The role of grant-making foundations in South Africa

The D G Murray Trust, and a number of DGMT funded projects, had the priviledge to be involved in the Towards Carnegie 3 conference held in Cape Town last month. The conference entitled ‘Strategies to Overcome Poverty and Inequality’ was styled as the Third Carnegie Conference (following on from that organised in 1932 and 1984), and aimed to bring attention to the causes and dimensions of persistent inequality in South Africa, and consider policies and actions aimed at significantly reducing inequality and poverty in both the short- and long-term.

Three papers were presented at the conference that emanated from DGMT: the state of early childhood development in South Africa, the use of mobile information technology to connect young people to opportunity and the role of foundations in transformation.  David Harrison, CEO of the D G Murray Trust, shares his paper on the role of grant-making foundations below.

Tackling the hard ‘soft’ aspects of transformation: The role of grant-making foundations in South Africa

David Harrison,Chief Executive Officer, DG Murray Trust

The promise of democracy

There was a palpable air of excitement among foreign donors in 1994. Democracy had come, and with it, the promise of a better life for all – because that, after all, is what democracy does: it improves people’s lives.  At least, that was the wisdom of the time. We now know that it doesn’t always, but more about that later. Across the world, bilateral aid was being used to promote the advent of democracy and then, once it had arrived, to support its entrenchment, largely through budget line support to institutions of government. South Africa was no different: donor funding was quickly shifted away from the community-rooted organisations which had mobilised around health, education and social development to support government departments.

Community-based organisations protested that the precipitous loss of funds gutted the very structures of civil society that could build an active citizenry needed to sustain democracy.

Government argued that it was now the legitimate representative of the people and needed additional foreign funds for transformation. In the main, the government view held sway.

If we had then the hindsight of experience from other so-called ‘third-wave’ democratic transitions – in Eastern Europe and sub-Saharan Africa – perhaps civil society in South Africa could have made a stronger case for continued support from foreign donors.  For democracy, it now seems, doesn’t always redress the disequilibrium that brought it about. For instance, Acemoglu and Robinson point to wealth inequality and capital mobility as the long-run determinants of democracy (Acemoglu and Robinson 2006).  In theory, democratic government could reduce wealth inequality and exploit capital mobility for human development.  Theoretically too, more unequal societies such as South Africa could derive even greater benefit because the median voter would press for the redistribution of public goods such as basic services, education and health. There is some evidence that democracy improves social outcomes: World Bank researchers have found that, regardless of per capita GDP, democracies are better at promoting literacy, longevity and the redistribution of health care resources (Vollmer & Ziegler 2009).  But in many third-wave democracies, the gains have not been as impressive.  In fact, the democratic transition has often worsened income inequality and corruption (Chang 2007), and returns on investments in public education and social security are generally lower than in more egalitarian states (Jacoby 2008).

Observers have pinpointed three related reasons for the failure of democracy to reduce inequality, and its tepid effect on social outcomes in third-wave democracies, namely: the lack of sufficient mechanisms of public accountability (Chang 2007); the focus on financial empowerment of a sliver of society (Jacoby 2008); and the lack of ‘generalised trust’ in plural societies (Uslaner 2008). A lack of trust leads to dominant self-interest groups and associated patronage. In such contexts, people’s beliefs about the legitimacy of rules and institutions gradually change and corruption becomes more palatable to society. Corruption, in turn, perpetuates inequality – a vicious cycle that undermines the efficacy of social contracts (You & Khagram 2005).  Policy analysts sometimes refer to these inefficiencies as ‘sticky’ implementation.

The stickiness of policy implementation

The stickiness of policies is typically explained by the weakness of State institutions and distorted incentives that cause officials to put self-interest ahead of the public good.  It follows, then, that the role of civil society should be one of moral watchdog and accountability monitor.    Framed in these terms, one can even go further and envisage non-government organisations (NGOs) as agents of State service delivery if it is believed that they could do a better job of delivering specific services. But civil society has an even wider role to play – particularly in polarised societies such as South Africa – for we cannot ignore the cultural factors that also contribute to ‘sticky policy implementation’.  Here, I’m not talking about specific ethnic practices, but a society that is hugely tolerant of destructive risk – manifested in the high prevalence of HIV and traffic accidents, educational drop-out, alcohol and drug abuse, domestic violence and crime.  You could refer to it as a pervasive culture of risk tolerance, which isn’t always visible on the national skyline.  It’s the soft underbelly of our nation that’s turning out to be the hardest aspect to change.

“Culture”, said the anthropologist Mary Douglas, “is a dynamically interactive and developing socio-psychic system…” (Douglas 2004) – interacting not least with the economic circumstances in which people find themselves. She, together with Aaron Wildavsky, developed the so-called ‘Cultural Theory of Risk’ which proposed two major determinants of risk tolerance, namely the degree to which people perceive that they have choices and the level of social solidarity (Douglas & Wildavsky 1983). They concluded that those societies with a high degree of choice and solidarity tend to be more egalitarian and avoid destructive risk, while fatalistic societies are characterised by limited choice and social polarisation. As people perceive more personal choice, they learn to trust their own judgments and make decisions based on a growing sense of self-efficacy, whereas strong social solidarity triggers a belief in the power of institutions – structural change – to protect individual and group interests (Tansey and O’Riordan 1999).

Cultural Theory is helpful in that it bridges neoliberal and progressive worldviews and points to the possibility of effective intervention in tackling the hard ‘soft’ aspects of transformation: The structure of society shapes both collective and individual behaviour; conversely, the culture of society affects the outcomes of structural changes. What, you may ask, are these potential points of intervention?  To answer this question, I need to introduce the work of Paul Slovic and Elke Weber. They have studied people’s attitudes to risk in a number of hazardous situations (Slovic & Weber 2002).  They’ve looked at the way that people perceive risks to their personal health and the environment, to financial security, the risk of technological failure and the threat of terrorism – and reach remarkably similar conclusions. They consistently find that, under conditions of risk, people make subliminal choices that they perceive to be the least risky.  People don’t look at risks in isolation, but in relation to the other risks they are experiencing in their lives. In other words, we take risks because – all things considered, at least subconsciously – we think the risk is worth taking.

The prospect of real and imminent possibility in life

The evidence presented by Slovic and Weber suggests that, if we could change perceptions of choice and build greater social solidarity, perceptions of risk could be recalibrated.  We could potentially modify response to life circumstance by changing the extent to which discouraged individuals discount the benefits of future health and well-being.  In this regard, what seems to be important is whether people feel that tomorrow can be just a bit better than today, rather than a general sense of bonhomie about life’s future prospects (Lowenstein and Prelec 1992)

In other words, a pivotal strategy is to build a sense of real and imminent possibility in life.  The anthropologistArjun Appadurai (2004) refers to this as the capacity to aspire – although in South Africa this term has been tainted by its association with a ‘culture of bling’.Soperhaps we should stick totheidea of building asense of real and imminent possibility in life – which refers not only to economic possibility, but also reflects perceptions of status in society and the ability to reposition oneself in a better light (Bourdieu 1986).

If this analysis is right, then the answer to South Africa’s persistent challenges is not merely skills development and the creation of opportunities; nor is it just getting the institutions of State to work better. The social and economic gradients are so great that any expansion of opportunity without corresponding increases in social solidarity will mainly result in those at the top of the pile capturing new benefits as private gains.  That society – where anyone, but not very many, can be a winner – will probably do little to change the underlying dynamics of crime, corruption, HIV infection and domestic abuse.  What is needed is a deliberative and systematic process to address the fractured psyche of South Africa.

Since 1994, gains have been made in improving access to basic infrastructure and services, land restitution and empowerment of an emerging middle class and financial elite. The harder parts of transformation – which have changed less – are the ‘soft’ factors: – the fragile social fabric, domestic fluidity and a persistent sense of social isolation.

While the dominant State has expedited infrastructure development and financial empowerment, it has been less successful in tackling these softer factors. This is not surprising, given that the social cluster of government departments are geared towards service delivery and are not primed to address the complex psycho-social realities of post-apartheid South Africa.  In more established democracies, organs of civil society tend to complement the work of the State and, to some extent, have done so in South Africa – just at insufficient scale and influence.  But the problem is not simply one of a domineering State, but a civil society that has failed to grasp the mettle.  Many non-government organisations have been sucked into the State service delivery machinery, which has ensured their sustainability but has often reduced their sensitivity and responsiveness to the psychosocial aspects of community development. Other initiatives have sought to tackle issues of social cohesion head-on, but have often become self-limiting because of the narrow prisms through which they view these issues.  A case in point is the Moral Regeneration Campaign, which has – with good reason – sought to approach the problem through the lens of social values.  Young people, however, were quickly turned off by the framing of the problem in this way – as if the answer were to revert to the customs of the ‘good old days’; as if their parents had values and they didn’t.  There is a role for initiatives that focus on normative change and, certainly, faith-based organisations help people to ‘pre-commit’ to positive behaviour (Prochaska &  DiClemente 1983).  However, these initiatives often fail to address the fundamental incentives that drive both individual behaviour and societal culture, which we have described above.

Where there is no sense of real and imminent possibility, people get stuck in the mud and cling to the vague hope of being airlifted out of it.  When others do get plucked out, it breeds a sense of victimhood, resentment and entitlement among those left behind.  On the other hand, where there is a strong sense of possibility, people become more entrepreneurial, find solid footholds even in the mire and are often able to navigate to better positions.  Such an environment leads to public innovation (Krishna 2002).

The role of foundations in public innovation

Public innovation is the explicit goal of most grant-makers. But, depending on outlook, the problem and solution will be framed differently by different donors. Some will place value on individual achievement – people who ‘pull themselves up by the bootstraps’ – while recognising the need for charity towards those who don’t make it. Others tend to think mainly in terms of facts and figures and the need to bring programs to demographic groups at risk. Typically, they will focus on single issues – educational reform, social security, sexual violence – that need to be addressed and often miss the overarching cultural and political factors that connect them (Lakoff 2009).  Yet, as we have shown, it is these factors that create the ‘sticky problems’ for public policy that limit the success of implementation.

Progressive foundations value individual and group achievement and support programs that address social priorities. But they go further than that. They inculcate a culture of empathy, responsibility, protection and empowerment – aimed at developing ‘equality of agency’.  They recognise that capacity development needs to go beyond ensuring equality of opportunity – even in contexts like South Africa where legal discrimination has been removed – because cultural and ideological constraints to achievement still persist (Appadurai 2004).

Here, I must digress to tackle an assumption implicit in my argument – which is that donor funding can be good for development. It’s not an uncontested assumption. Government-to-government funding often comes with political undertones. There is also considerable profiteering associated with development aid: either through large and costly technocracies based in the North which are commissioned, often at huge cost, to provide support to the South (McCoy et al 2009), or the diversion of funds from its intended purpose within recipient countries (Svensson 2000).  At a macro-economic level, development aid has been shown to promote economic growth (McGillivray et al 2005) and may have a weak positive effect on income distribution (Shafiullah 2011) where institutions of Government are strong (Calderòn et al 2006). However, these benefits may pale into insignificance if they exacerbate a culture of corruption or dependency – ultimately increasing the tenacity of social problems.   For government-to-government donors, the only way in which they can protect their investments and ensure that they are used for their intended programme purpose is to demand higher levels of accountability in implementation.

On the other hand, indigenous foundations hold an exciting and privileged position. They generally do not have the resources of foreign foundations operating within their countries, but they have the advantage of knowing the local context well and being able to develop long-term relationships with in-country implementing partners.  They are able to direct resources more specifically and to hold partners to account to a greater degree than most foreign donors can.

They also have the advantage of being relatively independent – able to fund where they see opportunity and not as constrained by the peer pressure of ‘best-practice funding’.  Clearly, there are advantages of funding best-practices which emerge from systematic evaluation, and foundations need to draw on this pool of knowledge.  However, we should always remember that that which has been effectively implemented and properly evaluated represents a relatively small part of the universe of public innovation, and we need to avoid the risk of ‘developmental topiary’ – where promising shoots are trimmed for want of a solid empirical basis.

Most importantly, indigenous foundations can make a significant contribution in tackling the hard ‘soft’ aspects of social transformation – helping to promote a culture of public innovation.

FDrawing on the experience of the DG Murray Trust and its implementing partners, I would like to share with you a few examples of what this could mean in practice.

  • Create a physical environment of protection and responsibility

Between January and March 2008, at least 78 infants died of diarrhoeal disease in the Ukhahlamba district of the Eastern Cape in South Africa. Contributing to the deaths were late referral to health facilities and poor clinical case management, but the cause of infection was contamination of local tap water by E. coli as a result of a breakdown of the local water treatment plant (Lake & Reynolds 2010).  Even further upstream, the water source had been contaminated by faecal pollution. This case illustrates the need for protection and responsibility: the health services needed to be improved; the water treatment plant needed to be maintained; the municipalities should have provided basic sanitation; and the communities should have been defecating far away from water sources.

At the same time, the Eastern Cape province was the recipient of considerable development aid from different foreign Governments aimed at strengthening health systems and building municipal capacity.  I think it is fair to say that the returns on those investments have not been great.  State institutions have remained weak and incentives for corruption abound.  But also, there was a failure of communities to protect their own water sources from contamination. The culture of apathy towards the environment has to be tackled – not through training workshops or externally-driven community liaison meetings, but by active mobilisation of local communities.

The organisation, Sustaining the Wild Coast (SWC), is an example of such mobilisation.  It works with local communities and activists on the Wild Coast to promote sustainable livelihoods that conserve, rehabilitate and protect the natural environment and ecosystem services on which rural people depend. They also lobby to protect the region from development which they view as environmentally destructive, including proposed titanium mining and the N2 Toll Road. It is driven by a group of passionate young leaders who live in the villages concerned.

  • Change power differentials by changing the ‘terms of recognition’ of people

Drawing on his research in Mumbai, Appadurai (2004) argues that change comes about through exercise of the ‘voice’ of the poor. This is no new insight, having been espoused in community development since the late 1970’s. However, experience has shown that, even within poorer communities, the relative elites capture newly introduced resources and benefits for themselves and use them to further client-patron relations with poorer groups (Platteau 2004). If the challenges posed by culturally embedded hierarchies are to be overcome, exercise of the ‘voice of the poor’ has to bring about changes in the way in which they are viewed by others in society – in Appadurai’s language, their ‘terms of recognition’ (Appadurai 2004).

The Black Consciousness Movement founded by Steve Biko and others maintained that such terms of recognition need to start with an understanding of one’s own identity. Without a positive recognition of self, it was impossible to re-negotiate the terms of relationship with others. It is clear that many black South Africans, including those born post-democracy, still feel devalued and unrecognised. Foundations have a crucial role to play in promoting a positive individual and collective identity, shaped by a purposeful commitment to the public good.

Having come to terms with one’s own identity, people are in a position to begin to change power differentials within their society. To quote Benjamin Barber, the process of investing in public-minded citizens – ‘growing their literacy to live in a civil society, their competence to participate in democratic communities, the ability to think critically and act deliberately in a pluralist world, the empathy to accommodate others’ – is the basis for public innovation (Barber 1992).

The DG Murray Trust has initiated a programme called Activate! to promote public innovation by developing the leadership and innovation ability of a cohort of 5,000 young leaders aged 20-30 years of age over the next five years. They are drawn predominantly from marginalized communities, connected to one another and to points of influence and opportunity across social and economic divides. They are selected on the basis of their proven commitment to the public good, and their abilities will be developed and directed to some of the toughest social problems faced by their communities.  Activate! started with 200 participants at the beginning of the year, and already their potential as public innovators has advanced considerably.

  • Nurture the development of human potential from pre-conception to adulthood

There is now little disagreement that life-long trajectories of health, learning and behaviour are all established during the first years of life (Harvard University 2011), and then need to be sustained into young adulthood. Where these trajectories are curtailed or interrupted, long-term human potential is damaged.

One of the challenges for Government is the ability to provide seamless services from pre-conception to adulthood.  With exception of basic utilities, services are often stratified by age or selected target group and provided by different government agencies.  Inevitably people fall between the cracks.  Only half of 3-4 year olds attend any form of out-of-home facility that could provide early childhood education (Branson and Lamb 2009); only half of Grade 1’s complete Grade 12 (Cloete 2009); only half of school leavers will find a job by the age of 24 (Altman & Marock 2008); and so the attrition of human potential goes on.

Although foundations are too small to fund large-scale national programmes from birth to adulthood, they can play a critical role in identifying and responding where the platforms of State support suddenly give way.  In this regard, a giant national pothole is the point at which infants leave the health care system – soon after birth – and are only formally assimilated into a State system of education at age five.  From a nutritional, educational and health point of view, our children under five years of age are neglected – with no systematic programmes (other than immunisation) to ensure their sustained development.   Together with two other funders – the ELMA and UBS Optimus Foundations – the DG Murray Trust is working with Government to find ways to provide wall-to-coverage of early childhood development services in specific geographical areas.

Of course, the gains of successful intervention among preschool children are easily eroded if they then move into a dysfunctional school system, and it is often difficult for foundations to see how they can influence the behemoth of formal education.  Perhaps there are external levers of change that can be used – supporting trade unions when they get serious about teacher development comes to mind; as does a focus on strengthening the ability to learn creatively as much as we focus on ‘teaching, textbooks and time in the classroom’.  Ultimately though, the people who are best positioned to protect their children’s interests are communities themselves, and we need to stimulate a demand for effective education.  A good example of this is the Botrivier Education Foundation, which has set itself the goal of increasing the number of professionals in that community.  But it realises that, to achieve this goal, it needs to start with young children, protect and develop them through school, and nurture special talent and ability.

We need a similar education foundation in every community!

  • Create connections to opportunity

Points of transition in the lives of young South Africans are times of greatest vulnerability, and school-leaving is a particularly dangerous time, especially for young people who do not have many connections to opportunity.  The challenge is not only in creating opportunity; it’s in linking young people to them. Connections matter, yet the costs of transport and the limitations of their social networks often mean that young people are isolated from possibilities that could change their lives. If those possibilities are to become real and imminent, we need to break down the virtual firewalls that separate young people from opportunity.  A technology that holds great promise in South Africa – if the costs of telecommunication could be reduced – is the use of cell phones.

The DG Murray Trust has funded the development of a mobile information hub young people aimed at providing timely, relevant and locality-specific information about further education, finances and work.  Its implementing partner, CareerPlanet, has recently launched this service. It success depends on two main success factors, namely the willingness of opportunity providers to use the service and low cost of telecommunication.  Experience from countries like India and Palestine suggests that the first condition for success can be secured.  For instance, in India, Babajob makes up to 8,000 connections between employers and job seekers every working day (see  It makes use of low-end cell phone technology called USSD (unstructured supplementary service data), which costs cell phone operators next to nothing to provide.  In fact, the costs are so low that USSD is free to the user.  In South Africa however, Vodacom and MTN charge USSD users a higher rate of connection than they charge smartphone users!  Free USSD would create many opportunities to link young people to opportunity.

  • Spark public innovation

A small change like free USSD has great potential for public innovation.  Even as South Africa seeks to strengthen its institutions of education and training, we should not lose sight of the early gains that could be achieved if we could galvanise business, civil society and government to overcome the obvious blockages that are relatively easy to sort out – and make best use of the new technological opportunities.

But not all future public innovation depends on new technology.  To date, much of the post-apartheid focus has been on the supply-side of social transformation, and there are undoubtedly untapped opportunities in demand-side strategies that need be tested.  For example, interventions such as the conditional cash transfer system implemented by Oportunidades in Mexico, and similar programmes in Brazil, have been used to promote school attendance – with some success – especially in poorer communities (Parker et al 2006).

Foundations can play a pivotal role in testing the effect of demand-side interventions.

Like most donors, however, foundations are flattered by the notion that they are at the cutting edge of social transformation, and could end up doing more harm than good. For example, imposing specific conditions on general cash transfers such as the child support grant could further disadvantage the poorest and most at risk (Lund et al 2008).  Similarly, while ‘mission-driven’ investments in social enterprise are all the rage in international foundation circles, these investments don’t necessarily address the structural factors that keep people out of the market (Giridharadas 2011). Social enterprise investments hold promise, but need to designed in concert with the strategies described above if they are not become an extension of the prevailing unequal economic system.

The State and civil society, working together to create a sense of real and imminent possibility

In conclusion, I would like to focus on the relationship between civil society and the State in addressing the hard ‘soft’ aspects of transformation.

I trust that I have not created the impression that the State has an insignificant role in issues of culture and risk tolerance.  On the contrary: political leadership is vital in shaping public discourse and guiding the way in which communities address issues like persistent social polarisation.  But I think that way in which issues of social transformation have been framed have sometimes been counter-productive. Those related to public accountability and freedom-of-expression dominate public discussion, but there are other vital issues that require equal attention.

For instance, we talk about economic empowerment far more than we do about public innovation, yet these are two sides of the same coin of social change. We appeal to a general sense of public goodwill in building social cohesion, but neglect the active and systematic development of a new leadership, especially from the most fragmented communities. We emphasise the importance of social values, but don’t do enough to change the perverse incentives that shape individual and group behaviour.

Many of the strategies described above are ‘nexus interventions’ that straddle the responsibilities of different government departments.  Yet they often need State support to achieve the necessary scale and influence.  But this will require a new mindset in recognising a role for non-government organisations that goes beyond that of moral watchdog, agent of service delivery, or even a general ‘glue’ that holds many communities together.  If we agree that a critical role is to help build a sense of real and imminent possibility in life, there are concrete and specific strategies to achieve this by building social solidarity, expanding choice and enabling people to navigate a lattice of connections to opportunity.

There is, I think, a growing willingness of the State with work with civil society – a growing recognition, expressed so clearly in the work of the National Planning Commission, that the State cannot do it alone.  But there is not yet a clear framework of how State and civil society can work together, especially in developing substantial common responses to many of the soft issues of transformation.  Such a framework would be a good place to start.

But we also know that many good ideas in post-democracy South Africa have got stuck on the drawing board. We need to establish real mechanisms for working together to drive public innovation.  One such mechanism could be a Fund for Public Innovation – just as the State seeks to support innovation in the private sector.  It would be a way in which the State could seek private funds to test some of its ideas to improve service delivery, and conversely, private funds could leverage public funds where ideas converge.  At present, it is extremely difficult for the State and foundations to pool funds, even if their programme aims are identical.

Such a mechanism for collaboration doesn’t replace the monitoring and advocacy role of civil society, but it could mitigate a real risk in South Africa at the moment, namely an increasingly adversarial relationship between State and non-government organisations.  Most importantly, it could provide a vehicle for the ‘nexus interventions’ that are now so needed for social transformation. 


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