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Rising state of poverty and the Nigerian attitude to giving (2)

By Afe Babalola

LAST week I discussed the rising state of poverty and how the poor attitude of Nigerians to giving continues to contribute to it. I stated how government alone cannot reasonably be expected, particularly in the light of the world’s current economic realities, to improve the quality of life of everyone to the level which most people expect and how wealthy individuals can aide government in the provision of amenities of life to the less privileged.

Modern day philanthropists

It is in recognition of this that philanthropy as a concept has been utilized by many, individuals and corporate institutions in other parts of the world to help in wealth distribution or re-distribution as the case may be. These persons have made it a duty to distribute their wealth to various causes in their lifetimes.


As Andrew Carnegie put it, “the man who dies rich dies disgraced” To achieve this they have either set up foundations to carry out their objectives or chosen to be directly involved themselves in charity work.  At present the most notable of these individuals are;

(1) Pierre & Pam Omidyar

Pierre Omidyar applies a venture-capital approach to recipients ranging from microloans to Wikipedia. The Omidyar Network operates more like a venture-capital outfit, investing in business and nonprofits that aim for social change.

Huge multiplier effects

The network and other efforts have huge multiplier effects: A $100million fund the couple established at Tufts University is set to produce $1billion microloans in developing countries while also turning a profit for Tufts, Pierre’s alma mater.

(2) Chris and Jamie Cooper-Hohn

As the manager of one of Britain’s largest activist hedge funds, Chris Cooper-Hahn has earned the label “ruthless”. The children of India and Sub-Saharan African may not know it but Chris sends a good chunk of the fund’s profits and fees to a foundation run by his wife Jamie, swelling it to $2.5billion in assets. The foundation then uses leverage of another kind, aiming, for instance, to save kids by saving their mothers.

(3) Eli & Edythe Broad

For Eli Broad to pursue a philanthropic cause, it has to survive one test: “Is it something that no one else is doing?” The Broads find plenty of ideas – from starting the Broad Art Foundation, a lending library to thousands of galleries and museums, to training superintendents to run more efficient schools. They also fund young doctors’ medical research that isn’t yet for grants from the National Institutes of Health. All those projects add up; the Broads have given away more than $400million since 1999.

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(4) Thomas Siebel

Thomas Siebel launched a program to eradicate meth abuse in the heartland. Tech billionaire Siebel zeroed in on methamphetamine after a friend in Montana, who happens to be a sheriff, showed him how the homemade drug was devastating rural America. Siebel, 57 years old, bankrolled a massive ad campaign in Montana –2,000 billboards across the state, 61,000 TV spots-to warn teens. Result: Montana dropped from its No. 5 ranking in the country for meth abuse to No. 39.

(5) Donna & Philip Berber

After Philip Berber sold his only trading firm, CyBerCorp, to Charles Schwab in 2000 for  $100million, he and his wife Donna focused their philanthropic firepower on just one country: Ethiopia. So far, they have financed 3,600 water wells, 400 schools and 6,500 microloans, reaching an estimated two million Ethiopians. “We’ll spend our lifetime going deep. The longer we spend in the country, the more effective we can be”.

(6) Richard Branson

After launching his own airline to challenge the giants, the British magnate is taking on some of the world’s most intractable social and environmental problems. His Carbon War Room, for instance, rewards individuals and scientists for coming up with new ways to control global warming. The entrepreneurial approach is vintage Branson, who in 2006 pledged all his profits from transportation businesses over the next 10 years – perhaps $3billion – to developing green energy.

(7) John Wood

John Wood inspired by an understocked Nepalese library, now works to get books to poor children. Wood’s mission – get books into the hands of as many kids as possible – “started as a hobby that turned into a passion that became an obsession fairly quickly” he says.

Stocking entire libraries

The former Microsoft executive moved from donating books to Nepalese schools to building and stocking entire libraries in nine countries, from Zambia to Laos. By now his programmes have reached more than three million children; he distributes a new book every three minutes.

(8) Arpard Busson

“Arki” Busson, a London-based financier, runs his philanthropic group just like a hedge fund, promising “absolute return” for donors. To that end, he takes a cue from one-time boss Paul Tudor Jones II and makes sure patrons cover all costs, so 100% of donations go to kids. He demands measurable results and gets them: The group has freed 1,700 kids in Eastern Europe from institutionalized care, and ensured that 50,000 children of AIDS patients in South Africa can attend school.

(9) Bill & Hilliary Clinton

Clinton amplifies his voice through partnerships; the Clinton Global Initiative challenges governments, business, academics and other leaders to develop innovative solutions to lingering problems. That’s brought about access to schooling for 10 million children, safe drinking water for 12million, and a reduction of 40million metric tons of carbon-dioxide emissions. Without a doubt, the activities of these persons have improved the lives of those who had the opportunity or privilege to benefit from their donations.

What should be the direction of philanthropy?

What has, however, been the subject of some debate is how and whether these acts of philanthropy have any real effect on the overall economic development of mankind and whether such development is in any event sustainable. Central to this is the issue whether philanthropists should just be concerned and content with the donation of money or items which improve the immediate lives of their recipients or whether all that philanthropic work would not have better effect if directed at charity work which on the long run would bring about widespread economic benefit to a generality of people.

Economic benefit

In this scenario it is arguable for example that a philanthropist rather than donate some specific items to one individual should direct the resources meant for those items to the provision of a means of self employment for the proposed recipient of the items.

If this is done, more persons who on the long run may be employed by the recipient as his business grows would have indirectly benefitted from a single act of philanthropy. It would have had a multiplier effect. The recipient himself would have shed the toga of dependency.

In one study on Philanthropy in Egypt, it was found out that the majority of Egyptians give to charitable causes with a minimum percentage (0.6%) to activities that would lead to human development as helping people to start projects and depend on themselves.

Although philanthropy is high, and there is a promising giving culture in Egypt, the challenge remains how to mobilize these resources to achieve development, and help save local resources from being lost in endless circles of charity that on the long run create dependency and do not achieve development.

Next week I will focus on how philanthropy can be utilised as a tool for economic development in Nigeria.   To be continued…

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