Africa's 'nouveau riche' rewrite the aid book, give $7bn every year in philanthropy

Samantha Spooner* US$7 billion is given every year by Africa’s high net worth individuals [caption id="attachment_11207" align="alignleft" width="300"] Nigerian business magnate Alhaji Aliko Dangote. As of March 2014, he had an estimated net worth of $25bn - and has also given away several millions.[/caption] AS African grows and develops economically, new individuals and social classes are emerging that challenge previous notions of philanthropy. The idea of philanthropy, to promote the welfare of others through donations, has long been about narratives of poor passive Africans receiving help from, often, Western outsiders – but this is slowly changing. Up to an estimated US$7 billion is given every year by Africa’s “high net worth individuals (HNWIs)”, says a recent report by the African Grantmakers Network. For decades names such as the World Bank, Ford Foundation and even Bono have been heavily linked to African philanthropy, but this is no longer the only or dominant reality as Africa’s middle class rises, economies grow and institutions begin to grow in prominence. Now hundreds of thousands of people are making small investments or donations that can aggregate up to large amounts that can meet various needs. African philanthropy has always existed on some level - the continent’s deep-rooted values of social solidarity and inter-personal connectedness corresponds to the West’s notion of philanthropy. But increased literature and awareness of African philanthropy combined with the formation of the African Grant-makers Network in 2009, a platform created to provide spaces for collective action, and the African Philanthropy Forum, earlier this year, has formalised it’s presence. This form of philanthropy has the ability to transform the aid agenda in Africa. As it originates from Africans it is more likely to be less controversial, more responsive to local needs, and less inclined to pack up and leave because of new orders or trends dictated by external funders. According to a report released by the African Grant-makers Network in 2013, that looks at various frameworks of African philanthropy, there are three broad categories of “giving” on the continent: 1. High net worth and institutional giving: where centrally controlled resources are directed towards a set of defined charitable aims in the broader society. 2. Mobilised philanthropy: where institutional structures continually mobilise resources from a range of sources to channel towards defined charitable aims in the broader society. 3. Community philanthropy: where givers pool resources to tackle challenges in their own immediate community that any one individual would have been unable to address. The last decade of sustained economic growth has seen the rise of a new class of wealthy Africans, who trace their fortunes to legitimate business unlike in the past when many of the richest Africans drew their wealth from close connections to, or control of, government. New research by the African Grantmakers Network highlighted this new pool of philanthropists whose “more legitimate wealth” made them more credible potential philanthropists. In all regions of the continent it is this group that is driving African philanthropy. The southern Africa region, supported by South Africa’s huge contributions, accounted for the highest amounts from HNWIs with $499m in donations. This reflected the high concentration of established private wealth as well as trustworthy and transparent mechanisms for aggregating contributions. West Africa was the region with the second highest contributions from HNWIs with $167m. But these were not just from Nigerians, the region was well represented with a growing pool of donors from Ghana and Senegal. What was interesting about this region was the degree to which many of them kept a distinct separation between their business activities and personal philanthropy. In contrast, East Africa’s key givers were active business leaders who tended to embed their philanthropic activities with their businesses. The HNWI figure for this region stood at $94m and was heavily biased towards Kenya. There was a low number of HNWI and institutional giving in Central and Northern Africa. In Central Africa sportsmen originally from the region, such as the Congolese NBA player Dikembe Mutombo, are key donor figures but they can’t make up for the generally less developed nature of economies and “shallower pool of indigenous philanthropy”. In the case of North Africa the lower figures also reflect the fact that socialist governments in countries like Algeria are providing widespread social services for the vast majority of the population. But even though there is a substantial amount coming from Africa’s HNWIs the report hints that more can be done. Among the Forbes 40 list of the wealthiest Africans, 22 had identified philanthropic efforts linked either directly to them or to at least a member of their families. 9 of the top 10 were affiliated directly or via a family member with a philanthropic organisation or activity. However that proportion steadily declined through the list suggesting that while the very wealthiest are coming under some pressure to do something, there is a large group of lesser known HNWIs that are currently not feeling compelled to engage in philanthropy on the continent. Mobilised giving accounted for the second highest contributions in African philanthropy after HNWI and institutions. This model, which relies on aggregated contributions, reflects Africa’s burgeoning middle class and growth in communications. The middle class are individuals with a growing disposable income who would previously route their donations through religiously affiliated organisations. Today the reach of media and technologies, such as mobile money, allows these donors to extend their support past their immediate community towards specific appeals or institutions. An example of this was “Kenyans for Kenya”, an initiative launched with the backing of the Safaricom Foundation, the KCB Foundation, the Media owners Association and Kenya Red Cross Society. It raised over $6m from over 250,000 individuals in Kenya to provide famine relief to over 3m Kenyans. Community-based philanthropy is the model most familiar to the continent. Notions such as Harambee in East Africa and Isusu in West Africa have traditionally been used for quickly pulling together resources of a community for a specific purpose. This model is more grounded in concepts of self-help – where individuals or groups help those within their social circles as opposed to mobilised philanthropy that targets separate groups. Today community foundations and faith-based community organisations account for the bulk of examples observed by the African Grantmakers Network report however a lot of giving tends to be religiously motivated as opposed to being explicitly channeled through religious structures. As Africans begin to rewrite the future of their “aid”, one group that cannot be omitted are the diaspora. Remittances from this group have grown to $60bn annually which exceeds funding from private foundations and bilateral and multilateral aid agencies. When looking at the philanthropists in this group, the HNWIs are said to contribute $43m. But it’s not just their donations which make them valuable, they also offer the key potential to broker better links between African philanthropic models and donors from other parts of the world. In support of this institutions such as “Africans in the Diaspora” are being set up, pooling the diaspora’s financial, human and intellectual resources to invest in African civil society organisations that are solving the biggest challenges in their communities. *Source M & G]]>