African HNWIs are planning to increase their financial donations over the next year with the majority of them preferring to make a contribution within the continent, a new study from UBS and TrustAfrica has revealed.
The report, "Africa’s Wealthy Give Back", is based on interviews and survey responses of almost 100 wealthy Africans and experts from the regions of Southern, Western and Eastern Africa, with a particular focus on Kenya, Nigeria, and South Africa.
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Over half of the respondents said the involvement of family members in philanthropic activities is increasing, with education (22%) and health (11%) being among the most supported causes.
Additionally, nearly half of the respondents (45%) said they would prefer to donate beyond their region, but within the African continent. More specifically, 32% are willing to give back within their region, 9% beyond the country but within Africa, while 14% would donate in the rest of the world.
Overall, 43% respondents said they would also increase infrastructural support for the development of the philanthropic sector. Over half of the African wealthy make their decisions about who or what they want to donate to on an informal basis, which largely means donating directly to the organisations or people they want to support.
Silvia Bastante de Unverhau, head of UBS Philanthropy Advisory, said: "We realised that much research has been done about foreign aid in Africa, but since the explosion of wealth in some African countries we were beginning to see more philanthropic activity being driven by Africans. We felt that we needed to better understand not only giving practices, their scale and scope but also to evaluate the potential of private philanthropy as a means of supporting systemic social change."
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By GlobalDataThe number of wealthy individuals in Africa in 2013 was estimated at 140,800, a growth of 3.7% year or year. Africa’s projected growth is estimated to be between 5% and 6% in 2015, according to the World Wealth Report 2014.
Among the African wealthy surveyed, 69% said being philanthropists is part of their identity, family tradition and legacy. Only 9% of the wealthy individuals surveyed viewed the importance of giving back as an ‘obligation’.
According to the UBS and TrustAfrica report, a total of $825 million in self-reported donations from Africa were noted, though this falls far short of the estimated potential of the continent’s wealthy individuals that is between $2.8m and $7 billion, the study revealed.
The findings also revealed that the scale of monetary giving is often significantly inconsistent and does not always involve large amounts. In the previous 12 months, almost a quarter of respondents gave less than $7,000, while another quarter gave between $500,000 and $3.1m, said the report.
While monetary donations scored the highest, the report showed that most wealthy Africans also gave time, skills and experience as well as donations in-kind to help the causes they support. According to the study, 58% of respondents said they gave time, skills and experience, while 25% said they did volunteer work, and 39% served on the board of a foundation, charity or NGO.
More than half of the respondents indicated that it is either likely or extremely likely that they will consider investments with a social impact, highlighting the potential of increasing links between philanthropy and business.
