Private Philanthropy for Development (Third Edition)

Executive summary

Key findings

Philanthropic contributions to development amounted to USD 68.2 billion over the 2020‑2023 period comprising USD 52.8 billion in cross-border flows and USD 15.4 billion in domestic philanthropic funding. This is equivalent to 10% of official development assistance (ODA) volumes. Domestic philanthropy in countries such as China, India, and Mexico now constitutes a substantial share of national development finance.

Africa was the top recipient region of cross-border philanthropic flows, receiving USD 17.6 billion over 2020‑23 (33%). Over the period, annual flows increased, from USD 4.0 billion to USD 4.8 billion. Cross-border philanthropic funding towards Africa was provided primarily by the Gates Foundation (36%) and the Mastercard Foundation (26%).

Private philanthropy remains a key partner and funder in health and education, revealing strong concentration patterns: 40% of total philanthropic flows targeted health, while 11% targeted education. Philanthropic donors are also significant funders of causes and institutions supported by civil society at large, which represents the third largest sector receiving philanthropic funding (7%).

Foundations allocate a higher proportion of their financing to gender‑specific initiatives, compared with ODA, although total volumes remain lower. Gender-specific funding amounted to 8% (USD 5.3 billion) of private philanthropy for development, compared with 2% (USD 14 billion) of total ODA. Philanthropic gender-specific giving was primarily channelled toward sexual and reproductive health and rights (SRHR) (USD 4.2 billion; 81% of gender-specific funding).

Traditional grants remain the predominant instrument of foundations, with limited uptake of innovative financing tools such as guarantees, loans, and equity. Moreover, the continued reliance on earmarked, project-specific funding implies that unrestricted and longer-term support – particularly for local organisations – remains limited relative to needs.

Non‑financial support is widely used, spanning a wide range of areas, of which the most commonly targeted are access to networks and coalitions of founders, and support with monitoring and evaluation, communication and advocacy.

Evaluation capacity is growing among foundations, but the rigorous impact-testing of programmes remains underutilised. Foundations continue to prioritise monitoring activities over more rigorous methodologies such as cost‑effectiveness analysis or randomised controlled trials (RCTs).

Despite increased global attention to locally led development, only 11% of cross‑border philanthropic flows were channelled directly to local organisations over 2020-2023. While local actors are frequently involved in programme implementation, their participation in design and evaluation remains limited. Operational constraints, due diligence requirements and limited local absorptive capacity are commonly cited barriers to deeper engagement in locally led development.

Co‑financing represents a structural modality within the philanthropy sector, with more than two‑thirds of surveyed philanthropies engaging in multiple collaborative projects with over 300 partners. However, partnerships continue to involve a relatively concentrated set of actors, primarily private foundations, companies and international non-governmental organisations (NGOs), while local NGOs remain underrepresented. Co-financing flows remain highly concentrated in a limited number of sectors – particularly health and education – and in Latin America and the Caribbean.

Key recommendations

Foundations

• Enhance catalytic role by expanding participation in blended finance and pooled funding mechanisms, leveraging philanthropic capital to mobilise additional public and private resources.

• Increase the provision of longer-term, unrestricted funding, particularly for frontline organisations including community-led and women-led organisations, to strengthen grantees’ organisational sustainability and enable local systems-change.

• Strengthen partnerships with local philanthropic actors and simplify access for field-based organisations through clearer, more open funding processes. Domestic foundations can also play an intermediary role by connecting international funders with local prospect organisations, facilitating trust-based partnerships, and helping to navigate local institutional and regulatory environments.

• Build internal and external evaluation capabilities, including by partnering with academic institutions and local research bodies. Given the limited internal and partner capacity to conduct rigorous evaluations, foundations could initially invest in external learning partnerships (with academia, research consultancies in local markets) to help grantees design and implement their M&E and further undertake impact evaluations in close collaboration with project teams.

• Engage and collaborate with governments and other development stakeholders to scale-up proven solutions. Rather than attempt to scale projects and programmes themselves, the sector could seek a division of labour: foundations fund innovation, early-stage proof of concept, and rigorous testing, while national governments take over delivery and financing at scale once programmes have proven successful.

Governments and other providers of development finance

• Create enabling regulatory and reporting frameworks for domestic philanthropy. Governments should establish incentive-based regulatory and tax environments that support domestic philanthropy, while mandating transparent reporting to improve accountability and data availability.

• Engage in blended finance solutions to scale up SDG-aligned investments in low- and middle-income countries. Donors should foster partnerships across philanthropy, multilateral development banks, development finance institutions and the private sector to move successful innovations beyond pilot stages, particularly in underfunded regions.

• Support platforms that enable efficient match‑making between philanthropic and public/private actors for blended finance opportunities. The creation of collaboration fora encouraging stronger links and awareness building is also critical.