Is development a sector where money ‘is given away pretty badly’?

Naina Batra, chief executive of the Asian Venture Philanthropy Network, thinks the sector gives too much power to philanthropists — and not enough to those they fund. And she’s trying to change it. “Philanthropy is the only sector where the nonexperts tell the experts what to do,” she told Devex. It’s not the first time Batra has said these words. Earlier this year she said the same thing at the Skoll World Forum — the annual gathering in Oxford, the United Kingdom, for social entrepreneurs — where her words struck a chord, and were repeated by speakers and delegates many times. Batra spoke to Devex about how philanthropy should be done differently, particularly when partnering with investment – and offered insight on the unique traits of philanthropy in Asia, compared to the rest of the world. She said a lot of money is “given away pretty badly.” “I mean, it's the same everywhere, right?” she said. “It’s there to reinforce a certain power dynamic. It’s there to almost reinforce a sort of parochial feudal paternalistic culture.” AVPN was founded in late 2011 as a membership body for social investors and grant-givers. When it came to giving away money itself, Batra was determined to do things differently. AVPN’s membership of more than 600 includes a wide-ranging group of primarily Asian institutions — ranging from philanthropists to social investors, to mainstream organizations interested in generating more impact, to government agencies such as Japan International Cooperation Agency, and the Department of Foreign Affairs and Trade in Australia. During the pandemic, members were not able to travel, and could therefore do less direct due diligence on international projects. AVPN, which had a presence across Asia, was asked to give funds on members’ behalf. The first fund started in June 2021, focused on last-mile health care delivery, and several more have followed. Batra said that so far, AVPN has given away $14.5 million — typically in unrestricted grants of $150,000 to $250,000. Batra estimated that less than 5% of the funding AVPN receives is unrestricted. “I thought, I can't do this to someone else,” she said, so from the start, the organization focused on trust-based philanthropy that’s flexible and long-term. “None of our backers, in their daily lives, funds like this,” she said. “They came to us and they told us we had to have strictures. And we were very clear that we don’t.” The results have been clear, she said. Grantees fed back that they were able to achieve far more with their money. Batra’s claims are backed up by evidence — research in the U.K. has found that removing restrictions from grants can double their value to nonprofits. Despite this, she said, too many philanthropists give money to development organizations and then tell them how it is to be spent. “It’s like hiring the plumber and telling them how to fix the toilet,” she said. For philanthropy to work well, she said, it must listen to the person on the ground, and recognize that it is they, not the philanthropist, who is the expert in solving the problem. The seeds of collaboration Batra also called on philanthropists to use their money to unlock other funding. One way to do this is “blended finance” — when a funder provides a grant to a project that would provide jobs and other social benefits. A small subsidy — or funding for the early, less profitable stages of a project — can make the whole thing suddenly viable. “Because what’s the worst thing that can happen?” she said. “You know, your money is lost? You're not expecting to get that money back anyway. But philanthropy in Asia, like philanthropy everywhere else, is probably the most risk averse capital. We tend to overthink it so much more than when we are looking at doing investments.” The changing face of Asian philanthropy These trends will be of growing importance in Asia, as economies grow, wealth increases, and major donor philanthropy becomes more common. Some of the world’s most generous countries are in Asia, with Indonesia topping the U.K.-based Charities Aid Foundation’s World Giving Index for five years in a row. AVPN is already attracting more members, and they are spending more each year. Batra said that there are some major differences between the way philanthropy is done in Asia, and the way it is done in the United States and Europe. For one, Asian philanthropists are more pragmatic — and therefore more open to working with governments. They are also less willing to talk about giving. This might be a cultural thing, she posits: Talking about giving takes the sheen off it. But it’s also because governments view giving quite differently. “In the U.S., if you look at it, giving is very much a tax deduction exercise,” she said. “You give because you get these huge tax breaks. In Asia, you don't talk about big numbers because you don't want to get attention, or be in front of government, who might question where you've got this wealth from.” Giving in Asia, particularly in Muslim countries, is also more likely to be driven by religion, she said. “For some reason, secular giving is considered to be better quality, higher pedigree, motivated by a higher good,” she said. “But there is a lot of religious giving that happens in Asia, and especially, especially Islamic giving, the Zakat. There’s a huge opportunity to access that capital, which is given away for significant social impact. And that's something that AVPN is focused on trying to do.”