My area of interest is the term “philanthropy”. We in South Africa take the thousands of organisations that contribute towards our democracy for granted. They provide services, relief and welfare, they educate, they create jobs, they build, they research, they publish, they contribute towards policy, they advocate, they contest, they litigate and they help to ensure that the country’s democracy is vibrant. What do we do to ensure that this powerful and necessary sector, our civil society, continues to thrive?
In South Africa the term “philanthropy” has a history and it does not necessarily find favour with the majority of its people. This history goes back to the missionaries of the nineteenth century who were philanthropic on their own terms: they looked after the “poor natives”, saved their souls and pushed the borders of the empire. The paternalistic attitudes of the day still resonate in South Africa. However, missionary philanthropy developed further towards providing health and educational facilities for local populations. Some of the best historic schools in South Africa emerged from this missionary philanthropy movement. The education provided to black pupils by these schools until the advent of apartheid and their closure was some of the best available and accounted for key leadership in the black community. Even more important and not to be forgotten is the role philanthropy played in the nineteenth century to abolish slavery.
A key component of the notion of philanthropy is altruism. If you check a thesaurus, it brings up words such as self-sacrifice, humanity, selflessness, unselfishness and philanthropy. For some, this kind of behaviour is counter-intuitive as it involves assisting people who are not your own family or community; trusting people who you do not know well and giving your own resources to others who may or may not use them effectively. Hence philanthropy involves some risk.
Charity and Philanthropy
Before moving on to the issue of risk, I would like to address the difference between philanthropy and charity, as most of us function within the charitable paradigm. Commonly charity is viewed as the voluntary giving to those in need, relieving poverty or personal distress. Charity has religious roots – it is one of the three theological virtues of Christianity (faith, hope and charity) and one of the five pillars of Islam. Members of these faiths therefore have a charitable obligation. Charity is a key part of our communal life and we need to act charitably when people are in need, but philanthropy is somewhat different. Charity is usually an immediate (and often emotional) response to an immediate crisis – short term alleviation of a specific problem such as starvation, homelessness or disease. Charity entails an unequal relationship between those who have and those who don’t. It involves pity. In some ways it creates a dependency and an obligation to appear needy. This manifests in the vision of a beggar on the side of the road, but also extends to some nonprofit organisations and the culture in which they operate. There are expectations on the part of the giver that organisations should not pay their staff well or that work conditions should be unpleasant to show the self-sacrifice required to work with the poor. Yet, we do not see the giver reducing him/herself to the same standards.
Unfortunately, the charitable impulse is also short term and immediate. It provides immediate relief in times of crisis and this is critical and appreciated, but it does not provide for long term solutions to social problems. In effect, it makes poverty bearable, but it doesn’t create any systemic change. We also tend to view our civil society organisations as charities, but most are not simply providing services to the poor. A university is not a charity, yet it relies on philanthropic funding to ensure globally competitive research, staff and scholarships.
When we talk about philanthropy, we are looking at strategic investment in social change that is long term. It is about supporting institutions and organisations that are making fundamental change in the world for the common good. We are looking at purpose, intended direction and a particular vision of society.
What are the key benefits of creating a healthy philanthropic sector in South Africa? When we explore where philanthropic money can go, it opens up new vistas. Going back to the issue of risk – philanthropists can take risks. They are not answerable to the voter or the shareholder. They can invest in highly innovative initiatives only found on the edge or they can support those new discoveries that push the boundaries of knowledge. New ideas generally develop on the fringe such as the women’s movement and the environmental movement. These were not supported by governments or the corporate sector – to the contrary, it would not have been in their interest to do so. The funds came from people, rich and poor, who were passionate about these issues. This was philanthropic money. Organisations involved in environmental, human rights and gender issues are not charities. This funding is strategic, it is about changing society for the good, it is about social justice. Universities and theatres are also recipients of philanthropic money (and they are not charities either). Government and the corporate sector are unlikely to fund issues that are not voter friendly. For example, initial research into the contraceptive pill could not attract government funding because it was politically controversial. Universities are often the anchor institutions that sow the seeds that change our world. In addition, philanthropy need not demand the immediate results that business expect, but can take its time to measure impact. For example, the green movement began in the 1960s, but we are really only seeing the impact now. It has been the philanthropists who have doggedly continued to support this movement that have made this contribution.
2010 was a momentous year in the development of the global philanthropic movement. In June two American billionaires, Warren Buffett and Bill Gates, launched The Giving Pledge, a philanthropic campaign that invited the wealthiest individuals in the USA to commit to giving the majority of their wealth to philanthropy. As of last month about 140 of the world’s richest people have joined this campaign, including one South African family: Patrice and Precious Motsepe. As this growing class of philanthro-capitalists use their wealth for various causes, the challenges of mutual accountability, legitimacy and effectiveness become increasingly more important. We have to ask ourselves, while this pledge campaign gains momentum, will the nature of philanthropy change? Will this movement be led by corporate concerns that focus on financial efficiency rather than risk and altruism; will the individual foundations concerned by-pass local civil society to run their own operations without partnerships on the ground, without consultation and engagement? Will this remain essentially philanthropic in nature or will it become a power game to create a world that mirrors the values of the market rather than focusing on the strengthening of civil society that provides the social fabric and the social cohesion that we require for stability and democracy?
The debate around philanthropy opens up a myriad of other issues. Philanthropy is not necessarily democratic for example, but then it is people’s own money. Tax is democratic (if everyone pays it), but then it is not always distributed fairly or effectively. The South African government has not been keen to open the floodgates with tax benefits related to philanthropy as it would, understandably, rather collect money to fulfil its own mandate). However, the consequence is, as mentioned before, that there are areas that will never receive financial support as they would not be a government priority in terms of re-election.
On a personal level, what impact does philanthropy have on those who participate? Firstly, it provides a powerful mechanism for individuals to express their personal values and commitments. Secondly, even with the distortion that transfers of money can involve, philanthropists are exposed to new perspectives and new ways of seeing the world. Their giving brings them into contact with people whom they might never have met. Whilst philanthropy clearly supports the important work done by others, there is an element that transforms the giver. In our experience, the most revealing element was the level of personal satisfaction, the potent sense of meaning and true happiness that arises from supporting social initiatives bigger than ourselves, the feeling of community with others who have the same values and ideals.
What is required to participate in philanthropy? Firstly, we see philanthropy as part of financial planning. If we operate on a random, charitable basis, our engagement with the world is generally not sustained as we only respond to need. Philanthropic activity is planned and purposeful. It is about identifying institutions and organisations that have common ideals and that offer opportunities to build long term fulfilling partnerships. This depends very much on the individual’s personal passions, whether they are in the field of conservation, education, health, human rights etc. South Africa, in particular, offers amazing opportunities to pioneer new ideas within the social, economic or political spheres. The innovation that is evident in our society is attractive to people who are interested in systemic change. Identifying organisations is the first piece of research required, then meeting leaders, visiting projects etc will provide a holistic view of your potential partner. A donation can then be made (a grant) and it will be important to assess how this is managed by the organisation. What is important is to know where your job stops and where the organisation’s starts. It can create conflict to become involved in the organisation, no matter how tempting. They are the founders and activists on the ground and they know their work. There has to be a level of trust and the donor needs to be able to let go. It is reasonable to request reports, but not when the requirement is so onerous that servicing the donation becomes an invasion of time and effort.
The second step in philanthropy is the creation of a philanthropic trust or foundation. This is often the choice of people with significant wealth who find that pressure from society can be overwhelming. They receive frequent requests for funding and this can become stressful. They therefore choose to formalise their philanthropy by creating a philanthropic entity through which their social giving is carried out. This enables them to make contributions to society, but in a concentrated way to ensure real impact. The establishment of philanthropic foundations is a key way of building effective giving and, as mentioned before, philanthropy then becomes part of financial planning.
The establishment of a foundation can be done on the basis of an endowment – a capital sum investment, the bulk of the income from which is used towards the foundation’s philanthropic aims. Some of the income is reinvested to ensure that the principal amount remains current with inflation. In many successful foundations, additional funds are added over time. The issue of personal legacy is important to many people and the benefit of such a foundation is that it keeps on giving and the founder’s generosity continues as long as the foundation exists. This has a greater impact than a single donation. From a personal perspective, many people want to leave a social legacy in the world rather than simply being remembered by the size of their cheque account.
A key benefit of a foundation is that it enables people to take risk, as mentioned previously. Whilst many existing foundations focus on welfare and charity in the old paradigm, increasing numbers are exploring a focus on systemic issues in a particular interest area. This can be in education at all levels, housing, health, music or the arts, in medical research, in policy relating to the environment and global warming and thousands of other areas. The foundation’s capacity to be innovative means that they can provide the seed funding that enables innovative ideas to be tested.
In addition, there are a number of family foundations in South Africa. Some families have found it to be a unique mechanism through which they bring the family together once or twice a year, and that it has stimulated the next generation to engage fully in society.
Lastly, some of the country’s most influential foundations were established through a bequest. Often individuals are not in a position to donate funds or establish a foundation during their lifetime. However, they can become involved in “planned giving” and establish the foundation as a legacy in their will.
Philanthropy has a clear place in our lives – a movement in South Africa to give back, to reinvest in those aspects of our lives that have meaning and for which we have a passion, whilst maintaining an altruistic view on what we do. Trevor Manuel, at his key note speech at one of the Inyathelo Philanthropy Awards, reminded the audience of the need to give generously without being patronising. Hopefully South Africans will begin to explore their philanthropic role and to start seriously thinking of what they have versus what they need. The balance can definitely be used elsewhere for the social good.
– Shelagh Gastrow