Big Ticket Philanthropy in Emerging Markets
The rapid economic transformation of the developing world has spawned significant wealth creation and the emergence of a vibrant local philanthropy sector. Voices on Society interviewed three creative philanthropists who are applying their ingenuity and capital to make a difference in the fast-changing societies of Sub-Saharan Africa, India and greater China.
Jumpstarting African businesses
Voices: Why have you chosen to give a portion of your wealth to charity?
Tony O. Elumelu: Philanthropy is a core component of my philosophy of “Africapitalism,” which says that Africans should take primary responsibility for our own development. I firmly believe that Africa’s wealthy have a vital role to play in this process. As a philanthropist, I focus on tackling underlying problems by investing in domestic industry and supporting the development of the next generation of African entrepreneurs. “Charity” as conventionally defined is not the best solution for our continent. Instead, we should focus on building the capacity of the private sector to create economic and social wealth by fostering a more enabling business environment.
Voices: What issues do you focus on as a philanthropist, and why?
Tony O. Elumelu: The Tony Elumelu Foundation is focused on driving Africa’s economic development by supporting entrepreneurship and enhancing the competitiveness of the African private sector. It’s a narrow focus, but we strongly believe that creating more entrepreneurs and ensuring that the private sector thrives are objectives that will stimulate an economy and create jobs and opportunities, thereby empowering individuals and communities. We mentor entrepreneurs, we provide access to finance through various funds and grants, and we drive policy change through the competiveness council that we were instrumental in setting up this year. We also help African government leaders develop the capacity to make decisions that will affect the private sector positively. We believe that fostering entrepreneurship and a more competitive operating environment for business will bring more people out of poverty than any other solution.
Voices: What impact has your philanthropy had to date and what do you expect to achieve in the future?
Tony O. Elumelu: If we support an entrepreneur today to ensure his business thrives tomorrow, then we have made a significant impact on that person’s life. If we do that enough times to enough entrepreneurs, we may not change the world, but we will start to change the way the world looks at Africa. In my own career, a $5 million investment in a small, dying bank spawned a pan-African financial institution that has created 25,000 jobs and generated wealth in communities all across Africa. UBA also expanded finance for trade, created stronger financial infrastructure for investment and economic growth, paid taxes to national and local governments to support public services, and gave millions of customers control over their financial lives. Imagine if we created 1,000 homegrown, pan-African companies like UBA in Africa. Now, that is impact! That is what drives me and that is why we started the foundation.
Voices: What is the biggest mistake you have made in your career as a philanthropist, and what did it teach you?
Tony O. Elumelu: My biggest mistake is not so much a mistake; it’s more of a regret. I regret that I didn’t start down the path of strategic philanthropy earlier and that more Africans have not taken up the challenge of supporting the development of our continent in a sustainable way. Organized philanthropy by Africans in Africa is still in its infancy. Through the foundation, we are working hard to ensure that we set a high standard for those that will follow. Our foundation is still new, we are still learning, and part of the role of philanthropy is to take risks where the private sector cannot. So, I would never say that we have made mistakes—it’s all part of the learning process. That said, perhaps my biggest learning as a philanthropist is that giving away money in a way that creates sustainable long-term solutions that impact lives is much harder than I thought.
Voices: What advice do you have for someone starting out in philanthropy?
Tony O. Elumelu: First, as a philanthropist you should focus on issues that you are very passionate about. That’s how you sustain the long-term interest and deep commitment required for impact. My passion is entrepreneurship and I set up my foundation with that in mind. For others it may be health care or education. Second, I firmly believe that we should be strategic and catalytic in our philanthropy. It is not and should not be about simply providing funding, as that is only one of many possible tools for impact. I would encourage entrepreneurs to give their time and experience, and use their influence, to create impact. I would also like to encourage more of Africa’s high-net-worth individuals to give in an institutional manner. Homegrown African philanthropy should be setting the agenda for Africa’s development.