Written evidence submitted by Development
1. Established in 1992, Development Initiatives
is an independent organisation with a particular expertise in
analysing, interpreting and improving information about international
aid and development, and making it more transparent and accessible.
2. DI receives funding from two foundations:
the William and Flora Hewlett Foundation and the Bill and Melinda
3. Our aidinfo programme seeks to increase the
transparency of all resources for poverty reduction, in order
to increase impact on poverty. As part of our work, we provide
technical support to the DFID-led International Aid Transparency
We have worked closely with the Hewlett and Gates Foundations
and the US-based Foundation Center to encourage private foundations
to publish information on their activities in an IATI-compatible
way, which would enable comparable analysis of their activities
and increase accountability and effectiveness.
4. Private financing for development has grown
in significance over the last decade. As well as additional financial
resources, private actors have brought innovative approaches to
international development drawn from business practices and new
philanthropic priorities. Consequently, foundations have also
attracted attention given the major financial and advocacy role
that larger grant-making bodies now play or might play in the
5. While comprehensive data on volumes and uses
of private giving are problematic, available data reveals the
growing role of private actors. Private grants as reported to
the OECD-DAC (Chart 1) increased nominally from US$ 7 billion
in 2000 to US$ 22.2 billion in 2009. This represents a real increase
of 128% over the period, compared to just 55% for ODA when debt
relief is discounted.
6. Private grants increased steadily to 2008
but fell 7% in real terms in 2009, moderating optimism on their
ability to remain insulated from effects of the economic crisis.
2009 levels were equivalent to 19% and 27% of DAC total and bilateral
ODA respectively (excluding debt relief). Volumes are primarily
driven by the USA, accounting for 73.5% of private grants in 2009,
followed by Germany (6.2%) and Canada (6%). The UK is the 9th
largest source, constituting 1.5%.
Source: Development Initiatives
calculation on OECD-DAC data.
7. Whilst valuable in indicating overall trends,
OECD DAC data on private giving is limited on a number of fronts.
Firstly, reporting of this category is voluntary and thus considered
to be underestimated, while more recent increases are also thought
to be skewed by improved reporting. Nor does it consider corporate
private giving. By contrast, for example, the Hudson Institute
estimates that 2009 private giving from DAC members to be US$
52.5 billion, more than double the amount reported to the DAC.
Further, data is limited to the perspective of the donor, not
beneficiary, such that it is not possible to ascertain where,
through which channels and for which purpose funds are allocated.
Finally, DAC figures aggregate several types of private grant
flows (e.g. NGOs, foundations, charitable sales etc.) and do not
present information on foundations specifically.
8. Coverage and detail of other sources that
focus on foundations specifically are similarly poor, with the
inability to track net inflows to developing countries a fundamental
limitation. Data on grant-making institutions in the developing
world are currently unavailable and those outside the US and Europe
Aggregated information on European foundations is also limited.
The European Foundation Centre counts more than 95,000 foundations
in Europe, with 58,588 foundations across 14 European countries
giving US$ 57.1 billion in 2004-2006.
Information is missing on contributions to international development.
Updated analysis is ongoing.
US FOUNDATIONS GIVING TO DEVELOPING COUNTRIES
|US Foundations Giving to Developing Countries, 2008-2009 (current US$ billion)
|Annual % variation||-||-35.3%
Source: The Hudson Center and Development Initiatives calculations.
9. Data are more complete for US-based foundations where the
sector is most dynamic. The Hudson Institute
records a nominal increase of 35.3% in US foundation giving to
developing countries over 2004-09, from US$ 3.4 billion to US$
4.6 billion (Table 1). The Foundation Center's map on international
US giving confirms these
trends, although volumes differ. It reports an upward trend in
giving to developing countries from US$ 515 million in 2005 to
US$ 5.4 billion in 2010, representing a 952% nominal increase
over 5 years. Particularly large foundations, such as the Bill
and Melinda Gates Foundation (BMGF), have driven much of this
growth, and are also responsible for increasing proportions of
total grants allocated for international development. BMGF grants
through its Global Health and Global Development program areas
reached US$ 1.98 billion in 2010, making it the 12th largest bilateral
donor in that year.
10. Although data on US foundations are most comprehensive,
they share a number of limitations with other regions. Estimates
vary greatly as each data source uses different methodologies
to calculate grants and classify key information, such as domestic
and international giving, type of organization and modes of operation.
There is also a lack of clarity on the volumes and proportions
of grants directly allocated to countries and projects rather
than, for example, those channelled through international or domestic
organisations. In addition to this, reporting practices by foundations
themselves are often unsatisfactory and an agreed reporting standard
11. As a consequence understanding the role of foundations
in relation to other international development financing remains
a challenge. The presentation of data is indicative of volumes
of giving as much as of the need of increased accountability and
transparency in private donorship.
12. Nevertheless, in the last year there have been significant
improvements in access to data on Foundation spending on international
development. In 2010 the Bill and Melinda Gates Foundation started
reporting to the OECD DAC on their grants to support Global Health,
allowing their investments in this area to be compared with, and
included in, figures from traditional aid donors and multilateral
organisations. They are now moving to report all of their international
work through the DAC.
13. In addition to this, US foundations are beginning to engage
with the International Aid Transparency Initiative (IATI). IATI
is a multi-stakeholder initiative, launched at the Accra High
Level Forum on Aid Effectiveness in 2008. It brought together
aid donors (bilateral, multilateral, foundations and more recently
non-governmental organisations), civil society representatives
and aid recipient governments to agree on a common standard for
reporting information on aid flows.
14. The content of the IATI Standard includes a common list
of data items, a common list of definitions, and an electronic
format to enable the automated sharing of data, and was agreed
in February 2011. IATI's ambition is to make aid information more
useful to stakeholders in partner countries by publishing more
timely, detailed and comparable aid information from a wide range
of aid providers.
15. DFID have taken a strong lead on the IATI process, hosting
the initiative, offering strong political support, and becoming
the first organisation to report to the standard. They first published
data in January 2011, as part of the UK Aid Transparency Guarantee.
Since then, momentum has been building on IATI with a further
eight organisations now reporting to the Standard, including the
World Bank, the European Commission, the William and Flora Hewlett
Foundation and two NGOs. A further five organisations a planning
to publish their data to the Standard before the High Level Forum
on Aid Effectiveness in Busan in November 2011. Furthermore, in
September 2011, a Statement by Commonwealth Finance Ministers
included a recommendation to "collectively support the adoption
of IATI or an IATI-compatible common standard".
It is currently unclear how IATI's role will be reflected in the
outcome document for HLF4 in Busan, but it is being incorporated
into a Building Block proposal on aid and fiscal transparency.
16. The Hewlett Foundation has been engaged in IATI since
its launch, and was the second aid donor to publish data to the
Standard. The Gates Foundation has been an observer to the IATI
process and is taking steps to publish
more detailed and timely data consistent with IATI standards.
17). By publishing to the IATI standard, the
Hewlett Foundation has taken the first steps to making its data
comparable with that of other traditional donors, in an open format
that makes it accessible to users of information. This helps partner
country governments build a more complete picture of aid activities
in their country, it helps other donors coordinate their activities
and avoid duplication, and it helps the Hewlett Foundation itself
to ensure that its activities complement those of other organisations.
18. With funding from the Hewlett Foundation,
the Foundation Center has been working on a project to align their
reporting standard with the IATI standard, in order "to foster
greater transparency and accountability, and provide leaders with
the information resources they need to be more strategic, purposeful,
and effective in their work".
They have mapped the data collected in their reporting system
with the data fields in the IATI standard, to understand the differences
in the information being collected and reported by the 600 or
so foundations reporting through eGrant and the data that is required
for reporting with the IATI standard. Their standard will then
be developed, following consultation and surveys with foundations,
to develop and include new fields that will enable alignment with
19. Foundation engagement with IATI has revealed
the different accountability arrangements which, in turn, lead
to different priorities in publishing data. For government donors
there is a clear line of accountability to taxpayers, which provides
an incentive to demonstrate that money invested in international
development is spent effectively. NGOs have a public constituency
to whom they have to be accountable for the way they spend money.
Accountability structures for foundations are to the board or
trustees, and thus information on grant-making is generally quite
internally focused. There is very little need to publish data
to the public, so their incentives for reporting to a standard
like IATI are focused rather towards ensuring good value for money,
and using the data they generate to improve their operations.
Sharing information openly and being able to understand the work
that other organisations are doing can enable foundations to target
their investments in the most effective way, ensuring best value
What could the future look like?
20. It is clear that there is a demand for improved
access to data on the work of private foundations in the international
development sector. This is of particular concern to partner country
governments, as evidenced in recent consultations. For example,
aid recipient governments at the IATI Partner Country Consultation
in Montenegro in 2009 agreed that "all providers of development
assistance need to report for a comprehensive overview of resource
flows for planning, ie including flows from NGOs, private organisations,
foundations and non-DAC donors".
Although it is not yet possible to calculate the precise volume
of financing coming from philanthropic foundations, the figures
already indicate a very significant contribution to work on international
21. The International Aid Transparency Initiative
Standard for reporting on aid flows holds great potential for
foundations in this respect. It offers a common platform and protocol
for what information foundations can share to increase publication
of data, and to enable greater collaboration and comparability
between the different organisations. More importantly, it offers
a platform for sharing data with other development actors who
choose to publish to the IATI standard, enabling greater comparability
and understanding of the larger picture of aid and development
flows from both traditional actors, and other new and emerging
donors, including foundations, NGOs and the private sector.
22. While the IATI Standard is based on the DAC
CRS, which applies principally to official donors, we are confident
on the basis of our current work with foundations and NGOs that
IATI has sufficient flexibility to be relevant to their business
models, irrespective of whether they are large or small funders
of development. Although some foundations already publish data
on their development activities via their own websites, this has
significantly more value if it can be easily compared with the
contributions of other actors. The advantage of IATI's approach
is that each organisation continues to publish its own information,
but does so in a common, open, electronic format, with the location
of that data catalogued in the IATI Registry. This makes IATI
data easy to find, use and compare.
23. Engagement with IATI offers a mechanism which
can improve coordination and make all resources more efficient
and effective. The value for foundations in using and sharing
data on projects from a broad range of different funders is that
they would be able to make decisions on their own grants with
better information on what else is being funded from elsewhere.
Development Initiatives would encourage all foundations to engage
with the work of the International Aid Transparency Initiative,
and consider the potential benefits it could bring to their work.
24. Although IATI is a voluntary initiative,
the UK Department for International Development has recently required
organisations that they fund to be IATI compliant. . In March
2011, DFID announced that all NGOs receiving DFID funding through
Programme Partnership Arrangements, Global Poverty Action Funds
and Civil Society Challenge Funds should publish data according
to a set of minimum requirements from the IATI Standard by April
2013. Where DFID provides funding to UK foundations, it may wish
to consider a similar approach. Engagement with IATI could also
support foundations in increasing their development effectiveness,
by helping stakeholders in partner countries to build up a more
complete picture of the resources available for poverty reduction,
and ensure best use of those resources. There is a tendency for
funding organisations to provide information that they want themselves
but this does not mean that it will be useful to others. IATI
was designed to meet the priority information needs of partner
country stakeholders, including their need for more and better
information from all actors, including private foundations. Without
information on all resource flows into developing countries, it
is impossible for planning and budgeting at a country level to
happen effectively. Put in this context, by publishing data to
the IATI standard, foundations will be able to understand better
how their investments can interact best with those of other players
in the field, and ensure that the valuable resources that they
are contributing to development are being spent in the most effective
27 October 2011
2 www.aidtransparency.net Back
Hudson Center , Index of Global Philanthropy and Remittances,
The Net private grants line includes grants and any additional
contributions (also in-kind) by NGOs, foundations and other private
sources for development assistance and relief made to or for developing
countries, multilateral organisations, special appeals or international
NGOs as well some expenditures in the donor country (e.g.: subsidies
to students from developing countries). The amount is discounted
of funds received by the donor country official sector or from
abroad. Source: DAC Statistical Reporting Directives, November
Some data are available on Japanese foundations: http://www.jfc.or.jp/eibun/e_index.html Back
European Foundation Centre, Foundations in the European Union
- Facts & Figures, May 2008. Original value of EUR 46.1 billion.
OECD-DAC exchange rates applied. Countries surveyed are Belgium,
Czech Republic, Estonia, Finland, France, Germany, Hungary, Italy,
Latvia, Luxembourg, Netherlands, Slovakia, Slovenia Spain, Sweden
and the UK. Back
Hudson Center, Index of Global Philanthropy and Remittances, 2006-2011. Back
Calculations based on the center's Interactive Map of Direct Grants
by US Grantmakers to Non US Recipients: http://fconline.foundationcenter.org/maps/ Back
When considering country bilateral ODA only (excluding debt relief).
It is the 15th largest if country donor contributions to multilateral
agencies are also included. Comparison based on 2010 provisional
OECD data for DAC donors. Data for the BMGF available at: http://www.gatesfoundation.org/annualreport/2010/Pages/grants-paid-summary.aspx Back
Foundation Center (2010), Proposal Summary from Grant Proposal
to the Hewlett Foundation Global Development Program. Back
International Aid Transparency Initiative Consultation for Europe
and the CIS, Consultation Report (2009), Montenegro, http://www.aidtransparency.net/wp-content/uploads/2009/08/Report-IATI-Consultation_Europe-and-the-CIS-Montenegro-6-and-7-July-2009.pdf