Africa needs philanthropy that understands enterprise Tony Elumelu Tony Elumelu There are tens of millions of people across this continent, yearning for some of the things that we take for granted. They want jobs. They want to send their children to school. They want – and they should be able to afford – healthcare, food, recreation, and the basic comforts of life. In short, Africans, like people the world over, yearn for self-determination, and the economic resources to make that possible. This is what I define as “development”. These are the questions that we should all be asking ourselves: Where are we with respect to these goals? Are we moving urgently enough? How can we do more good for millions more people? Not just to better their lives, but set them on a path to self-sufficiency so they can enjoy the kind of economic freedom and self-determination that we here all enjoy. For decades, charity has been front and centre in Africa’s development agenda – playing a prominent, if not a dominant role. And charity will always have a role to play in some aspects of healthcare, or education, or disaster relief. Even in the US, we saw a critical need for charity relief when Superstorm Sandy struck. But experience is teaching us that, over the long term, chronic health and welfare issues are better addressed by creating self-reliant individuals, families and communities. People and communities that have jobs and economic resources are better equipped to solve their own problems than charities that offer temporary relief. The philanthropic community, however, is only just beginning to take this lesson to heart. Most philanthropies still focus primarily on giving away “free money.” The world’s oldest, largest and most generous charitable institutions – like the Ford Foundation, the Carnegie Foundation, the Gates Foundation, and many others over many decades – have historically focused on grant-making and charitable support for public services, because in the 20th century worldview, addressing any problem merely required sufficient giving. But in fact, in his book, Random Reminiscences of Men and Events, John D. Rockefeller wrote that the goal of charity is essentially to beget more charity. He says: “It is easy to do harm in giving money. [Giving] to institutions which should be supported by others is not the best philanthropy.” A powerful statement indeed, from one of the world’s best known philanthropists. In this worldview, it was accepted as an immutable fact that recipients of charity would need to “make constant appeals”, meaning that they would forever remain in constant need. There is no talk here of outgrowing the need for appeals, or solving the underlying problems. The reason why social and welfare problems have been successfully addressed in developed nations is, in large part, because their economic ecosystems are working, whereas here in Africa, they aren’t . . . at least not quite yet. And so, today, we come to a critical crossroads in the evolution of philanthropy. Achieving self-sufficiency for recipients must be the overriding criteria for philanthropic gifts, and success should be measured by how many recipients no longer need charity, rather than how much money is given away. Essentially, we need a “new type of philanthropy”, one that can get the economic ecosystem working, resolving the underlying factors that contribute to the end goal of development. We need a new philanthropy that understands the power of private sector solutions. I believe, the most productive use of charity in this new world will be to support the growth of the private sector, with a goal of eliminating the need for “free money”. Free money often crowds out vital private sector solutions. Private enterprise cannot compete with highly subsidised capital, and the net result is that charity often provides a short-term fix at the expense of a long-term solution. This may be an unsettling idea to those of us who believe strongly in philanthropy, but it is a fact, nonetheless. We must not only face such facts, but also find practical ways of using them to our advantage. If our mission is self-sustaining African development, then “philanthropy” and “charity” need a new way forward. We must admit that many past practices are unproductive, if not outright counter-productive. Elumelu, former UBA CEO is chairman, Tony Elumelu Foundation. The article is excerpts from his keynote speech during the African Development Bank’s annual Board of Governors meetingin Marrakesh, Morocco last week
Posted on: Fri, 07 Jun 2013 12:03:44 +0000
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