What New Data Shows About Philanthropy's Role in Global Development

Photo: Oluwafemi Dawodu/shutterstock

One enduring takeaway of the COVID crisis has been that although the pandemic is global, its consequences have been grossly unequal, hitting the poorest the hardest. Another theme is that our fates and systems are intertwined and connected. The only way to end the pandemic in high-income countries is to end it everywhere. Addressing these global health and development challenges will require support to developing countries that matches the ambitions of the Marshall Plan. All forms of financing will be necessary—official development assistance, private investment and private philanthropy.

The OECD’s 2020 Development Cooperation Report suggests that there are some reasons for optimism—at least around the growing importance of philanthropy in financing global development. According to the report, foundation financing for global development increased by 50% between 2013 and 2019, from $6.3 billion to $9 billion.

Where is this money going? The top sector remains health. In 2018 and 2019, health accounted for nearly half of total spending on average—about $4.3 billion. The next two sectors were agriculture ($972 million) and government and civil society ($583 million). Foundation health sector spending has increased in significance compared to funding from other sources—foundations are now the third-highest source of health financing, right behind the U.S. government and the World Bank.

Broken down according to geography, foundation giving shows a bias toward Africa. In 2018 and 2019, on average, nearly half of regionally allocated funds were targeted to Africa—about $2.1 billion. Latin America was next, with about $1.6 billion. In terms of individual nations, Peru was the top recipient of foundation funds ($729 million).

The OECD report includes a breakdown by foundation, and some of the results are eye-opening. Here are the totals, based on data drawn from the report.

The overwhelming dominance of the Bill and Melinda Gates Foundation is striking, as is the second place finish by BBVA, a foundation based in Spain that provides microfinance to low-income entrepreneurs in five Latin American countries. And who knew that the United Postcode Lotteries Foundation was the third most significant foundation in global development? Funded by public charity lotteries operating in Europe and the United Kingdom, it disburses 90% of its funds to NGOs. 

Another surprising result is the Mastercard Foundation’s sixth place ranking. This grantmaker—which is independent from the company—is now among the largest foundations in the world, with an endowment of around $40 billion. Mastercard’s development giving, including a recent $1.3 billion donation for pandemic response, is almost entirely focused on Africa. Nearly half of the Mastercard Foundation’s NGO donations go to organizations based in developing countries. And there are other names on this list that receive relatively little attention, such as the MAVA Foundation, the H&M Foundation and the Gatsby Foundation.

Although private foundations’ increasing engagement in global development is a net positive, it also introduces some risks. The sheer scale of the spending—especially by the Gates Foundation—means that private funders wield a high degree of influence on the global health agenda, with little to no democratic accountability. Another concern is that without greater coordination between private and public donors, resources may not be allocated efficiently and strategically. 

One final note: In order to squeeze the most value from foundation global development spending, both public and private donors should consider explicitly aligning with the U.N.’s Sustainable Development Goals (SDG) agenda. This is the only way to ensure a collectively strategic approach, one that is fit for the purpose of addressing the monumental health and development challenges that COVID has underscored.