When private foundations take over development aid
Dear reader,
Something unexpected has happened these past few days. The Swiss foreign ministry announced in June that it would make further cuts to development aid. Instead, more money will be diverted to emergency humanitarian aid. This means that Swiss development aid will be completely withdrawn from entire regions of the world, such as Latin America. (Switzerland is following the trend of many Western countries in reducing their development aid).
In response to this move, almost 30 philanthropic foundations, some of them with very large budgets, complained that Switzerland’s credibility was at stake. Especially because it is mostly longer-term projects that are affected by the cuts.
Criticism from the political left was expected but dissenting voices also include the foundations of billion-dollar corporations like Zurich and Swiss Re, as well as that of tennis star Roger Federer. According to these philanthropic charities, development aid is an “investment in prevention, stability and security”, which is particularly necessary today. There are more philanthropic projects than ever before but these “cannot and should not replace public international cooperation”, they warn.
It is particularly interesting why there is an increase in such private initiatives. The main reason is that more and more wealth is being concentrated among a few. In Switzerland, the foundations sector has assets of CHF160 billion. By comparison, the annual budget of Swiss development aid adds up to CHF2.4 billion.
Individuals have the will to inject capital into projects – that’s essentially what philanthropy is based on. Because there are more and more super-rich, experts expect philanthropy to grow as well. This does not have to be negative for the quality of the projects. But it is obvious that this is a shift in power away from the state and towards the private sector. Some may welcome this but the complaint from the philanthropic sector itself shows that they are not entirely comfortable with this development.
How do you see this shift? Is the outsourcing of development aid a positive development? As always, you can write to me on giannis.mavris@swissinfo.ch
Best regards,
Giannis Mavris
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