Corporate Philanthropy and Democratic Governance: The Case of Colombia

Cristina Rojas1

Visiting ScholarDavid Rockefeller CenterHarvard University

The crucial question for democracy is not what we strive for, but by what means.

Philip Selznick (1953)2

In May 1957, 35 entrepreneurs of Medellín started a strike to oust General Rojas Pinilla from power, so forming a ‘civic front’ of employers against the military regime3. As a result the most important industries were on a standstill and some paid anticipated salaries and delivered groceries to workers and their families. Entrepreneurs of Bogota, which used the National Association of Industrialist –ANDI as headquarter to paralyze activities in the financial system, followed Medellín’s example. On May 10, Rojas abandoned the country. Two months later the leaders of the two political parties signed the agreement known as the National Front recognizing parity between liberals and conservatives for the period (1958-1974) in the distributing of bureaucratic positions and the alternation of the presidency of the country. The National Front is known as the “pact between gentlemen”4. The solution forged by the alliance of businessmen and traditional political elites was a ‘restricted democracy’5 granting a monopoly to the traditional liberal and conservative parties.

The events during these years provide important clues regarding the relationship between business elite, political parties and democracy. Contrary to the Latin American experience, in Colombia the authoritarian regime was short-lived (1953-57). Entrepreneurs not only organized as ‘civil actors’ to contest an authoritarian regime but used tools considered the privilege of working class organization: the strike. Thus their call for transition to democracy went far beyond the timid role played by their counterpart in the region6. As the restricted character of the

1 Case prepared for the Project Civil Society and Democratic Gobernability in the Andean and South Cone, coordinated by Pontificia Universidad Catolica del Peru. It was based on a research financed by the Ford Foundation whose results appear in Rojas, Cristina, Gustavo Morales, Carmenza Saldías, Elvia Caro and Juan Carlos Jaramillo. Filantropía y Cambio Social: El Caso de las Fundaciones Empresariales Filantrópicas en Colombia, Informe presentado a la Fundación Ford, CCRP, 1999. I thank all of them for their contribution. I am grateful to Anthony D. Tillett and Rodrigo Villar for their comments. I thank the David Rockefeller Center and Ford Foundation for their financial support. 2 Selznick, Philip, TVA and the Grass Roots. A Study in the Sociology of Formal Organizations, Berkeley and Los Angeles: University of California Press, 1953, p. 7.3 Echeverri Uruburu, Alvaro, Elites y Proceso Político en Colombia (1950-1978), Bogotá: Fundación Universitaria Autónoma de Colombia, 1986.4 Wilde, Alexander, Conversaciones de Caballeros. La Quiebra de la Democracia en Colombia, Bogota: Tercer Mundo, 1982. Also, Marco Palacios, Entre la Legitimidad y la Violencia, Santa Fe de Bogotá: Grupo Editorial Norma, 1995, p. 241.5The expression ‘restricted democracy’ belongs to Pizarro,Eduardo, “Democracia Restringida y desinstitucionalización Política”, in Medellín, Pedro La Reforma del Estado en América Latina, Bogotá: Fescol, 1989 .6 See for example Cardoso, Fernando H. “Entrepeneurs and the transition process: The Brazilian case”, en Guillermo O’Donnell, P. C. Schmitter, and Laurence Whitehead (eds.) Transitions from authoritarian Rule. Prospects for Democracy, Baltimore y Londres, 1986.

solution suggests their trust in democracy was less intense than their feelings against authoritarianism.

This chapter explores the relationship between business elites and democracy using the case of corporate philanthropic foundations.7 Although they are not the most predominant forms of civic association, their increasing participation in policy making, development projects and community led organizations makes a relevant example. First, it allows locating the debate in the context of Latin America business elites, traditionally not considered the most democratizing force8. Second, non-government associations are not just influencing government policy but ‘taking over the business of government’9. Furthermore, recent literature considers non-profits a ‘third-party government’10. Despite their involvement as an actor outside the state and traditional political institutions almost no attention is paid as to how the Third Sector governs and what the consequences for democracy are. Third, the emergence of philanthropy in a country characterized by low levels of confidence and high levels of violence question the assumption that it is the density of civic associations that triggers democracy.

I argue that in Colombian foundations are embedded in regimes of governance whose beneficiaries, scope and methodologies varied historically. Despite their diversity some trends are discernible: The 60s initiated with an assistentialist regime of governance centered in the protection of workers and their families; in the 70s the region makes its appearance allowing considerations of regional development. It is in the same decade that the concept of ‘property with social ends’ takes force as it was the case of the largest foundations, Fundación Social and FES, which became property foundations. In the 1980s the growth of unemployment and poverty revitalized the liberal principle of responsibility centered on local development. The Constitutional and economic changes in the 1990s triggered a concern for public governance aimed to improve the management of public institutions and to link citizens and the state. Although not uniform, there is a movement towards more democratic forms of governance, but still restricted in some areas. The economic and political crisis of the end of the 1990s is threatening the sustainability of a long tradition of corporate philanthropy in Colombia. At the same time it opens the space toward more democratic politics where foundations and the state play a crucial role. In order to discern this

7 Corporate foundations are non-profit organizations created and financing by a business enterprise or its owner. Corporate foundations can either receive periodical financing from the business enterprise or be the product of an initial endowment from a business. They have a philanthropic character which meant that their activities benefit other than their members. The later characteristic is not used as a exclusionary category because the meaning and content of philanthropy changes historically as it is demostrated here. According to the Colombian law the concept of foundation is associated with the achievement of a particular aim in whose implementation the founders provide a patrimony or capital. 8 In the 1970s the private sector was considered anti-democratic. Today the situation has changed and as stated by Silva and Durand, “for the moment, it seems that business elites have little fear from democracy.” Eduardo Silva and Francisco Durand, “Organized Business and Politics in Latin America”, in Durand, Francisco and Eduardo Silva, (eds) Organized Business, Economic Change and Democracy in Latin America, University of Miami: North South Center Press, 198 , 34. 9 Stoker, Gerry, “Governance as Theory: Five Propositions”, in International Social Science Journal -ISSJ, Journal Blackwell Publishers, 1998 , 23.10 Salamon, Lester M., Partners in Public Service: Government-Nonprofit Relations in the Modern Welfare State. Baltimore: John Hopkins University Press, 1995, Chapter 1.

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movement this paper uses the current discussion on the relationship between associations and democracy.

Theoretical Debate

The relation between engagement in associations and democracy is a contested one. Theda Skocpol11 identifies two different ways to pose the relationship: a ‘social capital’ view which emphasizes the socialization of individuals into cooperative behavior, and ‘neo-institutionalism’ which looks at the organizational component within the State or the associations. A third, ‘governance’ perspective is now emerging whose focus is the governing role that ‘non-government’ institutions perform.

Social Capital

Robert Putnam12 contends that it is via the generation of trust that individuals working together are more likely to engage in collective activities. Individuals engaged in civic associations, no matter which type, improve government institutions by increasing trust13. He uses the concept of ‘social capital’ to explain how civic associations relate to democracy14. Social Capital is defined as norms and networks that enhance collaboration and increase participation in the solutions for collective goods. What creates social capital is participation in civic associations, be it a soccer club, choral society or cooperative.

There are main limitations using a ‘social capital’ approach to analyze the democratic potential of associations. One is that an emphasis on social ties and associational density ignores differences in distribution and mobilization of resources between organizations. A second is that it ignores the role of the state. Neo-institutionalists provide a response to both. A third limitation is to assume that associations enhance democracy solely by allowing an intermediation with the state. Democracy is also in ‘how’ associations govern.

Neo-Institutionalism

For a neo-Institutionalist perspective the study of organizational resources for collective social and political activity are crucial. As Theda Skocpol argues, the key is the leverage capacity of associations15. Leverage depends on who is organized, for what purposes and how civic activity is distributed and what kinds of resources are mobilized. Thus lack of trust is not a problem for democracy nor is the lack of socialization of individuals. Democracy is a product of distrust and organized

11 Skocpol, Theda and Morris P. Fiorina (eds) Civic Engagement in American Democracy, Washington and New York: Brooking Institution Press and Russell Sage Foundation, 1999.12 Putnam ,Robert D., “Tuning In, Tuning Out: The strange disappearance of Social Capital in America”, en PS: Political Science and Politics, Diciembre 1995 , 664.13 Putnam, Robert D., “Tuning In, Tuning Out: The strange disappearance of Social Capital in America”, en PS: Political Science and Politics, Diciembre 1995, p. 664.14 Putnam, Robert D., Making Democracy Work: Civic Traditions in Modern Italy, Princeton: princeton University Press, 1993 .15 According to Skocpol and Fiorina “voluntary associations matter as sources of popular leverage, not just as facilitators of individual participation and generalized social trust.” op.cit., p. 15.

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conflict and depends from the capacity of civic organizations to mediate between the State and society, to empower citizens and to relate citizens and leaders. Thinking on institutions allows understanding why organizations from the elite are not the same than cross class neither associations nor membership the same than memberless associations. According to Skocpol the recent transformation of civic life16 from membership associations to advocacy brought a change in composition from cross class to professionally led organizations, which focus on lobbying and public education. The later tend to be managed from the top and tilted toward upper-middle-class constituencies. As long as they are managed by staff the bridges between classes eroding. Advocacy organizations and large private foundations are also less democratic in their structure since their leaders are not elected and they are less accountable. Grass-groups have a tendency to fragmentation and to concentrate on the local without changing state or city behavior. Even more worrisome is the fact that a top-heavy civic world “distorts national politics and public policymaking”17 as she documents with regard to the 1990s legislation on health security dominated by advocacy groups, pollsters and big money which left American people without the extension of coverage.

Neo-Institutionalists add other ingredient missed in Putnam’s view: the State.18

Social capital and confidence can be created by government institutions. As Peter Evans argues the most important ingredient is the ‘state-society’ synergy where both community and government enhance each other behavior19. This is the case of projects where local officials work with the community and as a result there is more pressure for change. The state also has the capacity to enhance the scale of projects and, therefore, local projects can have a national impact.

Regimes of Governance20

The concept of governance goes beyond the neo-institutionalist perspective. It is not restricted to influencing the state nor is restricted to activities backed by state’s authority. Inside this minimal definition, we can identify two levels of analysis. A systemic level whose focus is the self-governing network21. A more restricted level focuses on governance understood as the capacity to direct the conduct of individuals or of groups22.

16 Skocpol, Theda, “Advocates without Members: The Recent Transformation of American Civic Life”, in Skocpol and Fiorina, op.cit., pp. 498-504.17 Ibid., 50218 Tarrow, Sidney, “Making social science work across space and time: a critical reflection of Robert Putnam’s Making Democracy Work, in American Political Science Review, vol. 90, No.2 junio 1996 , 395.19 Evans, Peter, “Government Action, social capital and development: reviewing the evidency on sinergy”, en World Development, Vol. 24, No. 6 1996.20 I thank Valerie Howe for calling to my attention this aspect of ‘governance’. 21 Bob Jessop makes coterminous governance with self-organization (heterarchy) defined as a system of coordination that is neither anarchical as the market nor hierarchical as in the institutions. The emphasis is placed on the autonomy and self-organizing capacities of networks. Jessop, Bob, “The Rise of Governance and the Risks of Failure: the case of economic development”, ISSJ, Journal Blackwell Publishers, 1998, p.31. See also Rosenau, James N. and Ernst-Otto Czempiel, Governance without Government: Order and Chaos in World Politics, Cambridge: Cambridge University Press, 1992 , 422 Foucault, Michel, “The Subject of Power”, in Dreyfus, Hubert L. and Paul Rabinow, Michel Foucault, Beyond Structuralism and Hermeneutics, 2nd. Edition Chicago: The University of Chicago Press, 1983 , 221. See also his ‘Governmentality’, in Burchell, Graham, Colin Gordon and Peter Miller, The Foucault Effect. Studies in Governmentality, Chicago: University of Chicago Press, 1991.

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As Stoker23 states the “essence of governance is its focus on governing mechanisms which do not rest on recourse to the authority and sanctions of government”. What are these mechanisms? First, dialogue and exchange of information are key mechanisms of governance24. Second, self-restraint (negative coordination) is as important as positive coordination. According to Norbert Elias self-restraint is a mechanism of regulation central to the civilizing process.25

Civilization was neither planned nor produced by purposive measures. Rather civilization “is set in motion blindly, and kept in motion by the autonomous dynamics of a web of relationships, by specific changes in the way people are bound to live together”26.

Third, discipline is an important mechanism of governance. Discipline creates private links between individuals and wield constraints different that the contractual ones.27 Discipline classifies and distributes individual hierarchically according to a scale. These individuals are related to each other and regulate mutually. Discipline monitors and corrects actions of individuals and promotes loyalty, industriousness or friendly cooperation. According to Foucault, “all the authorities exercising individual control function according to a double mode: that of binary division and branding (made/sane; dangerous/harmless; normal/abnormal); and that of coercive assignment, of differential distribution (who he is; where he must be; how he is to be characterized; how he is to be recognized; how a constant surveillance is to be exercised over him in an individual way, etc.)28.

Another important steering mechanism is the creation of a ‘community’ (of worldviews, interests, and meanings) allowing collective action to take place. This is the proper political question and the place where democracy arises. Democracy is more than influencing government. This is a policy question. Democracy is about the construction of a “we” different from a “them” and about how despite their differences both are brought as partners in debates about collective action29. The definition of whose actors are allowed to participate in the community of citizens and the voices to be heard is a crucial issue. This is a political, and therefore, democratic question.

23 Stoker, Gerry, op.cit, p. 17.24 Jessop, op.cit., p. 35. The United Nations Human Development Report 1999 shows the impact of technologies on global governance. For example, internet which have 143 million users have transformed social interaction. Communication technologies have also changed the behavior of multinational corporations and local govrnments.25 Elias links both the transformation of personality structures and the social structure, calling for an approach closer to a ‘historical social psychology’ or sociogenetic. Elias, Norbert, The Civilizing Process.The History of manners and State Formation and Civilization, Oxford & Cambridge: Blackwell, 1994 .26 Ibid., 445.27 Foucault, Michel, Discipline and Punish: the Birth of the Prison New York: Vintage Books, 1979. 28 Ibid., 19929 I am following Mouffe and Zizek’s view of democracy. Mouffe, Chantal, “Democratic Politics and the Question of Identity”, in John Rajchman et al The Identity in Question, New York and London: Routledge, 1995. For Zizek democracy and politics are synonymours. The political struggle is not “a rational debate between multiple interests, but the struggle for one’s voice to be heard and recognized as the voice of a legitimized partner.” Zizek, Slavoj, The Ticklish Subject. The Absent Centre of Political Ontology, London, New York: Verso, 1999, p. 188.

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What does philanthropy add to governance? The incorporation of citizens into ‘civility’ is a main motivation for philanthropic institutions. This incorporation includes the creation of common understandings of who is included and who excluded from the community of citizens This incorporation is subject to contestation and changes historically. An instrument linking individual and societal aims is the identification of dangers that weaken the life of society. These dangers are internal and appear under the figure of internal agents endangering the healthy parts of society and thus justifying the creation of mechanisms and institutions to ‘defend society’. For philanthropy the distinction between ‘civic’ and ‘uncivil’ is perhaps the main instrument of governance both as exercise of self-restraint (negative coordination) and as a steering mechanism to direct they conduct (positive coordination). This explains why philanthropy has a strong component of civic education and it performs a role of conversion. Quoting to Edwald, “The practice of beneficence must take the form of teaching. It is educational.”30

How does philanthropy relate to democracy? The practice of philanthropy had an ambivalent relation to democracy. Philanthropy’s attempt to integrate the social in the moral and affective realm outside a concept of rights implies a relationship of dependency based on loyalty and affection. It is this relation of dependency that makes philanthropy not democratic. Philanthropy can open space for the representation of solidarity and for demands for the expansion of democracy. Philanthropy can also introduce changes that deterritorialize and de-individualize systems of dependence. Philanthropy can enhance democracy by opening spaces of negotiation and bringing in issues and concerns to the state. Philanthropy restricts democracy by avoiding politics. Thus depolitization reduces democracy’s scope. It also reduces democracy by not considering certain voices as legitimate partners. Democracy is not a ‘all’ or ‘nothing’ situation and different regimes of governance present combinations of democratic and authoritarian relations.

Corporate Philanthropy and Democracy in Colombia

Regimes of governance within corporate foundations varied historically. In general there is a process of learning where:

Affective dependency is being replaced by self-reliance.Distance is taking the place of neighbor protection.Gender equity is slowly displacing neutrality. Know how is a resource as important as material donations.Dialogue is taking war’s place.

The most important aspect of ‘politics’ in the broader sense of different voices participating in debates about collective action is emerging, albeit cautiously. The evolution is not unilinear and today old and new practices coexist.

Mapping the philanthropic sector: historical background

30 Ewald, François, Histoire de l’Etat Providence, Grasset: 1996 , 43.6

Colombia has a rich philanthropic tradition that originated in the Colonial period under the form of cofradías.31 They functioned under the surveillance of catholic bishops, in charge of the spiritual and social support of poor families, especially widows, orphans, and poor. In the mid-nineteenth century Conservatives saw in philanthropic societies an ideal route to promote morality and Catholic principles. Antioquia’s a Conservative enclave was especially rich in the creation of philanthropic societies.32 During the Regeneration Regime (1860-1902) the Boards of Beneficence increased the practice of contracts with religious communities, as it was the case of hospitals and poorhouses.33 Mutual aid societies and democratic Artisans Societies participated in technical training and hygienic education.34

In the early 20th Century the fear of communism, trade unionism and moral decay moved entrepreneurs to install governance practices as patronatos35 created by women from upper class to protect working women’s moral and chastity. As the danger of tradeunionims increased in 1936, business response, especially in Antioquia, was industrial paternalism based on female’s worker moral. As Farnsworth-Alvear illustrates this type of industrial paternalism combined anticommunist repression with material benefits that appear not as concessions but as gifts36.

In 1911 the Jesuit Priest Campoamor founded the Workers’ Circle, La Obra and a saving bank, Caja de Ahorros del Circulo de Obreros. The model implemented by Campoamor was based on three axis of intervention: 1) beneficence combining economic, moral, political and educational objectives; 2) harmony between the social classes and the praising of poverty as a virtue, 3) women participating in the task of workers redemption37. The organization had a non-political, gender and

31 Beatriz Castro, “Caridad y Beneficiencia en Cali, 1848-1898, en Boletín Cultural y Bibliográfico, XXVII, 2, Bogotá: Biblioteca Luis Angel Arango, (1990)32 Some Examples are the Association of the Sacred Heart (1871) the Society of Catholic Mothers. Conservatives men founded the Catholic Society and the society San Vicente de Paul. See Beatriz Castro C. El Tratamiento de la Pobreza Urbana en Colombia, 1869-1922, (Universidad del Valle, Facultad de Ciencias Sociales y Económicas, Departamento de Ciencias Sociales, 1998), Gloria Merced Arango, Arango R., “Las Asociaciones Católicas de Antioquia en el Siglo XIX y sus formas de Sociabilidad”, IX Congreso de Historia de Colombia, Tunja, Mayo de 1995 . Antonio Marín C., “Historia de las Prácticas Solidarias de Antioquia 1850-1930”, in IX Congreso de Historia de Colombia., 1995.33 This was the case of Hospital de San Juan de Dios; el Hospicio, el Asilo de Mujeres Indigentes; the Asilo de Varones Indigentes. Cf. Beatriz Castro.34 Sowell, David, The Early Colombian Labor Movement. Artisans and Politics in Bogota 1832-1918,Philadelphia, 1992.35 See Farnsworth-Alvear, Ann Dulcinea in the Factory. Myths, Morals, Men, and Women in Colombia’s Industrial Experiment, 1905-1960 (Durham and London: Duke University Press, 2000). See also Luz Gabriela Arango, “Mujeres Obreras, Familia y Políticas Empresariales. La Historia de Fabricato”, in VIII Congreso Nacional de Historia de Colombia, 1992.36 Material benefits included medical insurance, access to housing, factory schools, regular wage increases. Among the disciplinary methods there were virginity as a precondition for women’s employment, stric definitions of femaly chastity and factory beaty contests. Farnsworth-Alvear, op.cit., pgs. 148-149. 37 On the history of La Obra see Manuel Briceño Jauregui, Del Círculo de Obreros y de la Caja Social de Ahorros a la Fundación Social: 1911-1972. Santa Fe de Bogotá, Fundación Social, 1997. Casas, Maria. El Padre Campoamor y su obra: el Círculo de Obreros. Santa Fe de Bogotá, Fundación Social, 1995. Londoño, Rocio y Restrepo, Gabriel. Diez historias de vida: "Las Marías" Santa Fe de Bogotá, Fundación Social, 1995. Caro, Elvia, “Visiones y Realidades de Genero en la Filantropia Empresarial”, en Cristina Rojas, Gustavo Morales, op. cit.

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moral character.38 Women, known as las Marias, were reunited in a farm and accomplished agricultural tasks and also worked as cashiers in the saving banks and as teachers in the elementary schools and as vendors in the Obra shops. They did not have a salary and the product of their work was donated to the poor after deducing for their expenses.39 The governance regime extended to the management of space reflected in the construction of a working class quarter, Villa Javier, encircled with an iron gate which closed at 8pm. The aim was not only to solve the problem of housing, but to solve a problem of morality, whose ideal was the construction of Saint Agustin’ City of God40:

Since the beginning the idea of selling the houses prevailed, but the idea that the La Obra retained the property triumphed in order to build there the people of God, the people of the Ten Commencements and charity, the moral monument of San Francisco Javier...

The Obra was transformed in Fundación Social the largest philanthropic institution in Colombia.

Philanthropist was also motivated by sanitary dangers. The lack of hygiene was perceived as a menace to social and political order and a moral degradation in life style and habits. The concentration in the topics of health and hygiene by the philanthropic associations reflected this concern. Medical doctors created several charity associations and hospitals41 such as the Hospital la Misericordia created in 1897; the Pediatric Society founded by seven doctors; in 1919 the Sociedad Gota de Leche (Society Drop of Milk). Religious orders also created hospitals, as it is the case of the Hospital Clinica San Rafael.

Corporate Philanthropy

The philanthropic tradition in Colombia is reflected in today’s size of the non-for profit sector, which is larger and more diversified than the Latin American average. The contributions from corporate philanthropy to the third sector are also bigger42. The number of corporate foundations in Colombia confirms the mayor presence of business elites into philanthropy as compared to other countries43. In 1998 there

38 Campoamor’s aims were stated as follows: “the constitution of a non-political society that looks for the improvement of the quality of life of workers in the religious, moral, material and economic order; that attempts to accomplish the Christian unification of the different classes according to the taught of Leon XIII.” Quoted in Diez historias de vida, 16. 39 The Marias as they are known have a set of rules. Rule No. 4 stated: “To get the resources needed to our vocation, we use sources of social wealth like bank, commerce, industry and agriculture. The profits, after paying for our expenses and to ensure with prudence our future, are donated to Jesucristo in their poor...” Ibid., 34. 40 See Londoño Rocio Y Saldariaga, Alberto. La ciudad de Dios en Bogotá: Barrio Villa Javier. Santa Fe de Bogotá, Fundación Social, 1995, 134-135.41 This information is from Beatriz Castro, op. cit. Chapter 4. Hospitals were the ‘hart’ of secular and religious philanthropy until the 1950s. See Abel, Christopher, Ensayos de Historia de la Salud en Colombia 1920-1990, Bogotá: IEPRI-CEREC, 1996, pg. 65. 42 It employs about 300,000 persons, representing one third of the employment in the public sector or 2.4% of the total labor force compared to 2% in the region. in Colombia. The contribution from corporate philanthropy is 15% compared to 10% in other countries. See Rodrigo Villar, Regina List y Lester M. Salomon, “Colombia: a Diverse Nonprofit Sector”, Global Civil Society, Dimensions of the Nonprofit Sector, Baltimore: The John Hopkins Center for Civil Society Studies, 1999, pg. 413 ss.43 Information is taken from a sample of 34 foundations..

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were 94 corporate foundations whose assets amount one billion dollars, 1% of Colombian GDP and 5% of total public expenditures in 199744. 60% of these foundations are 15 years and older and most of them are highly institutionalized and heterogeneous. Their assets go from US$90 thousand to US $360 million. As shown in Table 1 half of the foundations are small (44%), one third are large (29%) and the remaining medium (27%)45.

Most of these foundations concentrate their activities in the social sector. Furthermore, their income is equivalent to 2.5% of Colombia’s social expenditures. There is also a high proportion of foundations working in microenterprise development indicating a change in orientation from paternalistic to self-reliance programs. The consequences for democracy of these changes will be considered later.

Table 1Corporate Foundations

Distribution by Size and Activities – 1998

Small Medium Large TotalEducation 2 1 3Health 1 1Community Develop. 2 1 3Microenterprise Dev. 9 6 5 20Environment 2 2Multipurpose 2 3 5Total 15 9 10 34 Source: Carmenza Saldias.

Another characteristic of corporate philanthropy in Colombia is the high proportion of resources concentrated in the largest foundations; the 10 largest foundations account for 97.7% of the total assets; the 9 medium size have 1.7% and 15 small 0.5% of the total assets. (Table 2). The unequal distribution of resources within the corporate foundations raises several questions regarding democratic governance. One is the relationship between the concentration of resources and the leverage capacity of these foundations as compared to the one with fewer resources and the ONG sector in general. A second one is the relationship between philanthropy and concentration of capital. This question is important in Colombia where the four main enterprises within each sector concentrates 62% of production and more than 67% of income.46

Table 2 also indicates that the largest foundations concentrate their activities in health and education and within the prevalence of policymaking.

Table 2

44 In Argentina, a country with a GDP 3.5 bigger than in Colombia, there are 59 foundations, most of them created in the 1990s. PNUD/GADIS, Grupo de Análisis y Desarrollo Institucional y Social, 1999. See also Luna, Elba, Las Fundaciones Empresarias Actuantes en el Campo Social en Argentina, GADIS, mim. 2000.45 The size is determined by the assets as follows: Large with assets of US$ 4.4 million or more; medium between $4.4 and bigger than US $880,000; small with assets smaller than US$880,000.46 Banco Mundial, “Colombia: Private Sector Assessment”, 1994. Report No. 13113-CO. All foundations belong to the 5000 biggest companies in Colombia and half of the foundations are related to the largest 300 companies. The industrial sector is more likely to create foundations (29%) followed by commerce and services (18%) and oil and hidrocarbures (15%). As compared to the contribution of each sector to GDP, the industrial and oil sectors are over-represented as long as their contribution to GDP is 18% and 4.5% respectively.

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Distribution by Size, Sector and Assets – 1997(Percentage)

Small Medium Large TotalEducation 0.2% -- 99.8 36.3Health -- -- 100.0 3.8Community Develop. 34.8 65.2 -- 0.4Microenterprise Dev 2.1 8.5 89.4 11.3Environment --

100.0 -- 0.5

Multipurpose 0.2 -- 99.8 47.7Total 0.5 1.7 97.7 100.0Source: Carmenza Saldias

In what follows I will present historically the development in regimes of governance in the previous 40 years using as examples the following foundations: FES, Fundación Social, Santo Domingo, Corona and Suramericana, which are largest foundations and Proantioquia and OCENSA, that have medium size.47 I will trace their pattern of development along three regimes: assistentialist, developmentalist and public governance.

Assistentialism (1960-72)

Despite the restricted character of democracy in the National Front (1958-1974) period, civic associations flourished as result of a state’s strategy to forge alliances with popular sectors for the implementation of programs like the agrarian reform and poverty reduction. The state supported the creation of popular organizations like the Juntas de Accion Comunal - JAC (Community Action Boards) and the Asociación de Usuarios Campesinos -ANUC (Association of Land-user Peasants). 48 Although JACs and ANUC have similar origin the different pattern of development illustrates the fear of reform among Colombian elites. Most JACs that were part of clientelist and electoral networks survived. ANUC that followed an independent and pro-reform ideology was repressed.49

Trade unions and social movements grew at margin of the traditional political parties and, in the case of social movements, from organizations from the left50. 47I will emphasise one program within each foundations: in FES the Female Head of Household Program, Fundación Social the Integral Local Development; OCENSA the Community Development and Improvement of Municipalities; Corona the Health programs, Santo Domingo the Microenterprise development and Proantioquia the Peace and Democracy programs. The concentration in few foundations and within them on specific programs obeys to methodological reasons and it does not do full justice to the richness and complexity of Colombian foundations. 48 From the year of its creation in 1958, to 1974 the number of JACs reached 18 thousand and 42 thousands in 1993. See Villar, Rodrigo, El Tercer Sector en Colombia, unpublished. 49 Peasants organized to put more preassure on a timid agrarian reform and used strategies such as land invasions and during the 1980s collective actions such as marchas and take over of public offices. Zamosc, Leon, “El Campesinado y las Perspectivas para la Democracia Rural”, in Leal Buitrago, Francisco y Leon Zamosc, Al Filo del Caos. Crisis Política en la Colombia de los Años 80, Bogotá: Tercer Mundo Editores, 1990, p. 334.50 Restrepo, Luis Alberto contends that was only in the mid-seventies that the guerrilla group M-19 attempt a link with social movements. In his view the left was not interested in ‘paros civicos.’ See his “Movimientos Civicos en la Decada de los Ochentas”, Francisco Leal Buitrago y Leon Zamosc, op.cit., 399. See also Villar, Rodrigo y Beatriz Castro, “Historia de las entidades sin ánimo de lucro en Colombia” Santafé de Bogotá, The Johns Hopkins Comparative Nonprofit Project y Confederación Colombiana de ONG, Febrero

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Between 1957 and 1965 the rate of affiliation to trade unions went from 5.5% in 1955 to 15.5% in 1965 and affiliates increased from 100 to 700 thousand.51 Civic stoppages were a common expression of civic discontent in municipios52. The closed character of the National Front is mentioned as a factor strengthening guerrillas in the 1960s.53 The Cold War environment and the Cuban revolution renew the elite’s fear of communism.

It is in this environment of social and political confrontation that Corporate Philanthropy emerged as an important actor in the national scene. In 1958 the Fundación Caycedo Gonzalez was born linked to the Cauca Valley sugar industries of Riopaila and Castilla. In 1960 the Santo Domingo family, owner of Bavaria’s beer industry and the biggest corporate group in Colombia, created the Fundación Barranquilla, today’s Fundación Santo Domingo, in the North Atlantic Coast of Colombia. One year later the Carvajal family whose company produce paper, office forms and cardboard donated 40% of their shares to Fundación Carvajal. In Antioquia the Echavarria family owner of the ceramic company Corona, established Fundación Corona in 1962; the same year the multinational corporation Smurfit Cartón de Colombia, also in the Cauca Valley created the Fundación Smurfit. A group of entrepreneurs from the same department launched in 1964 one of the most innovative experiments in corporate philanthropy, the Fundación FES (Fundación para la Educación Superior). It was in 1971 that Antioqueño Nicanor Restrepo, owner of the second biggest capital of the country, created Fundación Suramericana.

The case of Suramericana, linked to the second economic group in importance in Colombia, the Sindicato Antioqueño,54 is a good reminder that the past still survives in the present. Created in 1971, the foundation continued practicing a paternalistic philanthropy as it did in 1945. Philanthropy does not have a specialized unit within the company, nor is the object of a specific knowledge. The director of the foundation is the Vice-President of Suramericana, who depicts the relationship with the recipient of benefits as “personal and permanent; most of them (70%) have been “clients” for more than 25 years.” The beneficiaries are institutions, which provide protection to those unable to work like boarding houses for the old, the orphans, and the young. It also supports cultural institutions like the Modern Art Museum, the Public Library and the Hospital San Rafael. The beneficiaries receive an annual increment linked to the cost of living index”. The moral ties with the recipient and the confidence deposited in the institutions are the main criteria for receiving a donation: “we always must believe in what they ask

15 de 1998 .51 Londoño, Rocio. "Crisis y recomposición del sindicalismo colombiano". En: Nueva historia de Colombia. Bogotá, Editorial planeta, 1989. Citado por Villar Rodrigo, p 27. 52 In the 1980s there are on average 30 civic stoppages per year. Restrepo, Luis Alberto, “Movimientos Civicos en al Decada de los Ochenta”, 383.53 Pizarro, Eduardo, “La Insurgencia Armada: Raíces y Perspectivas”, en Leal Buitrago, Francisco y Leon Zamosc, op.cit. 421.54 The Sindicato Antioqueño joined as a group of three enterprises (Suramericana, Cementos Argos and Compañia Nacional) to faced with the power of the Santo Domingo and Grancolombiana Group. The income of the Sindicato is equivalent to 8% of Colombia’s GDP, and employs 83,000 workers in 126 companies. Semana, “El Desenroque”, January 10, 2000, p.16.

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for.”55 Although they only attend request from institutions they also assist ‘honorable families’ (Familias vergonzantes).

Most foundations born in the 1960s defined their mission and beneficiaries within an assistential model of governance.56 First, philanthropy occupies a unit within the company with specialized personnel. Some cases like Fundación Social, which in 1998 reached 10,000 employees, or Fundación Corona, which is smaller, but counts with 8 highly specialized professionals. Second, there is a specialized knowledge about expenditures and decision making, which differentiate foundations from alms giving. Foundations invest time and resources in process of selection of beneficiaries, project identification and, sometimes, monitoring and evaluation.

The target of intervention, unlike early century industrial paternalism, is neither the worker nor the population unable to work as in beneficence. Philanthropy is directed to the neighbor defined as the poor living near the mill, preferable the worker’s family, as in this description of Fundación Corona made by its actual director, Guillermo Carvajalino:57

During the first period (1963-88), the foundation was almost exclusively directed to Corona, in the sense that its programs focused on the family of the worker living in the area of influence where Corona was located, always a small town –Madrid in Cundinamarca; at that time the foundation was very important for the town. The foundation had small funds for the sons of the worker, credit to pay university education, welfare programs to the family, programs of breastfeeding for mothers, how to handle accidents at home, even love for the flag.

Education and especially technical training become the main instruments guiding the philanthropic activity. This situation coincides with the interest at that time for the principles of scientific administration in industries like Bavaria and Coltejer58. According to Marciano Puche director of Fundación Santo Domingo:59

The foundation was created with a philanthropic reason, to help the poor. Education became the basis for help; this explain why Fundación Barranquilla, it was the previous name, intervened in educational training for the more disadvantaged living in Barranquilla, of course, because him [Mario Santo Domingo] was in Barranquilla and their business at that time was in Barranquilla...Barranquilla was an important city and Don Mario Santo Domingo considered that it was important to train the poorest, to help them to have a good labor force, to allow them to work in the Colombia of the future.

Fundación FES (Foundation for Higher Education) was created to improve the university environment whose political mobilization was seen with concern by the regional elite of the Cauca Valley:

FES was born as a university institution and the pioneer result of 12 individuals whose contribution was of $2.000 pesos; FES was created as an organization to strength research projects and to support the academic branch of Valley University. Later on its

55 Interview with the president of the foundation.56 Some of these characteristics are developed by Castel, op.cit., 41-43.57 Personal interview.58 Mayor Mora, Alberto, Etica, Trabajo y Productividad en Antioquia. Una Interpretación Sociológica sobre la Influencia de la Escuela Nacional de Minas en la Vida, Costumbres e Industrialización Regionales, Bogotá: Tercer Mundo, 1989, pg. 475. 59 Personal interview.

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objective was to support higher education especially education and academic development.

La Obra was transformed in a foundation in 1965 emphasizing its educational mission60. They closed the elementary schools for poor children arguing that they were a state’s responsibility and opened the National Institute of the Worker Circle with a political aim: to train young leaders from the Catholic trade union, cooperatives and JACs because61 “communism will not prosper where leaders are conscious of their rights”. The creation in 1964 of Projuventud and the JTC (Young Workers of Colombia) reflects the change in target population from poor workers to young leaders.

The link with the beneficiary is constructed around the notion of territory, not in the broad sense of the nation but the neighborhood. As stated by Castel ‘assistance’ do themselves become protection to the neighbors in danger of stranded and unable to attend their need.62 In the case of Fundación Santo Domingo the concern for territory as the basis for protection is reflected in the original name “Fundación Barranquilla.” The use of patriotic symbols help to consolidate the feeling of commonality with the benefactor:

The Foundation is in Barranquilla and it is present in all civic programs of Barranquilla, because it is the place of the foundation, the place of the Santo Domingo family, that [this link] has never been lost, the foundation work in things important for the region

In an assistentialist regime of governance the dependence between employer-employee is weaken as compared with industrial paternalism but still persist in the affective link with the donor mediated by the feeling of protection from the neighbor. Education became an important tool in the socialization, especially of young, identified as targets of transformation and key instruments in the diffusion of Catholic faith and against communist doctrines.

Philanthropy and the construction of Regions- 1975

Towards mid 1970s there was some tension between government and business associations as consequence of the government’s attempt to liberalize the industrialization process. Political abstentionism and popular mobilization were also at the highest. Concerned about a lack of legitimacy of business associations63 and political parties, 12 businessmen of Antioquia created Proantioquia, an organization “with credibility, neither political nor corporative, in charge of the defense of the regional interest.” 64 The history of Proantioquia is important for several reasons: one is the identification of region as the scope of intervention. The region appears as an intermediate in the construction of the

60 The objective was formulated as to provide educación integral that combined knowledge, personal and community development. Martinez Boom, Alberto et al, Educacion, Poder Moral y Modernizacion. Historia de la Accion Educativa de la Fundacion Social (1911-1961), Fundacion Social, Memorias, 1996.61 Quoted in Idem. 62 Castel, p. 43.63 On the fragmentation of business associations see Palacios, op.cit., p. 267.64 “Gestora y Promotora del Desarrollo Regional. La Historia de Proantioquia”, en Revista Javeriana, Noviembre-Diciembre, 1997 .

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nation, “a strong nation, is only possible with strong regions.”65 Equally important, Proantioquia played as an intermediary between the state and business, a role which business associations were not easily able to perform since they represented particular interests. Proantioquia was intended to promote regional stability for, “almost immediately after its creation [Proantioquia] concentrated in the search of security as a key to development in the Antioqueño Tropic, where there was the biggest possibility of renovation: it bought land in Apartado, Caucasia and Puerto Berrio and gave them as a donation to the Ministry of Defense to build quarters. These decisions were possible with the join effort of associations in the banana and cattle sector”66

Proantioquia is an example of a foundation whose power is attached to the member’s capacity of influence rather than the economic contribution: the foundation is of medium size with a very low level of donations. Members were invited to join the organization by the board of directors.67 As the director states, the organization “is a site of encounter, of convergence in order to launch initiatives in the interest of the companies without translating in a direct benefit; the initiatives will contribute to the region’s development.”68 Some of the accomplishments of the foundation are a good indicator of the power of their members: a successful lobby resulted in government’s approval of new a road (Medellin-Turbo) and the paving of another (Troncal del Cafe).

Table 3 illustrates the importance that regions have in the creation of the Colombian foundations.

Table 3Regionl Distribution

Colombian FoundationsRegion Number Percentag

eWestern 17 50%East-Center 10 29%Atlantic Coast 7 21%Source: Carmenza Saldias

In 1998 most of the foundations were located in the Cauca Valley (9) followed by Antioquia (6) and Bogota (6).

Philanthropist as Entrepeneur-1975

In the mid-1970s a new figure entered Colombia’s foundation world, philanthropy as means to create enterprise. Now the social mission becomes a public endeavor. Fundación Social and Fundación FES, the largest of the Colombian foundations, were transformed in fundaciones empresarias (proprietor foundations) that owned their company(ies) and whose profits are used as social ends. FES was a Company of Financial Intermediation, the biggest in the area. Fundación Social owns 19 companies in the construction, insurance, banking,

65 Ibid.66 Ibid.67 Ibid.68 Interview with Proantioquia.

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leasing and communication branches. In 1997 employed 10,000 people with assets of US$3,500 million.69

Under a new direction La Obra experienced several changes from the period 1972 to 1980 when it takes the name of Grupo Social. In 1972 the saving bank is named Caja Social de Ahorros and it is detached from La Obra taking a more entrepreneurial character. This paragraph summarizes well the symbiosis between the social and the managerial70:

The institutional will of serving the poor is ratified emphasizing the promotion of young workers. At the same time Cenpro (1975) is created with the aim of spreading human and social values using mass media; the Corporation of Recreation and Culture ‘Servir’ (1976) is founded to offer workers and their families opportunities for enterntainment and culture; ‘Compensar’ (1978) a family welfare enterprise for the poorest... Fundación ‘Colmena’ for popular housing (1981)...Finally, the new enterprises forming part of the Group, in addition to the Caja Social, are Corporación de Ahorro y Vivienda Colmena (1974), Promotora Colmena (1974), Prosistemas (1978), Seguros Colmena (1980), Fiduciaria Colmena (1980), Leasing Colmena (1982) and Comercializadora Servir (1983).

The name Fundación Social was given in 1984 with the aim of creating a social enterprise (empresa social): “Fundación Social does not belong to a company, the companies belong to the Foundation. It is not a conglomerate of companies that own a foundation, it is a foundation that owns a conglomerate.”71 The concept of donation disappears within this conception. Social interventions are “the essence of la Obra. The whole foundation is social.”72 There is a change in the target of governance: it does not restrict its aim to alleviate workers’ poverty but to “change the structural causes of poverty.”73

The how of governance also changed. On the one hand, without abandoning the Christian inspiration, the entrepreneur74 becomes a “civil society actor, made co-responsible of [civil society] problems, even if they are outside the company.” Within this vision,75 management takes additional responsibilities like the payment of a fair salary, the view of the company as a community of individuals, the priority of the worker over capital, and a general orientation towards the common good. The aim of addressing the structural causes of poverty modifies the instruments and the scope of the interventions.76 One of the instruments, described as macroinfluence reflects the national and public orientation as compared to the local character of previous interventions. Its objective comprises the creation of public opinion, social mobilization, lobby and institutional coordination. This is a project with important consequences for democracy, as it will be explained later.

69 Ibid., p. 11.70 Quoted in Briceño Jauregui, op.cit., 17271 Fundación Social y Sus Empresas, 1997, Santa Fe de Bogotá, 1998, p.8.72 Ibid., 14.73 Ibid., 11.74 “La Actividad Empresarial en la Fundación Social”, Revista Javeriana, October 1996 , 317.75 Ver Fundación Social y sus Empresas, Una Trayectoria y una Voluntad al Servicio de los Pobres, Documento Axiológico, 8o. edición, 1997, Santa Fe de Bogotá: Editorial Gazeta, 1997, pp. 42-43.76 Fundación Social identifies four instruments of intervention: Projects of Integral Local Development with popular sector, the corporations, macroinfluence and Production of social thought.

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Interventions at the local level are not abandoned either, on the contrary they take a national perspective.77

Fundación FES was a financial organization with the mission of78 “reinforcing the democratic and representative institutional framework that governs the country and the rights guaranteed by its Constitution. To that effect will promote private participation in the solution of national problems to reach social justice and the effective integration of Colombian population.” FES used financial mechanisms to promote philanthropy by giving financial support to civil society organizations –CSOs. To accomplish this end, FES created a special financial mechanism, Permanent Endowment Funds, mainly from resources donated.79 In 1997 there were 429 CSO receiving resources from FES.80

The importance of financing mechanisms to support change is exemplified by the case of Female Head of Household Program -DFH81 created in the context of strengthening civil society for the exercise of women rights. Starting with a research on the condition of female households, the program reached 24 cities, 26 NGOs and 11,000 women by 1995. The project addressed both women’s development and institutional strengthening of NGOs working with the beneficiaries. The former contributes to improving the quality of life of women and their families and strengthening women self-esteem. The later strengthened local institutions. FES acted as a coordinator and NGOs implemented the program. The use of financing mechanisms allowed FES to select the most appropriated NGOs, to follow up the technical aspects and the results of the program. FES signed contracts with these NGOs who also committed to get local and community resources. The program has also mechanisms allowing women to voice their interest and to participate in the design of the program.

The program also included activities at the state and policy-making level. Thus FES supported the process of Constitutional reform in 1991 specifically with respect to article 45 on territoriality and the expedition of a law favoring women households, Law 52, 1993. There are also alliances with government offices as it is the case of the Oficina Nacional de la Mujer (National Women’s Office) which supported the extension of the program.

The financial strategy allowed FES to attract international resources from IDB, Ford Foundation, which strengthened FES capacity to develop methodologies of

77 Fundación Social works in 10 regions: Antioquia, Atlántico, Bogotá, Bolívar, Boyacá, Eje Cafetero, Huila, Nariño, Tolima and Valle.78 FES Foundation A Private Social Enterprise. FES works in the following lines of action: 1)Institutional strengthening of CSO whose goal is to enhance the communication between these organizations and the government. 2) Research oriented toward the formulation of social intervention policies and methodologies. 3) Social projects promotion, management and financing. 4) Communication and difussion. 5) Evaluation. 79 To the resources donated FES grants a matching fund with a 50% contribution. FES gurantees revenues equivalent to the market rate for Fixed Term Deposits plus 1%. Near 30% is capitalized and 70% is donated to the CSOs. By 1997 there were 420 funds with a capital of nearly US$28 million. 80 Donations since the year of its creation to 1997 are estimated in US$55 million. 81 The program is located in the Economic and Social Development Division. Other Divisions are Health, Education, Children and Youth, Funds and Evaluation and Environment and Natural Resources. In the description of the program I follow Caro, Elvia “Visiones y Realidades de Genero en la Filantropia Empresarial”, en Cristina Rojas, Gustavo Morales, op. cit.

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social intervention as well as extent the coverage of the programs.82 In 1999 as a result of a financial crisis Fundación FES was taken over by the government. It was divided between FES Financiera and FES social. As a result of the crisis and of the dispute between the institution and FOGAFIN (Fund of Financial Guarantees) 439 NOGs are not receiving the financial support and their future is also uncertain83. 1980s: Conflict and Negotiation

In the 1980s Colombia experienced turmoil in the political more than in the economic realm. The decade started with a repressive “security statute” put in place by president Turbay (1978-82) to curb the power of the guerrilla.84 In 1982 Belisario Betancur was elected president with a program for peace and democratic opening. He initiated a negotiated agreement with the guerrilla movement85 and led a political reform toward decentralization and popular election of mayors. Business associations were ‘ambivalent’ with regard to the peace proposals.86 In 1982, the president of ANDI endorsed the objective of Peace as a priority.87 One year later, ANDI’s president asked for a change of focus toward ‘security’88. According to Kalmanovitz business associations saw guerrillas as a greater threat than narcotraffickers which in few years accumulated assets equivalent to 30% of the country’s wealth of 100 years.89 There was a tendency to privatize the problem of security, with private police surpassing public police.90

In 1985 the fear of communism in Colombia was strong as reflected in the words of the president of ANDI: “[the communist] are here, representing Marxism-Leninism, with foreign instructions, and Colombia is a priority country...they want power, they are struggling to get it...in few words they want to manage the country, to introduce substantive changes...”91 The same year he made a proposal to form a non-profit corporation92

Which illustrates the country about their freedom, their institutions, about what democracy is, what to do [and] why there are mistakes...This invitation is made with no different interest that the one of the institution that I direct, ANDI, not in my own name...if

82 FES received US$60 million in external resources. FES, Informe de Actividades, 1997.83 See El Tiempo, “Incierto el Futuro de 439 ONGs del Pais”, February 17, 2000.84 The Estatuto de Seguridad restricted freedom of information, increased the power of the armed forces and penalized political participation. It is estimated that in the four years of application there were 82,000 persons under arrest. See Eduardo Pizarro, “La insurgencia armada: raices y perspectivas”, in Al Filo del Caos, 431.85 In 1982 president Betancurt offered the guerrillas an unconditional amnesty and pardon to guerrillas and political prisoners. In 1984 the government signed ceasefire with four guerrilla groups and started a national dialogue on political issues like agrarian reform, education and labor. On the peace agreements see Mark Chernik, “Negotiating Peace Amid Multiple Forms of Violence. The Protracted Search fora Settlement to the Armed Conflicts in Colombia”, in Arnson, Cynthia, ed. Comparative Peace Processes in Latin America, Stanford University Press, 1998.86 My analysis follows Kalmanovitz, Salomon, “Los Gremios Industriales ante la Crisis” in Leal, Francisco y Leon Zamosc, op.cit., p. 80.87 “In the search for [peace] we must compromise all our efforts, without political and ideological distinctions, without selfinesh, even making important sacrifices.”Quoted in Kalmanovitz, op.cit., p. 202.88 Quoted in idem., 208.89 Ibid, 213.90 Ibid., 211.91 Quoted in Ibid., 219.92 Quoted in Ibid, 221

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there are no committees that maintain contacts with noble families (sic), political parties, armed forces, mass media, university, and [without a committee] that link us, everyone will continue, in an efficient and smart way, doing its own job...the situation will be tricky...while outside there is communism, guerrilla, narcotraffickers, narcoguerrilla, bad-mannered citizens, people that do not accomplish their duties...

In 1983 the guerrilla group ELN (National Liberation Army) kidnapped four engineers from the German Company Manessman and asked US$ 8 million for their freedom. According to their petition, 4 million should be paid in cash and 4 million should be invested in education, roads, aqueducts and sewage system in the area where the company operated93.

By 1995 oil was a key sector for Colombian economy, surpassing coffee importance in total exports94. ECOPETROL the state Oil industry95 sponsored the creation of 11 corporate foundations between 1986 and 1994, most of them with the coordinated effort of more than one oil company.96 A representative of HOCOL, one of the philanthropic foundations, summarized the situation of conflict in the regions where these companies operated 97:

The communities where HOCOL functions are critical because of the absence of state, the amount of basic needs not fulfilled the poor economic, social and cultural development [and] the lack of leadership. If there is leadership it is done as opposition to [our] projects.

The problem is attributed to a false perception of guerrillas towards multinationals as expressed by an executive of Alcaravan foundation in the Arauca region:98

“armed actors see the oil industry as the producers of a stolen wealth while the people continued barefoot, even if they were ‘rich’ before.”

Initially the petroleum foundations were ‘shock absorbers’ (fundaciones de amortiguación) alleviating the impact generated by the company especially during the state of pipeline construction. They build infrastructure (sewage, electricity, and roads) for the population living within an area of 1 km. from the pipeline. The aim was to compensate for the environmental and social effects generated, including “the prostitution of nice women (muchachas bonitas) by technicians of the company.”99 Far from improving the communication between the corporation and the community, it created a relation of dependency. It was “like the customer that

93 Ver “El ELN y los alemanes”, en Semana, Junio 14, 1999, pg. 32.94 During the period 1984 to 1995 the contribution of the oil sector increased from 2.7% o 24% of the Colombian GDP and in the 1990s coffee exports surpassed coffee. Ver Martínez Villegas, Alejandro “Retos y Oportunidades del Sector Petrolero”, mim., Ponencia presentada al IV Encuentro de Fundaciones Petroleras, Cartagena, 12-20 de marzo de 1999.95 ECOPETROL was partner of eight of the foundations; in most the case several foreign multinationals were Ecopetrol’s partners.96 In 1997 there were 11 fundation most of them created during the 1980s: Fundación Hocol (1987), Alto del Magdalena (1993), Catatumbo (1991), Amanecer (1994), Alcaraván (1990), Oleoducto de Colombia (1992), Sur Colombia (1992), Fundesmag (1986), Actuar por Bolívar (1991), Golfo de Morrosquillo (1990) y Fundación Shell (1987). See Evaluar, Las Fundaciones Petroleras. Una Caracterización General, mim., March, 1997.97 Citado en “Compartiendo Experiencias”, Memorias del IV Encuentro de Fundaciones Petroleras, Cartagena, 12-20 de marzo de 1999,98 Ibid. 99 Personal interview.

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leaves a good tip and left” said the director of Fundación Oleoducto de Colombia.100

Some foundations redefined their strategy, as it was the case of Fundación Oleoducto de Colombia, the largest of the oil foundations. The new strategy, according to the director of community affairs, “was to raise the community to a higher level while lowering the company to allow an encounter between the two.”101

The aim was that the community considered the company as a member. In the words of a high executive of OCENSA,102 this strategy “allow us [the corporation] to work” but also the corporation can demand a response by the community. The foundation “improves the surrounding area allowing the corporation to be seen as part of the community, in order to ask our rights because we accomplish our duties.”103 The foundation performs the role of intermediary allowing reducing the distance between them. This strategy accomplish a role of ‘noise reduction.’104

The foundation functioned as a mechanism of regulation between the company, the community and the state. But an additional condition was imposed: in order to reduce conflicts the foundation should behave as105 “the nice face of the company.” To make this goal possible the Company operates two independent sections: security that handles conflicts and police matters and the foundation who performs the nice side of the business. As an organizational strategy this solution works smoothly. But the space for a democratic negotiation is also reduced.

1980s: Developmental

The economic crisis of the 1980s showed the vulnerability of the model of development put in place in the previous decades. Unemployment and the growth of what the ILO denominates the ‘informal sector’ were regarded with concern within government and private sector circles106. It was in 1984 that the National

100 Personal interview.101 Personal interview. In 1997 OCENSA began a program directed to improve the administration of the municipalities where Oleoducto de Colombia operates. The objective is to improve municipal finances, democratic participation, practices of good neighborhood and leadership through a three-stage program (motivation, planning and sustainability).102 personal interview.103 This is an important twist in relation to philanthropy’s relation to obligation. As François Ewald states, early liberalism recognized two types of obligation, one based on public law regulated by contracts as a relation between equals, and a relation between unequally regulated by morality, as it was the case of the poor. Philanthropy functioned in the ethical not political realm. In early liberalism to pose philanthropy in the realm of legal rights meant its own destruction. Ewald provides the main reason: a right to protection would exonerate the poor of their own responsibility, and more important it would destroy the efficacy of the practice of beneficence: mutual recognition and affection between benefactor and the one receiving the benefit. According to liberal principles, “to convert beneficence in a legal obligation, meant to make a factor of peace a cause of war.” Ewald, op.cit., p. 42. In the OCENSA case we have the opposite: a relation between unequally is made more equal so that one of the partners, in this case OCENSA, could reclaim its obligation from the community.104 As defined by Jessop, Bob, ‘noise reduction’ reduce the “incomprehension in communication between different institutional orders in and through increasing understanding and sensitivity to their distinctive rationalities, identities and interest.” p. 33.105 Personal interview.106 In Colombia the employment in the informal sector reached its peak in the 1980s.Between 1986 and 1988 urban informal employment grew from 55.9% to 56.8%. It is estimated that 64.9% of the jobs created between 1986-88 and 1988-94 were in the the informal sector. Rodrigo Villar, “La Influencia de las ONG en la Política paa las Microempresas en Colombia”, unpublished paper, Nov. 30, 1999, 3.

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Plan of Microenterprise Development –NPMD was established to cope with this problem.

Corporate foundations played an important role in the conception, implementation and evaluation of the Plan.107 The Plan adopted the methodology developed by Fundación Carvajal in 1970s which consists108 in comprehensive training (3 weeks) and technical assistance, including accounting, costs and investment courses and management assistance as prerequisite to obtain credit. In addition to training there are at least four visits to ensure that the administrative techniques are put into place.

The program of microenterprise marked important differences with the model implemented in the 1960s109. First, from a model where the beneficiary was conceived as recipient of donations, microenterprise programs revitalized what Ewald denominates the principle of responsibility as the main regulator of society. This principle states that each one is responsible of their existence and that individual progress is equivalent to collective progress110. Although this liberal principle permeates all structural reforms, nowhere is more clearly stated that in the programs of microenterprise given their faith “in the ability of the poor to defend themselves and survive”111. As a consequence some criteria are added to the selection of beneficiaries such as the ‘capacity’ to initiate processes of local development, organizational habits or leadership112.

Second, the modes of intervention are more complex and diversified and some of them provide more space for the political. In a developmental approach the basis for selection is not the affective linkage between donor and beneficiary but the appropriation of technologies, methodologies, networks that enable the population to negotiate their process of development.

One type of intervention is the implemented by Fundación Social in its program Desarrollo Integral Local DILA (Integral Local Development) whose objective is113

“the consolidation of the poor as social subjects.” The approach is participatory and its methodology includes a political dimension: beneficiaries are immersed “in the socio-political dynamic of the community to negotiate their project of society.” In contrast to the assistentialist model, the community has a voice in the negotiation with other institutional actors. There is also a component of synergy between local initiatives and the municipal process of planning.107 When approved the NPMD had US$ 7 million of IDB financing and US$ 3 million from national resources. In 1990 IDB resources amounted US$14 million and national resources US$ 6 million. Villar, 6. During the presidential period 1992-96 the resources amounted US$ 2.000 million. This amount is taken from Departamento Nacional de Planeación, Fundación Corona, Corporación para el Desarrollo de las Microempresas, Evaluación de los Programas de Apoyo a la Microempresa, 1997-1998, Fundación Corona, 1998, 104. 108 See McKean, Cressida S., “Training and Technical Assistance for Small and Microenterprise: A Discussion of their Effectiveness” in Rakowski, Cathy A., in Contrapunto. The Informal Sector Debate in Latin America, Albany: State University of New York Press, 1994 , 202.109 I thank Gustavo Morales whose input was very important in the developement of this criteria.110 According to Ewald the ‘responsibility’ is the diagram of liberalism. op.cit., p. 34. 111 Cathy A. Rakowski, “The Informal Sector Debate, part 2: 1984-1993”, op.cit., p.43.112The extreme romantized view of microentrepeneurs is Hernando de Soto and the view of the ILD – Instituto Libertad y Democracia.113 Fundación Social y Sus Empresas, 1997, 29.

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Not all programs of microenterprise have same political dimension nor is the political dimension placed at all level of decision making. The discussion between ‘maximalist’ and ‘minimalist’114 and between individualistics and solidaristic approaches illustrates the political implication of technologies of governance. Maximalists are closer to the Carvajal methodology. Minimalist reduce the training and technical support to a ‘minimum.’ Individualistic grants the credit on individual basis and ‘solidaristic’ is group oriented. Most of the corporate foundation adopted a maximalist approach. The longer the training the more exclusionary the program. Partly because it selects the beneficiaries more likely to remain in the program and with higher income.115 Generally the poorest and women were more likely to be excluded because of their lack of time to attend long training.

A contentious issue is related to mechanisms put in practice by foundations to control beneficiaries. Chastity in patronatos and Marias’ code of conduct116

perhaps are extreme examples. Visits to the home of beneficiaries are other tool of control. In programs of microcredit the tendency was to view the poor as lacking most skills and therefore made the program overloaded with ‘experts.’ For example Fundación Santo Domingo they have 40 advisors in the city of Barranquilla ranging from economists, accountants, psychologists and social workers. They are in charge of evaluating the economic and social aspects of the beneficiaries like “living conditions, family conditions, how they live, how much each member contributes, the condition of the house.” Thus rather than less governance there is governance through other instruments. Participation of beneficiaries varies according to the decision making level. Participation is easier to find at the local rather than the national level, where decisions matter. This is reflected in the resilience to allow the formation of an organization of microentrepreneurs for participating at the same level than the Asociación de Fundaciones. 117 As Rodrigo Villar concludes118, foundations conceived empowerment as transfer of technical capacities and “political empowerment was not a priority in the agenda of corporate foundations in their work with micro-entrepreneurs”.

Following Skocpol leverage depends on who is organized, for what purposes and what kinds of resources are mobilized. In the NPMD those organized and with resources were the corporate foundations which enjoyed more organizational resources than beneficiaries and therefore have more voice in the decision making process. Foundations have an important place in the Corporación Mixta para el

114 For this debate see Cressida S. McKean, “Training and Technical Assistance for Small and Microenterprise: A Discussion of their Effectiveness.” in Rakowski, Cathy A, op. cit.115 Ibid., 211116 Marias’ rules was compiled in Nuestro Modo de Ser (Our Conduct) used by the priest Campoamor and installed by the director. The book contained, among other, precepts on salaries (money not spent must be given to Jesus throu the poor), dress code (those of the working class), games (without touching), obedience and humility.117Foundations are members of the Asociación Nacional de Fundaciones Microempresarias which participate in the board of directors of the Corporación Mixta. There is also an over-representation of the largest foundations in the board of directors of the Association: 5 directors of the largest foundations take part in the seven member board directors. 118 The Asociación had an active participation in the orientation of the Plan for microenterprises in the Samper (1994-98) government.Villar, op.cit., 15.

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Desarrollo de la Microempresa where the policy for the sector is developed: they have half of the 14 seats of the board of directors. Foundations participate in the Technical Awarding Committee where they represent 50% of the votes among 4 members. The institutions participating in the board of directors also implement projects financed by the Corporation.

Foundations also play an important part in the implementation and financing of the Plan.119 From the total amount of resources assigned by the Corporación Mixta, the 40 foundations member of the Asociacion received 60% of the resources approved.120 Seven of the largest foundations received 25% and the largest share (14%) went to Fundación Santo Domingo.

Politically, emphases on individual responsibility tend to overlook macro-economic and political constraints faced by the program. Thus failures tend to be identified with individual failure, and ‘instruments’ rather than structural and macroeconomic context. The conclusion of the evaluation of the National Plan of Microenterprise Development is illuminating.121 According to the study microenterprise did not generate employment nor pull out people from poverty. The program helps beneficiaries to remain in their position. The study found that this was more true for the poorest and women. The successful cases occur in educated men with higher socio-economic level. The solution proposed is a separation in those with ‘potentiality’ and those that need ‘income.’ In their view “employment generation and wealth, on the one hand, and the support of the poorest, on the other, are two objectives that can not be dealt with the same instruments.” This solution of a change in the classification of beneficiaries was followed by the National Plan of president Pastrana (1998-2002). The Plan calls for giving “differential attention for microenterprise with potential for development and microenterprise for generation of income.”122 The danger is that it could lead to a further division and probably fewer resources for the one identified with less potential for development.

1990s: Public Governance

The 1990s started with the enactment of the 1991 Constitution, which opened spaces for political participation not available before. The first article summarizes well the priority that participatory democracy and social justice has in the new constitutional order: “Colombia is a socially constituted state organized as a unitary Republic which is decentralized with autonomy for its subnational territories, democratic and participatory.” Furthermore article 103 makes a constitutional mandate the state’s contribution to the organization of professional, civic, non-profit associations, among others. The accompanying reforms in the social sector also opened spaces for an increasing contribution from the private sector as it is the case of social security (Law 100 of 1993) and education (Law 115 of 1994). These reforms encompassed changes from subsidies to demand instead of

119 Foundation co-finance 50% of the amount approved by the Corporación.120 Asonotas, March 9, 1998. This is to November 1997. The total of institutions working in microenterprise development is 80. It means that 50% which are foundations receive 60% of the resources.121 Departamento Nacional de Planeación, Fundación Corona, Corporación para el Desarrollo de las Microempresas, Evaluación de los Programas de Apoyo a la Microempresa, 1997-1998, Fundación Corona, 1998 .122 Plan de Desarrollo presented to the Congress, Chapter IV, literal C, numeral 1. Quoted in Villar, 27.

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supply, privatization of social services, changes in the financing of social services through co-financing systems and decentralization of public services.The three governments123, which followed the 1991 Constitution attempted to reach negotiated agreements with FARC and ELN. President Pastrana’s (1998-2002) main priority is to made peace negotiations with the guerrilla. He went further than his predecessors did by granting to FARC the demilitarization of 42,000 square kms after designed this region a ‘laboratory for peace.’ The government also accepted to negotiate in the ‘middle of war.’

The 1990s also increased the processes of integration towards the external market124 and structural reforms which brought changes in the areas of the flexibilization of the labor market (Law 50 of 1990), tax reforms, financial and exchange rate and market and privatization. Fundaciones were not alien to these processes:

The year 1989 [Corona] began an interesting process of technological adaptation to cope with the process of economic liberalization and globalization. The process started in the 1980s with the construction of the most modern technology...In 1988 [Corona] realized that technological change was not enough. That it was important to change people’s head, people’s mentality, culture and organization and we began a process of integral quality management that it is still underway. It is not a campaign, it is permanent, and it implies education. It is guided by five basic principles; the fifth one is to make of Corona a social responsible organization. Here is the essence of Fundación Corona. To be social responsible is a requisite to be an effective organization.

The words of the director of Fundación Corona125 reflect the change in the concept of responsibility that foundations experienced in the 1990s. Responsibility does not refer to the worker or its family; it is not a territorial responsibility with the neighbor; nor it refers to the self-responsibility of the poorest. It is defined as the responsibility of the entrepreneur toward society. What does social responsibility mean? Here is his answer:

Social responsibility is like a series of concentric circles. The central circle is the client where the relationship is based on price, quality, opportunity, information etc. The second is the organization’s collaborators, its employers or workers; it goes beyond a fair salary, it comprises the personal fulfillment as a human being. A third level responds to the shareholders expectations; without an economic return they exit the company or the country. The fourth level is the neighbor community as long as we have an impact on them...The biggest circle is society. This is the Foundation’s scope. It is here where Corona as an organization and the Echavarria Family accomplish the responsibility toward the whole society. An organization must return what the country gave to it.

123Cesar Gaviria (1990-1994), Ernesto Samper (1994-1998) and Andrés Pastrana (1998-2002). Negotiated settlements date from 1982 when Betancur’s government offered an unconditional amnesty and pardon to guerrillas and political prisoners; in 1984 the government signed ceasefire agreements with four guerrillas groups –FARC, EPL (Ejercito Popular de Liberación) M-19 (Movimiento del 19 de Abril) and ADO (Autodefensa Obrera). The government has also negotiated ceasefire and demobilization with the M-19 (1990), the EPL and PRT and Quintin Lame (1990-91). The ceasefire agreement with FARC collapsed in 1986.124 Although economic liberalization started in the 1980s, it was in the government of Cesar Gaviria (1991-1994) that a deepening of the liberal agenda took place.125 Personal Interview.

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The responsibility of the entrepreneur is de-territorialized and de-individualized and the direct linkage between benefactor and recipient is lost. Business is responsible toward society. Thus, how do entrepreneurs perform their duties toward society? How do they participate?

[Corona] is a business organization that knows about management...Our mission is to contribute to the social development of Colombia, improving the management of its social process. Management has two dimensions: one is micro, how to improve management of organizations and institutions; another is macro, how to improve the management of public policies as a context for the operation of institutions. Institutions are not in a vacuum, they work or don’t work according to the framework of public policies; how policies are designed is a key element in the improvement of institutional management.

Implicit in this model is also a change in the concept of donation from monetary to ‘know-how’. Expertise and capacity of innovation are important instruments, as reflected in the words of the director of Health “the Fundación gives from its being not from its having”126. This is reflected in the mission of the organization, defined in 1995:127

To contribute to the country’s social development by improving the management of social processes, through innovative programs and projects, that facilitates the access of the poorest to the benefits of development.

Unlike the assistentialist and developmentalist models, the target is not the poorest but public institutions as it is the case of health128 where Corona focuses on hospital management. Corona sponsored the creation of the Centro de Gestión Hospitalaria with participation of the private sector, the state and other foundations, “looking for co-financing and leverage, not only in business but in the expertise that these institutions have”129.

Corona has a political influence and creates space for public deliberation around thematic areas. They initiate debates about laws and decrees related to health; about legislation proposal coming from the Ministry and about the results of investigation like the one on fiscal evasion on contributions to the health system. Corona’s professionals also participate in the board of directors of several associations. The foundation participates in the recently created Corporación Mixta para el Desarrollo de la Educación which using public-private alliances improve research in education. Corona also does research on teaching and educational technology. At the community level, it works in strengthening community organizations and in the improvement of local management.

Notwithstanding its support for dialogue around policy issues, Fundación Corona restricts it’s the scope of politics to expert’s discussions and managerial considerations. Certainly improving state’s managerial capacity has an impact on democracy as long as there is more transparency and less room for corruption. Notwithstanding the solution to social issues like poverty and access to health is a

126 Personal Interview.127 Fundación Corona, Reporte Anual 1996. Politicas de Desarrollo Empresarial, pg. 19.128 Fundación Corona intervenes in the following areas: Business Development, Education, Health and Local and Community Management.129 Personal interview director of Health.

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political problem whose solution ask for the constitution of political actors with capacity to participate in social debates. To reduce these problems to management de-politizes politics, and thus, reduces the scope of democracy130. The solution to Colombia’s conflict depends on a dialogue with actors excluded from politics either because they have replaced politics with the use of force or because they did not have an organized voice. The decision of Fundación Corona to participate in the project of the Fundación Ideas para la Paz confirms the will to ‘bringing in’ politics back.

Fundación Social have also broadened its participation to the public realm and defined its interventions as social responsibility. Bernardo Toro, Vice-President for External Affairs differentiates the later from philanthropy131:

In Latin America it does not make sense to talk about philanthropy; it makes more sense to talk about social responsibility, that is, how to construct the social contract. Thus the political endeavor is not ‘to contest’ the state but to influence and modify the social, economic and political relations of a country.

Fundación Social defines their project as a political one centered in the reform of citizen’s relation to government. The Fundación takes part in projects related to transparency in elections, organization of citizens against corruption, improvement of human rights and organization of civic society as it was the case of the most promising projects of citizens participation ‘Viva la Ciudadanía’. According to a senior executive “it is important to re-organize the public space and it is a duty to enter in contact with the state to re-create it”. The change in the causes of poverty is also seen as a political mission.

As part of its political agenda Fundación Social organized programs like “Entrepreneurs for Peace” as a space where private actors exchange views on the situation of Colombian conflict and peace initiatives. The program includes strategies that could contribute to a negotiated solution to arm conflict; to the improvement of human rights and the strengthening of justice as well as to the construction of a culture of pacific and democratic coexistence.132 Fundacion Social is the Technical Secretary of Mandato por la Paz (Citizens for Peace) and also organizes the follow–up to violations to the International Human Right mandate; it participates in the political orientation of the Asamblea Permanente por la Paz (Permanent Assembly for Peace) defined as a space of encounter in diversity; and contributed to the integration of ex-combatants to the civil life.

Proantioquia is also implementing a model of governance where decisions are reached by negotiations in order to mobilize consensus and build mutual understanding. Following this line of action Proantioquia sponsors the following programs whose aim is to reach peace and democracy based on dialogue and communication:

130 Recently Fundación Corona is sponsoring projects related to peace and democracy as it is the case of a Program of Empresarios por la Paz (Entrepeneurs for Peace). 131 Personal interview.132 Fundación Social, “Contribuir a Construir la Paz y la Convivencia Social como Prioridad de la Fundación Social”, informe de realizaciones, Junio 8 de 1999. See also Maria Eugenia Querubin “El Grupo Empresarios por la Paz Frente al Proceso de Negociación del Conflicto Armado”, Fundación Social, sin publicar, Agosto 1998.

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Entretodos. Programa de Convivencia Ciudadana (Between All. Citizens Living Together) created in 1996 to face the problem of violence in the city of Medellín, which has the highest rate of homicides in the world.133 According to her director, Beatriz White “guerrilla is in the back door” thus to fight the problem is part of the private sector investments to attract capital. Rather than measures as security the program emphasize coexistence and social investment.134 This is a program where the private sector and foundations participate as members.

Antioquia: Convergencia y Desarrollo (Antioquia: Convergence and Development)135 was created by three elite women with the aim of forming public opinion in issues related with the development of Antioquia. The program is oriented toward the formation of public opinion using publication of themes related to development in the main newspapers, exchange of opinion with journalists, and the creation of data banks on projects including citizens’ perceptions on these projects.

Conclusions

This case illustrates corporate foundations’ changes from assistentialist to developmental and public forms of governance. More democratic participation accompanied this transformation. Beneficiaries are targeted as participants in their own development rather than recipients of donations. The affective link between employer and employee is replaced by expert knowledge and specialized units of decision-making. The increasing distance between donor and beneficiary and the incorporation of national and public concerns weakens affective linkages. The case of women, an important target for philanthropy, illustrates this transformation: during early period of industrialization single female workers were objects of moral campaigns and paternalistic practices; then women were targeted as workers’ wives with programs related to the family and children; today programs target women as head of family and thus addressing their productive interests. The targeting of informal sector also introduced workers’ enabling qualities like leadership, responsibility, entrepreneurship and self-stem. The incorporation of public concerns allowed to link philanthropy to process of economic growth as reflected in the conception of property foundations. The expression used by corporate foundations that “it can not be a healthy business in a sick society” summarizes well the priority given to social and public forms of governance that characterize Colombian philanthropy. Thus governance focuses on macroinflujo, the institution and public institutions. The situation of conflict and violence is also a main context that fosters foundations’ practices of democratic governance. Thus foundations have targeted democratic participation by strengthening non-government organizations, opening spaces for dialogue and conflict resolution as well as by making the state more accountable to citizens.

The trend towards more democratic practice is not homogeneous neither all foundations are moving in the same direction. Democratic participation still happens more at the local than national level. Decisions about who, how and 133 The homicide rate per 100,000 is the highest in the world. See Entretodos. Problema de la Violencia. 134 Personal interview. The program has the participation of the private sector and other foundations like BIC, Buen Pastor, Conconcreto, Corona, Exito, Social and Suramericana.135 Personal interview with one of the coordinators.

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whose themes are submitted to deliberation still take place in closed circles and without public discussion. There are also important considerations related to accountability which have not been mentioned but that deserve further attention.

The economic and political crisis poses important challenges to the sustainability of foundations in a context of increasing poverty and diminishing economic resources. The case of FES foundation have been mentioned; the crisis has also affected Fundación Social, which have reduced its social programs,136 as well as foundations working in the oil industry. The present context of peace negotiation with the guerrilla movement introduces new topics and voices in the democratic agenda. Undoubtedly the participation of foundations is as important as ever calling for almost hundred years of cumulative expertise whose contribution should not be ignored. The present conjucture also opens room for overcoming old fears and ask for creative solution with the participation of voices previously excluded.

136The program of Integral Local Development was reduced from ten to one region, a high proportion of employees have been lay-off and the social budget drastically reduced.

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