On Global Philanthropy and Cell phones

The global recession is hurting developing countries' economies and societies more than it's damaging the developed world.

Having said this, the surge in global philanthropy, remittances and private investments that has been building over the past several years is easing the pain. As of 2007, global private philanthropy, remittances and private investments account for 83 percent, compared to 17 percent provided by government aid..

In the case of aid sent by the United States, government aid accounted for $21.8 billion, while $213.4 billion flowed to the developed world from the following sources: Private capital ($97.5 billion), remittances that migrants and immigrants in developed countries send back to their home countries ($79 billion), and philanthropy ($36.9 billion).

An interesting trend is the use of cell phones for money transfers. Considering that out of 3.6 billion cell-phone users worldwide, 2.45 billion live in developing countries, it is not surprising that "cell phones are being used to make it faster and easier for migrants to send money, and even goods, home and to link poor people to formal banking networks," says the Hudson Institute's Yulya Spantchack.

America's poor are its most generous givers

When Jody Richards saw a homeless man begging outside a downtown McDonald's recently, he bought the man a cheeseburger. There's nothing unusual about that, except that Richards is homeless, too, and the 99-cent cheeseburger was an outsized chunk of the $9.50 he'd earned that day from panhandling.

In fact, America's poor donate more, in percentage terms, than higher-income groups do, surveys of charitable giving show. What's more, their generosity declines less in hard times than the generosity of richer givers does.

"The lowest-income fifth (of the population) always give at more than their capacity," said Virginia Hodgkinson, former vice president for research at Independent Sector, a Washington-based association of major nonprofit agencies. "The next two-fifths give at capacity, and those above that are capable of giving two or three times more than they give."

[Excerpted from an article by Frank Greve, McClatchy]

The Giving Philosophy of Poor Immigrants

Remittances from U.S. immigrants totaled more than $100 billion in 2007. By comparison, individual giving to tax-deductible U.S. charities totaled about $220 billion that same year.

Much of the money remitted comes from struggling U.S. immigrants such as Zenaida Araviza, 42, a single mother. Araviza, who earns $1,300 a month, goes carless, cable-less and cell phone-less in order to send an aunt in the Philippines $200 a month to care for Araviza's mother, who has Alzheimer's.

Carmen De Jesus, the chief financial officer and treasurer of Forex Inc., a remittance agency based in Springfield, Va., said low-income Filipino-Americans such as Araviza were her most generous customers. "The domestic helpers send very, very frequently," she said. "The doctors, less so."

Why are they so generous? Christie Zerrudo, a cashier who handles Filipino remittances at a grocery/restaurant/remittance agency in Arlington, offered this explanation:

"It gives the heart comfort when you sit down at the end of the day, and you know that you did your part," Zerrudo said. "You took care of your family. If you eat here, they eat there, too. It would give you stress if they couldn't. But you love them, they are your family, and your love has had an expression."

Spend Down to Address Global Problems Now

The Wall Street Journal reports that a growing number of philanthropists are adopting spending deadlines and sunset provisions to ensure urgent global needs are addressed in a timely way. By granting the entirety of funds within a certain period of time, these charitable efforts are looking to have a bigger immediate impact.

Sadly, traditional foundations, which are typically set up to "last forever", only pay out roughly a mere 5% of their assets a year, and that a mandated figure.

The economic meltdown, an increased awareness of pressing environmental issues and a political climate ripe for policy change are all feeding the sense of urgency. Jennifer and Peter Buffett, the son and daughter-in-law of billionaire investor Warren Buffett; Charles Feeney, co-founder of Duty Free Shoppers Group; and Microsoft Corp. co-founder Bill Gates are among prominent philanthropists who have implemented so-called spend-down or sunset provisions in recent years.

"There are such pressing needs now, from climate change to the escalating economic challenges facing our communities; we need to get focused and step up in a big way now," said Jennifer Buffett, president of the NoVo Foundation, which aims to empower women and girls.

Limited-life foundations represent slightly more than 10% of active family foundations, according to a recent study by the Foundation Center, a nonprofit U.S. research firm. Those who choose to spend down are saying, "Let the next generation create new philanthropic capital for their own priorities and mission."

America's Top Philanthropists Discuss Global Problems

The Chronicle of Philanthropy reports that in a quiet meeting closed to the news media and the public, Bill Gates, David Rockefeller Sr., Oprah Winfrey, and other leading philanthropists met in New York on May 5th to discuss ways to promote charitable giving and make their philanthropy more effective in fighting problems at home and abroad.

Among the high-profile participants were Ted Turner, Warren E. Buffett, George Soros, Peter G. Peterson, Eli Broad, and New York City Mayor Michael R. Bloomberg.

The unusual event was an unprecedented gathering of the world’s wealthiest — and most generous — people. Together, the philanthropists in the room have committed a total of more than $72.5-billion to charitable causes since 1996, according to Chronicle of Philanthropy tallies.

While the meeting and its hush-hush nature has triggered intense speculation by the news media about what was discussed, Patricia Q. Stonesifer, former chief executive of the Bill & Melinda Gates Foundation, said it was simply a gathering of people who have a common passion for helping others.

“It was a wide-ranging conversation,” she said, “but they each shared what motivates their giving, their areas of focus of their work, the lessons learned, and thoughts on how we might increase giving.”

Lion’s share of U.S. aid to Israel

Despite expectations that the Obama administration would financially pressure Israel to accept a two-state solution and implement practical measures, the U.S. administration has indicated that aid to Israel will, in fact, be raised. At the same time, the budget also imposes harsh conditions on the Palestinian Authority in order to receive aid.

According to the Israeli daily, Haaretz, the budget proposed to Congress for 2010 is more than a 10% increase in total U.S. aid to Israel.

The Israeli government is already the largest recipient of US financial aid in the world, receiving one-third of total US aid to foreign countries, even though Israel’s population comprises just .001% of the world’s population, and it also has one the world’s higher per capita incomes.

The United States provides direct and indirect military aid to Israel – totaling more than it gives to all the countries of sub-Saharan Africa, Latin America, and the Caribbean put together, whose combined total population is well over a billion.

Homeless in America "eye-opening"

While the focus of this blog is international aid, clearly conditions for some in relatively wealthy western countries are beginning to mirror conditions that, unfortunately, have been a way of life for the many in developing nations for far too long.

Well before the brunt of the foreclosure crisis, 3.5 million people in the U.S. were experiencing homelessness at some point during the course of a given year.

Reflecting on her struggles over the last few years, one single mother who is now homeless in America calls it "eye-opening." "It's like they say you never know [someone] until you walk in their shoes, so truly I know now and if I ever get out [of] this situation, I will always give back to people less fortunate than I am because I know their struggles," she said.

School officials where the children of this particular family go to school, say a day doesn't go by without the need to enroll another child as homeless. "Some of them are embarrassed, some of them are scared, some of them are sad. They're just not sure what's going to happen next," the supervisor says. "Students who are displaced or homeless students feel that school is a safe haven. They really want to come to school."

For better or for worse, this emotional mixture of angst and anticipation, hopelessness and hope, so prevalent in developing nations, is an emotion that many in the west now share.