Universities gain from growth in philanthropy

There has been extraordinary growth in philanthropy in Africa – and universities have been major beneficiaries – according to Dr Bhekinkosi Moyo, CEO of the Southern Africa Trust. Also, the nature of philanthropy has transformed along with its relationship to governments as they seek to meet development goals.

Growth in Africa’s high net worth individuals is the highest in the world, while funding from American foundations alone grew five-fold in the decade to 2012. Most mega gifts in South Africa go to health or higher education – and for universities they have been crucial.

Moyo was delivering the opening address, “Of Rivers, Droughts and Floods: Trends and developments in philanthropy”, at the Inyathelo Ninth Leadership Retreat in Stellenbosch, South Africa, from 19-20 October. Held in partnership with America’s Kresge Foundation, the retreat for university leaders had the theme “The Best of Times, the Worst of Times – Positioning institutional advancement in times of challenge and change”.

Certainly, universities in South Africa face difficult challenges, Moyo said.

“The #FeesMustFall movement and the unequal nature of our society has placed huge burdens on university managers to not just build modern and first class universities but to do so in a way that does not leave anyone behind. After all, education is the gateway to creating lasting change in any society.

“This requires a fundamental shift in the future of education and models of funding, teaching, research and administration. University leaders cannot ignore the changes needed.

"Advancement and philanthropy have a key role to play,” contended Moyo – “the many faces, types and dimensions of philanthropy which are quite interlinked with the primary mandates of universities in an African setting”.

Personal journey

Moyo’s interest in philanthropy was sparked at the University of the Witwatersrand, or Wits, as a student with a research interest in community development, during a panel addressed by Professor Kathleen McCarthy of CUNY – City University of New York – Center on Philanthropy and Civil Society. He was interested in the links to development.

He learned that philanthropy was big in the world of business, but discovered a dearth of information about the topic in Africa: there was nobody studying it, and no thesis or book. “It was also not taught anywhere in Africa. Yet it was practised.

“I knew this was an area that required studying and positioning too in our academy, in our practice and in our thinking about development,” he continued. Moyo got accepted for a PhD at CUNY, and wrote his thesis on philanthropy.

He read material by Professor Adam Habib, now vice-chancellor of Wits University, and Europe’s Professor Alan Fowler, who became the external examiners. More than a decade later, when Moyo forged a plan to establish a Chair in African Philanthropy, Habib gave it a home at Wits and Fowler became a visiting chair. The chair was the first in Africa.

Momentous time for African philanthropy

“This is a momentous time for philanthropy in Africa,” said Moyo. “The momentum and interest around philanthropy have grown – at times surprisingly so, given that not so long ago philanthropy was accorded no role in formal and intergovernmental processes.”

If governments considered philanthropy in their policy processes, it was “in disparaging or suspecting ways. African governments viewed philanthropy (particularly international foundations) as part of a Western agenda to influence regime change”.

Moyo described research revealing trends in philanthropy.

The World Wealth Report 2015 showed that Africa has the fastest-growing market of high net worth individuals in the world – the number has soared by 145% in the last 14 years compared with worldwide growth of 73% – and their wealth has grown “by even higher proportions. Africans with assets of more than US$30 million will double by 2025.”

A recent report by the Foundation Center showed that the number of United States foundations giving to Africa almost doubled between 2002 and 2012, from 135 to 248. Their funding increased from US$289 million in 2002 to US$1.46 billion in 2012, given to 36 of 54 African countries.

The figures were drawn mainly from big foundations, and did not include amounts from other regions of the world or in-kind forms of philanthropy, Moyo pointed out.

“But perhaps the most interesting is the Coutts Million Dollar Donors Report, which shows massive growth since 2013 in mega donations of US$1 million and above. Globally, the 2016 report shows that US$56 billion was donated mainly by donors from the United Kingdom, United States and Middle East.

“Of this amount, US$36.3 billion was given to foundations and US$10.2 billion went to higher education. Education was among the top three recipients in the UK, US and China.

“Generally, and this is the trend we are witnessing now, individual givers (85%) topped the list, followed by foundations (11%) and then corporations (4%). In other words, individuals give the most and foundations receive the most.”

Moyo said philanthropists supported universities for a number of reasons, such as their absorptive capacity, track record, diversity and dynamism. In South Africa, most mega gifts are to health or higher education. According to a 2013 report, there were 19 mega gifts amounting to US$52.8 million and US$22 million of that went to higher education.

Philanthropy centre stage in policy

Philanthropy, Moyo told the Leadership Retreat, has “huge potential” to supplement government services. “African governments, knowing this, will craft ways through which these resources can be accessed.”

The Bill and Melinda Gates Foundation constitutes 71% of all US foundation giving to Africa. “Governments may see this as a source of funding for its services, but a foundation as big as Gates could see it as an opportunity to influence government systems and develop innovative ways of working.

“Philanthropy can use its poster-child status to reform government cultures and systems without attracting the wrath that often faces NGOs and social movements that hold the government to account,” Moyo argued.

“Across the continent, and for the first time in history, African philanthropy is beginning to take a central role in questions of development and sustainability and is increasingly informing policy processes at a national level.”

In 2009, the Liberian government created the Liberia Philanthropy Secretariat – a platform for linking national priorities with philanthropic resources. In 2015, the African Union Foundation was created to mobilise voluntary contributions in support of the African Union’s Agenda 2063. The Southern African Development Community is developing a framework for including philanthropic activities in supporting its regional integration agenda.

Rwanda’s government is developing a strategy to engage philanthropy in implementing its Vision 2020. The South African government has mapped collaborations between it and philanthropy, mainly in education and health; the result is a strategy for government to formally and coherently collaborate with philanthropy. Kenya and Ghana cooperated with the United Nations to establish their own philanthropy platforms.

“Clearly, something is happening here. It is not really about closing the space for civil society so much as opening the space for philanthropy.”

Civil society requires the kind of support that is provided mainly by philanthropy. “Yet, in so doing, philanthropy has earned itself a characterisation that depicts it as lacking democratic controls and accountability, from both civil society and governments.”

Philanthropy and development

A spotlight has focused on connections between philanthropy and development, especially as overseas development assistance has declined.

In consultations leading to the Fourth High Level Forum on Aid Effectiveness, held in Busan, South Korea in 2011, African countries stressed the need to shift from aid effectiveness to development effectiveness. The resulting Busan Partnership for Effective Development Cooperation was “crafted to be as broad as possible to accommodate other forms of development resources".

“This rethinking of development assistance has been apparent in recent global processes,” Moyo continued. The Financing for Development Conference in Addis Ababa in Ethiopia in July 2015 produced an outcomes document and agenda endorsed by the UN General Assembly that includes the role that ought to be played by philanthropy and foundations.

While philanthropy has always supported both civil society and governments, said Moyo, it is moving into a defining new era. “There are concerns that this new era of philanthropy will lead to collusion between philanthropy and governments in pursuing government agendas, which could be at the expense of civil society.”

Governments are engaging philanthropy in order to meet development targets. They “recognise the value of risk taking, innovation and stakeholder engagement, which characterise philanthropy. These are not features to be found in any government, and yet increasingly citizens are pushing governments hard on service delivery. It has become clear to some governments that they need philanthropy to provide these features.”

Ways forward

Moyo argued that there were three things that philanthropy needed to do now.

“First, it needs to engage governments strategically while maintaining independence of action and approaches. Principles of engagement ought to be collectively developed and agreed upon between governments and philanthropies. Philanthropy must insist on a seat in policy-making but do so with humility.”

Second, the principles should identify areas of collaboration, including clear demarcations between political activities and developmental ones.

“Third, philanthropy needs to continue supporting civil society and using its leverage and position with governments to push for reforms, including providing an enabling space for civil society,” Moyo said.

While philanthropy could use its status to demand reforms, it needed to address criticisms levelled against it in order to credibly demand government reforms.

“We know that, despite its current cordial relationship with governments, philanthropy is still part of civil society. Civil society does not change, but governments do. Philanthropy needs to enter into government partnerships with one foot but leave the other firmly – and vigilantly – planted in civil society.”