A Review of Philanthropy and Social Change in Latin America

Remedying Inequality

Philanthropy and Social Change in Latin America, Edited by Cynthia Sanborn and Felipe Portocarrero Harvard University Press, 2005, 480 pages

Standing in Mixco, a neighborhood of Guatemala City, on a crisp winter morning, I waited for a ride while digesting the conversation I just had with the director of La Coordinación de ONG y Cooperativas (CONGCOOP), a leader in the field of philanthropy and social change in Guatemala. CONGCOOP is on the cutting-edge of legal reform, development and charitable giving in Guatemala. Standing there next to the building’s security guard, the importance of the volume Philanthropy and Social Change in Latin America struck me. The contributors’ research questions had not only anticipated much of the conversation I just had with CONGCOOP but also contributed to it in substantial ways. The volume is an engaging and extremely readable collection from the David Rockefeller Center Series on Latin American Studies at Harvard University. It contains the stories of many organizations like CONGCOOP from across Latin America, and presents astute analysis of trends and statistics regarding philanthropy in the region.

Having to pass through three layers of security just to enter and exit the CONGCOOP office that morning reminded me that, despite its calm façade, I was in one of the most dangerous parts of Guatemala City. It also demonstrated that ten years after the signing of Guatemala’s Peace Accords, there is still a great deal of work to be done. Non-governmental organizations in Guatemala—funded in large part by private philanthropy—have taken over traditional State functions in terms of alleviating the profound inequality between Guatemala’s richest and poorest citizens. Such inequality exacerbates the country’s problems with violent crime, severe child malnutrition, and high unemployment rates, to name only a few social indicators.

As John H. Coatsworth points out in the prologue to Philanthropy and Social Change, this trend is in play across Latin America: private philanthropy is growing to address the region’s steep inequality between rich and poor. Coatsworth states, for example, that in Latin America, the top 20% of income earners receive roughly 15 times that of the bottom 20% (with the gap even wider in countries like Guatemala and Brazil). This compares to a ratio of 9:1 in the United States and 5:1 in several other developed countries. Private efforts at philanthropy and social change in Latin America therefore stem not only from an environment of poverty and political violence, but also from this entrenched history of inequality.

As the first comprehensive edited volume on the topic of philanthropy and social change in Latin America, the book is extraordinarily useful for current and future researchers because of its constant stream of examples, findings, and research questions. Academics and practitioners in the fields of nonprofit management, law, and philanthropy will find the volume to be an excellent resource. The collection is comprised of 17 distinct chapters within four general sections about: (I) history and context; (II) corporate social responsibility; (III) foundation grantmakers; and (IV) general reflections from international practice. The authors are experts in their respective sub-fields, both as academics and practitioners, including many from across Latin America. Chapters in the volume include the voices of reformers “on the ground” such as nonprofit consultants, tax attorneys, and foundation executives. This range of perspectives increases the book’s credibility as a foundational resource.

Together, the chapters focus almost entirely on institutional, or organized, philanthropy, examining most closely private foundation grantmakers and corporations. Many of the chapters contain case studies of philanthropy in particular countries, including Ecuador, Mexico, Brazil, Peru, and Colombia. Primarily profiling large foundations, corporate activities, and federations of grantmakers, the book offers helpful analyses of organizations like El Centro Mexicano para la Filantropía (CEMEFI) in Mexico, Grupo de Institutos, Fundações e Empresas (GIFE) in Brazil, and Peru 2021. The only possible additions to this otherwise comprehensive collection would have been more material specific to Central America, as well as smaller-scale examples of philanthropy and social change in the region, such as micro-credit and grassroots organizations.

The entire volume (as well as the future of philanthropy in Latin America) seems to rest on the notion of “balance.” The authors demonstrate that Latin American philanthropic institutions are working to achieve social change while balancing their activities against limited resources and small to non-existent endowments. These institutions are subject to some legal restrictions by the state, but also granted certain valuable legal benefits. Philanthropic organizations in this region are established on the basis of freedom of association on the one hand, and yet are establishing mechanisms for transparency and accountability to the State on the other hand. As the chapters discuss, and my own research in Guatemala confirms, legal frameworks are key to adjusting and maintaining this balance properly through tax incentives, reporting requirements, and government oversight.

A cluster of excellent chapters are of special interest. Chapter 1 describes Latin America’s historical traditions of philanthropy. Cynthia Sanborn lays out the key elements of this history, highlighting in particular the struggle between the interests of Latin America’s urban elite and the desire to achieve social change and a “progressive distributional impact” through philanthropy. Chapter 11, by Ignacio Irrarázaval and Julio Guzmán, addresses the role of tax incentives in promoting philanthropy, describing the curious discrepancies in many Latin American countries among different types of charitable organizations—discrepancies which often privilege organizations that benefit the urban elite. For example, in Guatemala, my own research analyzes the fact that charitable donations to private universities and cultural organizations result in better tax treatment than philanthropy in other spheres, like health or primary education.

Felipe Agüero’s chapter on corporate social responsibility in Latin America is an admirable introduction to this burgeoning field of philanthropy. Corporations throughout the volume are shown to be leaders in the region’s philanthropic initiatives. In Guatemala, for example, I spent time with CentraRSE (el Centro de Responsabilidad Social Empresarial), an influential new agency coordinating corporate efforts across the country. Agüero describes how similar corporations and umbrella organizations are doing the same across Latin America. Agüero’s treatment does raise questions about the motives of corporations in this arena—To remedy inequality? To avert social discontent? To capture a new market of consumers?—and whether those motives (versus actions) are at all relevant to achieving the larger goal of “social change.”

The editors and authors hope that this volume is only the beginning in what will certainly be a fruitful area of research well into the future. Some next steps to build on the sturdy foundation provided by this volume would, for example, include an examination of the political obstacles to legal and/or legislative reform that supports and promotes philanthropy. Also, the editors describe in their introduction a troubling lack of statistics about philanthropy across Latin America; this should certainly be the subject of further research by statisticians, sociologists, and others. The connection between philanthropy and democracy in politically turbulent countries would be another productive avenue of research building on this volume’s work.