Brazil: from charity to social investment

Today, Brazil continues to face many social and economic challenges. Poverty is widespread; both educational attainment and health indicators remain low; and wealth inequality has reached one of the highest levels among modern urban industrial societies. In spite of the ending, in 1985, of 20 years of military dictatorship, successive democratic governments have so far failed to guarantee the basic rights set out in the 1988 Constitution in health, education, housing and sanitation.

However, over the past few decades charges of misuse of foundations and other civil society organisations (CSOs) have led to much scepticism and mistrust across society.  The need to demonstrate that community involvement is part of citizenship and that philanthropy is based on ethical behaviour prompted the establishment of GIFE (Group of Institutes, Foundations and Enterprises), a membership organisation similar to the US Council on Foundations or the European Foundation Centre, but with corporations rather than foundations as members.

From this moment, Brazilian philanthropy gained momentum. In 1998, the Ethos Institute was created to lobby for corporate social responsibility (CSR) and corporate sustainability. In 1999, the Institute for the Development of Social Investment (IDIS) was established with the aim of making private social investment more strategic and relevant to Brazilian society.

Other elements of civil society have also evolved dramatically, with a rapid increase in the number and size of CSOs involved in development work in Brazil: there are currently around 750,000 in the country. 

Another important development is that corporate social responsibility (CSR) has begun to feature on the agenda of businesses. According to the Institute for Economic Applied Research (IPEA) 2005 national survey, two out of every three companies reported having had made social investments, which ranged from small donations directly to individuals, to large, structured projects.

The future?

Brazilian philanthropy is experiencing a paradigm shift: from charity to social investment. The way that inequality is being addressed in Brazilian society is changing, as philanthropists begin to work more with the causes of social problems and not just the effects; to be more proactive, strategic, and professional; and to focus on impact. Each year Brazilian philanthropists invest over US$1 billion in CSOs.

But, at the same time, mistrust dies hard, though this scepticism is not directed exclusively toward government.

In a 2001 poll by the Instituto Brasileiro de Opiniao Publica (IBOPE) for the Brazilian Association of NGOs (ABONG), respondents pointed to the need for civil society to be accountable, too. Whilst 58% of respondents approved of NGOs’ impact, 23% said that NGOs should report on their sources of funding, 18% felt that they should be overseen by the state, and 12% felt they should be overseen by society.

These cautionary notes notwithstanding, the emerging forms of private social investment represent an opportunity to individual, family and business donors to become active participants in Brazilian society. Government is still behind in addressing the key social challenges, and leadership is needed on both sides, as is commitment and compromise in a common agenda. New public laws should be enacted to shape the future of philanthropy in Brazil, involving tax incentives, professionalisation of existing organisations, support to institution-building and creativity for the overall benefit of the nation.

Marcos Kisil is President of Instituto para o Desenvolvimento do Invetimento Social (IDIS), São Paulo, Brazil. IDIS was the first non-profit-supporting organisation whose purpose was to develop knowledge and expertise to address the needs of corporations, wealthy families, individuals and communities that decide to organize their giving to become social investors and social entrepreneurs. IDIS is part of CAF International Network.  Marcos can be contacted at mkisil@idis.org.br or www.idis.org.br.