- Philanthropy provides long-term strategic investment in social change and supporting organizations that make fundamental changes for the common good, unlike charity which provides only short-term relief. - Philanthropy is important for taking risks and supporting new ideas, initiatives, and discoveries that governments and businesses won't, in order to push boundaries and create social justice. - As philanthrocapitalism grows, it's important to ensure philanthropy continues focusing on strengthening civil society rather than mirroring market values.

1. INYATHELO
THE SOUTH AFRICAN INSTITUTE FOR ADVANCEMENT
PRESENTATION TO SENATE CONFERENCE : CAPE TOWN
15 MARCH 2013
SHELAGH GASTROW
WHY PHILANTHROPY?
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. Charity
also emerges from various faiths and provides for those with resources to give to those who
are poor. This is seen as 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
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2. 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 non-profit 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 revolutionary 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 environment and gender issues are not charities. This funding is strategic, it is
about changing society for the good, it is about social justice. Universities 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.
Philanthro-capitalism
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,
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3. 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 100 billionaires
around the world have joined this campaign, including two African families : Patrice and
Precious Motsepe and Mo Ibrahim. 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, even reaching South Africa, 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
(although in the recent budget, there are indications that government will review some of
its conditions relating to tax benefits for philanthropy). 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.
Personal Philanthropy
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.
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4. 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 is poor practice 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.
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 the music or the arts, in medical research, in policy relating to the
environment and currently 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.
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5. Conclusion
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
Executive Director
Inyathelo : The South African Institute for Advancement
15 March 2013
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