Olajide Olutuyi, Co-Founder/ CEO, Top-Olax Energy Limited
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Subjects of Interest
- Frontier and Emerging Markets
- Private Sector Development
- Sustainable Development
Raising the effectiveness of philanthropy in Nigeria 18 May 2018
Chairman, Board of Trustees, TY Danjuma Foundation, Theophilus Danjuma
Growing up, I watched my dad engage in several philanthropic activities. He gave to people and causes he cared about. Much of the beneficiaries of these philanthropic deeds were extended family members, the local community, friends and religious organizations. Sometimes, the beneficiaries were strangers. This is typical of Nigerian philanthropy and giving, which are largely motivated by cultural beliefs and obligations, rather than generosity.
In Nigeria, as it is in many parts of Africa, philanthropy is at the core of what binds society together. Philanthropic giving generally supports poverty alleviation and sometimes helps to provide assistance towards education. But much of these giving is not measurable in terms of its impact, and it hardly produces the desired results.
On his 70th birthday in 2016, my dad formalised his philanthropy by setting up a private foundation. Sadly, he passed away four months after the launch of the foundation. Supported by a great Board of Trustees, I am now saddled with the responsibility of providing strategic direction and leadership that will produce measurable impact and results for the activities of the foundation.
Hitherto, I had obtained a certificate in Social Impact Leadership from University of California's Haas School of Business. The course was offered in partnership with Philanthropy University. The pivot of this certificate programme was social impact philanthropy and investment. But in spite of the knowledge that I acquired through this programme, my role at my late dad's private foundation has exposed me to the world of philanthropy in a different way.
Philanthropy is regarded as any goodwill to fellow human beings, especially efforts towards promoting their welfare. It could take several forms, including giving of money, time, expertise, skills and assets. Over the years, the act of giving to impact lives has evolved and the benefits of philanthropy to the socio-economic development of countries, especially developing nations, cannot be overemphasised. Even in developed countries, philanthropy is contributing in no small measure to the betterment of the society. In the United Kingdom, private giving averages around £9 billion each year.
In the United States, more than $800 billion resides in foundations and donor-advised funds. Fund for our Economic Future, a philanthropic collaboration dedicated to advancing economic growth and equitable access opportunity for the people of Northeast Ohio, has raised more than $100 million to improve regional economic competitiveness. Since it was launched in 2007, New Economy Initiative (NEI) has granted a total of $97 million to organizations and programmes supporting entrepreneurs. NEI is a $134 million philanthropy-led entrepreneurial development strategy in southeast Michigan. Its support has helped entrepreneurs and small businesses generate $2.9 billion in economic output and created 17,490 jobs.
Philanthropy or charitable giving is currently at an exciting stage of development in Nigeria. Over the past few years, there has been an increase in institutional philanthropy and the field now consists of private, corporate, family foundations, public foundations and a range of others. Some notable private and corporate foundations in the country include Dangote Foundation, MTN Foundation, UBA Foundation, Tony Elumelu Foundation, Danjuma Foundation, Airtel's Touching Lives, Toyin Saraki's Wellbeing Foundation, among others.
But it remains to be seen how these philanthropies have impacted the socio-economic development of the country. According to Michael Milken, Chairman of the Milken Institute, “Philanthropy is much more than charity, it's a profound commitment to understanding the needs of society and then rolling your sleeves to help get it done.” There is, therefore, a need to move towards a more strategic philanthropy and impact measurement. Even as individuals you can ensure that your giving is strategic, measurable and impactful.
Milken also observes that philanthropy is more than just writing cheques. For instance, Kokun Foundation is a well-known foundation that feeds the poor and gives money to poor people on the streets. Some of the foundation's deeds are phenomenal. A few of its videos on social media have brought viewers to tears. While one cannot fault these good deeds, giving away money is not always enough. There is a thin line between charity and what Andrew Carnegie, one of the wealthiest businessmen of the 19th century, once referred to as “indiscriminate charity.” According to Carnegie, this sort of philanthropy only rewards bad habits, rather than encourage good ones. Kokun Foundation will achieve greater results if it starts to measure its long-term impact.
The impact of one's giving can be increased by developing a more in-depth understanding of the challenge one seeks to address, and then defining a clear vision and a detailed strategy with an action plan. The strategy must also include a tool to measure impact. This is what is lacking when we see wives of state governors in Nigeria launching foundations and philanthropic projects that cease to exist soon after their spouses leave office.
Perhaps philanthropic organisations and the wealthy in Nigeria could learn a thing or two from Carnegie. After retiring in 1901 at the age of 66, Carnegie committed the rest of his life to philanthropy. He was known for impactful philanthropy. Amongst his philanthropic efforts was the founding of the Carnegie Technical School in 1900, and later the Carnegie Institution that is known today as Carnegie Mellon University, one of the world's leading research universities. He also built about 2,811 libraries across the world. To him, philanthropy was an essential tool for addressing some of society's socio-economic challenges.
According to the Nigeria 2014 Wealth Book, Nigeria had over 16,000 high net worth individuals (HNWIs) in 2013, who collectively owned about $90 billion in wealth. The number of HNWIs is estimated to grow by 7% to reach over 18,000 in 2018. Meanwhile, the wealth of these individuals is expected to grow by 27% to reach $123 billion this year. It is time for the well-heeled in Nigeria to support towards making a positive change in society. Nigerians need to start feeling the impact of this wealth. Nigerian communities need more and better access to health care, clean water, food, and education. As Carnegie said, “Successful men should help lift the unsuccessful into more productive lives, and a man who neglects this duty and dies rich, dies disgraced.”
For philanthropy to have a more meaningful and stronger impact, there has to be strong collaboration between wealthy individuals, private sector and governments. Interestingly, governments of developing countries have started taking keen interest in philanthropy. Governments of Brazil, South Africa, India, Indonesia, and China have already engaged in solid partnerships with philanthropic actors.
African philanthropy is also beginning to take a central role in the areas of social development and sustainability. In 2009, Liberia established the Liberia Philanthropy Secretariat to help funders identify the right partnerships. In 2015, the African Union launched the Africa Union Foundation to mobilize voluntary contributions in support of the AU's Agenda 2063. Kenya and Ghana have collaborated with the United Nations Development Programme (UNDP) to establish their own philanthropic platforms.
To further strengthen and improve the role of philanthropy as a partner in development, the Nigerian Government should provide an enabling environment for foundations to thrive. The government also needs to explore how it can introduce regulations to strengthen transparency and accountability for foundation's grantees.
There is the need for effective fiscal policy to encourage philanthropic giving by corporate organisations. Although there are a few bodies eligible for tax deductible donations listed in the Companies Income Tax Act (CITA), this is hardly enough and the framework is a bit obscure, mostly because the focus of tax authorities is on increasing revenue. Therefore, the government is not looking at providing more robust incentives for charitable donations.
Unlike Nigeria, South Africa has become known as a nation of givers. The country possesses a legal environment that incentivizes giving. It has a well-established corporate social investment (CSI) sector with an estimated R7.8 billion (approximately USD700 million) CSI in 2013. The country also has the largest philanthropic infrastructure on the continent, hosting at least 17 local and regional institutions.
In the end, becoming an effective philanthropist means planning to optimize your giving. Just like any important decision, investment, business or personal, a thoughtful longer-term strategy enables you to determine what you want to achieve and how to do so effectively. To become more effective, foundations can also partner with themselves by developing common strategies, sharing decision-making and pooling resources together. They need to engage governments strategically while maintaining independence of action and approach.
Olajide Olutuyi, a Financial Nigeria Guest Writer, is a graduate in Management from the University of Lethbridge, Canada. He is Founding Partner, Greentouch Consulting Inc. Canada, Co-Founder/CEO Top-Olax Energy Ltd. He is on the Board of Calgary Quest School, Canada. Email: Ola.firstname.lastname@example.org. Twitter: @jideolutuyi