Business leaders unite to increase donations in Brazil in the post-pandemic era.

TV presenter Luciano Huck, Elie Horn of Cyrella, and Sergio Rial of Santander are part of a group that wants to structure philanthropy

Presenter Luciano Huck, Cyrella founder Elie Horn, Santander board chairman Sergio Rial, Bradesco president Octavio de Lazari Junior, Marfrig founder Marcos Molina, and more than a thousand representatives from the business and social sectors met this Monday (25) to discuss how to organize and expand philanthropy in Brazil on a permanent basis.

Basically, they are trying to maintain what appeared to be a new pattern of private sector donations stemming from Covid-19. In the first year of the pandemic, the high volume of donations made by companies through spontaneous initiatives of their founders and shareholders drew attention. A total of R$ 7.2 billion was offered by 732,000 donors, a record number by Brazilian standards, according to the donation monitor of ABCR (Brazilian Association of Fundraising Professionals).

It is also possible to see the weight of companies in another survey, conducted by Bisc (Benchmarking of Corporate Social Investment), from Comunitas, which brings together 17 institutes and 324 of the largest companies in the country. In 2020 alone, the group donated R$ 5 billion, double the average of the previous four years.

These figures funded, to cite just a few examples, health equipment and products, social enterprises to generate income, and countless basic food baskets to help the families of the 36 million informal workers in the country who lost their jobs, 4 out of every 10 of the national total. Involvement was especially strong in 2020, but it gradually waned.

There are fears that there will be a setback with the easing of Covid-19. Data for 2021 has not yet been consolidated, but this year, up to mid-April, 66 companies donated R$ 50 million, according to monitoring by ABCR.

Historically, the pattern of generosity in the country leaves much to be desired. Only 0.2% of Brazilians make donations. Those who donate the most are those who have the least. In Brazil, the richest donate amounts equivalent to one-third of what the poorest donate, proportionally to their income, despite concentrating the national wealth—about 1% holds one-third of Brazilian income, according to data from Gife (Group of Institutes, Foundations and Companies), released to the audience.

“Talking about wealth creation shouldn’t be demonized, but selfishness needs to be demonized,” Rial said in his presentation. The event, organized by Santander Bank and the Bem Maior Movement, was called Legacy, alluding to what structured philanthropy can produce over the years in a country like Brazil.

The meeting was streamed online, but even so, for three hours, it filled the Santander theater in the Faria Lima region, which has a capacity of one thousand people.

“We are responsible for the suffering of the poor population and we have to do good, whether we want to or not, and it’s better to do it willingly, because it costs less,” stated Elie Horne, co-founder of the Bem Maior Movement, who was interviewed by Luciano Huck on the theater stage.

Elie Horn, along with his wife Suzy, was the first business leader in Latin America to join The Giving Pledge, at the invitation of its creators, Bill Gatesof Microsoft and Warren Buffett of Berkshire Hathaway. Joining this initiative stipulates that at least half of the donor's wealth will be donated to philanthropic causes. Horn pledged to donate 60% of his wealth to social causes.

One of the cornerstones of the discussion among advocates of philanthropy at this time is to make people recognize the power of donation to reduce the country's structural inequality, at a time when it is increasing.

“Brazil is a poor country, although people who are better off don't see it clearly, the numbers reflect it well, and there is a cyclical poverty in Brazil, passed down from generation to generation, that affects all dimensions of a person's life, not just income,” says Maurício Padro, founder of Plano CDE, a research company focused on low income.

According to a survey by Plano CDE, approximately 75% of the population lives with a monthly family income of less than R$ 4,500.

In some segments of the population, the money barely covers survival. About 45% of the population is in class C, with an income between R$ 2,000 and R$ 4,500. Someone earning R$ 2,500 in São Paulo, for example, spends R$ 1,250 on food and cleaning products, and another R$ 1,000 on rent. That leaves R$ 250 to pay for water, electricity, telephone, internet, and leisure for four people, the average size of a family in that income bracket.

This segment of the population still faces restricted access to basic services: 45% lack access to sewage systems, 16% still lack treated water, and internet access is precarious. According to Prado, 90% of families had to share WhatsApp on one cell phone during the pandemic. "That was distance learning for this part of the population," he stated.

The pandemic, followed by a slower and more disorganized recovery than anticipated, with shortages of supplies, increased inflation, and the outbreak of the war between Russia and Ukraine, worsened the situation for low-income. According to Plano CDE, 55% of Brazilians live with some type of food insecurity, and 38% of families depend on donations for food.

The outlook is for a worsening scenario. Research by Tendências Consultoria Integrada, released at the beginning of the year, shows that classes D and E already represent 55% of the country, and are expected to gain 1.2 million more households this year. At the same time, this segment will lose 14% of its income mass—the sum of usual work income calculated by IBGE, Bolsa Família, Continuous Benefit Payment, Social Security, and other sources.

The understanding is that philanthropy, in this context, could act to reduce shortages and deficiencies in basic services and products, expanding well-being and health, and creating conditions for social mobility, especially through initiatives in education.

Part of the work involves raising awareness among politicians. "We can't have an aversion to politics; we need to put the best politicians in power, otherwise we'll have mediocre leaders like we have today," stated Luciano Huck. According to the presenter, it's not just monetary donations that make a difference. People can act in many ways to reorganize Brazil.

Germano Guimarães, co-founder and CEO of Tellus, the first Public Service Innovation and Design organization in Brazil, gave a presentation based on this principle. "We are not going to replace the State, we cannot make public policy, but we can promote experiences that contribute to a better performance of the public sector," he said.

Guimarães cited as examples the movement of Idis, which led to the processing of the Philanthropic Endowment Funds bill, also known as Endowments, aimed at receiving donations to support causes or organizations. He also highlighted the initiative of the Lemann Foundation, by businessman Jorge Paulo Lemann, which helped to equalize the curriculum base of early childhood and primary education in the country.

The deterioration of Brazilians' income, which is beginning to spread across the social pyramid, is already compromising the generosity of the average Brazilian. This trend appears in the Giving Report 2021, released in February of this year, with data relating to the 12 months before the arrival of Covid-19 until November 2020. According to the report, the percentage of the population that declared having made some donation fell from 78% to 72%.

The decline in family income among the middle and lower classes explains this behavior. The research identified that three out of five Brazilians, equivalent to 60% of the population, feel a drop in income, while 84% declare themselves worried about the future of their family income.

The Giving Report is a publication organized by the British organization CAF (Charities Aid Foundation) that tracks and measures engagement in philanthropy in 114 countries. In Brazil, the research has been conducted in partnership with Idis (Institute for the Development of Social Investment) since 2005.

Another highlight of the survey was reinforcing the perception regarding companies. The majority, 53%, agree that companies supported communities during the pandemic, but an even larger share, 73%, said that companies could have done more.

According to American philanthropist Peggy Dulany, daughter of banker David Rockefeller, private sector participation begins with a shift in the business owner's worldview. She participated virtually in the event and recommended that Brazilian business leaders reflect on whether and how they donate.

“Being a philanthropist requires inner work, to see what your personal obstacles are: are you afraid to talk about the subject? Are you afraid to speak on equal terms with people? Because you may have the money, but other people will be doing the work. You need a degree of humility for that,” said Dulany.

In 1968, Dulany lived for three months in the Jacarezinho favela in Rio de Janeiro. She is an unconditional defender of wealth distribution, exemplified by her own home. Her father, a billionaire, died at the age of 101 in 2017, leaving most of his wealth to charity.

The Rockefeller family fortune, estimated at US$8.4 billion, is spread among more than 70 heirs. Peggy, founder and president of the Synergos Institute, an organization dedicated to promoting philanthropy and social responsibility, is convinced that the business sector can and should work to reduce inequality.

She is part of a group of American billionaires who have adopted philanthropy as part of their family business. In the United States, a country with 735 billionaires monitored by Forbes magazine, philanthropy is a practice advocated and organized by a segment of the business elite. Not only is the value of their fortunes tracked, but also the volume and destination of their donations.

Thanks to these monitoring methods, it's possible to measure generosity and cite Warren Buffett, currently the sixth richest man (his fortune fluctuates with the ups and downs of the stock market), as an example. With an estimated fortune of R$122 billion, he has already donated US$46.1 billion, almost 38% of his net worth. He is the leader in the ranking of donors. His focus is on improving healthcare and combating poverty.

No one, however, donated with such agility as lawyer and writer MacKenzie Scott, ex-wife of Jeff Bezos, founder of Amazon. She is considered one of the most influential women in the world and has pledged to donate at least half of her $54.5 billion fortune. In two years, she has already directed almost $9 billion to 780 organizations that advocate for causes such as gender equality, racial justice, and public health. Among them are 16 Brazilian NGOs.

Fueled by the stock market, the wealth of the 400 richest Americans listed by Forbes in 2021 grew by 40%, reaching an unprecedented US$4.5 trillion. But not all of them increased their donations. The two richest entrepreneurs in the world don't even appear on the list of the ten biggest donors.

Elon Musk of Tesla, with a fortune of US$270 billion, the richest person in the world, and Jeff Bezos of Amazon, with US$170 billion, the second richest, have donated less than 1% of their wealth. They are much younger than most of the most generous donors, an indication that philanthropy, anywhere in the world, is a culture that needs to be constantly debated and encouraged to become a legacy.

This article was originally published on the Folha de S.Paulo newspaper website.

Image Credit: Press Release/MBM