APF

There are three common mechanisms for giving which philanthropists often utilize. They: (1) establish foundations solely focused on giving; (2) create teams within their existing companies or non-profit organizations that provides grants and/or execute initiatives directly; and (3) provide funds directly to causes without any formal structure. Each of these methods has its advantages and disadvantages.

While the first two mechanisms are more visible, by nature of their design, the third option has been gaining prominence in recent years. For instance, Warren Buffet, one of the most charitable billionaires in the 21^st century has engaged in philanthropy through the pooling method. He has given away more than $46 billion since 2000, 71% of his $65.5 billion fortune. Buffett’s approach to philanthropy has largely mirrored his approach to business – investment and delegation. In 2006, Buffett pledged 85% of his net worth through annual gifts from Berkshire stock to five charities, valued at $37 billion per charity at the time. Since then, Buffett has largely stood back and let the five foundations manage the money he has donated, merely offering thoughts about how to effectively focus the funds. In both business and philanthropy, he leaves much to manager discretion.

Like Buffet, some African philanthropists may not have the time or capacity to create and sustain their own foundations or Corporate Social Responsibility (CSR) initiatives. For them, partnering and collaborating with credible local organizations who have a shared vision and strategy, is often considered the most effective way of giving. “Strategic philanthropy is essentially a bet on the value of rational decision making”.

Choosing to give strategically, without a formal foundation or team, requires that the philanthropist establish a clear area of focus – in terms of sector of interest (e.g. health, education, the arts, science & technology etc.), intervention area (e.g. by geographic area (e.g. your hometown, the city where you live, your country etc.) or demographic focus  (e.g. children, youth, women, the elderly etc.). Focus areas can evolve and change, based on the philanthropists’ experiences and passions. However, through the giving journey, the philanthropist must commit to constant learning, monitoring, evaluating and, when necessary, adjusting and reconfiguring his/her intervention.

Once a focus area has been determined, the philanthropist must sift through the numerous requests the he or she receives and actively:

• Engage in the focus area: identifying credible causes that would benefit immensely from support. He/she must resist the pressure to react to unsolicited requests and instead, actively engage a few credible individuals in the focus ecosystem to request for referrals to potentially high-impact intervention opportunities.
• Select doggedly: choose intentionally among the many options and exclude non-qualifying organizations.
• Be criteria-driven: selections should be made based on acknowledged, pre-determined criteria that are rational, and pragmatic. This form of giving is not impulsive nor emotional.
• Focus narrowly: it is important to centre your giving on a limited and specific number of causes that have common characteristics and excludes other types. The focusing principle can include aspects such as geography, need, charitable sector, or organizational style. Focusing your efforts and financial contribution on a limited number of causes makes the goal easier to achieve by providing larger donations to fewer organizations.
• Pursue impact: strategic giving, both with and without a foundation, seeks impact within the area of focus. From the outset and throughout the program, there should be a clear focus on meaningful outcomes and metrics. After all, the purpose of strategic giving is to create sustainable, positive impact.