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Despite facing numerous challenges, philanthropy in South Africa has demonstrated impressive resilience, largely thanks to the country’s strong base of highly committed givers. The fifth Nedbank Wealth Giving Report revealed a philanthropic landscape in the country in which independent decision-making, targeted giving in response to immediate or emergency needs, and a commitment to long-term support are all prevalent across this giving base of high-net-worth individuals (HNWI).
It also revealed that most have a relatively strategic, yet deeply personal, approach to giving that aligns with their values and desire to have a positive impact, irrespective of prevailing economic challenges and uncertainties.
The findings from the report highlight the distinct path South African philanthropists are carving in the realm of giving. Over the years that the report has been produced, the decision-making by HNW givers has steadily evolved. In most cases, it is now highly personal, with the majority of givers making their own decisions about who, or which cause, they want to support. This underscores a significant trend toward autonomy in philanthropy in South Africa, which is a notable step away from the traditional, advisor-led philanthropic practices of the past. The fact that 61% of HNWIs made their own decisions in 2021, up from 55% in 2018, speaks to this growing independence. Moreover, while responding to immediate needs is the key driver for selecting recipients, the findings of the report also suggest a pragmatic approach to philanthropy that is focused on addressing the most pressing issues.
Interestingly, while HNWIs in South Africa say they are typically motivated to give more when they, themselves, experience higher levels of income, they also tend to maintain a hands-off approach after making their contributions. This points to high levels of trust in the organisations they support and an emphasis on causes rather than recognition. It is also notable that while a significant majority of HNWIs believe their contributions have the desired impact, few actively measure these results. Again, this reflects a high level of trust in the organisations that are facilitating the donations, and those that are receiving them, which points to the importance of trust as a foundational component of giving resilience. Givers may not need to know exactly what good their contributions are doing, but they certainly need to know that their money is doing good.
The commitment by givers to long-term support as identified in the report is equally important, with nearly half of the surveyed HNWIs providing funding for over five years. This illustrates a strategic and sustained approach to philanthropy. However, despite the economic challenges posed by the pandemic and, more recently the lingering global economic challenges, South African HNWIs have still shown a readiness to adjust their giving strategies to focus more on immediate needs. This shift may reflect a wider societal trend towards 'in the moment' action in response to global crises. Yet, innovative funding practices like social impact bonds have not seen widespread adoption among HNWIs, indicating a potential gap in awareness or a preference for more traditional forms of philanthropy.
In light of the characteristics that were identified amongst the vast majority of resilient givers surveyed in the production of the Giving Report, it’s clear that expanding resilient philanthropy in South Africa, irrespective of the economic environment, requires a strategic approach. Based on the characteristics and trends identified in the report, at its core, such a resilient philanthropy strategy needs to prioritise the transformative capacity of philanthropy over the purely transactional act of giving. It also needs to support networks over individual solutions, while still allowing givers to select beneficiaries within those networks. And it must give givers a sense of comfort that, while they may not see quantifiable results of their generosity, they are supporting systemic change that builds societal resilience, rather than merely providing short-term symptomatic comfort to those in need.
To leverage these insights, philanthropic organisations would do well to adopt more strategic approaches to the work they do with their philanthropic clients. Firstly, they need to align with the identified preference for independent decision-making by offering opportunities for HNWIs to engage directly with causes. Secondly, they must incorporate flexible funding models that allow for a rapid response to emerging needs, without detracting from longer-term giving that underpins lasting systemic change. And thirdly, they need to create giving structures that deliver such systemic change at the root of the societal need, rather than just meeting the need in isolation.
In addition to these cornerstones of a more strategic approach to resilient giving, an effective giving resilience strategy should work to enhance the transformative capacity of beneficiary organisations and projects, to ensure that these align with identified donor preferences and expectations. Investing in networks of organisations that can collectively respond to challenges more effectively than individual entities aligns with the hands-off approach preferred by donors, while at the same time, giving them the peace of mind that their contributions are part of a larger, coordinated effort. Leveraging philanthropic influence to support and amplify the work of community organisations also aligns with the donors’ inclination towards a hands-off approach, but ensures that they know their contributions are part of empowering solutions which, in turn, has the potential to attract more givers and higher levels of contribution.
By incorporating these strategies, philanthropic organisations can cultivate a giving environment that not only meets the immediate needs of people, communities, and society as a whole, but also builds a resilient philanthropy system that is capable of withstanding and adapting to future challenges. Such a strategic approach has the potential to attract more HNWIs and to increase the amounts they are giving, assured by the effective use of their contributions for long-term, systemic impact. The path forward for philanthropy in South Africa seems clear: it needs to inspire confidence in current and future givers by demonstrating that they are contributing to a system that is adaptable, aligned with their giving preferences, and takes a calculated, strategic approach to building long-term resilience, both in the society supported by their donations and in the philanthropy sector that facilitates that support.
For more information on the Giving Report, or to download for free, visit Giving Report | Nedbank Private Wealth.
This post and content is sponsored, written and produced by Nedbank.
