Consider philanthropy in action – from the combined giving of USD 14.7 billion in 2017 by the top 50 donors, to funding a new malaria vaccine, or to opening schools that give girls access to a quality education. These and many other examples of philanthropy’s role in advancing sustainable development attract a great deal of attention. But how can we optimise its role in support of the 2030 Agenda for Sustainable Development? By contributing both financial resources and innovative approaches, foundations demonstrate their potential to influence and impact social and economic development worldwide. As the ambitious priorities of the Sustainable Development Goals come face-to-face with limited economic resources exacerbated by the 2007 financial crisis, the time is ripe to harness the promise of philanthropy. The first step towards assessing philanthropy’s role is having reliable evidence at hand. In this context, the ground-breaking survey at the heart of this report captures previously non-existent global and comparable data of how much and in what ways foundations support development. These data and qualitative evidence allow action-oriented recommendations to optimise philanthropy’s role in support of sustainable development.

Delivering the Sustainable Development Goals (SDGs) will require more resources than are currently spent, in particular in developing countries. Private foundations’ role in advancing sustainable development has attracted a great deal of attention. They are established sources of both funding and innovative approaches for sustainable development. However, two major bottlenecks have prevented foundations from fulfilling their development potential. First, the dearth of reliable and publicly available data about philanthropic flows hampers the ability of researchers, donors, governments and the philanthropic community itself to compare or aggregate data to map accurately foundations’ contribution to development. Second, the limited understanding of foundations’ priorities and partnering behaviours by official aid agencies, governments and civil society to some extent prevents closer co‑operation.

In order to achieve the Sustainable Development Goals (SDGs), financing for development needs to be optimised, however there is a lack of information surrounding flows from private philanthropic organisations as well as a lack of understanding on how they operate. With rising private wealth and an urgent need to close the funding gap for the SDGs. It is now crucial to understand the impact that philanthropy has, as well as its potential.This chapter presents the global picture and key findings on private philanthropy garnered through the OECD netFWD and a recent OECD DCD survey on global private philanthropy for development.

According to the results of the OECD survey (data questionnaire) foundations gave USD 23.9 billion for development in 2013-15.While these contributions remain relatively modest compared to ODA (5% of the three‑year total) and financing for development more broadly, foundations were major partners in some specific areas such as the health and reproductive health sectors (foundations’ support was the third-largest source of financing for developing countries). In general, over the period surveyed, health was the main sector targeted by philanthropic giving – far ahead of the other sectors – with 53% of the total in 2013-15 (or USD 12.6 billion).This chapter examines the data collected through the survey questionnaire and provides an in-depth analysis of private philanthropy distribution by recipient, income group and sector. It also describes the main modalities of giving used by the philanthropic foundations, in particular the institutions through which they channel most of their funding.

Foundations are often seen as innovators. This chapter explores the meaning of innovation in the philanthropic sector – focusing on organisational innovation and process innovation– as well as why and how foundations have innovated, supported by OECD survey results. It highlights a confluence of factors – growth and professionalisation of the philanthropic sector, foundations´ inner drive for innovation and a generational shift – has led to foundations to innovate in the way that they work. It finds that, in terms of organisational innovation, foundations have moved towards more “strategic” philanthropy and, in terms of process innovation, foundations are using new financial tools and changing their internal processes due to technology and access to data. OECD survey results show while foundations are increasingly changing their practices and delivery methods, these innovations are still far from being the norm across philanthropies.

Historically foundations have partnered with civil society and non-governmental organisations. However, over the last 15 years foundations have changed the way they operate and now work with a wider spectrum of development actors. Yet, while there is a trend towards collective action and multi-stakeholder initiatives, many barriers to forming coalitions remain.This chapter examines the drivers and hurdles for collaboration. It finds interactions between foundations and other actors working for development differ significantly depending on the type of stakeholder and highlights how and how much foundations collaborate with other foundations, with the donor community, with governments in developing countries and with civil society organisations.

This chapter summarises the findings from the OECD survey and presents an overview of how foundations behave as partners as well as notable successes and challenges in their ways of working to achieve development goals.The chapter offers policy recommendations for foundations, to enhance their impact in support of development as well as for providers of official development assistance and for governments.