Inyathelo in the Headlines

The Philanthropic Match Makers - 01 Oct 2013 - Debate

ENOUGH MONEY exists in South Africa to resolve all social problems. This is the view of Philip Faure, head of philanthropy at Citadel. He draws a sharp distinction between philanthropy and charity. To his way of thinking, charity provides relief, but philanthropy builds sustainable development. "In the way that a bank brings trust and efficiencies as an intermediary between borrowers and lenders, so philanthropy advisors play a similar role in facilitating the flow of funds between donors and beneficiaries,'' says Faure.

Many wealthy people have shied away from philanthropy because of the uncertainties and challenges of achieving a social impact. In the words of Andrew Carnegie: "It's more difficult to give money away intelligently than it is to earn it in the first place." Philanthropists, like other investors, want to see a 'social return on investment Their desire is for their hard earned wealth to be used in an efficient and effective manner, so as to maximise the social impact. Venture Philanthropy, appeals to the risk takers among philanthropists.

This form of philanthropy often leads to the creation of social enterprises that aim to be financially sustainable while solving a social issue. While unplanned and ad hoc charity (direct giving) is important, Faure believes that a more structured and planned approach to giving is necessary to create sustainable long-term change. Identifying the appropriate vehicle for giving is an important part of this process.

Establishing a private foundation is a wonderful opportunity to unite a family and leave a lasting legacy, but this is not a practical option for most people wanting to formalise their giving. An attractive alternative is a donor-advised fund, which is a single foundation with many sub-accounts, effectively a collective foundation. It offers the benefits and long-term sustainability of a private foundation, but at a low cost and with zero administration.

Equally important is the fact that these vehicles are easy to establish and provide information on carefully vetted Public Benefit organisations. While donor-advised funds are offered by leading financial services providers around the world, Citadel Philanthropy recently launched the Citadel Philanthropy Foundation: the first of its kind in South Africa. These donor advised fund structures can also be used by companies to effectively leverage their socio-economic development contributions which are an important component of their B-BBEE score card.

Shelagh Gastrow, executive director of Inyathelo, The South African Institute for Advancement, speaks of the "shift from a charitable paradigm towards a more strategic focus on change and impact." Many philanthropists prefer to do their good work in private, shunning the limelight. The downside to that is that they leave no benchmarks against which others can measure themselves. lnyathelo has filled that gap by instituting annual awards that contribute to establishing role models for others to follow.

Big and small philanthropists are recognised, both being seen as vitally important. Addressing the lnyathelo Philanthropy Awards, Minister Trevor Manuel reminded the audience of the need to give generously without being patronising. One of lnyathelo's projects is the Private Philanthropy Circle which, for the first time, brings together private philanthropic foundations to learn, collaborate and leverage their experiences.

"Collectively its members contribute in excess of R1 billion a year in grants yet they remain well below the radar," says Faure. Philanthropic foundations are not new to South Africa. The DG Murray Trust, which specialises in educational projects was established way back in 1944. Other South African Families with foundations doing remarkable work include the Oppenheimers, Ackermans, Motsepes and Ruperts. Well known foreign Foundations with a presence in South Africa include the Dell Foundation, Ford Foundation, Raith Foundation, and the Zennex Foundation to name a few.

Faure's view that enough money exists to resolve all the country's social problems is based on the size of the economy itself. We are the 25th largest economy in the world, out of 180. However, we have a higher Gini Co-efficient than any other country, making us arguably the most unequal society on the planet, a fact that may be contributing to much of the labour and service delivery unrest in the country. There is no doubt that philanthropic intercession can go a long way towards providing a remedy.

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