Principal Talk European University at St. Petersburg

March 20, 2012

On March 20, 2012, Jonathan Fanton delivered a keynote address on global trends in philanthropy and corporate responsibility to students and faculty at the European University at St. Petersburg, a leading private institution in Russia that trains graduate students from across the globe in the humanities. For more information about the European University at St. Petersburg, click here

I am delighted to be here at the European University St. Petersburg, an institution I have worked with since its founding.  I first knew it when I was President of the New School for Social Research, whose graduate faculty began as a University in Exile rescuing leading scholars threatened by Nazi and Fascist forces.  Like the New School, European University St. Petersburg has graduate education in the Humanities and Social Sciences as its core mission.  When I became President of the MacArthur Foundation I was pleased to deepen the Foundation’s commitment to European University St. Petersburg, which adds to eleven grants valued at almost $10m since 1995.

Yesterday I met with your talented Rector, Oleg Kharkhordin and his leadership team.  MacArthur supports universities all over the world so I can say with authority none has more determined, creative and effective leadership than European University St. Petersburg.  At our meeting we discussed the University’s strategic plan which is ambitious, inspiring and realistic.  I see a bright future for European University St. Petersburg and I promise to work with you as you build Russia’s pre-eminent graduate university in the social sciences and the humanities, a university admired the world over.

Academic programs at European University St. Petersburg honor Russia’s culture and history, illuminate Russia’s current political and economic challenges and prepare students for global engagement in the public, private and not-for-profit sectors.  The new program in philanthropy and corporate social responsibility is a good example of how European University St. Petersburg is responding to changes in Russian society.  I want to talk with you today about global trends in philanthropy and corporate social responsibility.  One of those trends is a focus on root causes of problems and I will explore with you how foundations can improve public policy.

I hope this is a topic your new philanthropy program will address.  Direct assistance to people in need, to health care institutions, to conservation efforts, is good and necessary.  But attention is also needed to the root causes of society’s problems and to changes in government policy that will help many more people.

But first let me tell you about the MacArthur Foundation and its work in Russia.

MacArthur is one of the ten largest foundations in the United States with assets of $5.5 billion and gives $220 million a year in the United States and sixty countries across the world.  It has offices in Moscow, New Delhi, Abuja Nigeria and Mexico City.  All of the assets derive from the wealth of John D. MacArthur, who made his money in insurance and real estate.

It’s governed by an independent board of trustees; the Foundation has no connection to the U.S. government, or any for-profit activity.

In the United States we work on improving opportunity for low income families, preserving affordable housing, improving public education, and reforming the juvenile justice system.

MacArthur’s work outside the U.S. focuses on biodiversity conservation, international peace and security, population and reproductive health, human rights and international justice, and the global migration and mobility of people.

MacArthur’s largest financial commitment outside the United States is here in Russia, where we have had an office since 1992.  We came to Russia in the spirit of partnership and respect for its people and its prominent role on the global stage.  Our early work supported cooperative research between Russian and American scientists and policy experts on disarmament.

This work contributed to the development of cooperative threat reduction programs that have done so much to make the world more secure and maintain positive momentum in the U.S. -Russian relations over the years.  MacArthur’s first decade in Russia also featured a research and writing grants competition that supported more than a thousand scholars.  And early grantmaking in the conservation field helped strengthen Russia’s network of protected areas and encouraged the growth of sustainable forestry.

But the centerpiece of MacArthur’s work here has been a 20 year, $100 million commitment to strengthening higher education and scholarly infrastructure.  MacArthur provided support to 24 state universities – from St. Petersburg State University to Tomsk State University to Far Eastern State University – and three private universities: the New Economic School, the Moscow School of Social and Economic Sciences, and, of course, the European University at St. Petersburg.

We also worked with independent think tanks like the Center for Social Policy and Gender Studies and the Center for Independent Social Research St. Petersburg, which are tackling challenging social issues like gender discrimination and the effect of globalization on rural communities.

MacArthur’s investment in universities and scholarly life reflected our belief that a robust and independent intellectual community goes hand-in-hand with democracy.  Can you think of any democratic country without academic freedom?  Or the reverse, an authoritarian regime that tolerates strong, independent universities?

MacArthur also supports organizations in Russia working in the field of human rights and the rule of law.  During the past twelve years, we have supported more than eighty civil society groups working on these topics – in Moscow but also in the regions, from Rostov to Perm to Tatarstan.

The focus for many years has been police reform, strengthening the ombuds offices throughout the country, and supporting those who take human rights cases to the European Court of Human Rights when appeals within Russia have been exhausted.

The issue of rule of law is a central theme of MacArthur’s work in the U.S. and in all the countries where MacArthur has offices.  Everywhere we work we believe that higher education and the rule of law are pillars of an open society where citizens are free to develop their individual potential as they contribute to economic growth and prosperity.

In recent years, MacArthur’s higher education work in Russia has been winding down.  But I am pleased to note that in September 2011 the MacArthur Board of Directors reconfirmed the Foundation’s deep and long-term commitment to Russia.

It is, of course, very pleasing to see Russian philanthropy grow and likely someday take over from MacArthur and other Western donors.   That growth is documented by a recent Report on Institutional Philanthropy in Russia by the Russian Donors Forum.  It found 300 active foundations in Russia, about 20 major ones.  The top three programs are assistance to vulnerable groups, education and culture, and health care.  It is estimated that the 100 corporate and private foundations the Report studied in detail made $800 million (22 billion rubles) in gifts in 2010.  And it is encouraging to see recent changes in the tax code that encourage philanthropy and the establishment of endowments.  So European University St. Petersburg is timely with its plan to start a program of research and teaching on philanthropy and corporate social responsibility.

I hope the new program will look at Russian philanthropy in global perspective.  Philanthropy across borders is on the rise and opportunities to partner with private foundations and corporate donors from other countries are expanding.  The Foundation Center, a research organization based in New York, reports that in the period 1990-2008 total foundation giving in the U.S. grew from $9 billion to $47 billion.  Giving to countries outside the United States grew faster than giving within the United States and constituted 25% of all giving.  The total number of foundations grew from 32,000 to 75,000 in this period and new foundations were more likely to give abroad.  For this analysis I am indebted to a thoughtful article by Anne Peterson and Gail McClure published in Foundation Review.  They concluded the propensity of new foundations to give internationally was not “surprising as many of the new foundations were funded by profits from the global finances, media and especially technology sectors.”

During my time at MacArthur the share of its grantmaking that went to international programs rose to 47%.

The top three areas of focus for U.S. foundations giving abroad are health, international development and the environment.  About half of the international giving overlaps with the U.N. Millennium Development Goals, focused on topics like reducing child and maternal mortality, combating HIV/AIDs, empowering women.  It should be noted that a sizable share of international giving by U.S. foundations goes to international organizations like the World Health Organization or U.S. based NGO’s working abroad.

The rise of global philanthropy is not limited to the United States and Russia. A recent article in the Index of Global Philanthropy (2010 Index of Global Philanthropy & Remittances, “International Philanthropy Outside the United States: Giving Goes Global” p. 42) found a dramatic rise in private philanthropy in OECD nations led by the United Kingdom, Germany, Canada and the Netherlands. And there is an increase in philanthropy from wealthy individuals and corporations in wealthy countries in the developed world. I think of Fondazioni 4 Africa, a joint venture of four Italian banks working in northern Uganda to help people displaced by the Lord’s Resistance Army. Or the Canadian cosmetic company M.A.C., which works on HIV-AIDS prevention in Sub-Saharan Africa. Or Irish philanthropist Niall Mellon whose Fund builds housing for poor townships in South Africa.

I hope in the future to hear more examples of Russian philanthropy working in Africa and other parts of the developing world.

So what are some future trends in global philanthropy?  Most U.S. foundations belong to the Council on Foundations, an organization similar to the Russian Donors Forum.  The Council surveyed its members involved in international grantmaking to ascertain their top ten predictions for 2012.  Here is a sample, summarized in an article by John Harvey in Global Philanthropy.

  • Global Philanthropy will continue rapid growth, especially in countries like China, India and Brazil.  I was surprised Russia was not listed.
  • As U.S. companies do more business overseas, they will give more money away abroad.
  • There will be increased partnerships between U.S. and overseas foundations and among foundations, governments, corporations and multilateral organizations.
  • The transition underway in the Middle East and North Africa will draw more money and engagement from U.S. philanthropy.
  • Foundations will supplement their charitable giving with low interest loans that advance their program goals.

Let me inject some predictions of my own here – not just for 2012, but longer term trends.

  • I hear the term philanthro-capitalism more and more these days.  There is an increasing interest in using business – or market – opportunities to solve social problems.  I am working with a group of business people dedicated to bringing safe water to poor communities in Africa by helping communities build, own and operate water purification systems which will cover their costs.
  • There is donor fatigue with experimenting with models for improving primary education, creating jobs, combating poverty.  Foundations want to understand how models can be applied at a wide scale.
  • And there is greater interest in addressing the root causes of problems and that should improve the prospects of funding for research and universities.
  • Finally, Foundations will increasingly be using new technology and social media to advance their philanthropic objectives.  There is a growing appreciation that solutions to problems need to take account of local history, culture and conditions.  New technology is changing the dynamic from pushing policy at people to pulling information and insights from ordinary citizens.

I hope your new program in philanthropy and corporate social responsibility will study these trends, especially the interest in getting at the root causes of issues and how philanthropy can improve public policy.

I want to devote the remainder of my talk to this topic by illustrating six ways philanthropy can improve public policy drawn from my experience at MacArthur.

Promoting pluralism of thought, action and innovation is a central contribution philanthropy can make to society.  Foundations are at their best when they take the long view, support basic research and experiment with models for change.

I think universities are the best partners for foundations wanting to improve public policy.  You will see that universities are central to most of the examples I am about to give. Foundations are not direct actors in the political process, prohibited by law in the U.S. and most countries from lobbying government officials.  But they can support research that illuminates policy choices and they can educate the public about the findings of research they support.

And I believe it is good policy for foundations to give unrestricted support to universities to strengthen their research capacity and trust the faculty to do research relevant to society’s needs.  My belief found confirmation in looking at the research interests described in your strategic plan, topics like the transformation of cultural phenomena of the Soviet era under new socio- economic conditions, the development of financial markets and institutions in Russia, the economics of health care and more.

So here is my list of how philanthropy can help society address the root causes of problems but also seize opportunities.

First.  Foundations help frame issues in new or better ways.  For instance, from its earliest days, MacArthur has focused on issues related to peace and international security. After the Cold War ended, we were one of the first foundations to take an active interest in the dangers posed by weapons grade material at risk of falling into the wrong hands.  We supported several research projects at Harvard, Stanford and the Brookings Institution.

These projects framed the debate on nuclear weapons, to powerful effect.  They articulated the concept of “Cooperative Threat Reduction” and introduced this idea into the strategic dialogue between the United States and Russia.  They formed the intellectual spine for the Nunn-Lugar Program, which brought the United States and Russia together to dismantle and secure nuclear weapons and stockpiles.  To date, the program has deactivated or destroyed about 7,601 nuclear warheads (82% of its 2017 target) in the former Soviet Union. It has also eliminated 792 ICBMs and upgraded security at all sites in Russia where nuclear weapon-related materials are stored.

Second.  Foundations commission research that provides a base of evidence for making policy-related decisions.  MacArthur is well-known for its long-term, multidisciplinary research initiatives, which have produced path-breaking work on topics like aging and wellness, juvenile justice, and mental health policy, among others.

These networks, that draw together scholars from several universities, are sometimes active for as long as a decade. The MacArthur approach to research allows smart people to ask big questions in a fresh way and then tackle them with perspectives from many disciplines.  Our support for these research networks is made with the goal of creating a robust evidence base for sound decision making by policymakers.

For example, the Network on Adolescent Development and Juvenile Justice, based at Temple University, studied the outcome of youths in trouble with the law who were tried as adults compared with those handled through a juvenile court with alternatives to incarceration.  Those tried in a juvenile court were 60% less likely to commit another crime when released.
We see signs that this research is helping lay the groundwork for significant change.  In October 2004, the U.S. Supreme Court drew on our Network’s findings in Roper v. Simmons, which prohibited the death penalty for those 18 and younger.  Several states, including Illinois, have closed down youth prisons and shifted resources toward community-based programs and services.

And the reforms developed by MacArthur are being implemented outside of the United States. For example, I hosted a delegation from China’s Supreme People’s Court in 2008.  The judges liked what they saw which contributed to reforms underway in China. A proposed law pending in the National People’s Congress would recognize juvenile offenders as a distinct group and establish a mechanism to provide rehabilitation programs rather than jail time.

Third.  Sometimes foundations take on demonstration projects to show that applying what we learn from research can actually work. The hope is that government or the private market steps in to scale up.  MacArthur’s work to conserve landscapes high in biodiversity is a good example.  In 1999, we began funding a pilot project on the island of Fiji, called the Locally Managed Marine Area Network, which links conservation organizations, university researchers, and local leaders in three villages to improve the management and protection of coral reefs and marine resources.

By involving scientists as well as village leaders, the network encourages adapting cutting edge research and conservation techniques to local circumstances and incorporating them into traditional practices.  A breakthrough for the project came in 2003, when the Great Council of Chiefs decided to apply the MacArthur conservation approach as a national fisheries and marine policy for all 300 islands within the Fijian archipelago.

Fourth.  Foundations can help articulate fundamental norms that guide decision making.  After the Rwandan genocide and at the urging of UN Secretary General Kofi Annan, the MacArthur Foundation funded the International Commission on State Sovereignty and Humanitarian Intervention, organized by the Canadian government.

The Commission’s report articulated a primary duty for the international community in cases of genocide, ethnic cleansing, and crimes against humanity – a “responsibility to protect.”  When a state fails to protect its own people – or worse, assaults them – the international community has an obligation to act, even intervene.  At the September 2005 World Summit, the United Nations (UN) General Assembly affirmed this principle in its Outcome Document.

In recent years we have seen the Responsibility to Protect successfully put to the test in limiting post-election violence in Kenya and heading off a civil war in the Ivory Coast. It may yet play a role in the Syrian conflict as Kofi Annan seeks to mediate and gain Russia’s support for the Responsibility to Protect.

Fifth.  Foundations build institutions that are the source of respected public analysis and provide a watchdog function.  MacArthur has given core support to several institutions that provide important policy advice: the Center for Budget and Policy Priorities; the World Resources Institute, the Center on Science, Technology and Security, the Global Fund for Women, and more. In Russia, the Independent Institute for Social Policy advises the Russian government on the critical topic of pension reform.  The Center for Energy Efficiency is a key implementer of World Bank projects on energy efficiency in Russia.  And the Centre for Independent Social Research continues to support the sustainable development efforts of indigenous communities of the Russian North.

MacArthur may not always agree with the positions they take, but we believe the policy process is stronger by the quality of analysis they bring and the informed debate that they stimulate.

Sixth.  My last example speaks to one of the trends I mentioned earlier:  building public understanding and support for sound policies in economic, social and international affairs.  We are living in an age where the public has direct access to a huge amount of information.  And at a time when people use Facebook, Twitter, You Tube and other social media to share ideas and to come together to express support or opposition to official policy.  MacArthur has helped civil society groups in conservation, women’s health, rule of law, neighborhood development in the U.S. to employ those new technologies to build support for policies they are advocating.  And MacArthur has helped groups use technology to deepen their effectiveness, for example, using cell phones to transmit vital information to reduce maternal mortality, to strengthen election monitoring in Nigeria and Bangladesh, or to document ethnic cleansing in Darfur.  Another project, this one in the U.S., aims to create a platform where the public can comment on draft laws and regulations before they are enacted.

Access to the Internet has changed the way people relate to each other and to power.  And therefore Internet freedom is essential to democratic development.  MacArthur supports a Harvard University research project that measures Internet freedom in countries around the world. The OpenNet Initiative reports that the number of internet users had reached 38 million in Russia by 2008. Expert opinions are divided about how free the internet is in Russia, with Freedom House ranking it partly free, noting a decline since 2009.

Technology is a good example of how private philanthropy, with all its flexibility, can spot a need early and move quickly to meet it.


Let me close with a puzzle.  MacArthur wants to be viewed as independent and objective, not ideological or political.  We see our mission as bringing quality information and sound evidence to bear on the policy formulation process.  But we also have views – we think an international criminal court is a good idea; that young people should have access to juvenile justice systems with redemptive options; that biodiversity preservation is important; that weapons of mass destruction should be controlled.

Do those views challenge the claim of objectivity?  Perhaps.  But we look at our views as hypothesis to be tested, and we are open to funding research and policy analysis that question those hypothesis.

We think it is important that the Foundation’s highest value is the continuous search for sensible policies, understanding that our initial hypothesis may be wrong or – at least – can be improved upon.  Effective advocates are usually committed to a fixed view; effective foundations are not.

And so we navigate the tension between making major investments based on a theory of sensible policy and encouraging those who challenge that theory.

I think philanthropy and public policy would be a good topic for the new program at European University St. Petersbug.  No doubt as private philanthropy grows and matures in Russia there will be policy engagement, engagement that needs to be carefully developed so it is not misunderstood as partisan meddling in politics.  It will take time for the society, especially those in power, to be comfortable with philanthropy’s effort to improve public policy so the sooner the discussion gets serious, the better.  I can think of no better – more rigorous and trusted – setting for this conversation than the European University St. Petersburg.

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