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Forms of philanthropic giving in South Africa
In a field that is historically embedded in the power and wealth structures of the white economic and political elite, there are increasing numbers of new black entrepreneurs translating into a new stratum of philanthropists.Giving from newly successful entrepreneurs remains under-researched, so it is unclear whether this philanthropy follows more traditional forms of giving. The extent to which its growth will spur new forms and directions of giving, through private social investment, remains to be seen.

Giving from low and middle-net worth individuals

This category of givers includes the majority of South Africans, i.e., low and middle net worth individuals who contribute what they are able in support of causes they believe in. This giving has been researched in various studies, including Everatt and Solanki (2005) and CAF Southern Africa (2015)47. These studies reflect that while much of this giving is deemed to be broadly “philanthropic” and it is directed toward what are referred to as “organisations”, only a small percentage reaches formal non-profit organisations or community-based public benefit entities.

Studies reflect that giving at this economic level takes all sorts of forms including:

  • Giving through religious structures
  • Giving to non-profit organisations
  • Supporting community organisations
  • Charitable support for individuals in need
  • Contributions to disaster campaigns
  • Handing out cash, food or other in-kind donations to those asking at traffic lights

In some studies, contributions to burial societies, stokvels and other savings clubs have been understood and represented as charity and philanthropic giving.48 The CAF Southern Africa study (2015) indicates that only 16% of those who gave to organisations were giving to formal non-profit organisations. It is assumed that the organisations therefore being supported included religious organisations, savings clubs and community organisations.49

There are many public examples of low and middle net worth giving in South Africa. Some such philanthropists have been recognised through a national philanthropy awards programme 50 which seeks specifically to avoid measuring the scale of philanthropic support in assessing award nominations.

This approach to defining philanthropy has ensured the opportunity to identify a full range of individuals who are, through their initiatives and their own commitment of funds, philanthropists in their own right.

video-iconTalking Philanthropy

Building the Field: Philanthropy at the Margins

 

It [the CAF research] painted a very rosy picture. The drawback is that it mostly focused on poor communities. I am not saying that we shouldn’t be looking at that, but access into middle class areas was difficult. What we need is a national study where we do the methodology in a different way.*

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Giving from high and ultra-high net worth individuals

High and ultra-high net worth individuals have been researched with regard to their giving knowledge, attitudes and practices in a number of studies. HNWIs have been researched through the BoE Private Clients and Nedbank Private Wealth Giving Reports (Reports I and II, respectively), and in a number of Masters dissertations produced at South African universities.51

UHNWIs have been researched to some degree, with key findings presented in Citadel’s Philanthropy Insights report, in the UBS/ TrustAfrica research conducted across Africa, and in a limited number of unpublished studies and feasibility reports. It is in this category of philanthropy that we are likely to see formalised giving practices through institutional entities such as Trusts and Foundations.

Judge and Jones (2013:iv) provide a useful summary of common characteristics of HNWI giving, as follows:

  • Being strategic in their approach to giving, however formal or informal the strategy may be
  • Tending to direct their giving locally, towards communities or causes with which they have an affiliation
  • Being results-driven in their motivation, with the desire to see demonstrable impacts for their investments
  • Preferring to support initiatives that have clear and tangible outcomes
  • Investing in organisations which have a proven record of efficient and effective delivery
  • Encouraging an ethic of sustainable giving within their families
  • Being mainly averse to ‘welfarist’ giving, preferring instead to invest in programmes that have the potential to influence or cause systemic change
  • Generally avoiding publicity associated with their philanthropic activities, preferring to operate out of the spotlight52
  • Ultimately tending to be driven by their personal interests, passions and political persuasions in deciding where to direct funding
A lot of individual philanthropists do it with a passionate heart but not always with the necessary strategic process or framework to inform their decisions. There is work that can be done in that respect.*

These are the category of South African philanthropists, currently supported by philanthropy advisors, whose needs, both strategic and technical, are becoming better understood in South Africa. It is in this grouping that one is likely to see impact investing, catalyst philanthropy, strategic philanthropy, and a range of other types of funding investments, such as donor-advised funds.

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Private Trusts and Foundations

Private Trusts and Foundations are included here as distinct from giving by HNWIs and UHNWIs. This is because many such entities are established in perpetuity, where the original donor may likely no longer be involved in grantmaking, and where they are either staffed by professional grantmaking staff, or are managed by wealth management institutions such as Nedbank Private Wealth, Investec, and others.

South African Trusts of this kind include:

That said, some private Trusts are still managed by the living donors and/or their family, for example:

left-quotePeople are very quiet about what they are doing but there is clearly awareness in this country of the need to give back.* right-quote
Shelagh Gastrow, Director, GastrowBloch Philanthropies

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Community giving

The Poor Philanthropist, a work produced out of the University of Cape Town’s Graduate School of Business, is one amongst a number of reports which provide analysis of practices and structures around giving within communities. Judge and Jones note that “giving by the general population has been examined by looking at systems of community-based assistance through ‘horizontal philanthropy’ or ‘philanthropy of community’ – the process whereby resources are mobilised in and by a community, with the poor being both givers and receivers.”53 A range of giving forms and behaviours have been documented as “philanthropic” in their local South African forms.

These funds and mechanisms for managing private money at a community level, with reference to stokvels54 in particular, have variously been termed local philanthropy, and local models of giving55, while others have been more cautious with regard to defining this kind of money management as philanthropic.56 Regardless, such mechanisms for monetary exchange at community level reflect consultative and democracy practices, and are sometimes the basis for much community cohesion and participation.57 Importantly, as Pickering notes in his review of the CAF Southern Africa (2015) study, “Though the above organisations might not seem charitable in the strictest sense, and a strong case could be made for their exception from this category, their scale, and the good that they do in society mean that they should not be overlooked in any appraisal of South African civil society…”.58

It is therefore important to bear in mind that where research reports might reflect a high percentage of individual giving to organisations, much of this “giving” goes to stokvels. While such money-management structures provide member services, serve to connect communities and promote solidarity, offer an alternative financial services industry, and are part of broader livelihood strategies, this is not the kind of funding that is going to support non-profit organisations in their endeavours.

Sizing the Field is one of the reports that explores models of community-based giving or “horizontal philanthropy”. The authors note a need for caution on the extent to which horizontal giving activities may be eclipsed by the more outwardly visible, often more dramatic and better recognised examples of HNWI philanthropy.

The authors further point out that unless horizontal forms of giving are surfaced and acknowledged, they become excluded from a broad understanding of philanthropy and could serve to relegate impoverished communities to the role of recipients of philanthropy rather than as “part of a class from which the largest volumes of philanthropy in Africa likely flow”.59

left-quoteI hope that philanthropic giving can be rooted in a desire to have a democracy that actually works for everybody, not just for an elite, or not just for people who have political business connections.* right-quote
Fatima Hassan, Executive Director, Open Society Foundation for South Africa

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