A Better Way of Giving

24 May 2013

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Guest Columnist : Tony Elumelu

“Rich Nigerians should give the right way.” This was the rallying call made by the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, at the inaugural Nigeria Philanthropy Summit co-hosted with the Tony Elumelu Foundation.

As Africans, we tend to give money to people to satisfy an immediate need, a child’s school fees, a hospital bill, a gift of cash to cover expenses.  But often this is not sustainable in the long run. Yes, a child goes to school for a while, the medical expenses are covered this time and the cash keeps the family afloat for another month or two. But soon enough, the next term’s fees become payable, the hospital bills and living expenses continue to mount and in time, they’ll inevitably be back to ask for more.  It’s a vicious circle that leads nowhere.

But there is a ‘right way’ to give, as the minister alluded to, a way that breaks the dependency that exists in much of the philanthropy we see in Africa today. It’s a strategic type of giving – a newer, smarter, better version that provides real solutions that can transform lives.  It is called catalytic philanthropy and it is what we do at The Tony Elumelu Foundation.

The catalytic philanthropist looks at the unpaid school fees, the hospital bill and the family unable to make ends meet, and asks, “How can I empower them to help themselves today and in the long term?”  So he applies his mind, collaborates with partners, and invests his time as well as his money to achieve a broader solution with lasting impact. Drawing upon the well-known analogy of teaching a man to fish rather than giving him fish, the catalytic philanthropist hires professional trainers to teach the latest fishing techniques. He provides the boat and nets and invests in equipment for storing the fish, but rather than pure charity, his actions are motivated by profit, so those who receive the boats and nets have ownership and the storage equipment is managed sustainably.  Leveraging his contacts, the catalytic philanthropist introduces the man to buyers, uses his connections in government to aid the passing of legislation to protect the newly trained fisherman so he can grow his business.

Over time, he continues to mentor him as the business grows and provides employment in the community. And because the fisherman is now making money, his wealth is spread around and his family and the broader community begin to thrive, with others learning from him how to fish and earn also.
And just like that, for less money and just slightly more time than one would expect, the catalytic philanthropist has transformed the lives of a community for the long term and empowered a man to create his own wealth. That is lasting impact. That is the power of catalytic philanthropy.

The concept of catalytic philanthropy is still gaining ground here in Africa. Few charities and foundations are measured by their catalytic impact. Few ask the question, “How many lives have been transformed?”
The next few years will no doubt be interesting ones for the few private foundations that have embraced catalytic philanthropy.  It was clear from the Nigeria Philanthropy Summit that The Tony Elumelu Foundation is one of these.  Through our philanthropy, we have chosen to support the new front line of Africa’s development – the entrepreneurs – in a sustainable, impactful way.

We promote entrepreneurship and entrepreneurs in Africa allowing them to start, grow and nurture their businesses more effectively.  We support them through leadership and development programmes, empower them through impact investing – a model that bridges philanthropy and investment and we create an enabling environment through our advocacy work on policy.
While foundations like ours may not capture the headlines today, we believe we will end up making greater contributions to Africa’s development because of our commitment to contribute to lasting change.

• Elumelu, former MD/CEO of United Bank for Africa Plc and Chairman of Heirs Holdings Limited, wrote from Lagos

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