Economic Downturn May Bring African Donors and Charities Together

With Africa spared the full brunt of the global economic crisis so far, some nonprofit leaders say the tough financial times can provide a new impetus, and opportunities, for African donors and philanthropies to expand their work.

While some major Western donors to Africa, like the Bill & Melinda Gates Foundation, plan to maintain or increase their giving, many are scaling back their efforts in Africa in order to concentrate shrinking resources on projects closer to home.

As a result, charitable groups here in South Africa and elsewhere on the continent may deepen their ties with African philanthropists, corporate grant makers, and others, observers speculate.

A new generation of African philanthropists has been gradually emerging, particularly in South Africa and Nigeria. The scale of their efforts so far is modest.

But the new players, such as Cyril Ramaphosa, a South African trade unionist-turned-businessman, and Theophilus Danjuma, a businessman and former defense minister of Nigeria, bring a hands-on approach that emphasizes making sure their gifts produce tangible results.

That trend will almost certainly accelerate because of the global downturn and the social problems it creates, said Akwasi Aidoo, executive director of TrustAfrica, a foundation in Dakar, Senegal, that promotes democracy and development on the continent.

“Donors are going to be asking tough questions about whether their efforts are going to help the society as a whole, the country as a whole,” said Mr. Aidoo.

What’s more, some officials said that non-African organizations working on issues of democracy, governance, human rights, and fair elections in Africa may increasingly want to work with some of the nascent African grant makers.

“With the global downturn, the bar has been raised,” said Josh N. Ruxin, an assistant clinical professor of public health at Columbia University, who lives in Rwanda and directs the Millennium Villages project and other efforts there. “Those who have dollars want more leverage for those dollars.”

Businesses Step In

To be sure, Africa is not free of economic turmoil. Flagging commodity prices are hurting some industries, and remittances from Africans who live abroad, which often pay for food, housing, and school fees for many families, appear to be declining.

But tight banking regulations on the continent have left financial institutions relatively unscathed, leaving both corporations and wealthy individuals relatively better off than many of their developed-world counterparts.

In part because of this, African businesses — and efforts to expand private enterprise — may take the lead in philanthropic projects in the years ahead.

Through two nonprofit organizations, the Access Project, in Rwanda, and Rwanda Community Works, Mr. Ruxin is trying to establish small businesses that will spur economic development.

Rwanda’s government, he said, prefers private investment to philanthropy and would like to build the tax base so that the government itself can support childhood health and education, causes that have often been the purview of aid organizations operating in Africa.

“Over all, there’s a pretty serious backlash against donorship and philanthropy because that makes us into a charity case instead of an investment case,” said Mr. Ruxin. “Rwanda Works is an incubator, but it takes donations, and the government was very clear in saying, ‘We really want you guys playing in the private sector.’”

Government Policies

Tough economic times may also drive more corporate giving, said TrustAfrica’s Mr. Aidoo. He expects companies may do more charitable work as they vie for customer loyalty and want to show their altruistic side in hard times.

In South Africa, new government policies have already triggered an uptick in such efforts. Last year the ruling African National Congress party introduced codes of conduct that businesses must follow in order to be eligible for government contracts.

The policy, known as Black Economic Empowerment, spurred an almost 30-percent rise in company support for social programs in 2008, according to research by Trialogue, a South Africa-based consulting company that tracks corporate-citizenship efforts.

The South African government has also extended tax breaks for charitable giving in recent years, and nonprofit groups are trying to promote philanthropy among the nation’s citizens.

“We’re moving away from the traditional perception that philanthropy is all about the wealthy,” said Carol Tappenden, managing director of Greater Good South Africa. “Anyone can be a citizen grant maker.”

The Greater Good South Africa operates a Web site (http://www.myggsa.co.za) that connects people with charities to volunteer for or support financially.

The organization screens the charities it lists online and also conducts research to determine the country’s most pressing needs.

Ms. Tappenden said that with South Africa’s racially fragmented society, people often feel overwhelmed by the magnitude of poverty and don’t know how they can make a difference.

While homegrown African philanthropy may expand, albeit slowly, in the near future, nonprofit leaders do expect charity casualties during the recession.

Mr. Aidoo of TrustAfrica said that organizations that are poorly run or do not connect with societal needs will fail.

“A lot of organizations that are on the margins are probably going to have to fold as donors cut back, which may not be such a bad thing,” said Mr. Aidoo. “We need strong institutions that are accountable and effective and efficiently run to produce results.”