Who will be Rockefellers of BRIC nations?

By Charles Landow and Courtney Lobel
December 24, 2012

John D. Rockefeller’s immense wealth made “rich as a Rockefeller” part of the lexicon. But his legacy rests not on what he earned. As the founder of Standard Oil and the richest person in history, Rockefeller donated so much money during his life that he needed a team of philanthropy specialists to distribute it. The result was the Rockefeller Foundation, chartered in 1913 “to promote the well-being of mankind throughout the world.”

Much as the Gilded Age in the United States created titans like Andrew Carnegie, Cornelius Vanderbilt and Rockefeller, the economic success of emerging powers has produced a new class of multimillionaires and multibillionaires. Brazil, Russia, India and China are home to 276 billionaires, according to the most recent Forbes list, almost a quarter of the world’s total. Many have begun to focus on what Carnegie called “the business of benevolence.” This nascent trend is poised to grow. But it requires support if philanthropy is to meet its potential to tackle the developing world’s socioeconomic challenges.

Philanthropy is a powerful tool because its contributions can go well beyond money. Many emerging donors are prominent citizens because of their business success. This gives them familiarity with their countries’ economic and policy issues as well as an ability to influence the national agenda. They can invest not just financial resources but also expertise and connections that can bolster the projects they support.

The need for both is great. The same growth that has produced remarkable wealth in emerging countries has left many behind. According to the latest World Bank data, 22 percent of rural Chinese live on less than $1.25 per day — far fewer than in the past, but still alarming. In India, 34 percent of people in rural areas and 29 percent in urban areas live below the same threshold. And in Brazil, while acclaimed programs such as Bolsa Familia have drastically reduced poverty, the poorest 10 percent continue to earn less than 1 percent of all income. The richest 10 percent earn some 55 times as much. Organized philanthropy can play a central role in helping those who remain poor in increasingly rich societies.

Small-scale individual and community charity has a long history in the Global South. What is unprecedented is the number of people with the wealth necessary to tackle the root causes of major socioeconomic problems on a transformational scale. This capacity has existed in the West since Rockefeller, but developing economies have produced this level of private wealth only in the past two decades.

Philanthropists in emerging markets began by contributing to Western institutions, such as elite universities, but they are increasingly seizing opportunities to give closer to home. Tycoons from Mexico’s Carlos Slim Helú to Hong Kong’s Li Ka-shing to India’s Azim Premji have created multibillion-dollar foundations in their countries. Premji’s $2 billion foundation, for example, is working with the Indian government to promote education in rural areas.

In South Korea, the family behind Hyundai recently established the Asan Nanum Foundation, with an endowment of almost $450 million, to encourage entrepreneurship and social innovation among young Koreans. In China, the number of private foundations has more than tripled, from 436 in 2007 to 1,332 in 2011, according to the China Foundation Center.

It is too early to judge the effects of these ventures on entrenched socioeconomic problems. But they highlight the growing interest among the world’s wealthiest in using philanthropy as a tool.

Regional groups that encourage organized philanthropy are also beginning to emerge. These include the World Congress of Muslim Philanthropists, the Asian Philanthropy Advisory Network and the Arab Foundations Forum, among others.

Moreover, Warren Buffett and Bill Gates have taken their Giving Pledge, which invites individuals to pledge at least half their wealth to charity, to China and India. Though they have yet to recruit any signatories, their visits highlight the growing capacity in the region.

All this is a good start. But young philanthropic sectors throughout the Global South need more extensive support to make the most of private giving.

First, there is a pressing need for programs to help budding or potential philanthropists in emerging countries collaborate with each other and with established philanthropists in the West. Substantive events and effective workshops and tools to connect online are all in short supply.

Second, Western foundations should increase efforts to help philanthropists in the Global South donate their money more effectively.

Third, to make informed decisions, philanthropists need information. Much about philanthropy in the developing world is unknown. Research, accessible in multiple languages, is needed to identify trends and share basic information about the quality and quantity of giving.

Unprecedented wealth now exists in many emerging countries, giving these nations new resources to tackle their development challenges and protect and promote their cultural heritage. But their 21st century Rockefellers need a boost if they are to emerge.

PHOTO (Top): The Rockefeller Foundation, at its New York City laboratory, helped fund development of the yellow fever vaccine, first tested and put into production in 1936. CREDIT: Library of Congress Prints and Photographs Division.

PHOTO (Insert Middle): John D. Rockefeller walking with John D. Rockefeller Jr. CREDIT: Library of Congress.

PHOTO (Insert Bottom): Bill Gates and his wife Melinda announced $168 million in grants to fight malaria while visiting  Mozambique, September 21, 2003. REUTERS/Juda Ngwenya

2 comments

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Meh, screw philanthropy; we should tax these evil rich people at 99% because the government can more efficiently distribute their unfair amount of wealth to the “needy”….

Posted by jaham | Report as abusive

you and me….

Posted by rikfre | Report as abusive