Philanthropy gaining visibility in Arab world
Patricia McCall inherited her 10-year professional commitment to the region from her grandparents, who were born in Lebanon. Today, she said she is hoping to help increase the effectiveness of local philanthropy through impact investment.
McCall is a senior adviser to the Al Ghanim family’s philanthropy endeavours in education, environment, entrepreneurship and empowerment in the Arab world. She advises many families on global partnerships and sits on the boards of local start-ups.
She worked on investment reform issues at the United Nations and at the World Bank. Focusing on solving the youth unemployment crisis, she helped launch the Centre for Economic Growth at INSEAD Business School and the Arab stabilisation plan.
She spoke with The Arab Weekly via Skype, discussing the need to prioritise among the development of social issues. She said that every society, under- or well-developed nation, needs philanthropy.
The Arab Weekly (TAW): How has the act of philanthropy evolved in the region?
Patricia McCall (PM): “While philanthropy and charity have always been part of society (in the region), it has become increasingly more visible and transparent. Several leading philanthropists have formed foundations and are increasingly calling on their peers to join them, giving a more public face to philanthropy, which I believe helps to encourage others to join in. I believe what matters is the increased participation in areas that are important to society such as education, health care, entrepreneurship.
“In the past, I was involved in a particularly innovative form of philanthropy whereby regional business leaders supported a policy initiative to assess a form of a Marshall Plan for the Middle East post ‘Arab spring.’
“This plan focused on identifying solutions for youth unemployment and laying the foundations of job creation and stability. It certainly did not fall into the traditional philanthropy model but was innovative in its design, where it was looking for creative solutions to society’s most pressing problems and used solid research and global thought leaders to develop a credible plan.”
TAW: Much of the donations are made primarily to education and health. Isn’t it unfair to other sectors and causes such as saving our environment, bringing more gender-parity, solving poverty and illegal immigration?
PM: “First, access to quality education and health are still and remain critical elements of any society and I think that philanthropists realise they have an important part to play in working closely with the education and health systems to complement and enhance the provision of those services. Addressing basic human needs is paramount, such as refugee education.
“I also believe that in many cases philanthropists know their own country and its requirements best and so it’s natural to aim to address local issues first as it’s important for the sustainability of our local economy. The philanthropist needs to feel connected to the issues they are supporting and often that means doing something local.
“Having said that, I think you will find that philanthropy in the region is diverse and many participants give widely to both their local community and abroad. The refugee crisis is an example of philanthropists working together to address an issue in the region not just their own country.”
TAW: How are philanthropy investments driving long-term sustainable social change and actual impact in the region?
PM: “Through the increase in philanthropy, there are more stakeholders involved in addressing the region’s needs. In youth unemployment and job creation, we have many businesses and corporate leaders supporting local entrepreneurship education programmes.
“There is, of course, a focus on the urgent needs such as food and education for refugees and conflict areas. There are many examples, including for example Injaz, which provides entrepreneurship learning to the youth in the region. It has reached thousands of students and provides role models for them and encourages them to think about an entrepreneurial future. This complements the national education systems and helps to up-skill the region’s youth for the long term.”
TAW: What could make impact investment even more impactful?
PM: “Impact investing is a significant theme globally among philanthropists and it is beginning to take hold in the region. It allows them to both address critical issues in the region and advocate for social change but also seek a return, often times equal to a more traditional rate of return, which can then also be put back into their philanthropic activities.
“Measuring impact investments has its challenges globally even among the leading players. There are variety of benchmarks, including [Impact Reporting and Investment Standards] IRIS and the new [International Finance Corporation] IFC principles so investors have to be thoughtful about what they seek to measure, ensure they are collecting reliable data to assess impact and adjusting portfolios and targets based on their long-term theory of change.
“In terms of return, of course, it depends on how you measure return, with impact investment the return equation incorporates often your intended impact outcome, say cleaner water or reduced poverty. In terms of financial returns, the rate expected by investors varies as some are willing to take a lower rate of return in exchange for a social impact but they don’t necessarily have to.
“The industry is growing significantly and will eventually settle upon several selected impact indicator standards. The legal framework does need to keep up as there does need to be thought given to non-profits that aim to seek a financial return.”