Growing local giving in emerging economies: Uganda and Tanzania

 

Daniel Ferrell-Schweppenstedde

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Communities rally around local responses to COVID-19 as economic futures are uncertain.

CAF is exploring charitable giving in Uganda and Tanzania with the release of two ground-breaking reports, the latest in a series conducted in partnership with the Aga Khan Foundation, the CS Mott Foundation, and the UK National Lottery Community Fund, that aim to capture how the region’s growing middle classes can help transform local civil society.

Emerging middle classes and economic shocks

Our research, conducted in the second half of 2019, found that the growing middle classes in these countries are giving away significant parts of their monthly income to help others. These figures correspond to a humbling 24 per cent of people’s monthly earnings in Tanzania and 31 per cent in Uganda.

Previous research by CAF found that if the estimated 2.4 billion people set to join the world’s middle classes were to donate just over 0.5 per cent of their spending, as much as $319 billion could be raised for local civil society organisations (CSOs) and charitable causes. But in this follow-up research we noted that the emerging middle classes in the east Africa region, while present and growing, were highly vulnerable to shocks to the fragile economy.

Clearly, these projections are now also complicated by the social and economic challenges brought about by the COVID-19 pandemic. While Uganda’s middle class has been growing in size and purchasing power, earlier promise of the country achieving middle-income status by 2020 has been stalled by drought, poverty and conflict in neighbouring countries. This delay has precluded the country’s opportunity to fully benefit from anticipated job growth and innovation, and also came before the ravages of the pandemic. Tanzania’s growth remained solid in 2019 but there are strong signs that GDP growth could fall to 2.5 per cent in 2020 (down from 6.9 per cent in 2019) as the impact of the pandemic unfolds, which could push an additional 500,000 vulnerable Tanzanians below the poverty line.

Whilst our findings show that charitable giving is already culturally rooted and likely to remain prevalent, the link between GDP and middle class growth cannot be ignored as a dampened economic outlook runs up against confidence and, in turn, the willingness of the newly middle class to engage with more formal ways of giving. Yet these challenges only breathe further urgency into the lessons and recommendations in our reports around sustainably and inclusively growing giving.

Local generosity movements in the time of COVID-19

Much of the grassroots philanthropy seen in our findings comes through informal gifts and support to family, friends and community members. Only three per cent of survey respondents in Tanzania, and none in Uganda, said they had not given to any group or individuals in the last 12 months.

Such informal giving has now been described as a de facto welfare system as COVID-19 took hold where formal social assistance programmes are weak or non-existent. CivSource Africa looked into a rise in individual giving during the Covid-19 lockdown in Uganda, ‘cross all sections of the public.’ Their anecdotal evidence captures a range of the formal and informal, financial and in-kind giving, that we too observed in our report forming a foundation for civil society resilience and sustainable development. Supporting the growth of individual giving is not only required to help civil society weather the storm of COVID-19, but to fulfil its role protecting civic freedoms, holding government to account and underpinning stable societies.

This role is currently under duress. Our reports looked into closing civic space and attacks on core freedoms in the countries in question. In Tanzania, government support for CSOs is highly dependent on their activities; many feel they cannot speak out on political issues and are misrepresented in the media. In Uganda, CSOs reported significant mistrust between the sector and the state and antagonistic government actions ranging from a lack of acknowledgement of the role CSOs play to a failure to deliver resources, office raids and levying of financial charges.

Unfortunately, the spectre of a global health emergency brings further pressure on civil liberties and the CSOs that advocate for them, both intended and unintended, as emergency measures and restrictions are put in place. It was worrying, for example, to see police in Uganda allegedly abusing lockdown laws to ramp up arrests of LGBT people. In this context our analysis of the regulatory and political challenges facing CSOs and our recommendations around an enabling policy environment for mass participation in giving and civil society speaks volumes.

International support for local solutions

We found that local CSOs (for example in Tanzania) are still reliant on international aid, and would benefit from focusing closer on growing local income sources. Meanwhile, Governments are now revisiting their overseas development budgets (on top of a pre-pandemic decline in foreign aid) and international NGOs (INGOs) are seeing their budgets strained due to a tougher fundraising environment.

This presents a challenge but also an opportunity to look at local solutions: growing domestic resources to meet local challenges. We found for example that in Tanzania, though under-resourced, a range of infrastructure bodies provide training and support to civil society bodies. One such body, the Foundation for Civil Society, is currently leading the country’s response to the COVID-19 pandemic: reallocating funds, spearheading further fundraising, and organising campaigns to provide protective equipment to healthcare workers.

Understanding and maximising local cultures of generosity is timely and pertinent, as ‘donor’ nations are preoccupied with their home fundraising and response efforts – besides all the negative implications that reliance on foreign aid can bring; our report identifies mission-drift, short-termism and power imbalances. However, international actors can do their part to support this effort, not least ensuring a pipeline of ongoing transition funding and closely monitoring the aforementioned vulnerability of the burgeoning middle classes. Strengthening local cultures of giving also requires an open discourse around power dynamics. Many INGOs and even multilateral funders have been gearing up to tap into domestic philanthropy in emerging economies. This has the potential of cannibalising local generosity movements already buffeted by the economic shockwaves of COVID-19. 

What can be done?

International partners have a range of tools available that can help build trust and support for local CSOs, for which many local and global civil society voices have been advocating:

  • Increasing the share of funding going directly to local CSOs
  • Providing flexible, multi-year, unrestricted funding for core costs
  • Technical assistance, such as on upskilling volunteer bases, financial sustainability, outreach activities and strategic communication

The truly crucial factor in grounding local giving movements in the ownership of local communities, mobilising mass participation and ensuring domestic accountability, is the funding of local civil society infrastructure. It is more important than ever as COVID-affected communities rely on the social safety net that informal giving and mutual aid weaves. Locally-resourced support bodies can make these philanthropic responses more efficient and confident, whilst remaining rooted in community needs, networks and approaches.

Daniel Ferrell-Schweppenstedde is Policy Manager at Charities Aid Foundation.

Tagged in: Coronavirus


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