynamics at the actors – how and where; dynamics at the country level. 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; WBG: intellectual and policy advocacy leadership; in country-relationships, processes, in country-relationships, processes, understanding of public investment priorities, understanding of public investment priorities, due diligence, financial rigor..due diligence, financial 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 7. WBG is deepening relationship with Aga Khan which is active in SME development and which is active in SME development and promotion of aro processing. Currently partner promotion of aro processing. Currently partner in Uganda, Mali, Cote D’Ivoire. IFC has 300 mln in Uganda, Mali, Cote D’Ivoire. IFC has 300 mln exposure with AK. 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 Aid implementation (country-based/global

funds)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 , the Bank has

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

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

Proposals for fast-track IDA funding under GFRP have been Proposals for fast-track IDA funding under GFRP have been approved in Kyrgyz Republic and are moving forward for approved in Kyrgyz Republic and are moving forward for Nepal, Afghanistan, and Burkina Faso, and are being Nepal, Afghanistan, and Burkina Faso, and are being developed under fast-track IBRD funding for The developed under fast-track IBRD funding for The Philippines. 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 weather derivatives to help transfer the financial risk of severe weather events to financial risk of severe weather events to financial markets. Malawi will be the first client financial markets. Malawi will be the first client – should the country suffer a drought it would – should the country suffer a drought it would receive a payout to offset the price of imported receive a payout to offset the price of imported maize.maize.

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