The establishment of a new philanthropic foundation by Jannie Mouton, Founder and Non-Executive Chairman of the PSG Group, is a major contribution towards the philanthropy sector and should ensure an annual spend to worthy causes of about R80-million a year at current rates. When asked why he was establishing this foundation, he pointed out that South Africa had been good to him and his family and he wanted to give back.

Besides his role in PSG, Jannie Mouton (aged 70) has also been involved in Capitec and Curro Holdings. His worth, according to Forbes, has been estimated at $1.06 billion. What makes a person move their sights from growing business to giving back to society? While it is impossible to understand each individual’s motivation, the general consensus when engaging with founders of philanthropic foundations is the issue of legacy. In an interview with Kate Douglas in February 2015, Mouton was asked what his favourite job interview question was. He replied, “What their dream or purpose in life is.” These are the very questions that many ask themselves about their own personal legacies. The drive to leave a legacy and some kind of imprint on the world that extends beyond family, friends and the size of a cheque account is a basic philosophical and existential question. For those with resources, philanthropy can provide the means to leave their mark on the world in areas they feel passionate about.

Mouton has also voiced his admiration for Warren Buffet and again, in his radio interview with Bruce Whitfield of Radio 702 about the establishment of the foundation, he mentioned that he had been inspired by Buffet’s approach to philanthropy. Buffet, with Bill Gates, initiated the “Giving Pledge” to inspire the world’s billionaires to commit a large portion of their fortunes to philanthropic causes. Buffet, who is said to be worth an estimated $73.2-billion, has signed this pledge and has been regularly transferring his Berkshire Hathaway shares into various foundations run by members of his family, although most of the funds have gone into topping up the Bill & Melinda Gates Foundation.

A question asked by Bruce Whitefield was why not invest these resources into growing new businesses rather than philanthropy. This is an interesting question in the modern environment where business claims to be able to solve all social ills. We have the burgeoning sector of “social entrepreneurs” and “social enterprises” where people are using business models to deal with social problems. Creating big business also provides work, which brings more people into the economy and grows that economy. So what does philanthropy do that business cannot do?

There are systemic issues in our society that business models cannot solve. In addition, despite the venture capitalists, in reality, business is risk averse. Businesses, even social entrepreneurs, also don’t like to enter the socio-political fray and tend to stay politically neutral as they are, in the end, answerable to their shareholders. Is there a market solution to systemic issues related to a specific values base? For example, is there a market solution to racism, violence against women or corruption? Would business advocate against genetically modified food or demand human rights in a dictatorship? These are causes that need to rely on philanthropy, but they are not the only recipients of philanthropic funding, which include a wide range of causes from simple welfare through to major think tanks and tertiary education.

The uniqueness of philanthropy, in an ironic way, is that it is less accountable than business or government. In addition, if the foundation hasn’t become bogged down in heavy bureaucratic systems, decisions can be made rapidly in response to specific needs. Philanthropy can therefore take risk to fund or seed innovative social programmes or to serve as a lever to encourage other forms of collaboration, sometimes with government and the corporate sector.

According to Michael Edwards, the author of Small Change: Why Business Won’t Save the World, there are many ways in which the market can be used to drive change, including those that are socially and environmentally beneficial. However, he points out that none of the social movements of the past have been based on the key business principle relating to competition, but have been built on “solidarity, co-operation, bridge building and networking” including an understanding that social change takes time and there are no quick fixes.

The role of philanthropy and civil society organisations is often measured in economic terms, with measures of impact being defined in rands and cents. However, most of the work in the social space is navigation of a very messy and complex terrain in order to ensure effective outcomes. Systemic shifts happen when there is a growing consensus in society that results in change. He points out that a thriving market economy that creates wealth can be used for socially useful purposes but philanthropy in partnership with civil society should be “constantly nudging, pressuring, and filling in gaps so that other, larger institutions do their jobs properly”.

Modern philanthropy is also focusing more on new technologies to solve social problems, but as Edwards points out, we should not forget to learn from the civil rights movements of the 1960s as well. Learning from previous experience is just as important as the new ideas that are emerging thick and fast in our new era of change.  DM