Innovations in International Development: How Is Finance a Path to Impact?
Senior Private Banker
On June 20, 2018, C. Hoare & Co. hosted Philanthropy Impact, the UK non-profit focused on exploring the role of philanthropy as part of wealth management, and Lombard Odier at a roundtable event in London.
In the panel discussion, the 50 participants took a close look at innovation opportunities involving finance in the international philanthropic work of foundations and NGOs. Chaired by Lucy Blythe, Director, Philia International, James Cameron, Chair of the Board, Overseas Development Institute; Andrea Coleman, Chief Executive, Two Wheels For Life; Martina Fuchs, Chief Executive, Real Medicine Foundation; and Maximilian Martin, our Global Head of Philanthropy at Lombard Odier asked what innovative options are available for philanthropists and dedicated charitable organisations to tackle a wide range of international issues.
The core questions were: how can finance be used as a path to impact on the leading causes – ranging from poverty alleviation, emergency response to disasters, health and social care, protecting people in conflict, protecting nature & dealing with environmental issues, building local capacity, medical/emotional support, to economic support? And how can humanitarian impact bonds provide a solution to international issues?
To get the formula right, the speakers pointed to the importance of navigating the difficult balance between a charitable mind-set and NGO’s need to compete for funds. Moreover, with need outpacing funding and an annual external financing gap of USD 44.3bn in the field of global health alone projected for 2015-2030, new strategies for innovative funding and co-operative models between the actors are urgently needed.
An engaging discussion with the audience demonstrated the shift in approaches currently under way toward a “philanthropy toolbox.” Next to grant making, it also includes mission-aligned and impact investing in private and public market options available to philanthropists and social/impact investors. One reaction to the intense competitive environment in which internationally focused NGOs operate is a tremendous wave of financial innovation. Part of the way forward is to find new and impactful ways to address international issues, including via the ICRC’s Programme for Humanitarian Impact Investment, which was co-sponsored and brought to market by Lombard Odier last year as the first-ever high-impact private debt transaction in the humanitarian space. There is also a great interest in the use of blockchain technology and fintech to reduce the cost of capital delivery in emerging countries. Remittances already make up 32 per cent of the USD 296bn in the resource mix in the 20 countries receiving the most international humanitarian assistance (2015). Cutting transaction cost and enabling more targeted deployment of financing is one logical way forward to drive impact.
Senior Private Banker from Lombard Odier’s London Office, Oliver Hart, concluded, “As professional wealth advisers, we see growing client interest in this area of funding. Displaying our market-leading expertise and collaborating with the UK’s oldest privately owned bank, C. Hoare & Co, on this occasion was a congenial way to raise our profile in the UK market and add value to issues that are top of mind for an increasing number of our clients and prospects.”