In the often dreary world of macroeconomic theory, few issues have generated as much passion as the debate over the benefits and drawbacks of globalization. In one corner, proponents of globalization argue that, over the last two decades, increased global trade, expanding markets, and spreading democracy have benefited tens, if not hundreds, of millions of people in China, India, Brazil, Indonesia, and other developing countries. In the other, critics of the current regime argue that, bright spots aside, globalization and its benefits have bypassed large swaths of the globe, leaving more than a billion of the world's people in the grip of extreme poverty.
The truth, one suspects, lies in between. And while one can hope, as the authors of UNDP's Human Development Report 2003 write, that the structural deficiencies of globalization are "amenable to practical, proven solutions," it's also clear that those with the biggest stake in integrating the world' economies need to do a better job of managing the process on behalf of the world's poor.
Earlier this month, Philanthropy News Digest spoke with John Harvey, executive director of Grantmakers Without Borders, a funders network that works to promote social change philanthropy in the developing world, about Gw/oB's programs, the impact of corporate-driven globalization on developing countries, international grantmaking and the war on terror, and the role of U.S. foundations in promoting a more peaceful world.
Prior to joining Gw/oB, Harvey, who has lived and traveled extensively in the developing world, was associate director of Grassroots International, which supports human rights and development work in conflict regions around the world. He also worked for many years at Oxfam America, where he was primarily involved in education, outreach, and fundraising, and is active within the National Network of Grantmakers.
Philanthropy News Digest: Tell us about Grantmakers Without Borders — when was it founded, by whom, and to what end?
John Harvey: Grantmakers Without Borders is a funders coalition working to leverage increased philanthropic support for social justice in the developing world. Our members are staff and trustees of public and private foundations, as well as individual donors with a significant commitment to philanthropy. We also welcome other participants from the philanthropic sector, such as philanthropic advisors. We work within the sector as a whole to make the case for global giving and to help remove obstacles for folks interested in international grantmaking.
We emerged out of a couple of entities. One was the National Network of Grantmakers, which had its own international working group, and the other was a Bay Area organization called International Donors Dialogue, which was an informal group of individual donors and small family foundations interested in progressive, international issues. At NNG's annual conference in March of 2000, which I happened to co-chair, the two groups got together and decided that we really could be doing more to leverage funding for social change in the developing world. So, after a fair amount of discussion, the two groups decided to put up some money and start an organization to do just that. I came on board as the first staff person in December of 2000, and we've been going like gangbusters ever since.
PND: How do you leverage funding for international causes?
JH: We try to do it in a variety of ways. One is to create a space for people interested in international philanthropy. By that I mean both a physical space, as when we convene conferences or member gatherings, as well as a sort of intellectual space, a place where people can think about and discuss issues. People need to connect with ideas as well as with each other, so we've been conducting a variety of workshops, among other activities, that teach them about the issues and the skills they need to do international grantmaking.
We've also just completed a year-long strategic planning process. Our new plan calls for our activities to be reorganized into five broad areas, one of which is donor education. Among other things, we're looking at creating a kind of grantmaking toolbox, complete with written materials, videos, and workshops that address every aspect of international philanthropy. And we plan to employ that toolbox in a variety of ways — for example, running year-long learning programs along the lines of the philanthropy workshop at the Rockefeller Foundation, or facilitating giving circles, or working with RAGs to convene international grantmaking workshops.
|"...philanthropy, though generally well meaning with respect to the global south, is more often than not based on a northern agenda...."|
We're also planning to beef up our advocacy work and become more involved in helping to lower regulatory barriers for international grantmaking. And we've developed a program called Global Southern Inclusion, which will look at the ways that U.S.-based foundations and donors engage with the global south — that is, the developing world — as well as the extent to which participants in the global south have a voice and are able to participate in decisions made by donors and grantmaking institutions in the developed world. We believe that philanthropy, though generally well meaning with respect to the global south, is more often than not based on a northern agenda, and we think the situation could be greatly improved if stakeholders in developing countries were brought more directly into the grantmaking process. So we're looking at creating a guide designed to bring the perspective of the global south into these institutions — everything from advice about the proper conduct on site visits, to rethinking proposal formats so that they reflect both the limitations and capacities of grassroots groups, to the most radical notion of all, which is asking foundations and donors to consider transferring 25 percent of their assets to a foundation in the developing world.
Those are some of things we'll be working on in the next few years, and we think they'll be quite helpful in terms of leveraging. And by "leveraging," we mean: one, bringing more foundations and individuals into the international grantmaking arena; two, encouraging more international grantmakers to get into the field of social justice philanthropy; and three improving the capacities, skills, and effectiveness of foundations and donors already working in the field.
PND: Well, since you brought it up, what exactly is social change philanthropy?
JH: A good question. And a question whose answer, for us, is a work in progress. Within the U.S.-based foundation community, the phrase "social change philanthropy" generally is taken to mean a set of values and practices, a theory of change, if you will, that is somewhat different than those associated with what I would call more traditional, charity-oriented philanthropy. What we're really interested in is what that approach, the social change approach, looks like when adapted to a global context.
Mind you, "social change" is not the same as "social change philanthropy." These days, people throw around the term "social change" rather indiscriminately. In contrast, social change philanthropy is, for us, a concrete methodology of giving based on a particular theory of change. It's philanthropy that is rooted in ideals of justice, equity, peace, democracy, and respect for the environment and, at the same time, seeks to address the fundamental causes of a host of social ills and problems.
Now, a critical aspect of social change philanthropy — which, by the way, might also be called social justice philanthropy — is that it values and respects the wisdom and experience of local communities and affirms their right to unite with other communities to build movements and achieve change. It also tends to serve those most acutely affected by injustice — low-income communities, women, children, indigenous peoples, sexual minorities, and other traditionally marginalized groups. At the end of the day, it's philanthropy that tries to give a voice to the voiceless and power to the powerless.
What it isn't, I think, is traditional, charity-based philanthropy. It's not funding universities or large hospitals — both of which are important but not what we would call social change or social justice philanthropy. Again, social change philanthropy really looks to engage grassroots groups, it looks to foster leadership development and encourage organizing at the community level, and it recognizes that things tend to happen in a big way when there is a social movement behind them — and incrementally when there isn't.
PND: Is social change something that can be imposed from the top down, or does it typically originate at the grassroots?
|"...Successful social change has got to happen at the grassroots first and bubble up; it's got to be a bottom-up kind of thing...."|
JH: Well, I think it can be imposed from the top down — historically there have been examples of that — but ultimately it's a grassroots-initiated process. Successful social change has got to happen at the grassroots first and bubble up; it's got to be a bottom-up kind of thing. Where the top needs to be involved is in being open and sympathetic to the kind of change that the grassroots are pushing for. So, to the extent that there's actually a dichotomy here, both ends of the spectrum are important to the picture.
PND: Today's globalization regime seems to be a top-down phenomenon. Is globalization a friend or foe of social change in the developing world?
JH: Before I answer that I think we need to clarify what you mean by "globalization," which, in fact, means different things to different people. I would say there are good aspects of globalization the Internet and World Wide Web, for example, both of which have been remarkably positive developments from the standpoint of allowing previously unempowered groups and communities to communicate and organize. I think another positive development over the past few years has been the globalization of social movements that we've seen. Yes, it's a process that has been facilitated by the Internet, but other things have facilitated it as well, and as a result we're seeing more, and more productive, connections between and among social change movements globally.
Maybe the most significant manifestation of that phenomenon is something called the World Social Forum, a gathering of anti-corporate globalization groups that has been held every year since 2001. Initially it was started as a counterpoint to the World Economic Forum, the annual confab in Davos, Switzerland, where various governmental functionaries and the heads of multinational corporations get together and kind of decide for the rest of us how the world should be run. But at some point, the folks behind the World Social Forum had had enough and said, "Hey, wait a minute. I don't see any social movements represented at Davos; I don't see grassroots groups represented at Davos; I don't see the unempowered and voiceless represented at Davos. Who says the people at Davos get to decide how the world is run?" So they created the WSF to give a voice to all the people and groups around the globe whose interests were not being represented in Davos.
Those are examples of good globalization. Bad globalization, which I prefer to call corporate-driven globalization, is the kind of globalization that insists on free flows of capital, the opening up of markets, more trade, and less regulation. It embraces the notion promulgated by the World Trade Organization and expressed and extended through agreements such as NAFTA, the North American Free Trade Agreement, and CAFTA, a sort of NAFTA for Central America, and the FTAA, the Free Trade Area of the Americas, that all trade is good, that growth, neverending economic growth, is a good thing. But it's not. Growth for growth's sake, let's remember, is also the dynamic that makes cancer lethal.
The bottom line is that in most parts of the world, globalization is lowering the standard of living for people, it's costing them their jobs, it's making them more susceptible to illness and disease, it's making things worse. We hear this over and over again, from people all over the globe.
|"...Globalization is helping some, but it's hurting many, many more, and we need to find alternatives to it...."|
Now, advocates of globalization would say, "Look, we're seeing positive change, and overall, the benefits of globalization outweigh its less attractive aspects." To which I would respond, if you were to invent a vaccine for a particular disease, and that vaccine was effective in 50 percent of the people who received it but made the other 50 percent very sick, or even dead, would you call it a success? I doubt it. In fact, regulators and the public would probably demand that it be taken off the market. That's what's our own analysis and the anecdotal evidence we're hearing at the grassroots level tells us is happening with today's corporate-driven globalization. Sure, it's helping some, but it's hurting many, many more, and we need to find alternatives to it. The good news is that alternatives, exciting alternatives, exist; they're out there but they need to be brought to the table. And this is where, in our view, philanthropy has a vital role to play. We need to start thinking about a different kind of globalization, a globalization that emphasizes and builds on the positive aspects of greater connectedness while minimizing its most harmful aspects.
PND: Do people working at the grassroots level share your view? Do they see globalization as something that, on balance, does them more harm than good?
JH: I think so, at least a majority of them do. I mean, we're seeing the downside of globalization all over the world. Let me give you an example. We took a delegation of donors to Central America last year, and one of the things they were interested in was just that — the impact of globalization on local communities and on women in particular. So we visited a number of organizations that were adopting different strategies in response to the global economy. One of them was a pottery cooperative that had been asked by a major U.S. retail chain to make about $50,000 worth of pottery — an absolutely huge order for this cooperative, which, up until that point, had been making small amounts of pottery for the tourist trade. Well, they were hesitant to take on the job, which is understandable, but eventually they did, and it was a disaster. They didn't have the capacity to do the job, so they had to hire a whole lot of extra staff; they couldn't meet their deadlines; and it eventually changed the relationships among the women in the coop as well as the culture of the workplace. In the end, they barely broke even. And then, after all of the convulsions and organizational changes imposed on them, the chain dropped them, leaving them back at square one.
Well, another organization comes along, this one well-meaning, and says, "We'd like to bring your products to the American market, and we'll work with you to do it. We won't ask you to do something you can't do; we'll only buy what you can produce, et cetera." And that went on for six months, maybe a year, and then that organization dropped them. By the time we met them, their heads were spinning. They had made two good-faith efforts to connect to the global economy, and it had almost destroyed their community. It just didn't work.
Another group we visited operated a sewing factory. Actually, it was a group of women who had gotten fed up with the conditions that prevailed in the sweatshops where they worked, so they started their own sewing cooperative and eventually hooked up with a U.S.-based fair-trade company. Are you familiar with the fair-trade concept?
PND: I am, but why don't you tell us anyhow.
JH: Okay. In the fair-trade model, the relationship between producer and distributor is predicated on shared risk and a more equitable division of the profits. A coffee producer involved in a fair-trade relationship is sure to earn a reasonable profit on his coffee beans. A coffee producer subject to free-trade arrangements, on the other hand, has no control over market forces, and so has little control over profit potential. Let's face it: Coffee buyers are looking for the cheapest beans they can find. That forces coffee producers to drop their prices. These days, many coffee farmers are going under because the price of coffee on the free-trade market is way down. Of course, that hasn't stopped coffee retailers from increasing their prices. But here's a way to understand free versus fair trade: With free trade, the profit pie is incredibly unbalanced: producers starve with only a tiny slice, and buyers and retailers get fat with their huge slices. In fair trade, the profit pie gets sliced much more fairly. There's enough pie for everyone to eat and prosper.
In any event, these women were fortunate enough to hook up with a fair-trade distributor in the U.S., and they were doing pretty well. But it was tough. When we visited them, they were trying to fill a huge order, but their sewing machines kept breaking down and it was tough. I mean, they were grateful for the autonomy they had; they were grateful that some manager wasn't breathing down their necks or screaming at them to increase their production; they were basically feeling good about things. But they were still tied to the demands of the global economy, and it was tough.
Lastly, we visited a group called COMAL, in Honduras, that had a different approach. Basically, they told us, "Look, there are a lot of goods produced by the global economy available in Honduras, and yes, it would be fabulous to have televisions and refrigerators in our homes, but our communities are just not there yet. Our needs are fairly straightforward. We need to feed our families, keep a roof over their heads, and get our work done."
So what they did was set up a production and distribution network involving a large number of local producers who market their goods in about four hundred shops, run by women, in local communities. The network doesn't import anything; it's completely autonomous. It's about local, autonomous production and local, autonomous distribution to meet people's basic needs. It doesn't need the global economy. It relies on and develops the local economy. And honestly, in all our visits during that trip, this was where we found people to be the most content. And it had nothing to do with all the "great stuff" they managed to get from the global economy.
|"...an economic system should be judged not on how well it serves the affluent, but rather on how well it serves the least well off...."|
PND: If I understand you correctly, you're saying that the problem with globalization isn't that it's about development per se, it's that it takes economic decision-making out of the hands of people at the local level and shifts it to unseen functionaries who have little or no accountability to the people affected by their decisions?
JH: Yes, exactly. But it's more than that. The decision-making process has become divorced from logic. I mean, it simply doesn't work. In my opinion, an economic system should be judged not on how well it serves the affluent, but rather on how well it serves the least well off. And the current globalization regime is not serving the least well off, by any stretch of the imagination.
PND: How have foundations here in the U.S. responded to your pleas for them to become more involved in funding activities at the grassroots level in developing countries?
JH: Very positively. You know, the whole idea of social justice is quite compelling. Too often, I think, we get bogged down in jargon, and that's a problem. But if you just describe the concepts of social change and social justice in their own terms, it's hard not to see their value. And with that as a starting point, people soon realize that there is some amazing work being done at the grassroots and terrific work being engendered by various social movements, whether local, national, or multinational. People get it. Most folks know the top-down approach doesn't work, and as they're exposed to bottom-up approaches, they see that they can work. The challenge is in helping folks connect to the grassroots, to find organizations that are effective and that can be trusted. But, you know, that's one of the wonderful things about funding grassroots work: a small amount of money can go an incredibly long way. So, yes, the response to our approach has been extremely positive.
PND: How has 9/11 changed the picture?
JH: In profound and unfortunate ways. A chill has descended on the international grantmaking community since 9/11, and especially since the Treasury Department issued Executive Order 13224 and its voluntary guidelines for international grantmakers. Folks are scared. They don't want to have their assets frozen, and they're afraid that international grantmaking is just too risky at the moment. We're even beginning to hear stories of U.S. foundations active in international work who feel their hands are being tied by the new regulatory climate and are considering leaving the U.S. and setting up shop in Europe.
But the thing that frightens me the most is not directly related to foundations, but rather to their grant recipients, and that's the so-called war on terror. Take Executive Order 13224, which makes it a crime for charitable organizations to support a terrorist group in any way. As a result of that order, we're now beginning to hear reports of governments in the developing world putting together lists of their political opponents people involved in furthering the cause of progressive civil society and handing those lists over to the U.S. with the warning that they contain the names of terrorists. In other words, not just the rhetoric, but now the actual tools of the war on terror are being used to squelch civil society and social change in certain parts of the world. I don't want to overstate this. It's not happening everywhere, but it is happening. And that is frightening.
PND: Can you mention where those reports have come from?
JH: In this case, the report was from Mexico. In terms of countries looking at changing the regulatory climate for NGOs operating there, Zimbabwe is the important test case right now. The Mugabe government has clamped down on the media, it's clamping down on civil society, and it's using the war on terror as a convenient excuse to further its own repressive agenda. It's a huge problem.
|"...the sense that the United States has a vital role to play in solving many of the world's problems persists and has grown even stronger [since 9/11]...."|
On the plus side, I think the U.S. public is beginning to recognize and accept that, in the post-9/11 world, the United States needs to be more, not less, engaged in global affairs. Right after 9/11, the rhetoric coming out of the Bush administration was much more positive than it has been over the last few years. Back then, the administration really talked about global solidarity and the fact we are one world. That evaporated quickly, however, and by the first anniversary of 9/11, the administration had changed its rhetoric. But the sense that the United States has a vital role to play in solving many of the world's problems persists and has grown even stronger, I think, both with the U.S. public in general and within the philanthropic sector specifically. If we haven't yet fully seen the dollars to back up that view, we're at least hearing the sentiment being expressed more forcefully, and from many corners.
PND: Last year, you posted an open letter on the Gw/oB Web site in which you argued that the voluntary guidelines promulgated by the Treasury Department were impeding the cause of reducing terrorism. How do they do that?
JH: First of all, it's essential to note that philanthropy and the charitable sector is not in any way a significant source of funding for terrorist activity. Numerous reports and studies have proved this. It's also worth noting that fewer than half a dozen charitable organizations have been charged with channeling funds to known terrorist groups and the verdict is still out on most of them. This is not the problem. Charities and the nonprofit sector are not where the financing for terrorist groups is coming from. To say that is simply wrong-headed and an unfortunate diversion from where the focus needs to be, which is on banks and family remittances and other highly unregulated financial arenas.
Having said that, the chill I mentioned earlier is the problem. Foundations are scared; they want to do the work they were set up to do, but they're afraid of running afoul of the law. Look, I don't believe there's a war on terror in any real sense. The "war on terror" is analogous to the "war on drugs" or the "war on poverty." It's a rhetorical device. What we're really trying to do is to engender a less violent, conflict-ridden world. And philanthropy has a role to play in that. If you look at the places where violence and conflict are raging, you'll see that they tend to be countries where the people have been disempowered, or were never empowered in the first place; where there is a total lack of opportunity for women and young people; and where people in general are alienated from their governments.
In the case of the Middle East, I think you have to add the fact that many people there feel an acute sense of humiliation as a result of the actions of the West, and the U.S. in particular. For decades we have supported repressive, authoritarian regimes throughout the region while extolling the virtues of democracy elsewhere in the world. We have invested heavily in exploiting the region's natural resources and invested almost nothing in developing its human resources. We have criticized the role of religion in the region's politics life while ignoring its increasingly prominent role in our own civic life.
|"...People need to have a stake in something, they need to believe that the future will be better than the present...."|
Why are we surprised that these forces breed terrorism and terrorists? People in many places feel they have nothing to lose. They don't have economic opportunity, their country's infrastructure is in shambles, they feel humiliated what do they have to lose? People need to have a stake in something, they need to believe that the future will be better than the present — if not for them, than for their kids. And philanthropy has a role to play in that, an important role. Philanthropy can help to engender opportunity in these countries. It can help to improve healthcare systems, and strengthen civil society, and make governments more transparent and accountable. So why would you want to tie its hands? It doesn't make any sense.
PND: Looking out over the next five years or so, what do you think are the three or four most critical issues facing international grantmakers?
JH: That's a tough one. Let me start by saying that I think it's vitally important that we all recognize the urgency of the task at hand. Many of the problems we face are getting worse, and at an accelerating rate. Climate change, environmental devastation, the depletion of our water resources it's estimated, for example, that within twenty-five years fully one-third of the world's population will be in extreme water stress HIV/AIDS, which continues to devastate entire communities and countries — and by the way, AIDS is not just a health issue, it's an economic and social issue. There are communities in Africa where the entire demographic middle, the productive adult population, has been wiped out, leaving only children and old people. Imagine the economic impact of that, the social impact of that. All of these are critical issues, and as I said, they are rapidly getting worse.
I don't know how folks felt twenty or thirty years ago, whether they felt the same sense of urgency about the problems they were facing as I feel about the problems we face today. I tend to think they didn't. But that's not really the issue. The issue is, can we afford tepid, tentative, half-baked responses to these life-threatening circumstances? I don't want to sound like Chicken Little, but there may not be much left for foundations to do if we all don't get more serious about the crises we're facing right now. Obviously, philanthropy can't do it alone, but I think we sometimes forget that the potential for leveraging philanthropic resources is enormous.
So, getting back to your question, one critical issue facing philanthropy over the next five years is the need to truly recognize the urgency of the problems we're facing right now, particularly in the developing world. As I said, examples include natural resource depletion, particularly water; rapidly increasing energy consumption; climate change; HIV/AIDS and other global health crises I mean, it's high time for us to kick things into high gear.
PND: Is philanthropy up to the challenge?
JH: Absolutely. You know, we just wrapped up our annual conference, and there was such phenomenal energy there, so many positive ideas and solutions being presented, so many people willing to put their lives on the line to make the world a better place. Yes, absolutely, it's up to it. We have the resources, and we have the know-how; we just need the political will. Philanthropy can provide some of the resources, but more importantly it can leverage its resources to move governments and people in the right direction and make things happen. I believe we can, and I believe we will.
PND: Well, thanks for your time this afternoon, John.
JH: Thank you.
Mitch Nauffts, PND's editorial director, spoke with John Harvey in October. For more information on the Newsmakers series, contact Mitch at firstname.lastname@example.org.