How can trust be the key to transformative philanthropy?
The pandemic created a new landscape for philanthropy in Brazil . Donations to combat the novel coronavirus and assist populations most affected by the economic crisis flowed in unprecedented volume and speed in the country, exceeding R$ 6.5 billion from March to December 2020, according to the Donations Monitor, an initiative of the Brazilian Association of Fundraising Professionals (ABCR). But this wave of goodwill didn't form overnight. There's a foundation being cultivated for the development of a culture of giving in the country. The fertilizer? Trust.
The third edition of the Brazil Giving Report 2020*, which monitors the culture of giving in the country, already pointed to this trend. Conducted in August 2019, still with pre-pandemic data, the study indicates that Brazilians' positive perception of the work of NGOs increased by seven percentage points. For 79% of respondents, the work of social organizations in their local communities had a positive impact , up from 72% in 2018 – one thousand online interviews were conducted.
But there is still a long way to go: another study, "The Impact of Covid-19 on Brazilian CSOs: From Immediate Response to Resilience ," conducted by Mobiliza and ReosPartners and published in August 2020, revealed that, at the time, 46% of the responding civil society organizations (CSOs) had enough cash to operate for a maximum of three more months, and 69% needed resources to maintain operational costs. Developed in the context of the pandemic, the research further reinforces the importance of trust in the Third Sector so that organizations receive continuous, flexible investments—that is, investments not tied to specific projects and available for use at the organization's own discretion.
Although it seems obvious that the manager of a social organization is the most qualified person to allocate resources within their area of expertise , in practice, social investors tend to link their donations to specific purposes within the organization and, with the best intentions, end up imposing a non-strategic use of the resource.
Trust and flexible investment
A good example of trust-based social investment occurred in the support agreements signed by the Bem Maior Movement with the 50 community-based social organizations selected through a public call for proposals in 2019 in partnership with the Phi Institute . Richard Sippli, Coordinator of Institutional Relations at MBM, tells us that as soon as the quarantine began in the country, “we quickly organized ourselves to contact each of these organizations and understand the difficulties they were facing at that moment. In a short time, it became clear that the focus had changed; our role now was to help them survive as organizations and ensure access to food and basic hygiene for their beneficiaries and teams.”
To help with the food issue, MBM chose to reallocate some of the resources from another project that was only scheduled for December to fund more than 1,200 basic food baskets, which were distributed among the 32 organizations that said they needed them. This entire action was coordinated by the Phi Institute. It's worth mentioning that 18 organizations voluntarily refused the baskets, understanding that their communities did not need this resource as much as the others. "This demonstrates the type of relationship we seek to build at MBM, where the relationship is horizontal and trust comes first, " says Richard.
To help cover essential expenses, MBM opted to make the funds initially earmarked for a specific project more flexible, so that they could be used to pay operational costs such as employee salaries, rent, electricity bills, and other expenses.
For Silvia Morais, director of Synergos in Brazil, it is crucial that this type of donation grows in the country, or we will witness a reduction in the number of civil society organizations, which are the result of years of exercising citizenship and building capital and social fabric . Synergos is an international organization that promotes the strengthening of donor practices, especially individual, family, and corporate philanthropists.
“Flexible resources allow for the practice of resilience in situations that threaten the long-term viability of organizations, such as the one we are currently experiencing, but they also expand the organization's possibilities for innovation, identifying opportunities for institutional evolution and maturation, addressing emergencies and unforeseen events that always occur in the routine of its projects, and, something very important today, not depending on government resources, because an organization that depends on government resources may have its voice and influence over the government reduced,” Silvia points out.
The reality is that social investors have very little appetite for risk. This is mainly because there is a reputational risk attached to the name of the company or family behind the social investment. However, according to the expert, with transparency and management , it is possible to mitigate these risks.
“Trust is the best form of risk mitigation. It is built in longer -term , with monitoring based on proximity and not control-oriented, based on collaborative and partnership attitudes, assisting in an organization's decision-making process and understanding the partner's choices. Trust is not something given; it is something built in the relationship between donors and recipients from its embryonic stage, and trust itself, in addition to guaranteeing broader, deeper, and more structural results, enables the reduction of reputational risks,” concludes Silvia.
As a result of this flexibility in MBM investment, all 50 social organizations remain active and, according to the PHI Institute's assessment, have practically doubled the number of direct beneficiaries served. This is the power of flexible philanthropic resources, this is the power of trust.
Download now
Brazil Giving Report 2020
">
