Private & Public Global Assistance

Considerable press attention is focused on the annual meetings of the International Monetary Fund (IMF) and World Bank in Washington this weekend. The gathering this year is particularly important, given the continuing global financial turmoil and recession.
Also in Washington, Secretary of State Hillary Clinton on April 22 addressed the eighth annual Global Philanthropy Forum, a program devoted to private giving. This event has received little media attention, which is unfortunate. Philanthropy on a global scale steadily expands.
At the recent London G-20 summit, government heads pledged to boost support for the IMF, the World Bank and other lending organizations by $1.1 trillion, but much of this money has not yet been formally committed. President Barack Obama this week asked Congress for authorization to boost the U.S. contribution to $100 billion, an enormous increase over past support.
Underscoring the serious context, the IMF forecasts the world economy likely will contract by 1.3 percent this year. Economists predict an output decline of that magnitude would leave at least 10 million more people jobless around the world.
The World Bank has just committed $45 billion over the next three years to support road building and other infrastructure projects in poor nations. This is $15 billion more than the Bank spent on such infrastructure efforts in the three years before the current crisis.
The initiative will direct to developing countries the same types of aid rich nations are devoting to domestic job creation. World Bank President Robert Zoellick estimates that in Latin America 200,000 to 500,000 jobs would be generated for every $1 billion spent on road infrastructure.
Zoellick also has said the United States and Europe should "reconsider old prerogatives" and allow developing countries a greater influence in World Bank management. The IMF is having the same debate, which will be an important dimension of the Washington conference.
Meanwhile, private philanthropy continues to expand. For example, in 2006 U.S. Overseas Development Assistance amounted to $23.5 billion, by far the largest absolute amount committed by any nation, though not the largest percentage of gross national product. Yet in the same year private philanthropy and overseas remittances, primarily fund transfers home by foreign workers, were four times larger than government aid. According to the Index of Global Philanthropy of the Hudson Institute, private financial flows now account for more than 75 percent of all developed donor nation flows to developing nations.
Secretary Clinton’s speech highlighted new approaches to public/private partnerships on the part of the State Department, including the durable but often beleaguered Agency for International Development (USAID). While foreign aid is less controversial than in earlier periods, heading the program traditionally has been a particularly tough job.
Foreign Aid Directors David E. Bell in the Kennedy and Johnson administrations and Peter McPherson in the Reagan administration emerged from their ordeals with reputations enhanced, but their success is unusual. Greater collaboration with the expanding nonprofit and philanthropic sectors may well reduce political pressures on the dedicated people who lead USAID.
Officials of both the IMF and World Bank should devote the same sort of focused attention to expanding cooperation with private foundations and other nonprofit organizations. The steady growth of philanthropy since World War II is inspiring. Winston Churchill aptly explained the incentive: “You make a living with what you get, but you make a life with what you give.”
Arthur I. Cyr is Clausen Distinguished Professor at Carthage College in Wisconsin and author of ‘After the Cold War’. He can be reached at acyr@carthage.edu