Foreign aid is an investment – not a gift

January 2021 marked the exciting start of a new term for PSI’s Board of Directors. We are conducting interviews with the Board members, delving into their backgrounds, personal and professional journeys, as well as their call to PSI and its mission to deliver consumer-powered healthcare. 

Below, we talk withPeter Smitham, Chairman of the Board of the Atlantic Philanthropies, which closed in September 2020. Director NXP Semiconductors.

PSI: Tell us about your background, your areas of expertise and your professional journey.

Peter Smitham
: I was born in 1942, in the middle of World War II. The earliest photo of me was aged 3 at a street party to celebrate VE Day (Victory in Europe). Just before I was born, my parents’ house was bombed.

My hometown of Swansea, Wales was a steel and coal mining center. Both were dying industries and Swansea had unemployment rates between 30 – 40 percent. It was an environment with a strongly socialist culture. When Stalin died, in 1953, we had two minutes of silence in class! I say this to describe an upbringing and the deep influence this has had on my view of the world.

As a teenager, I went to a technical school, envisioning a career as a craftsman. However, the school changed into a college of further education, so I studied geography, geology, and economics. I was encouraged to go to university. No one where I lived had ever done that.

Post-graduation, I joined the Cooperative Wholesale Society in Manchester, UK. With 250,000 employees in 30,000 shops, it was by far the largest organization in the UK and the backbone of the Labor political party. It was a strongly left-wing organization, echoing my upbringing and values.

I joined the union and worked in market and economic research. Many of us did research for the Labor movement and political party – we’d see senior Labor Members of Parliament there daily! I met MP Roy Jenkins there, he was the most radical Home Secretary. I wrote essays on some of his work, such as approving, under certain conditions, abortion and rescinding penalties for homosexuality.

I met MP Roy Jenkins there, he was the most radical Home Secretary. I wrote essays on some of his work, such as approving, under certain conditions, abortion and rescinding penalties for homosexuality.

The Cooperative paid for me to go to back to university, to do a business degree. There I researched issues like policies to reduce unemployment and regional development aid, both of which sparked new interests for me and broadened my perspectives, leading me to work for a company called ITT. At that time, ITT was one of the largest U.S. conglomerates, owning companies like Sheraton, Avis and many electronics businesses. ITT was the ultimate capitalist organization in terms of values and culture. I ran several of their European businesses and while there also lectured at the Open University. I left ITT to start my own business in 1973 in semiconductors. When we sold the business in 1983, we had 1,400 employees in three countries.

I was then approached by Schroders Investment Bank to help create a venture capital business with a focus on technology. Four of us started it with a $45 million dollar fund to invest; over the 30 years I was there, we bought around 200 companies and I sat on over 20 investee company boards. Eventually we separated from the bank and became Permira. By then we had created a true partnership, where ownership ends when you leave – a partnership, not a proprietorship. It is now one of the largest private equity firms in the world.

PSI: How did you go from private equity to discovering a passion for philanthropy?

PS: In the year 2000, I decided not to work full time in private equity but to become active in philanthropy and international development.

Everyone who worked in Permira where I was managing partner could take a day per month to engage in whatever philanthropic endeavor they chose. I chose Marie Stopes International (MSI) and became the first non-executive trustee to join MSI. The Board members were Phil Harvey, Tim Black, Tim Rutter and Dana Hovig, most of whom had deep and founding roots with PSI as well. At a similar time, I also joined the Board of New Philanthropy Capital, a philanthropic consultancy, and took an advisory role in Teach First.

Along the way, I met people like Michael Holscher and others connected to PSI. I’d been aware of PSI for a long time, aware of the camaraderie of the people and yes, even the intense competition between MSI and PSI!

I was asked in 2002 by Prime Minister Tony Blair to advise the Department for International Development (now called FCDO), on recreating its development finance institution, the CDC. I helped to create a venture capital fund called Actis from the CDC’s commercial investing work. Actis invested in companies with extremely strong social and economic goals in Africa, India, China and South America. Initially, 60% of the shares were owned by the employees and 40% by the British Government. In 2016, the year I left, the employees bought the Government’s 40% share.  

Also in 2002, businessman and philanthropist Chuck Feeney approached me to join the board of Atlantic Philanthropies – a spend-down foundation with a limited life and intention to give away all Chuck’s wealth during his lifetime.  From 2002 until we closed in September 2020, it was my big role, helping the vulnerable and disadvantaged, developing a spend-down philosophy that could be communicated and cast in a positive way, demonstrating a sense of urgency, and deeply listening to grantee partners and the customer. Of all the companies I have been involved in, this was the one I fell in love with.

…until we closed in September 2020, it was my big role, helping the vulnerable and disadvantaged, developing a spend-down philosophy that could be communicated and cast in a positive way…

All the strongly held ideals I had growing up about inequality and disadvantage, and all the left-wing political ambition I had in my 20s, came back to me at Atlantic. We worked on projects like joint education for Catholics and Protestants in Northern Ireland, aboriginal rights in Australia, issues for the hill tribes in Vietnam, we funded the library of the Supreme Court justices in South Africa after apartheid, we helped develop the peace process in Northern Ireland. Nothing has ever moved me as much as the work at Atlantic Philanthropies. I describe Chuck Feeney as having divine discontent; never satisfied, he always wanted to do more, faster, and help more people. Over 20 years, we made grants totaling $10 billion.

PSI: What might be a fun fact about yourself that we may not know?

One of the ways I got myself through my last few years at school was by playing professional soccer. I played for the Welsh youth team. I was asked to continue, but it would have meant not going to university, which I felt would be life-changing.  

On a less humorous note, people often ask why I have spent so much time in Northern Ireland with Catholics and Protestants. It’s because a factory that I ran in the mid-1970s was blown up by the IRA. In total over 20 years, 3,500 people died in what is euphemistically called “The Troubles”. It was meaningful to me that Chuck Feeney put money into the peace process there, supporting the vital work done by Bill Clinton and George Mitchell. In gaining peace and reconciliation, forgiveness is such an important element. I was at Chuck’s 80th birthday in Dublin along with Gerry Adams and Martin McGuinness, the heads of the IRA movement.

PSI: You said that through your work with MSI, you had been aware of PSI for a long time. How did that awareness then translate to you joining the PSI Board?

When I think about PSI and MSI, my initial driving force in joining was “children by choice and not by chance”.

Through my previous experiences I have had many connections to PSI’s world – such as working with donors like the British government, USAID and the Gates Foundation; partnering in India with organizations like CIFF and Packard in our family foundation’s work with adolescent girls; my involvement with Actis and Atlantic; all made me feel strongly attracted to be part of PSI and completely aligned with its goals. I was able to talk to many organizations that funded PSI, especially DFID and their network, the praise of PSI was unequivocal, and the rating of the management team was the highest of the INGO’s. Joining the Board was something I really wanted.

PSI pulls together several important themes for me. Tackling inequality, ending disadvantage, supporting the vulnerable—and doing so in a way that is strongly anti-colonial and anti-empire through a long history of national investment and national decision-making. Back all those years ago, pre-university, when I was delivering newspapers and playing soccer, I read widely about colonization – about “giving” India and Cyprus their independence, which I viewed as “giving independence to already independent people.” How can that be explained or justified?

PSI pulls together several important themes for me. Tackling inequality, ending disadvantage, supporting the vulnerable…in a way that is strongly anti-colonial and anti-empire…

I don’t like the word “aid,” because it is about putting money back from whence it came. I believe the aid commitment is a debt – not a gift. Aid is the wrong word; in lots of ways, it is recompense, the word should be investment. The British government’s aid budget commitment of 0.7 percent that was recently reduced to 0.5 percent troubles me deeply. PSI’s principle of helping to make national health systems strong and local businesses viable is a hugely worthwhile initiative.

PSI: PSI’s focus in delivering health solutions is on the consumer; what does that mean to you?

If you believe you can sit in London and think you know what is right in Mumbai, it is just not possible, it is arrogant and condescending. Involving the customer is key to success in any business. During my work with semi-conductors, our brightest ideas came from our customers. We couldn’t do what we did without them.

During one memorable India visit to see work supported by our family foundation, a teenage girl sitting next to me in a hut, said to me “it’s good to learn about my body and why I should stay in school, but you also need to find me a job. If I don’t have a job when I leave school, my family won’t be able to keep me, and they will marry me off.” Yes, all programs need boundaries to create focus, but we must also make sure that the voice of the local consumer is heard to drive the process.

INGOs are changing, with structural and strategic forces shifting for some time now. I have spent much of my life in organizations going through change in one form or another. PSI has done a great job of creating a specific Board committee to study the issues of localization and what it truly means. For me, this is a key issue that impacts everything else. The long-term result will be that the consumer will have more and more voice, they will have more and more influence. What PSI is doing to foster that is admirable.

PSI: What are you looking forward to in the remainder of 2021?

I thought last year was one of the most difficult years for INGOs, like PSI. You had the disturbance of COVID-19 and a reaffirmation of changing revenue. PSI had the courage to tackle that head-on by restructuring. This was the right reaction to the forces around us that are changing.

Now PSI and the Board are thinking about the strategic challenges with a different type of focus. We have committees like the Frontier Financing Committee, with a specific role in thinking of funding alternatives, how we make existing funding processes more effective and how to establish what we should be bidding for. As I have said, I think the debate around localization is also key and there is a complete awakening in our landscape of the ESG – environmental, social and governance agenda.

I’m looking forward to working with PSI to see what will come out of the new ad hoc committees of the Board – the Frontier Financing Committee, and the Global Network and National Capabilities Committee – and how they fit into and contribute to the existing committee work. All these things come together to create a holistic view of the future. It will be exciting for the Board to meet this November to analyze and discuss these major strategic threats and opportunities.

Something that has contributed hugely to my achievements is the number of truly talented people I have been lucky enough to work with. I include the PSI team in this group. Your passion and energy, focus and competence are amazing and make it a great place to work. I’ve so much to learn from you all.

Sign up to
Receive Updates

Donate to
Support Our Work