What makes a philanthropist?

What makes a philanthropist? What do philanthropists do?

Is it about money or does it include time and skills that are donated for the betterment of our society? When can someone be called a philanthropist? These are some of the questions that arise out of the call for nominations for the Inyathelo Philanthropy Awards that has recently gone out.

People involved in philanthropy are as diverse as the general population. They have passions for various causes and give what they can — time, money, skills and “gifts in kind” (books, computers, etc). All of these have value and all are appreciated. However, the bottom line for any non-profit organisation is money. There are organisations that were given their offices, their computers, their stationery and their telephones, but when push came to shove they had to close for lack of funding. With all the will in the world, little can be done without it, although there are organisations that have performed miracles with very little.

In South Africa, there are hundreds of thousands of people who regularly volunteer their time and skills and, according to recent studies, we also give generously. However, the Inyathelo Philanthropy Awards focus on individuals who have actually given money as it is in this area that we need to promote a real philanthropic movement — in fact, we have to build the philanthropic industry.

Let us look at how money works in the non-profit sector. Business people work in a paradigm where you make a product, sell it at a mark up and make a profit. The more products you produce and sell, the more money you make. The non-profit sector works differently. Its purpose is to effect change in society and to fill gaps left (and sometimes created) by government and business. To achieve change effectively, the non-profit sector has to attract donors/investors, often when its product is not always very clear. The sector certainly makes products (such as educational resources, “how-to” manuals, books or policy documents) but these are not always saleable. To top it off, organisations in the sector have to spend all their money. If there is an underspend, donors will ask the logical question: “Why didn’t you spend the money?”

What didn’t you do that which you planned to do? Occasionally underspends have to be returned to the donor or, at a minimum, permission has to be granted to roll-over these funds to the new year. Savings on a budget are not seen as good practice, they are seen as overbudgeting, and it is difficult for organisations to build any sizeable reserve through being frugal with the funds they have. Non-profits generally have to report to their donors on exactly how their funds were spent. This is significantly different from the business sector who are accountable to their shareholders and are congratulated for excess funding available, such as their profits.

Along with the requirement to spend available funding, non-profits face another big funding issue: The unwillingness of donors to fund core costs. “We do not provide funding for operational costs or salaries” is a common grant-making guideline. How can an organisation roll-out a project without being able to pay its staff? Once again, a comparison with corporate practice is useful in highlighting the challenge this presents to non-profit organisations. Can you imagine a factory churning out toothpaste without a single person to undertake market research, plan, find the recipe for the product, undertake quality control, design the packaging, market the goods, transport and then sell them. The reality is that for non-profit organisations to function effectively, achieve objectives and have a positive impact in their area of operation and, through all this, attract further funding, there has to be salaried human capacity to do the work. The reality is that people running and working in modern non-profits are not volunteers. Rather, they are generally activists of some sort who are passionate about their work, but need to have some resources to live on.

Non-profit staff are not volunteers earning pin money, nor should non-profit staff be expected to work in sub-standard office environments. South Africa’s non-profit sector has come a long way and work in the non-profit sector requires the professionalism that one would expect in any operating business. Donors, the public and the government expect good documentation, good reporting, proper budgeting, strategic planning, financial management, human resource strategies, succession planning, organisational development skills, monitoring, evaluation skills and intellectual input. This all has to be paid for, and the money has to come from somewhere.

There are hundreds if not thousands of organisations in South Africa that do the most wonderful work in our communities, but every year face financial crises. There is money out there but there is a disconnect between the organisations and the general public. The heavy reliance on the corporate sector and international donors needs to change if we want these organisations to continue their work.

There seems to be a relative reluctance in the non-profit sector about asking individual South Africans for support. While there are a few well-known organisations that have very effective, established campaigns that raise money from individuals, there also seems to be quite widespread belief among South Africans that they shouldn’t be giving to organised civil society — that this is the job of government or business. We know individuals give, but they give in a detached way. They give to beggars or to charities where everyone remains fairly anonymous, where they don’t have to face the realities of our world, but where giving assuages guilt. Real philanthropists undertake some sort of analysis of the world and the issues for which they have a passion — whether it is the environment or their city or their politics — and put their money there in a focused and deliberate way. This need not be huge amounts of money — often an ordinary person puts what resources they have into an organisation and this creates leverage for other funding. Philanthropists engage with the organisations and individuals who are at the rock face, they find out how their money is spent and provide real on-going backing.

While money is the primary resource, they are frequently valued for their advice and skills, their networks and the ambassadorial role that they play for the organisations that they support. These are the people that the Inyathelo Philanthropy Awards are seeking in its 2008 call for nominations — the role models for South African philanthropy. The more we know about how South Africans are giving and the more faces we can attach to effective philanthropic giving through profiling these role-models, the more likely others will follow their example.

And this is key to building momentum in growing a local philanthropy movement. Without those people whose donor money is, in reality, our insurance policy for the future, our democracy is unlikely to survive.