The Brazilian philanthropic landscape presents great challenges but also interesting opportunities that could result in Brazil becoming a leading force among the BRIC countries in terms of social investment.
Fueled in part by French economist Thomas Piketty’s Capital in the 21st Century, wealth creation accompanied by gaping inequality has dominated the global conversation in recent months. And Brazil, which has improved on inequality measures over the last few years (one of the few countries in the world able to make that claim!), continues to be one of the most economically unequal countries in the world. That reality requires not only government but other sectors in Brazil to come up with creative solutions and structural changes that will reduce inequality. Indeed, it is why I see great opportunities for philanthropy in Brazil, both in terms of taking risks and in contributing to a more sustainable development path for the country.
In 2013, Forbes magazine identified 124 Brazilian billionaires. Most of those fortunes were concentrated among families that owned or controlled the largest companies in the country. Nevertheless, Brazil is ranked 91st (out of 135 countries) in the World Giving Index published by the Charities Aid Foundation – evidence that philanthropy has not kept pace with wealth creation over the last few years.
At the same time, the world’s view of Brazil has changed, and international giving to the country has fallen fairly dramatically. According to a 2006 McKinsey report, the total amount of dollars sent from U.S. donors to Brazilian civil society organizations fell some 70 percent between 2002 and 2006. That, in turn, has led to a changed landscape for many Brazilian CSOs. According to the Associação Brasileira de Organizações Não Governamentais(ABONG) – the Brazilian association of NGOs – international funding for human rights NGOs has been replaced by funding from government and/or state-owned companies, which could pose a threat to the long-term independence of those NGOs. Moreover, as noted by Joan Spero in her report Charity and Philanthropy in Russia, China, India and Brazil, the weakness of civil society in Brazil may inhibit giving domestically and is one of the important challenges Brazilians must address over the next decade.
Spero also notes in her report that religion and family values have played a central role in the development of charitable giving in the country. But the emergence of new trends such as individual giving (as distinct from family giving) and a growing interest in impact investing on the part of young and high-net-worth (HNW) individuals is helping to create a new dynamic that seems likely to result in new opportunities for civil society organizations and philanthropists alike.
I see myself as part of these new trends. I worked for years in the financial markets and spent many hours in conversation with brilliant people who use spreadsheets and complex formulas to create money from money. I also got married and started a family. By the time I was pregnant with my third child, I realized I wanted to focus on creating a better world for my kids – and other kids. So, with the full support of my husband, I decided to switch from the corporate world to the nonprofit world and apply the expertise in dealing with capital I had developed to employing capital to address the social and economic disparities in my country.
Today, I am the executive director of the Institute for the Development of Social Investment(IDIS), having earlier served as chief financial officer of the Maria Cecilia Souto Vidigal Foundation, a family foundation focused on promoting early childhood development, and as controller at the Akatu Institute for Conscious Consumption. At the Maria Cecilia Souto Vidigal Foundation I specialized in endowments and later published a book, Fundos Patrimoniais – Criação e Gestão no Brasil, as well as a number of articles[1] on the subject. I also formed a study group that eventually proposed a new regulatory framework for endowments (with incentives for giving) that is being analyzed by the government[2] and may be voted on as early as this year. If it’s approved, the legal environment for philanthropy in Brazil will improve greatly, and my work at IDIS will be much easier!
What does IDIS do? Founded in 1999 by Marcos Kisil, who previously had served as the Latin America and Caribbean director for the W.K. Kellogg Foundation, IDIS is a civil society organization that works to promote private social investment in Latin America and supports the efforts of the philanthropic community to be more strategic about and engaged in social issues. In addition to working with HNW families, companies, and CSOs, IDIS uses events, surveys, publications, seminars, and a web portal to generate and disseminate valuable knowledge about philanthropy to the broader public. To address the lack of solid data on philanthropy in Brazil, for example, we are in the process of developing a survey to estimate total individual giving in the country – something that has never been done!
Brazil is a wonderful country. We are hosting the 2014 FIFA World Cup as I write this and will host the Summer Olympic games in 2016. We welcome visitors, we smile, we dance samba, and we are a large democracy with a burgeoning civil society. But we also need to improve the philanthropic infrastructure and culture of giving in our country to cope with the many social and environmental challenges we face. New concepts and ideas such as impact investing and social businesses are getting a foothold and grabbing mindshare, but they aren’t enough. They need to be aligned with private social investment and the efforts of civil society in order to succeed. If we can do that, we have the potential to emerge as a leading force in the developing world, one that can help other BRIC countries find solutions to their own problems – and maybe take some of the burden off of developed countries, which increasingly are preoccupied by the needs and challenges of their own aging populations. Brazil will continue to need international support, not so much financial resources but expertise and knowledge. But If we all work together, we can help lead the way to a brighter future – not just for Brazilians, but for the entire global community.
Paula Fabiani is the executive director of IDIS, the Instituto para o Desenvolvimento do Investimento Social, in São Paulo, Brazil. This is the second installment in a four-part series dedicated to philanthropy in the BRIC countries.
[1] Fundos Patrimoniais e a Perenização da Ação Filantrópica, A Importância dos Fundos Patrimoniais and Financiamento e Sustentabilidade Econômica das Organizações Sociais, etc.
[2] http://www.idis.org.br/acontece/noticias/governo-comeca-a-analisar-proposta-de-projeto-de-lei-sobre-fundos-patrimoniais