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The innovation race facing the future of philanthropy
Leaders face a stark challenge: meeting social needs that are constantly rising. Hundreds of millions of people are undernourished; billions lack clean water and air pollution dominates the skies of cities. But funding is stretched and the nature of aid has changed, with lines between philanthropy and investing for impact becoming increasingly blurred.
To unlock capital on the scale needed to settle humanitarian concerns, new financing mechanisms are now needed.
Global problems require new financing models
Lombard Odier Senior Managing Partner Patrick Odier says, “there is a growing sensibility of the capital markets today toward impact investing and its different instruments, which allow for a vastly more efficient use of resources". Nevertheless, significant work remains ahead in that solutions must be able to work at scale and be compelling to the public at large.
One way of easing investors into new models is to target innovative projects at specific markets. The promise of innovative funding models for development and humanitarian impact is huge. Moreover, one thing is certain - standing still is not an option.
Cancer research funding: navigating a competitive environment
Cancer will surpass heart disease as the world's leading killer by 2030 so how can research and development and new models of healthcare find the treatments and solutions we need?
The widespread availability of genetic data, combined with innovations in biotechnology, nanotechnology and robotics are ushering in a new era of 'personalised' healthcare solutions, advances which have brought fresh focus and funding on the disease.
However, public money and philanthropic donations continue to be essential to feed the research pipeline and overcome roadblocks, particularly in the highly risky, very early stages of research and development.
Accelerating progress will need innovative ways to mobilise capital, where philanthropy and investment complement each other. Lombard Odier is excited by the many possibilities in this space to help would-be donors find and fund exciting projects.
Building on our longstanding engagement in the field of oncology, we will continue to offer our clients novel, high-impact solutions as we enter a new era of ground-breaking research and innovative drugs.
Can innovative financing take philanthropy to the next level?
Given the emerging set of opportunities and constraints, developing new financing models, which will transform how philanthropy works, is a key milestone to attain. The International Committee of the Red Cross (ICRC) has a similar approach to Lombard Odier - where the power of investing and traditional charitable giving are strategically combined to achieve the highest impact possible.
With that shared vision in mind, the two bodies have worked together in the past on innovative financial approaches, such as the 'Programme for Humanitarian Impact Investment', a financing instrument to fund the construction and operation of physical rehabilitation centres in Mali, Nigeria and the Democratic Republic of Congo.
Lombard Odier shares the passion of so many of today's philanthropic leaders – to do good in a world where some established models are becoming obsolete, said the bank's Global Head of Philanthropy, Dr Maximilian Martin. “The creation of innovative financing models not only promises greater social impact; it may be critical for humanity to solve the challenges now before us."
Can Big Data transform charitable giving and investing?
Can voluminous amounts of structured, semi-structured and unstructured data steer new forms of value creation, in terms of both financial value and social impact? Data collection and analysis are already allowing charities to make better-informed funding decisions.
Cheaper and more abundant information is enabling Lombard Odier to invest capital in ever more efficient ways. Our proprietary data analytics platform allows us to gain deep insights into what corporations say and do about sustainability. Big Data enables investors to zoom in even better on the risks associated with unsustainable corporate behaviour, and the resulting implications for reputation and financial performance.
Applying new sources of data to investment decisions and philanthropic giving is a powerful way to help us seize opportunities and deal with humanity's urgent challenges, and we are excited to put this huge potential at our clients' fingertips.
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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