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'Venture philanthropy' could accelerate Millennium goal targets

The world's 2015 millennium development goal targets could be met with a budget of USD 150bn a year raised from the world's richest people, says a leading economist

Economist Jeffery Sachs has said that the world's 2015 millennium development goal (MDG) targets could be met with a budget of USD 150bn a year, some of which could be raised from the world's richest people.

In a press statement, Sachs identified the Forbes Rich List as the best potential source of the cash. Just five percent of the income of the world's 950 dollar billionaires would easily raise the funds.

The Bill and Melinda Gates Foundation has spent USD 13.6bn since 2000 on domestic and international projects. Its assets will top USD 60bn when the contribution of investor Warren Buffett is included.

In October 2007, the foundation launched a USD 100m, five-year programme providing small grants to nurture unorthodox approaches to global health. The Grand Challenges Explorations programme will target scientists in Africa and Asia, offering research grants of USD 100,000 in areas considered unprofitable by the medical and pharmaceutical private sector.

Other "venture philanthropist" activities include ex-US president Bill Clinton's annual fundraising gatherings in New York, which draw thousands of the world's richest and most innovative people together for three days. In September 2007, the gathering included 52 former or current world leaders. Each invitation-only participant pays USD 15,000 to discuss problems that were previously the preserve of the aid sector.

The Clinton Global Initiative (CGI) says it attempts to create a composition that matches people who have resources with those who have the most innovative ideas. The CGI does not make grants but fosters partnerships between groups. About USD 10bn worth of commitments were made through the initiative, once described as a stock exchange for donations to worthy causes.

In addition, the UK's Impetus Trust, brings venture capital techniques to the voluntary sector by working with charities to improve their management and performance. The US-based Acumen Fund invests in pro-poor business but expects monetary success as well as promoting worthy products and causes through enterprise.

Tax breaks or philanthropy?
Those opposed to Sachs say, however, that reducing poverty, disease and dealing with other issues are not about money.

Nobel Prize winner and micro-credit pioneer Muhammad Yunus said: "If someone makes USD 100 profit and donates USD 5 to a good cause, and possibly only to save on taxes, that doesn't impress me very much."

Randolph Kent, director of the Humanitarian Futures Programme at King's College, University of London, said: "There is a strong danger that if more money is thrown at the problems we will see an increase of problems and not the solutions. I am more interested in what global philanthropy looks like, not just the individual giving of a few Anglo-American billionaires."

"While it may be true that the aid sector hasn't yet successfully addressed some of the major global problems, there is no evidence the billionaires will be any more successful. I am not convinced that they have any greater advantage in terms of assessment or accountability than the traditional mechanisms available," concluded Kent.

30th September 2008

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