By Rakesh Rajani, President at JustSystems, previously Vice President of Programs at Co-Impact and director of Governance at the Ford Foundation
Impact through philanthropy
On a whim, a philanthropist walks into a fortune teller’s booth. “I have just retired after a long, successful career and decided to give away most of my wealth to charity. Tell me what legacy will I leave behind?”
The fortune teller gazes into her crystal ball, and after a long pause, replies, “Well, you are at a crossroads. The first path has your foundation developing a clear, detailed strategy that results in many elegant, well-run projects. Your staff make sure that all the steps are well managed and ensure people get top-class services. Monthly reports in your color-coded dashboard tell you how well your projects are going and how every rand is spent. The work wraps up 7 years after you die, though a few buildings still carry your name. A total of 50,000 people, almost 0.1% of South Africa’s population, have benefited from it.”
“The second path is a messier one”, continues the fortune teller, “your foundation does not have a big strategy; it spends its time listening to people in communities and in government, trying to understand their constraints and ideas, and asks how it can be useful. It provides grants for things that others do not do, like leadership mentoring, to try things out and take risks, and help bring unlikely allies together to achieve shared goals. This work does not have your name on it; in fact, most people have no idea of your contribution. About half the efforts fail to achieve their goals. But the rest, after some wobbles, fits and starts, succeeds in helping government put billions in its budget to much better use, as well as strengthen how people engage with the state. Seven years after you die, your contributions continue to benefit 20 million or 33% of South Africans, and these innovations are being used in 18 other countries to help countless others.”
A wry smile spreads over the philanthropist’s face. “That’s a no-brainer”, he says, “In my businesses, I have always leveraged resources to generate maximum impact. Of course, I will take the second path”.
“I’m not so sure, sir,” replies the fortune teller, “the future looks hazy in my crystal ball. Most of your peers have chosen the first path, and if you stick to your comfort zone, you will too.”
Which path are you on?
In my 25 years as a civil society leader and 10 years as a funder, I get why philanthropic funders like to fund well defined, self-contained projects. They are investing in an area outside their business expertise and are anxious that their money is being spent well and shows results. They would rather avoid politics, government bureaucracy and other unpredictable areas. It is hard to trust what you do not know and cannot control.
Comfort zones and impact do not go together
This is understandable. But what if the price of staying within your comfort zone means less impact?
While the world is riddled with problems, unprecedented progress has been made in the past 50 years. Billions of people today are better educated, can access decent healthcare, earn higher incomes and live measurably longer lives spurred by advances in technological innovation, governance, and expanding human rights, including racial and gender equality. But none of these good things would have happened at scale – in China, India, Vietnam, Brazil or across the African continent – without government making public systems work better for people.
Government matters because it is the only institution that has the democratic and legal mandate, human and physical infrastructure, and reach to work at the scale of the need. Even where market systems spur development, governments need to create the rule of law, legal protections, and enabling regulations. And while government budgets are rarely sufficient, they are vastly larger than all of philanthropy put together. According to IPASA, in 2022/23 high-net-worth individuals and corporate social spending in South Africa was less than 1% of the government budget. See Figure 1 below.
Unlocking and leveraging government resources
Imagine if some of the philanthropic money was used to derive better value from what government is already doing, and from the huge amount government is already spending. Even a 10% shift in public spending would likely add up to a bigger difference than all philanthropic projects on the side. And if the shift was systemic and designed to strengthen government ownership, it would also more likely last over time.
It is true that government can be difficult to work with. People in government have to deal with a myriad of rules and constraints. Their working cultures can be bewilderingly slow, bureaucratic, and unfocused on outcomes. Public systems can often reproduce societal blind spots about gender and other axes of discrimination. It is therefore easy to see why many philanthropic organisations are not inclined to work with Government.
But choosing to avoid government is taking the fortune teller’s first path – clean and more certain, but with less impact. And we do know what it takes to help government do a better job.
A challenge to think and do things differently
Drawing from a JustSystems review of 53 systems change initiatives and consultations with 130 leaders, we identify five principles:
- Government is human. Ask yourself, when was the last time you showed up at a government office with genuine curiosity and empathy? We like to think of government as an imposing building or opaque machine. But government is made up of people, like you and me. And while not everyone is great, every department is likely to have people who care, seek to make a difference, are frustrated and wish they had support to do a better job. So, start with curiosity and genuine empathy. Listen to understand their constraints, ideas, and motivations.
- Instead of your agenda, start with theirs. As one senior Indian government official told us, his day is spent dealing with a hundred “salesmen” trying to pitch their issue, evidence, project, idea. Many of these ideas may be worthwhile, but that’s not helpful when government faces huge challenges and is struggling to implement what is already on their plate. So instead of pitching the 101st idea, start by understanding what is already there, and what would be helpful to prioritize and strengthen state effectiveness. A more capable state will deliver better results for people, including on your issue.
- Learn how to navigate power. There are laws, policies and procedures – and they are all important. And then there is how things really work – the political economy of a system – where all kinds of other considerations are at play, such as who is related to or friends with whom, who cares about what, how crises create windows of opportunity, what makes a bureaucracy tick at the top and on the frontlines, and how would one build a coalition across difference that is powerful enough to win and make the change last over time. None of this is a blueprint; it is tacit, informal and evolving knowledge that comes from experience and connection.
- Reimagine accountability as relational not control. When people’s lives and wellbeing are at stake, and when huge sums of money are involved, accountability matters. But the way we exercise accountability – as anxious oversight, as ‘we will watch you because we do not trust you,’ as strict compliance to multiple requirements, and as short-term commitment to solving deep, intractable, long-term challenges – does not work because it sabotages the conditions needed for success. Instead, we could try an approach that says, ‘we know that the constraints are real, and the work is hard, but are in this together and will support you over the long term and be co-responsible for achieving results.’
- Build trust. Trust is the currency for change. More than data, evidence, credentials, great plans, or money. When government leaders can trust you, they can be more open, candid, and vulnerable. They are more likely to divulge the multiple considerations and trade-offs they need to manage, treat you as a thought partner, and be willing to take risks. More than formal agreements, trusted relationships can provide the stamina and motivation to hang in there through the long slog of implementation. This does not mean you need to agree on everything; rather it is a commitment to work across difference because what you have in common matters, and you both recognize you can achieve more together than apart.
Navigating the relationship with government
The idea is not that all philanthropic spending should follow these five principles. Constituency organising and movements can help set and drive crucial agendas. When government is illegitimate or incalcitrant, principled activism is often necessary to shake the status quo. Vibrant democracies make room for and celebrate critique, dissent and protest. My point is to make the case for a better balance in the philanthropic portfolio, recognizing that government is by far the most important actor in enabling people to thrive, and that people in government could do a better job with mutually respectful, trusted support.
In some cases, philanthropic actors with a history, rootedness and connections in South Africa may develop trusted relationships with government themselves. In many others it will be the partners they support. Providing partners with long-term, flexible funding to engage their governments in making public systems work for people, may be the best legacy philanthropy can leave behind.