Beyond Governments: Philanthropists at the Table — An interview with Howard G. Buffet

Editor's note:

This interview is a condensed and edited version of the exchange between the Journal and Howard G. Buffett.

JIA Editorial Board
September 29, 2014

Journal of International Affairs: Your foundation aims to end hunger and improve the standard of living and quality of life for the world’s most impoverished and marginalized populations by funding projects in food and water security, conflict resolution, and post-conflict development. There are many global issues that need attention. Why did you pick food security as your target?

Howard Buffett: Well, I kind of work backwards. I consider myself a farmer, and I have spent most of my adult life involved in agriculture. My dad always says, “Stick to your circle of competence.” I understand agriculture and farming, and so if I go somewhere else in the world, I can always talk to farmers as a farmer, understand their problems and needs, and see what they do differently. I do not know everything about agriculture, but I have a good starting point. And most of the smallholder farmers we come in contact with are actually dealing with hunger and food security issues. So I started out looking at agriculture because this is what I was familiar with, and this led me to hunger and food security issues.

Journal: There are other philanthropic foundations working in the field of food security. What is the Howard G. Buffett Foundation doing that is unique, different, or innovative?

Buffett: The main difference is the geography we operate in. We work in a lot of conflict areas such as Sierra Leone, Liberia, South Sudan, Burundi, and Democratic Republic of Congo (DRC). For example, in the DRC provinces of South and North Kivu, we are funding some projects involving coffee and cocoa, and we are the only U.S. foundation involved in those projects. We are also funding a hydroelectric power project, which is currently the largest in the DRC. However, what makes us unique is not just where we fund projects, but also how we fund and what we fund. There are many NGOs in the DRC, but we are different because we are not doing charity work. We are trying to invest. We do not really fund what I call “standard projects” anymore, because we think they are not effective. Purchase for Progress, a World Food Programme (WFP) initiative that we are co-funding, is a good example of the type of project we like. This project connects poor farmers to markets, so that they can sell their products to commercial buyers at a fair price, and increase their incomes. The goal is to put 500,000 smallholder farmers into the commercial marketplace. We want these farmers to be trained to provide quality products within contractually obligated deadlines, and to develop the skills needed to participate in agricultural markets. This is something that has not been done before, and is an example of the types of projects we like. It might work and it might not, but it is a new idea.

Journal: What do you mean by “standard projects” and why, according to you, they are ineffective?

Buffett: Well, I am talking about the kind of standard project in which an NGO would say, “We want to do a three-year program with 3,000 beneficiaries in this particular area. We are going to provide them seeds and fertilizer, and we are going to train them a little bit.” So they go in but some of them actually cause harm, because they promise to give things such as seeds and fertilizer for free. As a result, the productivity of these farmers may increase quite a bit for those three years. But when the NGO leaves and stops providing free seeds and fertilizer, the situation changes. We even had a project in Liberia where we were trying to get farmers involved. During the first year, participation was high, but in the second year farmers stopped showing up. When we asked them why they said, “You are not giving us anything.” So you start to develop this culture of entitlement, and never solve the long-term problem. The program will not last forever, so we cannot do something that is perpetually dependent on us. We must take into account the context of their needs, and have a long-term commitment to help empower them to solve their own problems.

Journal: You mentioned geography and the places you work as unique to your organization. Can you explain which countries you choose, and why you target them and not others?

Buffett: We work in countries and regions that we know and understand, and where we have relationships. It takes time to make progress, and we do not have the time or people to significantly expand our efforts. Thus, we prefer to focus on what and whom we already know. For example, we are working now in the DRC because we know people there well. We trust them, and we know they can help us with what we want to do. The decision is based on relationships. When it comes to people, we look for a combination of two things: people who we have the right chemistry with, and whom we feel good about, and people who are able to put together teams that know how to work in conflict areas. We hope they would not run home if bullets fly. We work in conflict and post-conflict countries because they have the toughest problems. Conflict and hunger go together. Conflict breeds hunger, and hunger fuels conflict. So we try to invest in those projects that can improve the lives of these people in countries with conflicts through food and water security, and conflict resolution.

Journal: You have just published your book, 40 Chances: Finding Hope in a Hungry World, and in the foreword you wrote that the book is a guide for “intelligent philanthropy.” Can you elaborate a bit more on what you mean by “intelligent philanthropy”? 

Buffett: Well, I think we have done a lot of things for a long time just because we were used to doing it that way. If you look at a lot of businesses, they have zero-based budgets. You throw out last year’s budget, and you start all over again. And we need to do that with philanthropy. We need to throw out all the old ideas. We have been doing the same thing over and over again because it is convenient or because it is what we know, and in a lot of cases, because it is the least risky option. A lot of people do not want to take risks because they are worried about their job, their reputation, or about not being able to raise money if they fail. What you want is impact, and you want to show that. But the truth is that we often give money to programs, but have no idea if they will succeed. I do not have to win every time; I actually expect to fail more than I win. Failure and success are not always black and white. I think a different mindset is needed.

Journal: On this topic, what have been some of your biggest failures when working in food security issues?

Buffett: Well, for example, last year we gave USD $500,000 to the Ugandan government to help with the peace process in eastern Congo. They tried to negotiate with the M23 rebel group and the Congolese government. The Congolese government did not want this effort to succeed, and M23 made unreasonable demands. It was a very tough negotiation and, ultimately, no peace agreement was reached. Detractors say we wasted that money. However, while no peace agreement was made, we still acted in good faith to address the issue. I would say that we succeeded in supporting people who were trying to bring stability to the region, and this might help the next thing we try to do. They knew we were willing to help, and they asked us to do it; it was not our idea. It is very important when you are somewhere else in the world that you listen to people about their needs. But this was a big failure in terms of food security, because people were not going to be able to grow food or transport it as a result of the conflict. The conflict substantially damaged local markets. It is very difficult to trade or buy food. Once again, conflict begets hunger, although some people do not make the connection.

We also failed when for many years we funded standard projects that included a three-year time frame. These projects were often set up to help a set amount of beneficiaries. When the project time frames were over, we went home without solving the problem because we could not help people to be financially independent and be engaged and involved in the market in such a short amount of time. We didn’t change anything from a long-term perspective. I fear some of these efforts may have done more harm than good because there are people who over a three-year period increased their yields, and as a result, experienced an inflated standard of living. Once we left, and there was no more free seed or fertilizer, some may have had difficulties readjusting to the realities of the long-term food situation in the region. When you do harm, that’s a big failure.

Journal: What do you think are some of your foundation’s greatest successes in food security? Is there a particular project that you are proud to have completed?

 Buffett: I would say Purchase for Progress with the World Food Programme. It is an exciting program because it proves that the model works: that you can find poor farmers and help them get into the marketplace and be part of the economy. Instead of giving things away and then going home, we helped create businesses and lasting jobs, which are pulling people out of poverty and starting to change lives permanently.