Much philanthropy among Africans is home-grown and informal, while a UBS poll of wealthy individuals from the continent also shows that a significant number plan to increase donations, and the link between giving and business is getting stronger.

Much philanthropy among Africans is home-grown and informal, while a UBS poll of wealthy individuals from the continent also shows that a significant number plan to increase donations, and the link between giving and business is getting stronger.

In general terms, philanthropy in Africa is expanding, the Zurich-listed wealth management house said in a report called Africa’s Wealthy Give Back. The report suggests that as the ranks of high net worth individuals in the continent have expanded, charity is becoming more “home-grown” and less dependent on non-Africa sources.

This study is based on the work and expertise of UBS and TrustAfrica, with the support of SGS Consulting. It employed qualitative and quantitative methods in the form of a survey and in-depth interviews. The data collection period ran from September 2013 to May 2014. A total of 95 people participated in this study: 39 of these were survey respondents, the remainder comprising the interview sample of 42 wealthy individuals or representatives of wealthy individuals, and 14 philanthropy experts.

“Wealthy individuals would like to increase their engagement with philanthropic causes by becoming more strategic in their philanthropy, multiplying the ways in which they give and/or by increasing the amounts they give,” the report said.

“Half of the respondents are planning to increase financial giving over the next year. Many also cite that the involvement of family members is increasing,” the report continued.

Giving is largely focused on the extended family and local community; informal giving is more important than formal channels and giving is embedded in culture and belief, the report said.

The authors of the report define “wealthy” individuals in Africa as someone with an annual income of more than $150,000 or with investable assets of more than $500,000.

The report has been released at a time when philanthropy and aid in Africa are very much headline news events because of the Ebola virus outbreak in the west of the continent. UBS’s study of philanthropy trends in the region is also a part of the work that bank is doing to serve clients interested in the philanthropy space.

Wealth in Africa, while growing unevenly, is expanding, according to data UBS references in its 99-page study. It refers, for example, to figures from the African Economic Outlook 2014, which says growth in sub-Saharan Africa was 5 per cent last year and expected to be 5.8 per cent in 2014. East and West Africa recorded the fastest growth in 2013, of 6 per cent or above. (Sources: African Development Bank; OECD; United Nations). According to the McKinsey Global Institute, a combination of economic and demographic expansion will see substantial wealth created over the next 15 years, with GDP projected to rise to $2.6 trillion in 20204.

The RBC/Capgemini World Wealth Report 2014, issued earlier this year, notes that the number of wealthy individuals in Africa in 2013 was estimated at 140,800, a growth of 3.7 per cent over the year. In the same period, wealth held by this group witnessed an increase of 7.3 per cent to $1.3 trillion.

Philanthropy is so much a part of Africans’ identity that many of them don’t even use the term when giving, the UBS report said. The word is often associated with global transfers from the North, it said.

“In many instances, English terms such as ‘giving’ or ‘charity’ are used instead, as well as a wide range of other terms in African languages such as ‘ubuntu’. This giving includes, but is not limited to monetary resources; time, expertise, skills and other mechanisms embedded in systems of mutuality and reciprocity have significant weight,” UBS said. 

The report noted that there is infrequent checking of the impact of giving; many wealthy donors judge the effect of what they do on what they can see and feel rather on more standardized or quantitative approaches.