The UN Must Be More Imaginative in Engaging and Encouraging the Private Sector to Drive Global Social Progress

This week UN Secretary General Ban Ki-moon released a statement as part of the UN's efforts to build consensus and support for the new global development targets. The Millennium Development goals -- globally agreed targets that range from halving extreme poverty to halting the spread of HIV/AIDS -- have been a milestone in global and national development efforts. However, as the UN works on the on a post-2015 development framework there is a growing realization that governments cannot do it on their own and a big question about how to involve private actors in the fight against poverty.

Ban Ki-moon said this week that "international public finance will not be sufficient to build a more sustainable and prosperous world" and added that "financing and investment from the private sector will play an increasingly vital role." It is easy to forget how big a shift this is in thinking about the financing of development.

Less than a decade ago, philanthropy was seen as a sideshow in global development. When I left the Department for International Development (DfID) in early 2007 to write Philanthrocapitalism, most of my colleagues wondered why I was interested in such a marginal issue. The Paris Declaration on Aid Effectiveness of 2005, for example, made no reference to philanthropy. Why should it? Pledges of extra aid money made at the G8 summit in Gleneagles that year meant signatories had little need to partner with private donors. Those hopes of plentiful official aid flows were dented by the financial crisis of 2008, however, prompting a search for new ways to finance development and complement official development assistance (ODA). When the Organisation for Economic Co-operation and Development assistance committee (OECD DAC) met again in Busan, South Korea, in 2011, philanthropy had made its way into the communiqué. The G20 went a step further that year by asking Bill Gates, a philanthropist, to write a report on how to finance the millennium development goals (MDGs).

Yet the question remains of how to make this grand alliance of governments, business and philanthropy work together. Many in the aid business remain skeptical about the motives of business and are suspicious of philanthropy -- private actors just don't play by the same rules as multilateral organizations like the UN or government aid agencies. Thank goodness. Here is an opportunity to dump some conventional wisdoms, sacrifice some holy cows and try new approaches to solving problems.

William Eggers and Paul Macmillan call this "the Solution Revolution," in their excellent new book of the same name. And it has radical implications for global governance. The Global Fund to Fight Aids, Tuberculosis and Malaria, for example, has given private donors and businesses seats on the board alongside governments. More of these unconventional funding mechanisms and issues-based partnerships will be needed.

It also has implications for target setting. Partnership works best around specific issues. Like it or not, success breeds success: If philanthropic organizations and businesses can see their money having concrete results and tangible impact, further donations are likelier. So expect more single issue campaigns to create solutions for specific problems.

It is also necessary to understand the division of labor. I am optimistic about the potential of the new global partnership because philanthropy and business can do things official donors cannot. A philanthropic dollar and an ODA dollar are very different. Rather than trying to fill the funding gap in existing official donor programs, philanthropy should play the role of innovative risk capital in development, testing new ideas that can be scaled by official donors in collaboration with partner governments and local organizations. Businesses can, through the profit motive, lever enormous amounts of capital to spread innovations. Just look at the spread of the cellphone in Africa, for example. If aid agencies had tried to deliver that, cellphones would be the size of bricks and as rare as hen's teeth.

Ban Ki-moon also said this week that "The public sector can help leverage private resources and encourage long-term investment." As new post-2015 development targets are set, so too must the UN be willing to embrace new partnership models to ensure that businesses and philanthropic engagement are harnessed in the most effective ways possible.

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