This article aims to help the next generation of African philanthropists better understand the importance of continued philanthropy, how to set up their own charitable giving and avoid the pitfalls of the past. This article will provide prescriptive advice for the first generation of wealth accumulators in Africa on how to create and sustain their own philanthropic legacy.
Historically, individuals and families at a high net-worth level have created long-lived family foundations, but the current generation of millionaires and billionaires are focusing on a shorter time horizon and the sustainable impact of their giving. They want to eradicate the world’s problems one by one and do it fast. However, there are questions that one must ask themselves before-hand: Why are you giving? What do you want to achieve? How do you think change will happen? How will you assess progress? Who will join you?
The majority of givers have stated that the motivation to give spurs from their personal values and the desire translate their vision to better communities into reality. Another aspect of giving and philanthropy is to leave a positive and impactful legacy for oneself and their family for generations to come. Legacy refers to the reputation and contributions for which we are most remembered. Building a family’s legacy can be very exciting; however, depending on the family’s internal dynamics, it can be fraught with complexity. Family, particularly within Africa, holds several definitions ranging from a nuclear family to the entire community. As a first/second generation wealth accumulator who wants to strategically give; regardless of how you define family, whether by law, bond or blood, it is fundamental to strategically execute your philanthropic goals. There are key areas to be considered when starting your philanthropy journey no matter the type of philanthropist you are considering. In this article, we will identify important aspects that will be beneficial when undertaking the journey ahead.
While donors give via their personal foundations and their personal bank accounts this alone does not constitute as philanthropy. Philanthropy centers on giving for the love of humankind. Philanthropy, whether it’s generational, strategic or high impact, does not respect structure. Great grant-making and/or social investments does not require a family office, a trust, or a foundation. Philanthropy through grant-making requires focus, knowledge and learning, active listening, commitment and partnership, and trust.
While formal structures can carry out your philanthropic vision and goals, a structure, entity or institution alone will in no way guarantee it. A structure or entity cannot operate itself. The more structure you create, the more systems and leadership you will require. Take heed: depending on your country’s laws, it can be more challenging to dissolve an entity than it is in creating it. There are situations in which an entity, whether a foundation, a trust, or a fund by a grant-making organization, can be ideal. Before you and your family create an entity, there are a few critical issues to consider:
The most important factor to realize is that there are alternatives to setting up one’s own foundation. Partnering with an existing grant-maker may accomplish your philanthropic goals. A grant-maker has the systems and knowledgeable staff already in place to help realize your philanthropic dreams almost immediately. There are many African-led and African-based grant-makers involved in a diversity of issues working on the continent, including but not exclusive to-
It is important to consider all of the options; setting up your own entity or partnering with an existing grant-maker to best realize your philanthropic vision. Building a philanthropic legacy does not require brick or bullion. It is about you and your family’s love for humankind. To learn more on giving without a foundation read our article on the topic.