Making money and doing good should go hand-in-hand

“Only 3 percent of the world's assets/funds are engaged in what's often referred to as ‘social innovation’ or ‘impact investing.’ It's known as the ‘97 vs. 3’ dilemma.

“Why are micro finance funds, NGOs and foundations the only ones playing big in this space? How will we ever get enough of these great ideas and programs to scale if we only approach them as philanthropic endeavors? Despite the good intentions and great work, the truth is that philanthropy -- in the broadest sense -- can rarely make the long-term impact business can.

“I think of it this way -- as the president of the Kraft Foods Foundation, I have about $100 million in cash and in-kind we can invest each year. But as Kraft Foods Inc, my company has literally billions to invest in the things we need to buy.”

--Perry Yeatman, Kraft Foods SVP, and President of the Kraft Foods Foundation


Business and philanthropy can go hand in hand

The Australian of the Year for 2011 is Simon McKeon, a high-flying investment banker who decided to work part-time to dedicate himself to social causes at home and abroad.

The Victorian businessman is a leading social entrepreneur who showed business and philanthropy could go hand in hand. “His lifelong efforts to support Australian and international charities have earned him great admiration and respect in the community,” the Australia Day Council said.

Mr McKeon hopes to spend the year inspiring others to help out the not-for-profit sector, particularly corporations which, he said, needed to do more to help the community. "There are many ways in which corporates nowadays can actually share their facilities, their expertise, their people and, of course, their people. Of course, they can do more."

McKeon is director of the Global Poverty Project, chairman of Business for Millennium Development and is involved with Red Dust Role Models, which works with remote indigenous communities.

A multiple sclerosis sufferer, he was the founding chairman of MS Research Australia. At one stage, he was paralyzed from the hip down and endured blindness for a period of time. He said it gave him the inspiration to keep fighting for what mattered.


Republicans propose big cuts in US international aid

American nonprofit lobbyists will have their hands full in the new Congress. House Republican leaders have already said they want to bring a big chunk of federal spending this year back to 2008 levels.

But now a group of conservative Republicans says that’s not enough. The Republican Study Committee, a bloc of more than 165 members, unveiled a proposal Thursday that would end a range of federal programs that benefit charities and their clients.

Among its proposals:

* Abolish the Agency for International Development.


Sharp Reversal on Microcredit

Microcredit was once extolled by world leaders as a powerful tool that could help eliminate poverty, through loans as small as $50 to cowherds, basket weavers and other poor people for starting or expanding businesses. But now microloans have prompted political hostility in Bangladesh, India, Nicaragua and other developing countries.

In December, the prime minister of Bangladesh, Sheik Hasina Wazed, who had championed microloans alongside President Clinton at talks in Washington in 1997, turned her back on them. She said microlenders were “sucking blood from the poor in the name of poverty alleviation,” and she ordered an investigation into Grameen Bank, which had pioneered microcredit and, with its founder, was awarded the Nobel Peace Prize in 2006.

In India, until recently home to the world’s fastest-growing microcredit businesses, lending has slowed sharply since the state with the most microloans adopted a strict law restricting lending. In Nicaragua, Pakistan and Bolivia, activists and politicians have urged borrowers not to repay their loans.

The hostility toward microfinance is a sharp reversal from the praise and good will that politicians, social workers and bankers showered on the sector in the last decade. But as with other trumpeted development initiatives that have promised to lift hundreds of millions from poverty, microcredit has struggled to turn rhetoric into tangible success.

Done right, these loans have shown promise in allowing some borrowers to build sustainable livelihoods. But it has also become clear that the rapid growth of microcredit has made the loans much less effective. Most borrowers do not appear to be climbing out of poverty, and a sizable minority is getting trapped in a spiral of debt, according to studies and analysts.

NY Times


India's new rich prove reluctant philanthropists

An Indian billionaire, Azim Premji, who transformed a family-owned cooking oil firm into the software giant Wipro, announced earlier this month that he was giving two billion dollars to fund rural education.

The 100 wealthiest Indians have a net worth equal to 25 percent of India's GDP and Premji's donation -- by far the largest ever made by an individual -- was seen as a challenge to others in the ultra-rich club.

While charitable giving by the wealthy is widespread in countries like the United States, it is far less established in developing nations such as India and China.

Arpan Sheth, author of an overview of philanthropy in India, says "Should individuals in India, particularly the well off, be giving more? And can they afford to make more and larger donations? The answer to both questions is, 'Absolutely yes'."

But philanthropic activity has failed to keep pace, partly, Sheth believes, because the rapid accumulation of individual wealth is a still a relatively new phenomenon.

There is also a suspicion that charitable networks in India are not professionally managed and so donors fear their contributions "won't be put to good use or are at risk of being misappropriated," Seth said.