the campaigns for safe water, home solar electric systems, and the exclusive use of ACTs for malaria treatment, and they could serve as effective partners of the enterprises that provide the products and services.

Meanwhile, the many donors and NGOs that already employ similar techniques with success should be supported and encouraged. The philosophy of philanthropy proposed here raises some associated problems that should be solved. In the United States, philanthropic foundations must register with the Internal Revenue Service for tax exemption under Section 501(c)(3) of the Internal Revenue Code. One of the conditions is that they not make grants to profit-making enterprises, even with charitable intent. Many such grants are made legally, however (for example, reportedly the Rockefeller Foundation made a start-up grant to SELCO in India), whereas other companies continue to confront obstacles in trying to secure such support. Each foundation must evaluate its situation in each case and find an appropriate way to support these enterprises. The same problem may arise when the subsidy for ACTs is finally established and private companies are paid above-market prices for their medicines. This committee does not find itself competent to assist with these problems.

Recommendation: Philanthropic foundations and donor agencies should orient some of their activities in developing countries toward creating and supporting profit-making enterprises that would provide public-benefit goods and services to poor people. Grants should be replaced in spirit with first-stage financing or investments, and the portfolio should be broad enough in diversity of enterprises with different business plans and different technologies to raise the probability of financial success in this area, where there is relatively little experience.


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