"philanthropy as Social Investment": Trends and Perspectives on Philanthropy in Brazil

The City University of New York ́s Center for the Study of Philanthropy

Renato de Paiva Guimarães Journalist; Director of Communications of the Associação Projeto Roda Viva Rio de Janeiro - Brazil 1997

"Philanthropy as Social Investment": Trends and Perspectives on Philanthropy in Brazil

"The best philanthropy, the help that does the most good and the least harm, the help that nourishes civilization at its very root, that most widely disseminates health, righteousness, and happiness, is not what is usually called charity. It is, in my judgment, the investment of effort or time or money, carefully considered with relation to power of employing people at a remunerative wage, to expand and develop the resources at hand, and to give opportunity for progress, and healthful labor where it did not exist before." John D. Rockefeller (Random Reminiscences of Men and Events - 1908)

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Acknowledgment

I am grateful for the strong and fundamental support given by the Center for the Study of Philanthropy, especially by its director, Professor Kathleen D. McCarthy. I would like to thank to Anahi Villadrich for her useful suggestions. I also would like to thank the following institutions for the information and directly support: The Synergos Institute, Group of Institutes, Foundations and Private Enterprises (GIFE), Fundação Grupo Esquel-Brasil, the Rockefeller Foundation, Council on Foundations, Instituto Superior de Estudos da Religião (ISER), and Associação Projeto Roda Viva.

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Table of Contents

Introduction....................................................................................5

I. The Nonprofit Sector in Brazil: a Brief History......................10

II. The Nonprofit Sector in Brazil Today....................................13

III. The Pattern of Philanthropy in Brazil...................................17

IV. GIFE's Experience....................................................................20

V. Trends and Perspectives in Philanthropy in Brazil..............24

Visibility and Transparency, 24 Professionalization, 27 Legislation and Accountability, 29 Partnerships and Internationalization, 34 Community Foundations, 37

Conclusion...................................................................................39 Bibliography ................................................................................41

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Introduction

Brazil is often depicted as a "Sleeping Giant", a country with enormous economic potential, but one that is not fully awakened to this potential. Brazilian philanthropy is much the same. This is a sector that is clearly maturing, but it has not yet realized its economic, political and cultural potential.

With a population of over 159 million inhabitants and a geographical area around 5.3 million miles2, (an area larger than the continental United States), Brazil has a more diversified and dynamic economy than the majority of Latin-American countries. Brazil's Gross Domestic Product (GDP), for instance, is over US$ 412 billion, with a GDP per capita of US$ 2,5961.

The largest growth in the Brazilian economy occurred shortly before the closing of national political life, when democracy was strangled by the two longest dictatorships in Brazilian history: Getúlio Vargas' presidency (1930/19452), and the military dictatorship (1964/1985). During Getúlio Vargas' regime, the government and its allies implemented a plan to modernize the Brazilian economy that abandoned rural efforts to embrace a new model based on the development of the industrial and service sectors. This period was also an era of urban development, marked by the migration of people from rural areas to cities such as Rio de Janeiro and São Paulo in search of better living conditions.

The years following the end of the World War II witnessed the continuing modernization and diversification of the Brazilian economy. Under the democratically elected presidency of Juscelino Kubistcheck, between 1956 and 1960,

1 All data were gathered from "Statistics and Quantitative Analysis - Brazil" of the Interamerican Development Bank's Home Page in the Internet (Http://www.iadb.org).

2The period between 1937 and 1945, known as "New State", was formally an authoritarian regime based on German and Italian models. During the pre-War period and after the beginning of the World War II, Getulio Vargas hesitated in to support the Allies or the Germans. Finally, he decided to support the Allies, receiving in exchange various benefits and American investments that helped to modernize the Brazilian economy, as symbolized by the building of the first big "usina siderurgica", in the city of Volta Redonda, midway between Rio de Janeiro and Sao Paulo. In exchange, Brazil sent troops to fight against the Germans in Italy.

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the city of Brasilia was inaugurated as the new capital of the Republic, replete with grandiloquent architecture to reflect the grandeur of national life. Also, the first large automobile factories were created around São Paulo. These factories contributed to the modernization of Brazilian industry and to the emergence of an "elite" cadre of workers, the best paid, the best prepared, and the best organized, who were known as "metalurgicos", who in a few years would be in the forefront of the modernization of Brazilian labor unions and one of the main opponents of the military dictatorship.

The military stayed in the power for 21 years until 1985 when a civilian, José Sarney, was elected by Congress to assume the Presidency. Under the military, conservative economists known as "technocrats" developed a policy of "Substitution of Importations", which closed the Brazilian market to various foreign products while supporting the development of Brazilian industry with fiscal and monetary incentives and controlling salaries and labor unions with an iron hand. The idea was that first the economy should grow, after which the population would receive the benefits. In fact, there was a significant increase in the GDP and a process of modernization and diversification within the economy known as the "Economic Miracle". It was a miracle built upon a growing gap between