Entrepreneurs unite to increase donations in Brazil in the post-pandemic

The presenter Luciano Huck, the founder of Cyrella, Elie Horn, the chairman of the board of directors of Santander, Sergio Rial, the chairman of Bradesco, Octavio de Lazari Junior, the founder of Marfrig Marcos Molina, and more than a thousand representatives of the business sectors and social groups met this Monday (25th) to discuss how to organize and expand philanthropy in Brazil on a permanent basis.

Basically, they try to maintain what appeared to be a new pattern of private sector giving starting with Covid-19. In the first year of the pandemic, attention was drawn to the high volume of donations made by companies based on spontaneous initiatives by their founders and shareholders. A total of R$7.2 billion was donated by 732,000 donors, a historic number by Brazilian standards, according to the ABCR (Brazilian Association of Fundraisers) donation monitor.

It is also possible to see the weight of companies in another survey, carried out by Bics (Benchmarking of Private Social Investment), by Comunitas, which brings together 17 institutes and 324 of the largest companies in the country. In 2020 alone, the group donated BRL 5 billion, double the average in the previous four years.

These figures financed, just to cite a few examples, health equipment and products, social enterprises to generate income and countless basic food baskets to help the families of the 36 million informal workers in the country who were left without work, 4 in 10 of the national total. Engagement was especially strong in 2020, but it was losing steam.

There are fears that there will be a setback with the slowdown of Covid-19. Data for 2021 has not yet been consolidated, but this year, until mid-April, 66 companies donated R$50 million, according to ABCR monitoring.

Historically, the standard of generosity is lacking in the country. Only 0.2% of Brazilians make donations. The one who gives the most is the one who has the least. In Brazil, the richest people donate amounts equivalent to a third of what the poorest donate, in proportion to their income, despite concentrating the national wealth —about 1% of the Brazilian income, according to data from GIFE (Grupo de Institutos Fundações) and Companies), disclosed to the audience.

“Talking about generating wealth cannot be demonized, but selfishness needs to be demonized,” Rial said in his presentation. The meeting, organized by Banco Santander and Movimento Bem Maior, was called Legacy, in allusion to what structured philanthropy can produce over the years in a country like Brazil.

The meeting was broadcast over the internet, but even so, for three hours, it filled the Santander theater, in the Faria Lima region, with a capacity for 1,000 people.

“We are responsible for the malaise of the poor and we have to do good, whether we like it or not, and it’s better to do it willingly, because it costs less,” said Elie Horne, co-founder of the Bem Maior Movement, who was interviewed by Luciano Huck in theater stage.

Elie Horn, along with his wife Suzy, was the first business leader in Latin America to join The Giving Pledge, at the invitation of its creators, Bill Gates, from Microsoft, and Warren Buffett, from Berkshire Hathaway. Adherence to this initiative determines that at least half of the donor’s wealth will be transferred to philanthropic actions. Horn pledged to donate 60% of his wealth to social causes.

One of the pillars of the discussion among advocates of philanthropy at the moment is to recognize the power of donation to reduce the country’s structural inequality, at a time when it increases.

“Brazil is a poor country, although people who are in a better condition do not see this clearly, the numbers portray it well, and there is poverty in Brazil that is cyclical, from generation to generation, and that affects all dimensions of person’s life, not just income”, says Maurício Padro, founder of Plano CDE, a research company on low income.

According to a survey by Plano CDE, about 75% of the population lives with a monthly family income of less than R$4,500.

In some layers, the money is barely enough to survive. About 45% of the population is in the C class, with an income between R$2,000 and R$4,500. Those who earn R$2,500 in São Paulo, for example, spend R$1,250 on food and cleaning products, and another R$1,000 on rent. There is R$ 250 left over to pay for water, electricity, telephone, internet and leisure for four people, the average size of a family in this range.

This portion still has restricted access to basic services: 45% do not have access to sewage, 16% still do not have treated water and internet access is precarious. According to Prado, 90% of families had to share WhatsApp on a cell phone during the pandemic. “That was distance learning for this part of the population,” she said.

The pandemic, followed by a slower and more disorganized recovery than expected, with a lack of inputs, rising inflation, and the outbreak of Russia’s war in Ukraine worsened the situation in low income. According to Plano CDE, 55% of Brazilians live with some type of food insecurity, and 38% of families depend on donations to eat.

The outlook is for a worsening scenario. Research by Tendências Consultoria Integrada, released at the beginning of the year, shows that classes D and E already represent 55% of the country, and tend to gain 1.2 million more households this year. At the same time, this segment will lose 14% of its mass income — the sum of the usual income from work calculated by the IBGE, transfers from Bolsa Família, Continuous Cash Benefit, Social Security and other sources.

The understanding is that philanthropy, in this context, could act to reduce shortages and deficiencies in services and basic products, increasing well-being, health, and creating conditions for social mobility, especially with initiatives in education.

Part of the work is to sensitize politicians. “We cannot have an aversion to politics, we need to put the best politicians in power, otherwise there will be mediocre leaders like today,” said Luciano Huck. In the presenter’s opinion, it’s not just cash donations that make a difference. People can act in many ways to reorganize Brazil.

Germano Guimarães, co-founder and CEO at Tellus, the first Public Service Innovation and Design organization in Brazil, gave a presentation based on this principle. “We are not going to replace the State, we cannot make public policy, but we can promote experiences that contribute to a better performance of the public sector”, he said.

Guimarães cited as examples the Idis movement, which led to the passage of the Philanthropic Heritage Funds bill, also known as Endowments, aimed at receiving donations to support causes or organizations. He also highlighted the initiative of Fundação Lemann, by businessman Jorge Paulo Lemann, which helped to equalize the curricular base of early childhood and elementary education in the country.

The deterioration of Brazilians’ income, which is beginning to spread through the social pyramid, is already compromising the generosity of the average Brazilian. The trend appears in the Giving Report 2021, released in February this year, with data for the 12 months before the arrival of Covid-19 until November 2020. According to the report, the share of the population that reported having made a donation dropped by 78%. at 72%.

The fall in family income of the middle and lower classes explains the behavior. The survey identified that three out of five Brazilians, the equivalent of 60% of the population, feel a drop in income, while 84% say they are worried about the future of their family income.

The Giving Report is a publication organized by the British entity CAF (Charities Aid Foundation) that tracks and measures engagement in philanthropy in 114 countries. In Brazil, the research has, since 2005, been in partnership with Idis (Institute for the Development of Social Investment).

Another highlight of the survey was to reinforce the perception of companies. A majority, 53%, agree that companies have supported communities during the pandemic, but an even larger share, 73%, said companies could have done more.

According to American philanthropist Peggy Dulany, daughter of banker David Rockefeller, private sector participation begins with a change in the business owner’s worldview. She had a virtual participation in the event and recommended that Brazilian businessmen reflect on whether and how they donate.

“Being a philanthropist requires an inside job, so you can see what your personal obstacles are: are you afraid to talk about the topic? Are you afraid to speak on equal terms with people? that will do the work. It takes a certain amount of humility for that,” said Dulany.

In 1968, Dulany lived for three months in the Jacarezinho favela in Rio de Janeiro. She is a staunch supporter of wealth distribution, with an example at home. Her father, a billionaire, died aged 101 in 2017, leaving most of his wealth to charity.

The Rockefeller family fortune, estimated at $8.4 billion, is spread among more than 70 heirs. Founder and president of the Synergos Institute, an entity dedicated to promoting philanthropy and social responsibility, Peggy is convinced that the business sector can and must work to reduce inequality.

She is part of a group of American billionaires who have embraced philanthropy as part of the family business. In the United States, a country with 735 billionaires monitored by Forbes magazine, philanthropy is a practice defended and organized by a part of the business elite. Not only is the value of fortunes monitored, but also the volume and destination of donations of the most.

Thanks to these accompaniments, it is possible to measure the detachment and present as an example of Warren Buffett, the sixth richest man at the moment (a fortune that fluctuates with the rise and fall of the stock markets). With an estimated fortune of R$122 billion, he has already donated $46.1 billion, almost 38% of his net worth. He is the leader in the donor ranking. Its focus is on improving health care and fighting poverty.

No one, however, donated as quickly as lawyer and writer MacKenzie Scott, ex-wife of Jeff Bezos, founder of Amazon. She is considered one of the most influential women in the world and has pledged to donate at least half of a $54.5 billion fortune. In two years, she has channeled nearly $9 billion to 780 organizations advocating for causes such as gender equality, racial justice and public health. Among them are 16 Brazilian NGOs.

Driven by the stock market, the wealth of the 400 richest Americans listed by Forbes in 2021 grew 40% to an unparalleled $4.5 trillion. But not everyone raised donations. The two richest entrepreneurs in the world are not even on the list of the ten biggest donors.

Tesla’s Elon Musk, with a fortune of US$ 270 billion, the richest in the world, and Jeff Bezos, of Amazon, with US$ 170 billion, the second in the ranking, donated less than 1% of the wealth. They are much younger than most of the most generous donors, an indication that philanthropy, anywhere in the world, is a culture that needs to be constantly debated and encouraged if it is to become a legacy.