Long isolated from the rest of International Geneva, the philanthropy sector is finally opening up for collaborations that will pave the way for financial innovation, write Professor Henry Peter, director of the Geneva Centre for Philanthropy, and its executive director Mara de Monte.
Geneva has been a major centre of multilateral cooperation and a philanthropy hub for over a century, built on its protestant culture and the Swiss tradition of neutrality, stability and credibility, fuelled by an international human capital and a legacy of being a welcoming land – this is known as l’esprit de Genève. It’s what has attracted so many NGOs and altruistic players to Geneva. Unfortunately, today’s global challenges indicate that Geneva’s value as a philanthropy hub will still be needed in 20 years and more to come.
Traditionally it has been believed that two worlds coexist without interacting: international Geneva and the finance community, each one on opposite sides of the lake. But this dichotomy is blurring, in part thanks to a third player: the academic world. The University of Geneva (UNIGE), the Graduate Institute and other academic centres of the Leman region have great potential for positioning Geneva as a unique philanthropic hub in the decades to come, with some major trends already emerging.
Private actors stepping up
It is well-known that a sizable part of the world’s private wealth is managed in Geneva. Its owners are gradually becoming sensitive to the common good, increasingly willing to invest into venture philanthropy, an investment in an altruistic venture in which the investor accepts the risk of losing all or part of the invested capital. The philanthropic contribution is in that case the risk-taker, contrary to the norm.
Corporations and the private sector are also recognising their societal responsibilities and more business leaders can be expected to adopt alternative, stakeholder-oriented business models, moving away from profit maximisation. Priority is given to the social impact, as illustrated by the growing social entrepreneurship movement. As an example, the World Economic Forum adopted sustainability as one of its key focuses, and its sister, the Schwab Foundation for Social Entrepreneurship, recently joined forces with the Geneva Centre for Philanthropy to organise a major international conference on social entrepreneurship.
Innovating for altruistic finance
While pure grant-making remains fundamental, innovative philanthropic investment funds enable different types of investors, foundations and others to pool their resources, share risks and better respond to needs through continuous innovation. Geneva’s know-how has bred new players, such as Sustainable Finance Geneva, an NGO promoting sustainable finance, and Impaakt, a platform relying on collective intelligence to produce research on the social and environmental impact of firms.
What’s more, several platforms are offering new opportunities for exchange and collaboration between academia and practitioners, as well as private and public entities. This is the case of Building Bridges, a joint initiative launched in 2019 by Swiss public authorities, the finance community, the United Nations and other international actors to advance sustainable finance. And it’s still in Geneva that many innovative financial instruments for the pursuance of philanthropic endeavours have been developed, such as the humanitarian impact bond of the International Committee of the Red Cross, with the participation of key financial players in Geneva.
Ethical and inclusive digitalisation
Like most fields, philanthropy is immersed in digital transformation, promising to increase efficiency, transparency and collaboration. In this context, artificial intelligence (AI) has incredible potential. Because of its complexity, however, this technology raises a number of critical questions around benefits, costs and associated risks.
At present, philanthropy is seemingly Al-illiterate and thus remains absent from the debates on regulations, potential applications and usage of AI. To examine its potential, the Behavioural Philanthropy Lab at UNIGE has launched a research project, bringing together academia, civil society and industry to discuss the role of philanthropy for an inclusive and ethical AI. Similarly, the Geneva Science and Diplomacy Anticipator (GESDA) is exploring “how advances in science and technology can most efficiently be translated into and used as tools for the benefit of humanity”.
These ingredients make the “Geneva system”, a unique environment which, building on Geneva’s culture, innovative potential and heterogeneous community, can play a major role for the common good by incubating projects that will show their full potential in a twenty-year horizon.