Originally appeared on TPI’s Deep Social Impact blog (August 3, 2016)
The recent USA Giving Report shared the good news that last year there was an increase in international giving stemming from the U.S. However, many people still see barriers to global giving.
Those obstacles include the fear of corruption and dollars being wasted, the inability to directly see the impact of philanthropy done abroad, or the obvious needs we all see right here in own backyard. When donors do consider international giving, they can be stymied by which organizations to fund and by which approach to international giving will have the greatest impact.
In our work at TPI’s Center for Global Philanthropy, we often see clients grapple with the decision to fund larger, international organizations, or to seek out small grassroots organizations; struggling with the right approach may be one of the reasons international giving from the U.S. remains relatively low.
It’s understandable that many donors wrestle with this issue. With so many amazing organizations doing social justice work every day to change the world, how do you think about practicing effective international philanthropy? How do you decide which organizations will achieve the biggest impact with your giving? How can you ensure that there is transparency and accountability by the organization you’re supporting? How do you decide when to go big and when to go small?
Here, a few questions to consider:
Why might you think about funding large, international organizations?
- Scale: Large organizations are able to replicate their approach across countries and even large regions. If there is an innovative approach you think works well, you may be able to partner with an international organization that can take the idea from a local office to a national approach, and then expand it beyond a country’s borders.
- Resources: International organizations often have access to significant funding from other donors, including governments, which allows them to have a broader reach in their initial engagements, ramp up more quickly, and provide infrastructure support.
- Entrée: If you are thinking about funding in a country where you haven’t invested before, there might be an opportunity to partner with a larger internationally based organization that can help identify the right approaches and partners. Many such agencies are well connected in the countries where they work and have a strong understanding of current gaps in funding.
Why consider working with grassroots organizations?
- Expertise: Local organizations, based in the countries and communities where they work, offer invaluable expertise. They understand the context in which they’re working—the culture, the government, and the financial systems, and they know how to get things done.
- Sustainability: Local organizations rooted in their communities will continue to build on their work in the long-term. They may grow and expand, and their work will evolve as the situation changes. Technical expertise gained by their staff will be reinvested in the community through enhanced programming, and they will have long-term ownership over the work.
- Immediacy: Of particular importance in emergency response, local organizations are able to immediately respond to the crisis in front of them. They are on the frontlines of responding to emergencies. While it may take several weeks for the international humanitarian system to be up and running, these organizations are there from the start.
- Cost-effectiveness: In many countries around the world, philanthropic dollars stretch farther than they do in the US, particularly when funding small organizations. A donor may see greater impact with the same investment and feel that even small amounts of support are going a long way with small organizations.
Of course, there are many shades of gray in this topic. International organizations like Mercy Corps and Oxfam see support to grassroots organizations as integral to the way they work. UNICEF operates around the world lifting up communities through their support to children. Many other international organizations are also trying to change the system to better support grassroots organizations. At the same time, there are large organizations like national networks or coalitions that have a broad reach across the country where they are based, and can serve as effective philanthropic partners.
There are also logistical considerations to your decision. An international organization registered as a 501(c)(3) can receive funding immediately, while a small grassroots organization may not be set up to receive U.S. charitable funds. Donors investing for the long term can help support an organization’s access to international funds through an equivalency determination.
One way to ensure your support has a long-lasting impact is to fund capacity development for grassroots organizations. Another is to jointly fund international and local organizations, bringing together both technical expertise and local expertise, to tackle a particular issue together. Still a third is to look for opportunities to advocate for the representation of grassroots organizations in key humanitarian meetings, such as UN coordination meetings in their countries, which builds up their international exposure, highlights their expertise, and brings together local and international approaches.
Both types of funding have merits, but it’s crucial to consider your philanthropic goals, the barriers you are particularly seeking to overcome in your giving, and the long-term impact you hope to have, and then deploy your resources tailored to each situation, context, and country.
The Philanthropic Initiative works with new and experienced philanthropists around the world. Clients include major companies, leading foundations, and influential families and individuals who are eager to make their mark. The firm also educates and trains professional advisors about how to discuss philanthropy with their clients.