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African philanthropy on the rise

NEW YORK, 11 April 2014 (IRIN) - The emergence of a new breed of super-rich individuals in Africa has been accompanied by the steady growth of Western-style philanthropic foundations and other structured forms of giving.

An estimated US$7 billion is given every year by Africa’s “high net worth individuals (HNWIs)”, according to a recent report by the African Grantmakers Network.

Sustained economic growth in Africa, accompanied by the economic downturn in the West, has contributed to the “rapid emergence of structured forms of strategic philanthropy by wealthy Africans”, notes the report. Although economic growth has seen a deepening divide between rich and poor, it has also spawned a rising middle class, which the report estimates could make a further $22 billion available in combined philanthropic giving.

But some in the field warn that unless the 54 countries on the continent - each with its own context, traditions of giving and unique contemporary challenges - develop locally-driven, community-based philanthropic models, some of these new patterns of giving may not change the lives of the poor in the long run.

They also site the need for more and better data to track philanthropic money. The same report notes that only $1 billion of the $7 billion given could be traced, and that of the Forbes list of the 40 richest Africans only 22 had philanthropic initiatives that involved them or their families. But the report notes that many of the recently-rich may underreport their giving, partly because of “sensitivities about the source of their wealth” and potential tax implications. It also notes the lack of an “enabling policy environment” for structured philanthropy in many countries.

Africa’s wealthiest are giving less than 1 percent of their net worth, versus 9 percent in Europe, Asia and Latin America, says the report, and many of the richest families are not formally engaged in philanthropy. “Some of these doubtless give anonymously or informally but the data suggests that while the very wealthiest are coming under some pressure to do something, there is a large group of lesser-known HNWIs that are currently not feeling compelled to engage in philanthropy on the continent.”

Nigeria’s nouveau riche lead the way

Nevertheless the philanthropy bug is fast catching on, with the nouveau riche in Nigeria leading the way, and those in South Africa, Kenya and Zimbabwe following suite. Many are using business models to spread their wealth - by nurturing small businesses and educating future entrepreneurs, for example. There is a rich tradition of formalized giving in Southern Africa, where the wealthiest families have long been concentrated, but prominent new generation givers include Patrice Motsepe, Tokyo Sexwale, Cyril Ramaphosa and Jay Naidoo from South Africa, and Strive Masiyiwa from Zimbabwe. Among Nigeria’s prominent givers are Tony Elumelu, Theophilus Danjuma and Aliko Dangote.

Elumelu, founder of the Tony Elumelu Foundation, described Africa as “a continent of economic opportunities” where the “return on investment is huge… The best way to sustainably alleviate poverty across Africa is through private sector development and ultimately job creation,” he said in an interview on CNN several months ago. His foundation helps nurture small and medium businesses by offering skills from top business school graduates, among other endeavours.

Institutions like the African Grantmakers Network, set up in 2009, with offices in Dakar and Johannesburg, Elumelu’s foundation (2010) and recently the African Philanthropy Forum that launched in Addis Ababa in February this year, are signs that institutionalized giving by the wealthy is taking root.

Sheilagh Gastrow, executive director of South African based Inyathelo, an organization that strengthens local NGOs through grant-making, says there has been a “momentous global awareness around philanthropy and what’s happening in Africa is part of that. It’s not unique. The rise in philanthropy is trending right now,” she says, noting that the very wealthy tend to network with each other, educate their children at the same places and establish personal connections, so it is no surprise that the “high end buzz” has spread to Africa.

She cites the Giving Pledge as a phenomenon that is prompting many wealthy people to join Bill Gates, the richest man in the world, in giving most of their wealth to philanthropy. South African billionaire Patrice Motsepe was the first African to sign the pledge a year ago.

New channels of giving

The African Grantmakers report also identifies other trends on the continent such as the emergence of new channels of giving among more urbanized communities (including the African diaspora), and more recognition of community-based giving practices, for example. 

Clearly this relatively new, fast-changing and growing philanthropic sector is only a part of a much bigger and more complex range of players and practices on the continent, many of which have been around for centuries.

Halima Mohamed, a philanthropy adviser at Trust Africa in an article in Alliance magazine, describes a much larger and more prevalent “set of diverse practices, mechanisms and traditions of giving” that are embedded in African societies but have “been largely ignored or deemed inconsequential to mainstream philanthropy...

“Until not long ago, use of the term philanthropy in Africa automatically meant formal, legal, institutionalized giving - primarily top down; almost always about money, and at considerable scale. Slowly this is changing and new narratives are emerging that reflect systems, practices, traditions and mechanisms of giving that have long played a fundamental role in Africa,” she writes.

Experts note that as formal philanthropic giving becomes more widespread, it is an opportune time for players in the field to draw on these local traditions and practices in an effort to make development more locally-driven and owned. As Mohamed writes, “there is space to reframe our own history and narrative of giving so that it is rooted in our practice and relevant to our context.”

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Theme (s): Aid Policy, Economy, Governance,

[This report does not necessarily reflect the views of the United Nations]

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