Posted on January 19, 2007

Philanthropy Emerges as Economic Force in Seattle

Philanthropy in the Pacific Northwest is developing into big business, especially in Seattle, and the region may soon be known as much for the charitable causes it supports as for the fortunes that were amassed there, the Seattle Times reports.

During the city's thirty-fifth annual Economic Forecast Conference this week, the focus was on the economics of global philanthropy, which is emerging as a pillar of the region's economy. According to local economist Dick Conway, principal of local research firm Conway Pedersen Economics, the influence of the Bill & Melinda Gates Foundation "could be a magnet for other activities." Already the world's largest charitable foundation, with a $32 billion endowment and almost that much pledged to it from billionaire Warren Buffett, the foundation will double its grantmaking in 2009 to about $3 billion a year.

Meanwhile, researchers at the University of Washington are working to assess the impact of Seattle-based global health initiatives on the region's economy. To date, they've found that such programs are reaching people in sixty-five countries, that more than two hundred organizations in Washington state identified their work as having an impact on global health, and that roughly 30 percent of total U.S. funding for HIV research is going to institutions and programs in the region.

At the same time, Seattle entrepreneurs are emerging as an important factor in the steady blurring of the lines between business and philanthropy. For instance, Seattle-based Global Partnerships, a microfinance lender, has raised $25 million from private investors and traditional capital markets for a number of social-investment funds, while the Initiative for Global Development, a national network of business leaders that is working to make global poverty a priority among policy makers, is encouraging potential presidential candidates in 2008 to make poverty eradication a top theme of their campaigns.

Looking ahead, philanthropy as an industry will develop many of the attributes of the for-profit world, predicted Matthew Bishop, American business editor of the Economist. "We're on the threshold of an industrial revolution in this new industry of giving," he said, adding that philanthropy's higher profile inevitably will result in more scrutiny of foundation investments. "That kind of scrutiny, fair or unfair, is going to be part of philanthropy going forward."