Private philanthropy is increasingly shaping the development landscape. The amounts that foundations provide for philanthropic purpose have steadily grown in the last decade and have been laser-focused on specific areas. Consequently, foundations have come to play a significant role in specific sectors of the development realm. This article reviews the top private foundations in the development sector and where their financial flows are directed.
Philanthropy is emerging as a powerful factor in the financing of the development sector. However, philanthropic giving remains relatively small compared to Official Development Assistance (ODA) and financing for development more broadly. In 2018, philanthropic giving reached US$7.5 billion which accounts for 5% of ODA. However, in key sectors such as health, they are significant players being, for example, the third largest provider in the health sector.
Source: OECD DAC Statistics
The sources of philanthropic giving for developing countries are highly concentrated. According to data for 2018, the Bill & Melinda Gates Foundation (BMGF) is by far the most significant philanthropic donor, having provided more than half of the total donation (~60%) in 2018, mounting to almost US$ 4 billion.
Source: OECD DAC Statistics
The Bill and Melinda Gates Foundation
The US based Bill & Melinda Gates Foundation was established by Bill and Melinda Gates in 2000. The Foundation has been the largest private philanthropic provider for nearly a decade, and, since 2006, has also benefitted from Warren Buffett’s Support.
The Foundation was set up with profits from the Gates family’s ownership of technology giant Microsoft and has grown to have an annual healthcare budget bigger than that of the World Health Organization. Currently, the Bill and Melinda Gates Foundation is WHO’s second largest donor, representing 10% of the organization’s budget. However, the BMGF is also a donor to a range of other multilateral organizations that fund WHO, mainly the Gavi Alliance and the United Nations. From its allocation to multilateral organizations, 41% of the budget was directed to the United Nations in 2017.
The Gates Foundation has five areas of focus:
Global Development Division – invests in issues related to poverty in developing countries;
Global Health Division – invests in advances in science and technology for developing countries;
Global Growth & Opportunity Division – focuses on creating and scaling market-based innovations to stimulate economic growth;
United States Division – funds improvement of US high school and post-secondary education and supports vulnerable children and families in the United States;
Global Policy & Advocacy Division – seeks to build strategic relationships and promote policies that help advance their work.
Source: OECD iLibrary
The United Postcode Lotteries
The United Postcode Lotteries (operating in Germany, the Netherlands, Norway, Sweden, the United Kingdom, Netherlands and Sweden) are public charity lotteries administered by the social enterprise, Novamedia. The lotteries are funded through the sale of tickets 50% of the gross proceeds are provided to a broad range of organizations working in the development sector.
The United Postcode Lotteries are a significant provider of core and unrestricted support to organizations working on development issues and beyond. In 2018, the United Postcode Lotteries was the second most generous private provider for development after, the Bill & Melinda Gates Foundation.
Source: OECD iLibrary
The Wellcome Trust
The Wellcome Trust is the second wealthiest foundation in Europe with an endowment valued at US$26.0 billion. It began operations in 1936 using capital requested in the will of Sir Henry Wellcome, a pharmaceutical entrepreneur and the founder of Burroughs Wellcome & Company. The organization, which focuses on the field of biomedical research, is headquartered in London and funds new drug discoveries and medical methods. It publishes free journals to keep the public informed of its activities.
All the Wellcome Trust’s funding is provided bilaterally. In the UK, philanthropic funding from the Wellcome Trust is comparable to that from the government’s Medical Research Council.
Source: OECD iLibrary
You can review the open tenders of the Bill and Melinda Gates Foundation on the DevelopmentAid website, as well as insider information regarding the Foundation’s tender activity on the DevelopmentAid platform.
