By Jacob Mati, Deputy Director of the Centre on African Philanthropy and Social Investment (CAPSI) and Associate Professor at Wits Business School, in Johannesburg, South Africa.
Priorities in philanthropy in Sub-Saharan Africa
Across Sub-Saharan Africa, there’s hesitancy in many governments to fully embrace philanthropy. When, for instance, governments face humanitarian crises, then philanthropy will be embraced — and this is a common thing across Sub-Saharan Africa, and probably even beyond. But whenever, let’s say, a social movement calls for fundamental changes or an overhaul of structural issues causing inequality, and big things like that, then almost every single African government that I know of has been very uneasy about philanthropy.
The continent is also guided, to a large extent, by Agenda 2063: The Africa We Want, which is part of the African Union’s broader framework, and there are regional frameworks, such as that of the Southern African Development Community (SADC) — and all these inform how countries behave regarding philanthropy.
Some countries, like Rwanda, have done quite a bit in terms of policies that try to structure philanthropic interventions. There’s a lot of philanthropy in Rwanda. The Mastercard Foundation is a huge presence, and there are many other foundations.
There’s a lot of duplication in philanthropy and, therefore, there’s a need to have a policy that guides operations and the need to have a specific ministry through which international organizations can engage. One way of avoiding duplication and chaos is to say, “These are our national development priorities,” or to say, “These are the SDGs,” as opposed to organizations choosing what they want. Rwanda is probably better developed than most in terms of policies that structure philanthropy.
In addition, nearly every single African country has been able to prioritize philanthropy around sectors like health and education. Here, in South Africa, there’s also a huge focus on job creation, especially for young people.
Laws related to philanthropy that do and don’t operate
Communities in various African countries stand to benefit in one form or another if policies or tax laws guide philanthropy.
On the whole, from a policy perspective, perhaps the most important element related to philanthropy is the tax law in each country. A second element is the relationship between a government and its nonprofit sector broadly. Some countries have tried to create an enabling environment, and that “enabling environment” helps governments to respond to immediate or social development needs and brings value in terms of taxes. In other words, governments want something positive coming out of philanthropy.
And in some cases, tax laws indicate that organizations can benefit in terms of tax rebates or exemptions related to what they’re trying to do. However, in many countries, tax laws are complicated and don’t fully operate, either because of the bureaucracy or the type of documentation required. Ethiopia is an extreme example of too much regulation, which dictated that organizations can’t operate in certain sectors. A backlash ensued, because the philanthropic work and resource mobilization of organizations was overly constrained.
Also, I was talking to someone who operates a community-based organization in Zimbabwe, and she said her organization was hit by a sudden, retroactive, tax demand going back five years – and she thinks it was punishment for asking important questions about the relationship between mining companies, governments and communities. So, many philanthropic organizations in the region operate without applying for tax benefits.
Three exceptions are Kenya, Mauritius and South Africa, which have better developed tax systems. For instance, instead of relying only on the goodwill of mining companies to work with community nonprofit groups, South Africa has specific laws that require companies listed on the Johannesburg Stock Exchange to invest at least 1% of post-tax profit into corporate social investment (CSI). It’s 2% in Mauritius.
More countries may want to do this, if these examples are anything to go by. There’s a huge component of private-sector input, but also nonprofit organizations’ input in terms of processes. It ensures that certain investments go to communities, especially in places with huge extractive industries, such as the Democratic Republic of the Congo (DRC), which has nothing to show after years of mining. Communities in various countries stand to benefit in one form or another if policies or tax laws guide philanthropy.
