Giving for beginners: real philanthropy—not simply charity—is in its infancy in Latin America. But that's changing fast

Latin Trade, Jan, 2005 by Greg Brown

One key is to get to know the members of the charity's board. Do they support the charity financially? If they don't support the cause from their own pockets, it's reasonable to ask why you, as an outsider, should put in money for them to control. Find out what they do for the organization, and ask for the financial statements. "I want to make sure I'm investing money with other people," says Alexander. "I want to make sure that the people running the organization have the same passion I do." Another strategy is not to provide an outright gift but ask for a project proposal. It can help rationalize the investment decisions and provides measurement abilities.

Engaged. Measurement will soon become the best bottom-line a charity could ask for. That's because giving is changing. Writing checks, while always welcome, is giving way to more involved forms of seeking change.

"Traditional philanthropy has focused on social welfare. It's important but it doesn't really get to the root causes," says Nicole Etchart, co-founder of Santiago, Chile NGO Nesst, or non-profit enterprise and sustainability team, which trains groups on how to get beyond charity by creating businesses and self-financing.

Companies have begun to look beyond that approach, she says, taking part more and more in "back-yard philanthropy," helping their employees create and carry out projects. The next step is what Etchart calls "engaged philanthropy," focused not on absorbing short-term needs like hunger or disaster relief or even medium-term projects of up to five years but on helping organizations create effective, permanent change. "That's what it takes, especially for social problems;' she says. "It's complex and there are many levels. The way philanthropy has been framed, unfortunately, relies on quick results."

Engaged philanthropy is riskier. There's usually no immediate, demonstrable results, and complex problems can lead to setbacks. But the engaged approach needs business people to succeed, often less for their monetary support and more for their brainpower when it comes to strategy. Her advice to new philanthropists: Take a risk, just like you would expect do so with your business, and really invest in something that would ultimately lead to social change. "This kind of philanthropy resonates with companies," Etchart says, "because they understand that, with companies, you need to invest time and people."

TIME AND MONEY

Latin America's non-profit workforce varies widely by country.

as % of economically active population *

Mexico            0.4%
Brazil            1.6%
Peru              2.4%
Colombia          2.4%
Argentina         4.8%
United States     9.8%

* excludes religious organizations

SOURCE: Johns Hopkins Comparative Nonprofit Sector Project

Note: Table made from bar graph.