I recently had a discussion with a senior non-profit lawyer who has, for years, assisted philanthropists to establish formalised giving structures such as philanthropic trusts and foundations. Whilst the tax regime is not supportive of sustainable and endowed entities, there were always people who felt that they had enough wealth for their own future and that of their families and would like to give back to society, leaving a personal legacy. However, in our discussion he indicated that there had been no takers for formalised philanthropy for a while.
What does happen when people lose confidence and when they sense that the country lacks a coherent direction? Institutionalised philanthropy often mirrors the actions of business – that is, the money leaves the country (and sometimes the people leave too). In a recent research project undertaken by GastrowBloch Philanthropies, it was clear that during the 1970s and 1980s, the period of the banning of organisations and the Soweto revolt, the instability of the border wars in Angola and Namibia and the rise of the UDF when South Africa’s future was unpredictable, money left the country and, in the case of philanthropy, few philanthropic foundations were established. (Disclosure: Shelagh Gastrow is Director of GastrowBloch Philanthropies – Ed)
Despite the flickering lights of reason, such as the Public Protector, the Constitutional Court and the recent elections, people are not sensing any direction for the country. There is simply no “Project South Africa” that citizens can pull behind. The ruling party seems to be simply looking forward to a looting spree for those in power, before pulling the plug. There doesn’t appear to be any ethical leadership, no real capacity to provide the environment for job creation and improve education. Essentially we have reached the “rent-seeking” stage of our history where people enrich themselves through the public purse and BEE deals, rather than creating new wealth through economically productive undertakings which could benefit the whole society.
So where does the philanthropic impulse go when people are fed up? The first thing is that there is a shrinkage in the establishment of new sustainable, endowed philanthropic foundations. Secondly, existing foundations either keep their heads down and revert to charity (making poverty bearable) whilst others try to support organisations and movements that promote constitutionalism, social justice and human rights.
I listened to Pravin Gordhan speak at the Cape Chamber of Commerce on 24 August 2016, asking South Africans to pitch in and make a contribution, to create work opportunities for young people. However, if the country could be reduced to junk because of the utterly unashamed shenanigans of the ruling elite, it is highly unlikely that people will gather up the enthusiasm of chipping into their own resources, when politicians are simultaneously stealing their tax contributions.
What should South African philanthropy be doing now? From my perspective there are two key responses. The first is to accept that philanthropy alone cannot shift the poverty levels in South Africa. The only way out of poverty is to enable people to produce income for themselves and this is done through education, job creation and entrepreneurship. The bottom line is that there is no job creation without business. We have learnt the hard way what happens when jobs are created in a bloated civil service that doesn’t deliver, other than salaries for deployed cadres. This is not sustainable as it doesn’t benefit society as a whole. The role of business is to make a profit for the owners or shareholders who have taken risk with their investment, but it also creates jobs. There is room for philanthropy to partner with business to create jobs, such as the work being done by the Alan Gray Orbis Foundation that creates innovators and entrepreneurs. Philanthropy can also partner with academic institutions and business to create a pipeline into work and it can also partner with civil society organisations and social entrepreneurs who are creating income generating opportunities for themselves.
If philanthropy is serious about a developmental agenda, despite the politics, the priority is to invest in job creation and improved educational opportunities. There are many ways for philanthropy to invest in these areas within their existing mandates, albeit the environment, the arts, health or social justice. For example, a philanthropic foundation focusing on the environment is supporting bursaries and fellowships in the field of biodiversity that ensures a pipeline of qualified students who can now find work in the environmental sector. This provides for both the environment, education and job creation. Other philanthropists who focus on the performing arts fund music projects that build skills and eventually work opportunities.
One of philanthropy’s unique advantages is the power to take risk and pilot new initiatives. Therefore, poverty can be addressed through innovative small scale interventions that could in future be enhanced, but this can only eventually happen with government support and appropriate educational interventions. At this stage in our history, this is unlikely to occur. According to philanthropy specialist, Amanda Bloch, business and philanthropy cannot change the world, but there has to be intersectionality between government, business, civil society and philanthropy.
Secondly, philanthropy has to take on corruption by supporting organisations that oppose corruption, that expose corruption (including through the media and research) and through litigation in the courts to continually harass the corrupt.
It is only when South Africa has a clear path and purpose that philanthropy will really thrive, and unfortunately our ruling party is no longer providing that. It has degenerated from the clear vision provided by Mandela focussing on reconciliation and the Reconstruction and Development Programme, to the tainted vision of Mbeki (although we at least all knew where he wanted to go with GEAR and the African Renaissance) to a derelict sham of leadership with not a single coherent concept, no idea of direction other than personal enrichment. How sad that so many people of good will therefore resist investing their philanthropic funding simply because each day in South Africa brings more news of double-speak, deceit and dishonesty that would undermine their efforts and passions. DM
Shelagh Gastrow is Director, GastrowBloch Philanthropies