Amid a global pandemic, philanthropic organizations in emerging markets are finding their voice and challenging historical constructs.

Sociologist Erving Goffman suggested that the best time to understand social interaction is when it’s disrupted. This may also be true of philanthropy, and the field is certainly experiencing disruption today. The prolonged and increasingly devastating nature of the COVID-19 pandemic means that large foundations in the Global North—even those that didn’t originally focus on health issues—have diverted a significant proportion of their funding to the health sector to support pandemic relief. This shift has in many ways highlighted the historically unequal power dynamic that exists between philanthropic organizations in the Global South (including NGOs and social enterprises, grant makers and grant recipients) and resource-rich foundations of the Global North. It not only has underlined the immense control foundations exert over the allocation of funding, but also has blown away the veil that previously concealed deep frustrations with established grantmaking practices.

Yet, through this shift, many grantees have found their voice; they’ve demanded the faster disbursement of grants and the ability to use funds according to what they deem most pressing. Foundations, in turn, have deviated dramatically from traditional grant distribution practices developed in the North—where grantees must endure lengthy application processes, wait months to receive grants, and apply them in specified ways—and instead responded to the urgent needs of frontline fieldworkers based in the Global South.

In our recent study of 24 philanthropic organizations operating or based in the Global South—in particular the Middle East, Africa, and South East Asia—we interviewed more than 40 grant makers and grantees, and asked if and how the pandemic had changed their work. We then combined insights from these interviews with large amounts of secondary data, including industry reports, commentaries from sector experts, research data on grant giving, and industry webinars. Our findings clearly indicate a desire in the Global South to continue radically recalibrating traditional industry practices. There is a desire for faster decision-making that responds to locally defined needs, as well as less-restricted funding and more-efficient reporting requirements. Global South practitioners also suggested that making and sustaining these changes could help fill institutional voids that continue to hinder the effective disbursement of philanthropy in emerging markets. In particular, they expressed a renewed appetite for South-South collaboration, with a view to building strong peer networks, knowledge sharing, and collaborative funding initiatives.

In this article, we elaborate on this changing dynamic, as well as show how some specific interventions can help institutionalize it and thus further empower the Global South.

The Shifting Locus of Knowledge and Power

Because Northern foundations typically hold the purse strings, grants often come with numerous conditionalities and parameters set by grant makers that are physically and institutionally disconnected from grantees and the people they serve. This creates a number of inefficiencies.

For one, despite possessing valuable situational and local contextual knowledge, frontline workers in the Global South must implement decisions made and approved at the top. Some of the grant recipients we spoke to complained that grant makers based in far-off markets and with little field presence simply didn’t listen to communities in need on the ground, let alone collaborate with them on solutions. Over the years, this sustained lack of meaningful input from Global South organizations has eroded foundations’ capacity to devise more-effective interventions, thus undermining their ability to deliver sustainable impact or advocate for much-needed core funding.

Shaheen Kassim-Lakha, director of strategic partnerships of the US-based Conrad N Hilton Foundation, told us that Global North foundations can learn from Global South practitioners but that doing so requires “a shift in the appreciation of how social impact institutions can look very different in those countries and how we can support them in their own image rather than in our own.” For example, philanthropic organizations in the Global South that don’t have sophisticated technology or databases often use their knowledge of the local community—built on years of community engagement and local forums—to identify areas of greatest need. The absence of electronic data can be a disadvantage when navigating traditional grant application processes, but when it comes to determining where to focus on pandemic relief, local insight is invaluable.

The NGO Save the Children, for example, pointed out that while Global North countries were focused on the availability of ventilators, oxygen supplies were much more urgently needed in areas “marked by endemic malnutrition, childhood pneumonia, and malaria,” such as northwest Nigeria, where it works with local organizations to ensure its efforts are well-connected to insights from local practitioners. Across the field, the pandemic’s disruption has made local knowledge critical to effective interventions and allocation of funds. There is now a clear, if implicit, recognition from both the North and South that operational and funding decisions require more input from grantees in complex, emerging-market contexts.

Philanthropic organizations in the Global South also struggle with the same kinds of issues grantees in other geographies face, including the time and transaction costs associated with approval and disbursement of grants, and demanding reporting processes. In addition, they face a metrics-based bias on the part of Northern donors. While the aim may be to promote transparency and accountability, a strong focus on metrics can inadvertently end up prioritizing what can be measured rather than what matters. Several of our interviewees spoke of a “pendulum swinging too far in the other direction’’ when describing the shift from a historical lack of impact measurement to the current obsession with measurable outcomes and key performance indicators.

The health and education sectors are a case in point. Both receive significantly more funding than, say, sector-wide capacity building, in part because measuring the number of children enrolled in schools or how many people have received a polio vaccination is easier than assessing institutional development. Professional funding networks, for example, help improve social outcomes by offering training, sharing knowledge, and creating opportunities to co-fund, yet all of these activities sit less comfortably in a simple numerical log frame. As a result, despite philanthropy’s ostensible “risk appetite,” a lot of philanthropic capital flows into the same, known areas, rather than filling riskier, systemic gaps—including capacity building.

Nana Afadiznu, executive director of the West Africa Civil Society Institute told us that COVID-19 exposed the ongoing, fundamental weaknesses in philanthropy that had failed to “strengthen institutional capacity in the Global South.” The urgency of need caused multiple grant makers to waive conditionalities, speed up disbursement, and make access to grants easier. One grant maker we interviewed quipped that the organization’s grant application form is now so simple “you couldn’t really call it that anymore.” Many also sought to leverage additional finance to create emergency funds. In several cases, grant makers allowed existing grant commitments to go toward salary costs and thus avoid redundancies—a clear defiance of the long-held belief that real impact depends on grants going directly to programs rather than overhead. In this way, many of the long-standing demands of philanthropic organizations in the Global South were granted.

A New Sense of Empowerment

Alongside these changes, our interviewees told us that, despite its challenges, COVID-19 had brought about a new sense of community solidarity. In many areas of the Global South, government response was limited, and philanthropic organizations mobilized to fill important public-service gaps. The pandemic encouraged greater South-South engagement. Using peer-to-peer networks, sharing local knowledge, adopting more inclusive approaches, and building more-decentralized communities empowered Global South organizations and increased the impact of their work.

For example, Naila Farouky, CEO of the Arab Foundations Forum, a professional network for philanthropic practitioners, told us:

I feel bad saying it, but in a way, the crisis [gave] us a real sense of purpose. We are even more necessary than before as an organization, because we have access to this network, and we can really help unite the various strategies that people are using to fortify the sector and to thrive. We can share information across countries and across organizations for those who are not going to have the opportunity to see each other in the foreseeable future.

Forced to conjure up resources for immediate medical needs, many Global South philanthropic organizations also realized that they could effectively lead interventions. Somalia’s Adeso, a registered nonprofit in Kenya, for instance, made extensive use of a network of volunteers to provide medical advice during the crisis. Somalian volunteers based around the world, including Somalian public health specialists in Canada and the United States, came together to provide telemedicine and support for local doctors. Executive Director Degan Ali told us:

This effort, this volunteerism—basically Somalis relying on Somalis—[made me realize we should] aspire to mobilize and work with other NGOs to understand that we have a lot of resources and power within ourselves. We don’t need to always be these professional beggars waiting for donors. To me, that has been one of the most positive consequences … there’s a silver lining to every problem, and I think that has been a great consequence of the [COVID-19] crisis.

Addressing Institutional Voids

While these shifting dynamics have already led to greater social impact in the Global South, certain institutional voids—areas where institutions and institutional infrastructure that enables development and capacity building are absent—hinder further progress. For example, without effective regulation or contract enforcement, the transaction costs of organizing or operating any venture in the economy go up.

To build on the changes Global South organizations have witnessed during the COVID-19 pandemic, there needs to be greater collaboration across them. Historically, the sector has been notoriously uncollaborative, with few foundations working together despite some growth of multi-sector partnerships. The result is a significant waste (or duplication) of funding and missed learning opportunities. While some organizations are moving toward a more collective approach, notably to address the Sustainable Development Goals, these are largely confined to Global North grant makers. In the Global South, professional intermediaries and networks are less developed, and even seemingly innocuous groupings such as professional associations feel discouraged in areas where governments see them as a potential affront.

While grant makers like the Asian Venture Philanthropy Network, the Arab Foundations Forum (AFF), the newly formed Africa Venture Philanthropy AllianceWorldwide Initiatives for Grantmaker Support, and the Centre on African Philanthropy and Social Investment are taking a lead on building networks and supporting relevant research, there is still much to do. Our research showed that assessing where philanthropic organizations can build institutional capacity in a scalable fashion is a good starting point, and we identified three core areas in this respect:

1. Boards and technical advice from grant makers are chronically under-used. For decades, philanthropic organizations have extolled the value of non-financial inputs, including technical advice on scenario planning, strategy, funding, and back-office systems. Yet to date, grant makers have delivered few. Many of the Global South organizations we interviewed noted that the pandemic changed this. Grant makers and boards went beyond standard governance practices such as providing high-level strategy input; they listened more, strived to truly understand grantees’ detailed needs, and responded with ongoing coaching, mentoring, specific strategy advice, and knowledge transfer. Maria Anik Tunjung of Indonesia for Humanity noted that since COVID-19 hit, the organization’s board became “more accessible and more consultative, whereas historically board members might have been just a name.”

2. Regulatory environments need reform. Global South governments often see the philanthropic sector as a threat rather than an ally, and yet with more-efficient and more-conducive regulations, Global South philanthropic organizations would likely mature faster, deliver more impact, and secure more funding. Governments in emerging markets often struggle to find a healthy balance between enforcing anti-money-laundering and counter-terrorism regulations and creating incentives (fiscal or otherwise) to encourage giving. Merely establishing a foundation in an emerging market is often challenging. As Marwa El-Daly, founder of Egypt’s Waqfeyat al Maadi Community Foundation, noted in an Alliance report on Arab Philanthropy, “[Government] treats the civic sector as guilty until proved innocent, which is not very encouraging.”

Global South philanthropic organizations therefore need strong business, legal, fiduciary, and political acumen just to navigate the operational burdens imposed by local market regulation. Developing uniform, fit-for-purpose regulation for the sector across the Global South could significantly help scale impact, bring new funds to market, and encourage greater intra-regional collaboration. Grant makers can help by sharing their networks, data, and expertise. For example, in 2020 local market restrictions in Jordan brought AFF’s operations to a near-standstill, but flexible support and guidance from the Ford Foundation, including its agreement to re-issue grant funding to the AFF’s newly established presence in the United States, allowed the network to continue working.

3. Digital technology can accelerate capacity development. Accelerating the philanthropic sector’s adoption of technology can help improve data capture, improve market knowledge and understanding, and drive much greater transparency. Greater transparency can, in turn, help facilitate access to funding, including much-needed unrestricted funding, and sharing programmatic and financial data systematically online can help grantees build trust with grant makers about the effectiveness of their operations. As Liza Kimbo, director of Kenya’s South Lake Medical Centre told us, “I’ve got nothing to hide. My operations are 100 percent transparent. I really just want to have unrestricted funding, and if that means me signing off on a system that connects my information system directly to a donor-reporting interface, then so be it.” She added that a “digital passport” that enabled grantees to undertake a single process of due diligence that qualifies them for multiple donors could radically reduce costs and inefficiencies and further free up resources.

To conclude, the COVID-19 pandemic has dramatically disrupted the bureaucratic, hierarchical relationship between Global North and Global South philanthropic organizations, and a more dynamic, open relationship that allows more local capability development and the effective use of local knowledge has emerged. Now the sector must focus on filling the institutional voids that characterize Global South countries and hinder the attainment of true local potential. Organizational capacity building, better and more-supportive regulation, and the digital transformation of organizations and shared platforms are essential to this effort.

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