This plenary session chaired by Ecologic's, R. Andreas Kramer featured Kurt Hoffman, from the Shell Foundation, Måns Lönnroth of MISTRA and William Day from UNDP. The focus of the panelists was clearly directed on the role public, private and corporate foundations could and might play in catalyzing the positive and mitigating the negative forces of globalization.

Day identified challenges that have arisen as a result of the much less clearly defined categories and geography between different sectors as well as organization types. Moreover, he noted the need to harness the positive potential of effective business models in poorer regions. Recognizing the special circumstances encountered in several of the most undeveloped regions in the world, he recognized the need for a “hybrid business model” which would incorporate some necessary philanthropic elements, but concurrently push for self-sustained financing. This could only be done, however, through partnerships with a variety of organizations that combine the resources of large organizations with the legitimacy of local NGOs. “It is all about trust,” said Day. As an example, he pointed out that many local and regional governments remain very hesitant to hand water issues over to the private sector although it may, in fact, be the best and only solution. Foundations need to acknowledge the possibility of strategically collaborating with the private sector because foundations simply don’t have the capacity or resources for the task at hand.

Kurt Hoffman, in turn, provocatively questioned the efficiency, or lack thereof, of foundations as they distribute their considerable resources. Hoffman said that “We should not be worrying about specific problems, rather the inefficiency and ineffectiveness of the organizations (foundations) in the system.” He noted that the agendas often set in the rich world do not necessarily address the needs of those who they are meant to help. Moreover, incentives of satisfying customers and creating scalable models are lacking with foundation work and therefore lead to less effective grant-making. Hoffman raised the question “Are you delivering a product that people need and want?” He stated that we need to measure the impact rather than the actions themselves and challenged foundations to better understand supply and demand mechanisms where they work and further expose themselves to the “drivers of change.” “Foundations,” he said, “are able to take risks, but are often both inefficient and too cautious.” They enjoy considerable private and public financial resources but generally lack a great deal of accountability to the societies which they are meant to assist. The drivers of scale, that is profit – are most often absent from the projects undertaken by foundations. Scalability, only works when money is being made.

MISTRA’s Måns Lönnroth concentrated on the capacity of foundations to make the fundamental changes needed in “this second round of globalization.” The first big foundations tried to establish “respectability” for their (often unscrupulous) founders such as John D. Rockefeller. The philanthropists of the post-WWII world, however, are often more open to a less traditional view. Lönnroth believes that one of the greatest opportunities and challenges is for foundations to use the “other 95%” of their assets as part of their mission. Foundations must look very closely at how they manage their assets and align them with their missions. In terms of foundations’ underlying mission Lönnroth said, “Foundations role is to create hope. When people ask, will the world be a better place for my children than for me, they want to answer positively. In China there is more hope today than there is in the United States or Western Europe.” Finally, noting that “money isn’t the answer to most problems, knowledge is,” Lönnroth called on foundations “which are created with a lot of money, but not a lot of knowledge,” to work in tandem with other organizations, including corporations, “to take the type of risks they should be taking given the stakes we are facing.”