New York Times, 9/12/2014
Alberto Beeck is having what would be considered a solid year for any businessman-philanthropist. In February, Mr. Beeck, who was born in Peru and fled to the United States after his country’s 1968 military coup, and his Cuban-born wife, Olga Maria, gave Georgetown University $10 million to start the Beeck Center for Social Impact and Innovation.
After years of serving on the board of Lumni, a Mexican organization that gives students in five countries education grants in return for a portion of their future earnings, Mr. Beeck is now the chairman of the board and plans to expand Lumni’s mission further.
And after three years of work, he is about to see the fruits of a fairly unusual philanthropic investment: a reality television show airing for 15 Sunday nights in Colombia focused on little-known do-gooders.
“You think about celebrities getting behind causes,” Mr. Beeck said from Lima. “The idea with the reality show is to highlight the work of the supersocial entrepreneurs.”
While most of the protagonists this season are addressing the effects of Colombia’s notorious drug trade, Mr. Beeck hopes to begin the show in other Latin countries next year by focusing on a different set of social ills.
Yet for a Latin American philanthropist, Mr. Beeck’s year has been notable. Historically, wealthy Latin Americans have had little interest in philanthropic giving aimed at solving social problems.
According to the World Giving Index, Costa Rica is the highest-ranked Latin American country in terms of giving at 23 on the 2013 list. Mr. Beeck’s native Peru is ranked 74th, Mexico 76th and Argentina 78th. (France is 77th.) Brazil is tied for 90th, with Iraq, Mali and Mauritania.
But that record is slowly changing. Today, the attitude has shifted to something that could be deemed enlightened self-interest: So great are the social problems in many Latin American countries and so strapped or ineffective are the resources on the ground, that many Latins — especially those living abroad — feel compelled to help make the situation better for fear that if they don’t, no one will.
“The big driver is they need to help create a strong civil society in their countries, and they have an ability to make a difference — they have to make a difference,” said Maria Elena Lagomasino, chief executive and managing partner of WE Family Offices, whose family fled Cuba. “Look at some of these countries: It’s really terrible social conditions. Look at all these kids who are ending up on the U.S. border. You just can’t leave it to the government or to the N.G.O.s.”
While the rate of giving is still small by most standards, the trend toward what is known as “impact philanthropy” or giving intended to bring about specific social change, tracks with a similar trend in the United States, particularly among the entrepreneurial set. Its emergence among the Latin diaspora has the potential to change the philanthropic agenda throughout the region.
To understand the shift, it helps to start with a brief history of social aid in the region. Traditionally, governments and the Catholic Church were seen as primarily responsible for helping the poor.
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“If you had the private sector take on something that the state saw as its province, it would almost be like you were trying to undermine the government,” Ms. Lagomasino said. “Unlike the U.S., most people in Latin America grew up in a culture where people didn’t know a lot about philanthropy.”
Even now, writing a check to a charity is a lot less popular in Latin America than in the United States, added Julia Chu, head of philanthropy at Credit Suisse Private Banking, North America. “There is this notion of wanting to see a discernible return. There isn’t a value of funding an institution just for the sake of funding it. There is a bit of skepticism.”
And Latin American countries have offered no tax incentives to encourage philanthropy — unlike the United States. Luis Stuhlberger, a Brazilian hedge fund manager, philanthropist and president of the Instituto Credit Suisse Hedging-Griffo, a corporate philanthropy, calculated that even Brazil’s small tax incentive for charitable giving often goes unused by individuals, even though the money then goes to the government as a tax. (Corporations, he said, use it all, to pay less tax and to burnish their reputations.)
But most of all, the hesitancy was related to decades of political, economic and social upheaval.
“When I look at my generation, it was a fairly selfish generation,” said Mr. Beeck, 58, whose philanthropic plan began in 2008 when he sold his stake in Hochschild Mining, a mining group with operations in Latin America and Canada. The relative stability in Peru helped make the notion of philanthropic work seem possible.
“When we have a stable economy, stable political system, you can think about other things rather than just protecting your family and your assets and your needs,” he said. “You see it in Peru in part after the difficult times we’ve had with military coups.”
Angela Maria Tafur started Give to Colombia in 2004 after moving her family to Miami because of safety concerns. Her father was a senator in Colombia before he was assassinated in the early 1990s. “I was brought up to understand that not all of us have the same opportunity,” she said.
Her foundation focuses on educating members of the “demobilized” — young people who left the guerrilla movement — and reintegrating them into society. For her, though, showing individuals, family foundations and corporations that her organization is accountable and effective is paramount.
“We’re very successful because of our transparency, our accountability and how closely we monitor the use of the funds,” she said. “When the model is transparency, people trust you, and they trust you to give you more and more each time.”
For Rosario Perez, a former private banker at JPMorgan Chase who is now the president and chief executive of Pro Mujer, which focuses on microlending, health and job training for women, the challenge is expanding the funding base.
“They didn’t have a fund-raising team before I came here,” said Ms. Perez, a Mexican immigrant who gives to her own organization. “Most of our money comes from the generation of our own equity. Eight percent is from grants and donations. It really should be more like 35 percent.”
This shows a limit of the impact philanthropy model: While organizations can generate returns to keep the programs going, they need donations to expand what they’re doing. Ms. Perez’s goal is to tap the diaspora for more money, with a focus on entrepreneurs in the United States.
For many of the smaller countries, that diaspora can be an even bigger force — and one that can take advantage of United States tax incentives to be charitable by setting up in the United States as tax-exempt organizations.
“What these organizations are doing in funding local organizations is making people living abroad more comfortable,” said Ignacio Pakciarz, chief executive of Big Sur Partners, an investment firm, and a board member of Reaching U, a charity focused on education in his native Uruguay. “They’re getting guidelines. They’re measuring this.”
Yet the dollar amounts remain small. Give to Colombia has raised $22 million in the last 10 years to educate people displaced by the guerrilla war in the country. That money has financed 157 projects that have directly helped 277,000 individuals. But getting that money from a few family foundations and corporations — along with thousands of small donors — has been time-consuming.
For Reaching U, the numbers are smaller still. In 2014, it has a goal of raising $350,000 to help 2,220 children get after-school care. And that money is coming only after a difficult courting process.
“If you want people to donate, you’re going to have to call them twice,” Mr. Pakciarz said. “You’re going to have to send them an invitation. You’re going to have to push. It’s not natural. They’re not going to call you and say, ‘I want to make a donation.’ ”
But he is betting that with nearly as many Uruguayans living outside the country as in Uruguay, he will be able to marshal change. “The wealthy people in my country are the older generation,” he said. “I’m focusing on fund-raising here.”