New philanthropists in South Africa – A way to go

Yvonne Morgan

South Africa has a sound and expanding economy and, like Brazil, a huge income disparity between rich and poor. It also has an official policy of Black Economic Empowerment (BEE) which has led to an upsurge in the numbers of wealthy black families and a strong black middle class. While corporate philanthropy is well developed, with an estimated R2.65 billion going to charity in 2005, individual philanthropy lags behind.

Corporate social investment (CSI) in South Africa is moving towards a more proactive approach, with businesses beginning to align their CSI strategy with business goals, to fund the communities that they provide services to, to more effectively adapt their strengths and skills to match community needs, and to seek a more visible giving image among their customers. They are also using employee time and skills and company resources and products to complement financial donations.

Individual giving presents a contrasting picture. For most South African donors, giving is a very private matter, and there is a distinct lack of information on individual philanthropists. Traditionally, wealthy white businessmen have formed the backbone of social givers in South Africa, both as individuals and through their businesses – though giving is by no means confined to the wealthy.[1] Their giving tends to reflect their personal interests, and they seldom disclose what they are funding or how much. While a few have formed family foundations, the majority prefer to give on an ad hoc basis.

Most private donors seem to prefer to fund where there is a well-established need, such as education and health, particularly HIV/AIDS-related work. Both corporate and individual giving is often influenced by what government has identified as the most pressing social needs (particularly among big business, which is strongly motivated to work with a democratically elected black establishment). Since big business tends to produce the private philanthropists, it is not surprising that there has been little noticeable innovation in private giving.

While private donors are likely to demand regular reports and good financial management of funds received, they prefer to write cheques rather than become closely involved. South Africa’s newly wealthy do not seem to have embraced private philanthropy as a means of helping their local communities. Where giving patterns have been tracked, these reflect a bias towards giving to religious institutions, particularly in the Jewish and Muslim communities.

A handful of well-known families have their own foundations. The Oppenheimer family of Anglo American and De Beers fame established the Brenthurst Foundation, an economic strategy think-tank, while others such as the Ackerman Family Educational Trust and the Donald Gordon Foundation support educational issues.
One of these, the Donald Gordon Foundation, has stepped out of the mould, providing extensive funding for a university business school in 1999 and a tertiary medical centre in 2003. Hylton Appelbaum, the Foundation’s executive trustee, is a believer in the new style of philanthropy, where private donors use the business acumen that made them successful to manage their philanthropy.

Some feel that the relatively small group of wealthy blacks who have profited significantly from the government’s BEE policies are feeling the pressure to give as individuals, even though their new companies may not yet have a CSI policy. So far, there is no evidence that their giving patterns will differ from those of their white counterparts.[2]

Peer pressure may become a motive. A handful of newly wealthy black businessmen have started corporate foundations, such as the Shanduka Foundation of Cyril Ramaphosa and the Mvela Trust of Tokyo Sexwale. Another prominent black businessman, Patrice Motsepe, has a newly established family trust that he plans to play a significant role in directing.

So far, therefore, there is little sign that individual South African philanthropists are following the corporate lead and adopting ‘philanthrocapitalism’. South Africa lacks a philanthropic network to draw in newcomers and promote new approaches. However, there is a pilot programme called Youth In Philanthropy Programme South Africa that aims to inspire giving and promote social responsibility among the country’s youth. Perhaps this is where South Africa’s new philanthropists will come from.

1 David Everatt and Geteesh Solanki (2004) A Nation of Givers? Social giving among South Africans Strategy and Tactics. See also Susan Wilkinson-Maposa et al (2005) The Poor Philanthropist: How and why the poor help each other UCT Graduate School of Business.

2 Steven Friedman et al (2006) The Colour of Giving: Racial identity and corporate social investment Centre for Civil Society.

Yvonne Morgan is Advisory Services Manager at CAF Southern Africa. Email ymorgan@cafsouthernafrica.org

 
Next Special feature to read

What have we learned?

Nilda Bullain