6/28/07

Billionaire donors give back to poor of Africa

Always central to any conversation about Africa is that of aid, which was a central topic at the recent World Economic Forum (WEF) on Africa in Cape Town. The WEF's 800 participants from 42 countries had statesmen, economists and business leaders debating again how aid was not the salve to the continent's ills: Africa's development was reliant on Africans implementing African solutions.

Private philanthropy, however, is another story and the distinction between philanthropy and investment, between social entrepreneurship and corporate responsibility, still another.
Ninety percent of the UK’s SABMiller's business was in emerging markets and the company could offer the most value philanthropically by leveraging its expertise locally in training people. The company had innovated an industry in Uganda by using locally grown sorghum instead of barley for a beer product. The project had expanded to Zambia, Zimbabwe and Tanzania and was now the second largest brand in Africa. It empowered more than 12 000 farmers, and not through straightforward "check book philanthropy".

Susan M Clark, a director of corporate affairs at SABMiller, said philanthropy had to "make business sense" to be sustainable. "It cannot be an issue of charity," she said, boiling down what has become a worldwide trend among the world's biggest givers: a commitment to get involved and see a return on their investment.

For some, as in the case of Bill and Melinda Gates, that means pumping money into preventive treatments for major diseases in the developing world that are ignored by drug companies. For others, it means a career in social entrepreneurship where profits are secondary and indeed often nonexistent.

Former AOL chairman Steve Case and his wife committed at least $5 million to PlayPumps, which builds water pumps that also function as merry-go-rounds for rural African communities in desperate need of clean drinking water. The Case Foundation also supports KickStart, which sells low-cost farming tools and supplies to African families that increase productivity.

Nick Moon, co-founder of KickStart International in Kenya, said the organisation's approach was to create wealth from the bottom up by tapping human capital. "Market-based solutions fit extremely well with the basic characteristics of the African people," he said.

The mega philanthropic players in Africa, who are exercising this bottom-up or venture philanthropic approach, be it in medical research, education or providing financial services to the poor, include Gates, Winfrey, Case, eBay's Pierre Omidyar, financier George Soros, investor Warren Buffett and airline founder Richard Branson.

[Excerpt from the South African Cape Times]

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