Acting locally - the South's rising philanthropy

Forget Gates. Move over Oprah. Emerging economies too have their own home-grown titans of philanthropy, providing a potentially better attuned and more sustainable income source for local humanitarian and development needs.

According to Jenny Hodgson, executive director of the Global Fund for Community Foundations, the emergence of a new class of wealthy individuals in many developing countries has led to “a rapid growth in private and family foundations in many emerging markets”.

It is not just in powerful new economies where philanthropy is rising, but also among a globalised elite in still relatively poorer African countries.

See: Africa’s Top-10 Philanthropists

Hodgson believes that the growth of local philanthrocapitalists is not just a response to tighter north-south aid flows, but a recognition of the shortcomings of mainstream development, “with its issue-based silos, short-term project horizons and upward accountability to external donors”. Locally-funded initiatives can instead “take more holistic, long-term and flexible approaches that can develop community resilience and social cohesion,” she says.

Certainly engaging with local philanthropists presents a steep learning curve for both NGOs and the philanthropists themselves. While the former are familiar with technocratic “donor speak” and the onerous bureaucratic reporting procedures that overseas funders require, the latter speak the language of business and are inclined “to tackle every problem with a business solution”, said Hodgson.

Another challenge is that each philanthropist operates differently, said Dugan Fraser, coordinator of the Social Justice Initiative in South Africa, and NGOs must get used to their individual, personal styles and idiosyncrasies.

Civil society organizations in South Africa are increasingly seeing the advantages of working with local givers, Fraser added, and not just because there is less bureaucracy and onerous reporting. “It’s much better to have someone locally, who appreciates the local context and knows the local players. It means that programmes will be more tightly bound into the national dynamic,” he said.

And given the prevailing suspicion that governments and communities are often beholden to the hidden or imposed agendas of foreign donors, locally-funded programmes tend to have more credibility and local support, adds Hodgson.

Local philanthropists wary of funding human rights programmes

But some complain that local philanthropists are not always willing to fund “politically sensitive” human rights-oriented programmes, which may be viewed with suspicion by governments and the newly wealthy. Lucia Nader, director of Brazil-based human rights NGO Conectas believes Brazilian philanthropy has not emerged at the same pace as the country’s international political and economic prominence.

In a recent article in she argues that while Brazilians have a history of giving to charity, “there is no sustainable and organized philanthropy towards established and professional human rights groups,” for example. Partly, this wealth has not been tapped by organizations because up until now they have not needed to.

But she also sites a perception held by the public, in a country where the homicide rate is 50,000 per year, that human rights groups working in the area of justice system reform, for example, are simply empowering criminals. “Now, however, this is changing,” Nader adds. “The new generation understands what we’re talking about. There is a growing perception that if we don’t start talking about these issues related to human rights the country will explode.”

In South Africa, local philanthropists have always given generously in the past, said Fraser, but they have also tended to shy away from overtly political causes like human rights and social justice, channelling their money into “safer” areas like education, health and the environment.

But Fraser discerns a trend where some local philanthropies, for example Millennium Trust and the Bertha Foundation, are now stepping into the vacuum. “They are starting to see that in many areas the government is failing to perform, that there is unfinished business on transformation and that civil society has a big role to play.”

In the wake of Nigeria’s worst floods in decades in 2012, the government set up a committee chaired by industrialist Aliko Dangote where private sector firms made huge donations to help some seven million people. The Presidential Committee on Flood Relief and Rehabilitation set itself a target of around US $640 million for immediate and long-term reconstruction and rehabilitation. At a single fundraising dinner it raised US $70 million, according to the UN’s Office for the Coordination of Humanitarian Affairs, although details are limited on disbursement.

Charitable giving has a long history in India, says Maja Daruwala, executive director of the Commonwealth Human Rights Initiative, but “the notion of supporting human rights, or shall I say civil liberties organizations, is not tempting local funding or philanthropies.” Issues such as economic and social rights, and prevention of violence against women and children do get funding as long as they are cloaked in the language of bettering the situation of victims and not enabling them to “rise up to claim rights”, she added.

There can be a sentiment among the wealthy, prevalent in emerging markets, which blames the poor for their poverty, said Hodgson. “There’s this philosophy of, ‘I picked myself up by my bootstraps, so why can’t you?’”

Tapping the wealthy in developing countries

Nevertheless the growth of local philanthropy in emerging markets has prompted Human Rights Watch to expand its model of tapping high earners in developed countries by eliciting donations from wealthy people in developing countries too. “It’s important to us that our donors come from countries beyond only North America and Western Europe,” said Elizabeth Seuling, senior director at HRW’s Foundations and Program Liaison Office.

See: African philanthropy on the rise

HRW has been fundraising in South Africa, Brazil and India, partly because it wants “its work to be supported by people in countries with an influential global voice”. Seuling said that in each country the organization had faced different challenges, “from laws that limit our ability to raise funds locally to different philanthropic traditions.

“We’ve come across communities where people give to local initiatives rather than international ones; others where people prefer to fund direct services rather than the advocacy it takes to ensure those services are offered without discrimination. In some communities we find that people make generous donations of food or clothing but do not make cash gifts.”

Hodgson argues that the perspective is shifting from one of issue-driven to cross-sectoral community-driven approaches to development, with less focus on donor needs and more on the many interlocking needs articulated by the communities themselves.

Growing number of community foundations

Viewed through this prism, the trend towards community philanthropy, which refers to philanthropy that uses local resources and assets not just from wealthy local donors, but from the communities themselves, and simultaneously builds civil society, is growing rapidly in developing countries. According to a Global Philanthropy for Communications report, the number of community foundations grew by 86 percent from 2000 to 2010, with local donors investing in various types of community development.

See: Tapping into a tradition of giving

In Kenya, an organization called the Makutano Community Development Association has constructed dams and wells and developed farmland by empowering residents to steer their own development.

Hodgson believes that community philanthropic institutions “tend to be overlooked as marginal and unstrategic by the formal development sector” when in fact they are highly valuable - not just as a strategy for funding but because “development outcomes are more lasting when people have invested in their own development”.