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PHILANTHROPICATION thru PRIVATIZATION : A New Approach to Building Charitable Endowments in Developing Regions LESTER M. SALAMON Johns Hopkins University.

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Presentation on theme: "PHILANTHROPICATION thru PRIVATIZATION : A New Approach to Building Charitable Endowments in Developing Regions LESTER M. SALAMON Johns Hopkins University."— Presentation transcript:

1 PHILANTHROPICATION thru PRIVATIZATION : A New Approach to Building Charitable Endowments in Developing Regions LESTER M. SALAMON Johns Hopkins University and East-West Management Institute

2 BACKGROUND Major efforts under way to foster community foundations in less developed areas These efforts are hampered by lack of capital Growing frustration the result

3 Meanwhile, enormous privatization sales going forward in same countries  Hungarian mortgage bank FHB (2007)  Ukraine’s Kryvorishstal Steel Mill (2005)  Kenya Generating Company (2008)  Turkey’s power grid ( )  Kenya telephone grid sold to Vodaphone in 2008  : $545+ billion of privatization sales Meanwhile, enormous privatization sales going forward in same countries

4 249Georgia 10 Rwanda 61Pakistan 27 Turkey Pending Sales Country Shenyang Province, China24 Kosovo Kenya26 PRIVATIZATION STILL UNDERWAY PENDING TRANSACTIONS

5  Kenya Pipeline Co.  Kenya Ports Authority—Eldoret Container Terminal  Chemelli Sugar Co.  South Nyanza Sugar Co.  Kabarnet Hotel  Mt. Elgon Lodge Ltd  Kenya Safari Lodges and Hotels  Agrochemical and Food Corporation  Kenya Wine Agencies  East African Portland Cement  New Kenya Co-operative Creameries  Various power stations PENDING PRIVATIZATIONS: KENYA

6  Capturing a fraction of the privatization proceeds for community foundations could revolutionize the foundation landscape of the world  10% of proceeds of Kryvoriszhstal Steel in Ukraine could have yielded a $480 million Ukrainian community foundation  10% of proceeds of Kenya-Vodaphone deal would have yielded a $70 million Kenya community foundation THE OPPORTUNITY

7  Italian banking foundations  Blue Cross/Blue Shield Sales in US  New Zealand Community Trusts  Volkswagen Foundation  Czech Foundation Investment Fund  415 verified cases so far Not Just a Theoretical Idea

8  Little systematic information  No cross-fertilization of experience  No assembly of best practices  Limited analysis of lessons  No effort to seize the opportunity to build on the experience in other places THE PROBLEM

9 Defuse opposition to privatization  CEE Survey  Citizen protests Ukraine/China  Sales halted in: Sweden, Germany, France, Italy  Sarkozy dedication of 2007 sale to universities An Opportune Moment

10 Build the case for PtP by documenting prior cases Identify best practices/useful lessons Disseminate materials/increase awareness Promote implementation PtP PROJECT

11 Track I: Building the Case  Identify past cases of PtP  Analyze cases, identify best practices  Disseminate results Track II: Implementation Assistance— 3-4 sites TWO-TRACK APPROACH

12 A public or quasi-public asset A resulting privately controlled charitable endowment A process of transformation 3 Defining Features

13 5 TYPES I.State-owned enterprise II.Other state-owned asset III.Government lottery IV.Debt swap V.Quasi-governmental organization (e.g. nonprofit ) Depends on Initial asset

14 NEXT STEPS  Conduct case studies  Form advisory committee  Develop “best practice” guidelines  Disseminate results–conferences/PtP website  Identify pilot test countries  Launch pilot implementations  Chronicle pilot implementation progress/lessons  Publicize & promote further implementation

15  Increased interest in global philanthropy  Increased resistance to privatization  Business community looking for win-win opportunities  Institutional structure for community foundations in place in many locales THE TIME IS RIPE Let’s seize the moment!

16 Lester M. Salamon For further information CONTACT

17 Proceeds by region, Region Value in US$ billion Percent of total value Total$ % East Asia & Pacific $ % Eastern Europe & Central Asia $ % Latin America & Caribbean $ % Middle East & North Africa $ % South Asia $8.72.6% Sub-Saharan Africa $8.42.6% PRIVATIZATION STILL UNDERWAY DEVELOPING COUNTRIES Source: World Bank Group

18 YearValue in US$ billion Total$ $ $ $ $45.2 Proceeds by year, PRIVATIZATION STILL UNDERWAY OECD COUNTRIES Source: Privatization Barometer


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