With the resources and capabilities of governments barely growing or in decline around the world, yet the problems of poverty, ill-health and environmental degradation ballooning daily, it is increasingly clear that new efforts, and new financial resources, are urgently needed to address the world’s pressing social, economic, and environmental challenges.
One promising route to solving this dilemma may be to channel into charitable endowments all or a portion of the proceeds of privatization transactions, a process we are calling Philanthropication thru Privatization, or PtP.
Properly designed and executed, PtP can revolutionize the charitable landscape of countries while transforming privatization into a “win-win” process for citizens, governments, and investors alike.
PtP is not just an abstract idea, moreover. It is already in operation. Indeed, some of the largest and most reputable foundations in the world, such as Germany’s Volkswagen Foundation, Italy’s foundations of banking origin, New Zealand’s network of “community trusts,” Belgium’s King Baudouin Foundation, and close to 200 health conversion foundations in the U.S. have all resulted from, or been enlarged through, a PtP process.
Yet these developments have all proceeded in virtual isolation. No one has thought to draw a circle around them and call attention to their striking commonalities. More importantly, no one has thought to highlight the important lessons they might hold for a new approach to privatization that can yield win-win payoffs for citizens and civil society, as well as for governments and investors.
Next steps include: