The Fondo de Estrategia Social (FES) was launched in Mexico City this summer. It has two key aims: to tackle social problems with an effectiveness often lacking in Mexican philanthropy, which is more concerned with traditional almsgiving than with social change and social development, and to help develop a culture of giving.

Most ‘professional’ philanthropy in Mexico is still in the hands of a few business leaders (no more than 50 people in a country of 100 million), but despite their efforts no structured philanthropic culture has developed and there is still very limited private sector involvement in community and local issues. The founders realized, therefore, that as well as establishing a grantmaking foundation to strengthen the non-profit sector, they needed to build a culture of giving, both among people who already give (mostly wealthy people) and among those who do not but who want to be involved in the well-being of their local community. In short, we need a more democratic approach to social investment that involves people from different income levels.

The best solution, it was decided, was a mix between a community foundation and a social venture programme. FES was therefore established as a community social investment fund in Mexico City to address issues exclusively within the metropolitan community.

FES resources come mainly from its partners, either institutional or individual. Contribution levels vary, the annual minimum being 6,000 pesos (about US$540). The low annual threshold was set to enable people who could not otherwise afford to participate in a structured philanthropic effort to be involved. We see this as one of the most attractive components of the FES model.

Partners are asked for a minimum three-year commitment. They can choose whether to invest their money in social projects, with funds allocated to NGOs working on the issues they select, or in productive projects, where the funds are used to support for-profit projects with a social component. Eighty-five per cent of their contributions will go to support projects.

FES is now in the process of deciding on three investment areas to focus on. The process has included a series of workshops with people from different sectors. Topics have included water, women, civic participation, urban migration, urban management, and poverty measurement. Once the investment areas are decided, we will identify non-profits and productive projects working on related issues. An investment committee comprising investment teams and external advisers (grantmaking and non-profit evaluation experts) will be established for each area. The teams will evaluate proposals and organizations and present them to the Board for a final decision.

From 2006, we will focus on recruiting partners with a view to engaging at least 40 partners with a target of 1.5 million pesos ($150,000) of which we will distribute 1.3 million pesos.

FES is a giving tool that can have a great impact on social development issues as well as enabling community participation. We are convinced that it is a valuable addition to Mexican philanthropy.

Marcela O de Rovzar is one of the founders of FES. She is also the founder of Procura AC, a non-profit capacity building institute, with almost 7,000 people served over ten years. She can be contacted at procura_ac@yahoo.com

Almudena Ocejo is a member of FES’s board. She was the first director of FES. She can be contacted at aocejo@yahoo.com