Two sides of philanthropy in Africa

The phrase ‘philanthropy in Africa’ has often tended to conjure up two quite diverse images. On the one hand, there are the well‑intentioned multi‑million dollar budgets of large (often international) foundations. On the other, the well‑established cultures and practice of small grassroots‑contributions and systems of social solidarity at the community level – the significance of which has never really been tapped by the formal development sector.

Across the continent, however, a new generation of local philanthropic institutions is emerging, some seeded with money from outside the continent, others entirely home‑grown – and all seeking to draw on local resources and tap into different forms of wealth, which include cash but also include other, less tangible, forms of social capital such as trust and credibility. These organizations seek to occupy the spaces between large, formal philanthropy and more local level mobilization of communities and their assets, and to build bridges between the two. At the same time they also promote a form of development which is community‑led and community‑owned.

Although the first self‑described ‘community foundations’ may only have been established in Africa in the late 1990s, the idea was not falling on fallow turf but rather offered a more formalized framework for naturally occurring traditions of giving and sharing. Those traditions are well encapsulated in the African philosophy of Ubuntu, defined by Liberian peace activist, Leymah Gbowee, as ‘I am what I am because of who we all are.’ The idea of Ubuntu means that you are known for your generosity. Instead of thinking of ourselves as individuals, separated from one another, we are connected and what anyone does affects the whole world. Generosity spreads outwards in a ripple that benefits the whole of humanity.

Africa is a continent rich with traditions of solidarity and reciprocity. In Kenya, for example, the practice of harambee as a form of local fundraising to cover the costs of funerals, weddings and school fees, was well‑established and drew heavily on a local culture of giving which had a social as well as a financial aspect.6 And in Southern Africa, ilima (coming together to help those without) was a mechanism for the sharing of communal labor for harvesting and house‑building.

A recent report by Jenny Hodgson and Barry Knight, “Mapping a Baseline of African Community Foundations” focuses on this group of institutions. They include community foundations, other types of community philanthropy institutions and local foundations – all operating throughout the African continent.

 

Africa Social Venture Crowd Sourcing

In microfinance, crowd-sourced ventures have aimed at connecting first world capital with developing world opportunity – and with some success.

Mads Kjaer and Tim Vang co-founded MYC4 which works to connect online investors with entrepreneurs in Africa. MYC4 was founded using a Dutch auction method for retailing loans to small and mid-sized businesses in developing countries – a crowd-sourced for-profit micro finance company with an initial presence in Africa.

Since they started five years back, over $20M has been invested in over 10,000 loans. These funds have come from over 19,000 investors/lenders. The biggest challenge facing MYC4 at the moment is lack of adequate liquidity to fund all the loan requests. This year alone, over $1M worth of loan requests has not funded. At the moment, MYC4 requires an increase of investors/lenders with a short term year end funding gap of $1M in new liquidity to fund growth.

Says Mads, “Africa is no longer a basket case but a business case. For decades, highly subsidized credit and grants have not helped African businesses grow but has often created a dependency syndrome.

“What we are learning now is that small businesses that are looking for capital to grow can pay market rates of interest. Their major concern is reliable and continuous access to rightly priced capital. Through the Dutch Action on MYC4, businesses have an upside of receiving cheaper funds than they were initially willing and able to pay. We have seen to type of investors/lenders; social and for profit and the Dutch auction accommodates both.

“The on-going transformation in microfinance means grants and subsidies are a thing of the past and commercial sources of funding will continue to be the major source of funding.”

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Mobile phones impacting health care in Africa

A little over a decade ago there were around 100,000 phone lines in Nigeria, mostly landlines run by the state-owned telecoms behemoth, NITEL. Today NITEL is dead, and Nigeria has close to 100 million mobile phone lines, making it Africa’s largest telecoms market.

Across the rest of the continent the trends are similar: between 2000 and 2010, Kenyan mobile phone firm Safaricom saw its subscriber base increase in excess of 500-fold. In 2010 alone the number of mobile phone users in Rwanda grew by 50 per cent, figures from the country’s regulatory agency show.

Amongst the ways lives are changing as a result: A simple text-messaging solution was all 28-year-old Ghanaian doctoral student, Bright Simons needed for his innovative plan to tackle counterfeit medicine in African countries. The World Health Organization estimates that nearly 30% of drugs supplied in developing countries are fake. (In 2009, nearly 100 Nigerian babies died after they were given teething medicine that contained a solvent usually found in antifreeze.)

Simons’ pioneering idea was to put unique codes within scratch cards on medicine packaging that buyers can send via SMS to a designated number to find out if the drug is genuine or not. The system is now being used by several countries in Africa and rolled out to places such as Asia where there are similar problems with counterfeit drugs.

In South Africa there’s Impilo, a service that allows people to find healthcare providers anywhere in the country 24 hours a day, using their mobile phones.

Mobile phones are going to play an increasingly important role in mediating the provision of better healthcare to the citizens of African countries. Phone companies are realizing that mobiles are highly effective — and potentially lucrative — for the dissemination of health and lifestyle tips.

 

Food production for developing nations

The Obama administration drafted some of the world’s largest food and finance companies to invest more than $3 billion in projects aimed at helping the world’s poorest farmers grow enough food to not only feed themselves and their families but to earn a livelihood as well.

President Obama and the leaders of four African countries introduced the group of 45 companies, the New Alliance for Food Security and Nutrition, at the last summit meeting of the Group of 8 industrialized nations. The alliance includes well-known multinational giants like Monsanto, Diageo and Swiss Re as well as little-known businesses like Mullege, an Ethiopian coffee exporter.

The U.S. administration also reported on the progress of what is known as the L’Aquila Food Security Initiative, the largest international effort in decades to combat hunger by investing in the fundamentals of agriculture, including seeds, fertilizer, grain storage, roads and infrastructure. The initiative, first agreed upon by the Group of 8 leaders at their meeting in L’Aquila, Italy, in 2009, was a pledge to put $22 billion into food and agriculture projects. Although much of the money had previously been earmarked for agriculture projects, about $6 billion was new. Apparently most all of the $22 billion is budgeted and appropriated, and over half of this disbursed.