IN A world in which the gap between the “haves” and the “have-nots” remains a critical issue, the role of philanthropy is important and strategic. Nowhere is this more true than in South Africa, where, despite the slow but steady growth in access to critical social infrastructure such as water, electricity and land, the government alone is not capable of creating the equitable society that we hope for and envision.
Internationally, we have seen a proliferation of wealthy individuals and families making public and effective social investments, both a status symbol, and a perceived attempt to “even out” the disproportionate spread of wealth that pervades modern society.
From Bill Gates to Carlos Slim and from Sunil Patel to Brad Pitt, leveraging of resources to those in need is seen to be important, “cool” and worthy of strategic consideration. With the exception of a select group of people and families, including the Oppenheimer family, the Gordon family, the Ackerman family and, more recently, Patrice Motsepe, who publicly dedicated half of his money to charity, this philanthropic spending power of South Africa’s wealthy individuals is largely untapped, and is certainly unreported.
In his discussion of South African philanthropy, Giving and Philanthropy, Adam Habib reports that more than 90% of South Africans are continually engaged in some kind of giving.
A significant proportion of this consists of small exchanges of goods and services within very small communities or extended families, and is often more prolific among poorer populations than those that are better off.
This suggests a lack of strategic, larger-scale, more collaborative “giving” efforts among South Africa’s wealthy, who are prolific both in number and in relative wealth.
It stands in sharp contrast to the South African corporate social development sector, which is among the most developed anywhere in the world.
Black economic empowerment (BEE) has ensured that, on the whole, companies take seriously their responsibilities to the communities in which they work. Companies have realised that, not only is corporate social investment good for public relations and for the “feel-good” factor of helping one’s countrymen, but that the upliftment of the country’s poor and vulnerable is necessary if markets are to grow, creating better and more vibrant business opportunities and a more equal, sustainable society.
In their corporate capacities, South Africans give more than R6bn a year, an amount that exceeds substantially the 1% net profit after tax requirement of the companies that contribute to that number.
This suggests the existence of sophisticated investment strategies and vehicles, nongovernmental organisations (NGOs) that are able to manage significant grants, as well as the critical “culture of giving”. It stands to reason that the visible, measurable manifestation thereof need not remain, for the most part, limited to corporate entities, as is the case at present.
Wealthy South Africans with good philanthropic intentions seem to fall into one of two categories.
The first is made up of those who would like to give money, but simply do not know how to. They are so overwhelmed by the constant barrage of requests to donate, sponsor and give that they end up doing little or nothing at all. Sometimes this is also partly due to having donated money to a cause before, and then having very little idea what this money has actually done, whether it has served its intended purpose or whether it has disappeared down the notorious “black hole” of charity.
The second category consists of those who do a significant amount of giving, but which tends to be in relatively small amounts to causes in their immediate sphere of interest or line of vision. Sometimes this entails paying school fees for a single child, or sponsoring the local crèche, or giving money to the high school that one attended.
Although undoubtedly positive, this sort of giving is hard to measure, hard to co-ordinate and almost impossible to track.
Ultimately, South African philanthropists are doing themselves and the causes they support a great disservice by not taking a bigger picture, more strategic approach to the way in which they put their philanthropic money to use.
There may be better, more effective ways of supporting the same people and causes; there may be ways to leverage off the work of other people and originations; and there may be ways of integrating this giving into a system which would allow one to track the effect of the investment years after it has been made.
However, in raising this, it must also be acknowledged that individuals and families have very little access to information about where and how to spend money, and the system or platform about which I speak does not exist. Although success stories abound, one seldom hears of the philanthropic disasters of those with all the money and good intentions, but less of the strategic or operational ability. Even among the Hollywood crowd there have been some major embarrassments — Madonna put $3.8m towards a school in Malawi that was never completed and remains unused, while Wyclef Jean managed to raise $16m towards Haitian disaster recovery, of which he was only able to spend $5m.
Ultimately, individuals at all points on the wealth spectrum need access to the same tactical thinking as is afforded to corporate players. They should be given the same number of choices about where to invest their money, they should be made aware of the work being done by the organisations to which they are directing funds, and they should be given some kind of access to networks and information sessions ensuring that they are kept abreast of local and international trends in philanthropy.
Ideally, this greater access to information would place them in a position to hold the NGOs and people to whom they are giving money to account for the responsible and effective use of those funds. This would simultaneously incentivise the NGO sector to think wisely and strategically about the way they do their work if they are to attract funding from this significant source.
As a nation, and as a society, we are very mindful about our financial investments. These are well-considered and we have high expectations about the return on those investments. We make different decisions based on whether we are looking for a short-or long-term yield on those investments.
If one investment is not producing the desired dividends, we are likely to disinvest and look elsewhere. If companies or financial managers are not sufficiently transparent about where money is being placed, they are called to account. We should be no less mindful, nor less demanding, on the social investments we make, but we need the tools and the information to make these investment decisions wisely.
So, changes need to take place at both ends of the spectrum: systems need to facilitate and incentivise strategic social giving, as we have seen in the case of BEE, but at the other end of the spectrum, individuals and families need to want to engage in meaningful social investments, and need to apply the same bold, entrepreneurial spirit embodied in the South African business sector, to their charitable endeavours.
• Ball is a corporate social investment specialist returning to SA after a period with the Clinton Global Initiative in New York (first published in Business Day, 8 November 2013).