Introduction

The South African business environment is one of the most sophisticated in sub-Saharan Africa. That backdrop has allowed the development of profitable companies and wealth creation, and in turn is leading to the growth of major philanthropy.

The country’s National Development Plan (NDP) emphasises the need for cooperation and partnerships across sectors in order to realise South Africa’s inherent potential. That has given philanthropy and civil society organisations the opportunity to play a significant role in helping the developmental efforts of government and businesses. 

Civil society sector

Funding for South Africa's civil society sector

The South African non-profit sector (as it is termed in the country’s legislation) is large and heterogeneous.

Some estimates suggest that there may be over 100,000 organisations, though there are no recent reliable statistics given it has been more than 12 years since a private national study was completed.

The sector is made up of organisations ranging from large, urban-based and professionally resourced institutions to very small community-based organisations providing a range of survivalist care services in remote and rural areas.

Financial sustainability is a challenge for the South African non-profit sector at present. Whereas under apartheid the sector was generously funded by the international donor community, more recently much of the international funding has been channelled through state apparatus. Most organisations now rely on a combination of diminishing international funding, corporate social investment, donations from individuals and a degree of income-generation, often via government contracts[1]. These challenges make the role of major donors crucial to the effective resourcing and functioning of the sector.

[1] Critical Perspectives on the South African Civil Society Sector, Coalition on Civil Society Resource Mobilisation, 2012, pg22  

Corporate philanthropy

The role of corporate philanthropy in South Africa

Corporate philanthropy, termed corporate social investment (CSI) in South Africa, had its genesis in the early mining era (late 1890s) when mining magnates gave donations to those they deemed less fortunate. 

Over the years, CSI evolved but remained at the charitable giving level until the late 1970s, when international pressure on the apartheid government and business community pushed companies to begin investing in the welfare of their workers and surrounding communities. 

With the advent of democracy, various pieces of transformational legislation were passed, including the Black Economic Empowerment Act, which requires listed companies to contribute at least one per cent of net profit after tax to support socio-economic development. The figures for 2013/14 indicate that South African companies contributed approximately R8.2bn ($713m) to various sectors of civil society, with education receiving the largest percentage[2].

[2] The Trialogue 2014 CSI Handbook, 17th Edition, Trialogue, pg32

High net worth philanthropy

Development of South African high-net-worth philanthropy

Research on the emergence of high-net-worth philanthropy in South Africa suggests that this type of giving tends to be more private than public and more emotional than rational.

South African philanthropists are becoming increasingly willing to collaborate for greater impact, but individuals still seem to want to be personally involved rather than delegating responsibility[3].

One example of collaboration between philanthropists is the Private Philanthropy Circle (PPC), which is an independent forum of individual philanthropists, local trusts and foundations. Its mission is to build private philanthropy in South Africa, create a community of private local foundations and philanthropists, and contribute towards the creation of a philanthropic movement in the country. Its collective spend is around R1.5bn annually[4].

As with other countries where high-net-worth giving tends to be done away from the public eye, the scale of South African million dollar philanthropy may be significantly larger than our findings in this report.

 

 

[3] Philanthropy Insights:  Perspectives from South Africa, Citadel Wealth Management in partnership with Inyathelo: The Institute for Advancement, 2013, p 45  https://www.citadel.co.za/Insights/view/168/insights-into-philanthropy-in-south-africa

[4] http://www.philanthropy.org.za/ppc.html

Incentives for giving

Fiscal and public policy incentives for giving

South African public policy is geared towards enabling and encouraging philanthropy, especially when compared to other African countries. 

Provided that contributions are made to registered public benefit organisations, individuals and companies making donations are entitled to a tax incentive of up to ten per cent of their taxable income per year. Improvements to the regulatory environment for contributions towards endowment funds are currently being considered by the National Treasury.

And, as already noted, corporate philanthropy is encouraged via the Black Economic Empowerment legislation.

The future

The future of philanthropy in South Africa

South Africa is currently rated as one of the most unequal societies in the world[5], a place where great wealth exists in an uneasy relationship with the social challenges associated with poverty and unemployment. 

While philanthropy alone cannot solve these problems, it has a critical role to play, especially in relation to building social cohesion and active citizenship. In addition, causes of social justice, such as tackling gender violence and providing access to land and basic services, are currently almost exclusively funded by international donors. There is therefore significant potential for local philanthropists to engage in such issues and to help mobilise domestic philanthropy. 

CAF Southern Africa’s recent pilot study on giving and volunteering by ordinary people in Gauteng[6], South Africa’s most populous province, showed that individuals are motivated and committed to helping each other and creating a country that is a better place for everyone. Building on these findings, major philanthropists have the potential to play significant leadership roles to advance social change. 

 

[5] Oxfam Report ‘Even it Up – Time to end extreme inequality’, October 2014

[6] www.cafsouthernafrica.org/images/GautengGivingReport2015.pdf

History

The history of South African philanthropy

Over the past ten years, the notion and practise of a particularly African philanthropy has emerged and is quickly growing.

The story unfolding is one of “an increasingly confident and knowledgeable assertion of African capacities to give not only to help but also to transform and seek to address the root causes of injustice, want, ignorance and disease”[7].

South Africa has a long and diverse history of giving that ranges from the traditional forms of ‘horizontal’ care that have been practised for centuries in communities across Africa, to the philanthropy of high-net-worth individuals, large private foundations and corporations that is the subject of this study.

While the horizontal ‘philanthropy of community’ is not the subject of this report, no overview of South African philanthropy would be complete without mention of this type of giving. This is pervasive throughout society and shown through many unique local practices, including family and community networks and volunteering, stokvels, burial societies, savings clubs, and the like. Integral to an understanding of South African indigenous giving is the concept of ‘ubuntu’ or what has been termed, the ‘moral philosophy of the collective self’[8].  Much of this giving occurs within an ‘economy of affection’ related to extended families or community groups, where it is not so much motivated by altruism as by mutual obligation[9].

 

[7] Aina, T.A and Moyo, B., Giving to Help, Helping to Give: The context and politics of African Philanthropy, Amalion Publishing and Trust Africa, 2013, pgxv

[8] Individual Philanthropy in Post-Apartheid South Africa – A Study of Attitudes and Approaches, Holly Rodgers Wescott. Thesis presented in partial fulfilment of the requirements for the degree of Master of Philosophy (Sustainable Development, Planning and Management), University of Stellenbosch, 2012

[9] Habib, A. and Maharaj, B., Giving and Solidarity, Resource Flows for Poverty Alleviation and Development in South Africa, HSRC Press, 2008, pgs26-33