The Novartis Foundation for Sustainable Development: Tackling Hiv/Aids and Poverty in South Africa (a)

9 Pages Posted: 10 Jun 2009

See all articles by Patricia H. Werhane

Patricia H. Werhane

University of Virginia - Darden School of Business

Jenny Mead

University of Virginia - Darden School of Business

Abstract

In 1998, Klaus Leisinger and Karin Schmitt of the Novartis Foundation for Sustainable Development in Basel, Switzerland, were approached by a sociologist who wanted help in launching a pilot program in Tanzania to deal with the crisis of the more than 8 million HIV/AIDS-orphaned children in sub-Saharan Africa. The proposed program was unusual in that it addressed the psychological and social traumas these children experienced. The other unusual aspect of this request was that Novartis, at that time the second-largest pharmaceutical company in the world, did not make, sell, or distribute any products related to HIV/AIDS. Novartis, and its philanthropic foundation, was committed to helping the neediest in developing countries, however. Leisinger and Schmitt did not believe that “throwing money” at problems resulted in solutions; rather, they looked for innovative ways to address problems and crises. But given the unusual nature of the request, Leisinger and Schmitt had to decide whether the foundation should help launch this program.

Excerpt

UVA-E-0303

TACKLING HIV/AIDS AND POVERTY IN SOUTH AFRICA (A)

THE NOVARTIS FOUNDATION FOR SUSTAINABLE DEVELOPMENT:

In 1998, sociologist Kurt Madörin from the Swiss-based NGO terre des hommes schweiz approached Klaus Leisinger and Karin Schmitt of the Novartis Foundation for Sustainable Development in Basel, Switzerland. There was an acute problem with orphans in sub-Saharan Africa, he told Leisinger, Novartis president and executive director, and Schmitt, director of foundation affairs and special projects. With one or both parents dying from AIDS, many African children were left vulnerable to homelessness, exploitation, abuse, violence, starvation, and other dangers. There were more than 8 million AIDS orphans in Africa, a number expected to reach 42 million by 2008. Being an orphan often meant being a social outcast, and orphaned children were more likely to fall into greater poverty. At the time, there was no effective solution for dealing with the crisis; these parentless children were either put into orphanages, if available; lived on the streets; or were taken care of by an NGO, which gave them food, shelter, and clothing. The result often was deep psychosocial trauma for the orphans, which no group was equipped to handle. Madörin wanted to develop a program that would help the orphaned children of Africa deal with this psychosocial trauma. He wanted to start in Tanzania, where the number of orphans who had lost both parents had risen from 71,100 in 1992 to 174,400 in 1998. A pilot program in Tanzania would help him assess the feasibility and effectiveness of such a program. But he needed financial and other assistance. Madörin asked Leisinger and Schmitt if the Novartis Foundation could help. They agreed to consider the proposal, although Novartis, one of the largest pharmaceutical companies in the world, did not manufacture or sell any HIV/AIDS-related products.

The HIV/AIDS Crisis

As the close of the 20th century approached, the 20-year-old AIDS crisis had ravaged many developing countries.

. . .

Keywords: ethics, stakeholder management, corporate social responsibility, business ethics, ethical issues, children's issues, health care, HIV/AIDS, nonprofit initiatives, pharmaceutical, philanthropy, foundations, innovation, leadership

Suggested Citation

Werhane, Patricia H. and Mead, Jenny, The Novartis Foundation for Sustainable Development: Tackling Hiv/Aids and Poverty in South Africa (a). Darden Case No. UVA-E-0303, Available at SSRN: https://ssrn.com/abstract=1417173 or http://dx.doi.org/10.2139/ssrn.1417173

Patricia H. Werhane (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4840 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/werhane.htm

Jenny Mead

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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