As some public donors cut back on foreign aid spending, global philanthropy and other forms of private giving are expanding. While the international development community is beginning to appreciate the impact of philanthropy on development and how public and private players can work together, tracking private giving remains a challenge resulting in imprecise foreign aid calculations. As the international development community pushes for more coordination, transparency, and accountability, accurately quantifying private and alternative sources of giving is becoming increasingly important.
According to a recently released report by the Hudson Institute’s Center for Global Prosperity (CGP), the Organization for Economic Cooperation and Development – Development Assistance Committee (OECD-DAC) – regarded as a top official source for global development data and information – does not have complete private giving figures so the organization cannot paint a complete picture of development contributions.
According to a CGP report titled “The Index of Global Philanthropy and Remittances 2011,” philanthropy and remittances are also key development indicators and when brought together with official development assistance (ODA) tell a more complete story foreign aid generosity by country. The report contends that private capital investment of $228 billion represents the largest financial flow from developed to developing countries, while remittances were the second largest flow pegged at $174 billion.
OECD reports that ODA among DAC donors totaled $120 billion in 2009 while private giving to the developing world amounted to $22.7 billion. Per the CGP assessment, however, global philanthropy totaled approximately $53 billion and many individual countries contributed significantly more funds to the developing world than what OECD reported (see chart).
For instance, OECD data for the United States reveals $16.67 billion in private giving, but CGP estimates that actual private giving amounted to $37.5 billion due to contributions from international private volunteer organizations, universities and colleges, religious organizations and volunteerism. Interestingly, that estimate is greater than $28.8 billion in U.S. ODA reported by OECD.