CEO of the UBS Optimus Foundation, Phyllis Costanza, joins Alberto Lidji to discuss social finance, philanthropy, blockchain, innovation, the SDGs and more.
UBS Optimus was founded 19 years ago in Switzerland, and today it is overseeing about 175 projects in approximately 20 countries. The Foundation started off supporting children and now has broadened its portfolio to include a range of thematic areas, from slavery to health and innovative finance. In 2019, it expects to grant out $80m and next year is aiming for $100m. 
Phyllis thinks this is only “scratching the surface”.  She notes that UBS, the bank, has roughly $2.5 trillion assets under management, so “even if we could just get half a percentage point [deployed for philanthropy], that’s $12.5 billion”.
UBS Optimus does not have an endowment, nor does it wish to establish one; 100% of the money that is donated by clients is deployed for programs.  Phyllis notes that UBS Optimus’ strategy has not been to grow an endowment. The money “does us no good sitting in a bank, which I know is anathema to how bankers think. Our goal is to get the money in and to get it out as quickly as possible.”
UBS is actively supporting philanthropists. A lot of high-net-worth individuals don’t know where to start their philanthropy work, and many who are already on the journey don’t feel satisfied. 
UBS did a survey of its clients, which revealed that more than 90% of their large clients are giving philanthropically but fewer than 20% are satisfied they’re making an impact, which as Phyllis notes is pretty extraordinary. 
She sees really interesting trends globally:  99% of UBS’s clients in Hong Kong want to give back to mainland China, consequently, UBS Optimus has become the largest international grantor into China, which “is a bit of a scary position to hold because giving in China is incredibly complicated". Their European clients primarily want to give into Africa and some to South East Asia, whilst out of their American clients, 96% of philanthropic giving stays in the US, where there’s an appetite to give domestically.
UBS appreciates the value of peer-to-peer interaction and tries to connect their clients through different platforms.  They’ve developed the ‘Global Philanthropist Community’ – a network of clients who identify the key thematic areas they’re interested in supporting, such as early childhood development, the environment, culture – UBS then connects the dots. They convene key stakeholders at their annual UBS Philanthropy Forum and have insightful gatherings across the world, from Detroit to Shanghai.
An interesting observation is that many trillions of dollars have been committed to charity as a consequence of ultra high-net-worth individuals signing ‘The Giving Pledge’, however, many of these people don’t know how to deploy these funds in a meaningful philanthropic and impactful way. She’s convinced that many clients actually come to UBS because of the bank's strong philanthropy offering.
There is an increasing number of financial options available for philanthropists, from traditional charitable giving all the way to impact investing.  Strategic philanthropy and social finance falling somewhere in between the two. Social finance still falls within the philanthropy category because you’re getting concessional returns, as opposed to market rate returns. 
Phyllis is passionate as she talks of a “really cool instrument”… “a really interesting, innovative debt instrument” called the ‘Social Success Note’.  In the podcast she explains how it came about and how it was structured to support an organization called Impact Water. In this instance, the Rockefeller Foundation was ‘the outcome funder’ who collaborated closely with UBS.
Collaboration is essential, and UBS Optimus’ whole strategy is based on collaboration. They rarely go at it alone.  There is increased cross-sector collaboration and acknowledgement that you’re not going to reach your goals if you go at it alone. She sp