The South African Donor Market
Impact on Higher Education
MACE Conference November 2013
© Shelagh Gastrow
Executive Director : Inyathelo : the South African Institute for Advancement
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Is there a funding crisis?
• Media tells us so.
• Many well known civil society
organisations closing their doors.
• Have the opportunities really
declined?
• Have we adapted to the current
context?
• Are we looking in the right
places?
• Are we busy doing the wrong
thing?
• What are the trends?
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Do we understand new trends in philanthropy?
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Venture philanthropy
Impact philanthropy
Strategic philanthropy
Catalytic philanthropy
Impact investing
Resilient organisations
Social return on investment/social profit
“Harnessing financial innovation for real social impact”. - See more
at: http://philanthrocapitalism.net/#sthash.Xt4iM0Mc.dpuf
• Social Impact Bonds/Development Impact Bonds according to the
Philanthrocapitalism website are “the hottest innovation in social
policy of the last decade….”
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Modern Philanthropy
• The pioneers of modern philanthropy were
the Carnegie Corporation of New York
(1911) and the Rockefeller Foundation
(1913)
• Shifted philanthropic paradigm from charity
to innovative programmes dealing with the
socio-economic factors impacting on
society.
• This led to international grantmaking
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Modern Philanthropy
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Bill Gates
Philanthrocapitalists
Clinton Global Initiative
– “philanthrocapitalist market place with an emphasis on making
explicit commitments to take action to tackle global problems.”
Social Good Summit
Partnerships between governments, multilaterals, business, nonprofits and civil society. “The age of the posse, when global
problems are tackled by ad hoc coalitions of the positive.”
World Economic Forum : Council on Philanthropy and Social
Investing : impact investing to fund a better world.
G20 asked Bill Gates how to finance the MDGs.
Size of their endowments put them on equal terms with some
governments.
Global Fund to Fight Aids, Tuberculosis and Malaria – donors and
business on the board. Prefer their own control than donating
money to the WHO.
http://philanthrocapitalism.net/
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International Private Foundations
Current context
• Come and go in South Africa
• Atlantic, Kellogg, Rockefeller Bros, van Leer
• Mellon, Carnegie, Ford, Kresge, Mott, Open
Society, Wellcome Trust,
• Elma, Dell, Bertha, MasterCard
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International private foundations
Changing requirements
• More accountability
• More measurement
• Influence of the philanthro-capitalists :
• Social enterprises, impact investing, catalytic
philanthropy
• Monetarisation of impact
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International private foundations
• Non-governmental
• Non-profit
• Have their own endowments (principal funds)
• Managed by own trustees and directors
• Established to maintain or aid charitable, educational,
religious and other activities serving the public good.
• Make grants to non-profit organisations
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Regulations regarding US Foundations
• Grants only to non-profits classified as public charities
• International funding can be awarded
– Through an intermediary organisation in the USA,UK or
Europe
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OR
– In the USA an Equivalency determination has to be made
(would overseas charity qualify as a public charity in terms
of US Internal Revenue Code?)
• Post 9-11 Patriot Act rules require foundations to
confirm that grantees are not funding terrorism.
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International foundation process
• The background investigation
• The Review
• The Grant Agreement
• Monitoring and Evaluation
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Background investigation
To assess :
• If the organisation can deliver what they envisage in the proposal.
• If the organisation is the equivalent of a public charity
• If the organisation can meet the reporting and accounting
requirements
• Past performance
• Understanding the broader context and long-term impact.
• The political environment
• If the programme has community support
• If there is duplication of effort by other projects
• Long-term sustainability (multiple sources of income)
• Evaluation and monitoring.
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Background investigation
• To build the case for support
• This may involve an in loco visit or meetings
with project leaders
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Proposal Review
• Anticipating the concerns and queries of the
board
• Seeking additional information or budget
queries
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The grant agreement
Conditions are intended to meet their regulations
governing foundations.
The agreement will explain :
• Funds can only be used for the purpose of the
approved proposal
• Changes need to to agreed in writing by the foundation
• The duration of the grant and disbursements
• Monies not used will need to be returned, or extension
of the grant by written request for rescheduling
• Reporting and accounting requirements
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Oversight
• Programme officers may visit the project
• The visit is to check compliance with the grant
agreement and to observe progress
• May require independent evaluation
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Building relationships
• Programme officers are your advocates and
champions within the foundation.
• They therefore need answers to questions.
• They become invested in the success of your
project.
• They continue to monitor and champion the
success of your project.
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Reporting
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Courtesy
Reassurance
Transparency
Contractual obligation
• Negotiate any changes that you might want to
implement.
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Local philanthropic foundations
DG Murray
Trust
Fuchs
Foundation
Hans
Hoheisen
Trust
Nussbaum
Foundation
Oppenheimer
Memorial
Fund
Shuttleworth
Foundation
Lewis
Foundation
Motsepe
Family
Foundation
Institutionalised Philanthropy in South Africa
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Business and Corporate Social Investment
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Current Context
Trialogue : R6,9 billion invested in social
projects (32 companies accounting for half the
spend)
BEE Codes
Triple bottom line : impact measurement –
integrated reporting
Lack of confidence in the SA economy
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Corporate giving : motivation
• Enlightened self-interest to ensure a contented labour force
• Direct commercial benefits
• Community investment – helps build a stable society
• Social responsibility and BEE points
• Tax benefits
• Inter-corporate competition for social standing
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Good Corporate Citizenship
Increased focus on BUSINESS ETHICS in the light of
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Globalisation
Environmental and health issues
Sustainable development issues
Employee relations (decent standards)
Government relations
Community relations
Corporate governance (Enron and WorldCom scandals)
Investors requiring greater transparency
Corporate reputation
Good governance
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• The relation of business to society is changing fundamentally.
• Technology has created transparency – the world can see
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Child labour
Cheap labour
Environmental degradation
Profiteering
Abuse of resources in developing countries
• Community management is necessary to become successful in the
social environment
• Responsibility in the way business is done, rather than the
enlightened way profits are distributed
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Branding and social good
• Ethical branding – “This organic product is good for you
– pay extra!”
• Brands are affected by environmental, ethical and
social issues.
• Philanthropy integrated into the act of consumption
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What is the new CSI?
• OLD THINK :
– Philanthropic giving by the company
• NEW THINK :
– Leadership in social problem solving - Community involvement
(philanthropy) TOGETHER with
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The way it does business
The way it creates jobs
How it produces wealth
If it pays taxes
Whether it is innovative (technology)
If it is environmentally friendly
How it impacts on the value chain – suppliers, distributors and
customers
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How is CSI evaluated?
• INPUT is the resources made available by a company for corporate social
investment. These include
– Funds
– Employees’ time (support, advice)
– Gifts in kind (products, use of facilities)
• OUTPUT is the benefit that emerges from the input and includes :
– Community benefit (project implemented)
– Business benefit (enhanced reputation, marketing benefits)
– Leverage (other funds, volunteers etc)
• IMPACT is the effect over time and this includes :
– Community impact (related to the project)
– Business impact (new business generated, goodwill, brand recognition,
employee productivity, overcoming legislative obstacles etc)
– Social profit
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Measuring Risk and outcomes
• Grantmaking means giving money to another
institution/organisation/partner
• Impact is determined by the partner’s
effectiveness
• The best partner gives more “bang for the
buck” (“social impact per rand expended”)
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Where do you go in the corporate world?
• The Chief Executive Officer – Large donations.
• The Human Resources Manager – bursaries,
career office
• The Marketing Department – sponsorships
• The Corporate Social Investment Office – projects
or programmes
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Company Foundations
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Established by businesses for charitable giving or community investment
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Some have endowments
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Resources generally based on formula (percentage of profits)
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Generally managed by company representatives
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Generally give in areas where they do business.
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Debate as to whether they should be separate from the company’s corporate
policies – cuts off information and discourse from other sectors such as civil
society, academia, government.
– Eg donations to universities where they recruit.
– Insurers donate to non-profits dealing with health care transformation.
– Art suppliers donate to organisations that promote the arts.
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International Development Aid
• Aid – a Foreign policy
tool
• Choice between military
and/or economic aid?
• Is Economic aid an only
solution to global
development
challenges?
• Development Aid is
always in line with
foreign policy agendas.
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Is International Development Aid negotiated?
THE END OF INTERNATIONAL AID? Presenter: Emmanuel Ramathuba
| Senior Policy Analyst, National Treasury |
11 September 2013 Inyathelo : Breakfast on the Second Floor
IMPLICATIONS FOR SOUTH AFRICA AND THE CIVIL SOCIETY SECTOR
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International development aid
• Foreign government agencies
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Not for general budget support
Requires synergy with government priorities
Fits with foreign policy issues
Global warming
HIV/AIDS declining
Sustainable development
Education
Bilateral relations (exchange)
Economic relations (building business relationships)
Extension of political strategies
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Foreign Political Agencies
• Westminster Foundation for Democracy (UK)
• National Endowment for Democracy (US)
• Friedrich Ebert Stiftung (Germany)
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International NGOs
• Global charities.
• Raise funds to support projects in Developing
World
• Themes usually include health, welfare,
environment, education and relief aid.
• Examples : CARE, Oxfam
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Faith based funders
• Usually support religious community or relief
causes
• Examples : Catholic Agency for Overseas
Development (CAFOD); Christian Aid; Church
World Service (CWS).
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Government funding
• Local government
• Provincial government
• National Government eg Ministries of Health,
Education, Public Welfare, Arts & Culture.
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Community Foundations
• Established locally to raise funds for
community projects
• Examples
– Social Change Assistance Trust
– Uthungulu Community Foundation
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Individual stakeholders
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Staff
Beneficiaries
Parents
Service Providers
Board
People who use facilities (sports, library,
medical)
• Individual citizens
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Why do people give
• They have a relationship with the
organisation.
• Nobody goes from no relationship to being a
donor
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Building and maintaining relationships
• How connected are you with your
beneficiaries and other stakeholders?
• Do you have an accurate data base?
• How frequently do you communicate with
them?
• Do they give?
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Annual Fund
• If well planned it serves as
– The framework around which all other individual
giving is based.
– A way to identify an important base of donor
support.
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Annual fund
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Develops relationships
Encourages philanthropy
Identifies new donors
Renews previous donors
Can upgrade existing
donors
• Opens space for bequests
• Assists with tracing
• Forces institution to
repriortise annually.
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Annual Fund
Least cost-effective form of
fundraising initially
– Printing
– Postage
– Staff costs
– Materials design
– Response from
unsegmented donor base is
small
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Annual Fund : Benefits over time
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Alumni Relations as part of Advancement
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Key stakeholders
The only constant
Research required
Most interactive group
Life long learning
Value of the degree
Connecting alumni to the
institution
– Relationship building
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Role of Marketing and Communications
Visibility and voice critical
to raising awareness,
building trust and
confidence, identifying
potential support :
• Voice : opinion
• Visibility : marketing
• Image building : Vice
Chancellor, the
institution, other
leaders.
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Marketing as part of Advancement
• Attracting support
– Image and positioning of the institution : what is
unique
– Image of the Vice Chancellor
– Views of the Vice Chancellor
– Stories of the university
– Strategic meetings with stakeholders : follow up
– Alumni achievements
– Information for fundraising : fact sheets
– Annual reports – strategic list – needs you are meeting
– Case for support
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Advancement : attracting support
– Have focussed on donors
– Need to focus on how an institution engages with
the external environment to attract resources
– The basis for advancement – creating an
investment climate
Thank you
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