Jane Wales
Buoyed by the success of the millennium development goals (MDGs), the community of nations has come together once again to commit to a shared set of objectives. This time, UN member states have made an even bolder promise: to eradicate poverty by 2030 and to do so in an environmentally sustainable way.
But they did not say they would foot the bill.
At an estimated annual price tag of $3.5 trillion, the sustainable development goals (SDGs) are as expensive as they are worthy. The sum is far too large for bilateral and multilateral aid agencies to muster from within. So they have turned to private sources, including philanthropies, for help in filling the budgetary gap. When it comes to financing poverty eradication, the SDGs are, by necessity, as much of a clarion call as they are a commitment.
To assess the likely ways that the SDGs will be financed, it is important to understand how the MDGs – the SDG’s forebears – were achieved. Government aid was only part of the picture, with philanthropy playing a supporting role.
However, it was policy, not philanthropy that made the decisive difference. An increasing number of nations pursued policies to open and connect their economies, creating great wealth and reducing extreme poverty in the process. The growth of China and India alone was responsible for much of the progress. The global economy has its faults, searing inequities among them. Nonetheless, it has lifted more people from poverty than aid or philanthropy could.
None of this is to say that the role of philanthropy is either modest or unhelpful. Quite the contrary. According to the Foundation Center, between 2002 and 2012, foundations made $30.5 billion in grants toward achieving the Sustainable Development Goals. And, in soon-to-be-released figures, it projects as much as $364 billion in such grants over the 15 years, the time frame covered by the SDGs.
But, while philanthropy’s contributions are significant, the combination of governmental development assistance and private philanthropy is measured in billions; the funding shortfall for the SDGs is in the trillions. Foundation leaders and development economists agree that capital markets, growing where there is sound policy, must be tapped.
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