Betting Bigger on Africa: As a Continent Rises, Foundations Are Upping the Ante

Close your eyes for a moment and try to forget the agony of South Sudan or the carnage in Congo or the bloodletting in the Central African Republic. 

Focus instead on a few statistics. From 2000 to 2008, Africa’s real GDP increased by nearly 5 percent each year, which was about twice the pace of economic growth in the 1980s and 1990s. Economic expansion during that time wasn’t restricted to a few industries or sectors, it was widespread. Agriculture, manufacturing, resource extraction, retail—all areas saw growth. For nearly a decade, Africa’s rate of return on foreign investment was higher than any other developing region in the world, the continent home to some of the fastest national economies to be found anywhere. 

Savvy investors weren’t the only ones spotting Africa’s potential—foundations and major donors took notice, as well. They've been making grants on a historic level dedicated to solving a whole host of pressing global health and development challenges. Meanwhile, social investors have created a growing tide of impact investments in Africa toward a wide diversity of causes including solar power, clean water, more affordable tampons and more.

According to a Foundation Center study, U.S. foundation giving toward Africa grew at "more than twice the rate of overall international giving between 2002 and 2012. Africa-focused foundation grant dollars jumped more than 400 percent, from $288.8 million to nearly $1.5 billion... Africa accounted for 25 percent of international grant dollars in 2012, up from 14 percent in 2002."

The Gates Foundation is a key driver of these increases. Since 2008, Gates has awarded nearly 1,400 sub-Saharan Africa grants worth billions of dollars. The foundation works in over 45 African countries while maintaining an unobtrusive presence, with just three offices located in Ethiopia, Nigeria and South Africa. Incidentally, those three countries are where the foundation dedicates most of its resources.

Gates is pretty well known for its work combating diseases like polio and malaria in Africa. It’s also one of the few global funders working to reduce the burden of neglected tropical diseases in least-developed countries. But according to the foundation’s Africa team director, Dr. Ayo Ajayi, the foundation's “...work in Africa is much more far-reaching” than combating diseases.

Related:Behind the Gates Foundation’s Research War Room in the Fight Against Neglected Infectious Diseases.

The Gates Foundation also dedicates significant resources to family health and hygiene, recently awarding a $2.8 million grant to Marie Stopes International to support its work expanding family planning choices for women in Senegal, Niger and Burkina Faso. The foundation is also a big player in the advancement of Africa’s agricultural sector, paying special attention to small holder farmers. Last year, Gates awarded $260 million in grants to benefit Africa’s farmers and pastoralists. 

More recently, Gates made headlines with a commitment of $5 billion over the next five years to combat diseases, and to grow and sustain economic progress further. Upon the announcement, Bill Gates said, “We continue to spend the majority of our money on health-related issues, so tuberculosis, HIV, diarrhea, pneumonia—all the things that affect kids under the age of five.” The foundation is maintaining that focus, as an estimated two-thirds of the $5 billion is reportedly dedicated to health matters.

The Gates Foundation may be the biggest player in the field, but it’s far from the only funder working to help Africa become healthier and more prosperous. The Ford Foundation has long worked in Africa, with offices in Johannesburg, Lagos and Nairobi, and that work continues after the foundation's recent reorganization. In 2012, it was the No. 2 U.S. funder in Africa after Gates, making some $60 million in grants. The Open Society Foundations also has a big presence in Africa, with four main offices around the continent and eight satellite offices. It gave $24 million toward Africa in 2012. The giant Hewlett Foundation also funds heavily here, as does the Conrad N. Hilton Foundation. Packard, MacArthur, Carnegie, and Omidyar have been African funders over the past decade, too. The Michael and Susan Dell Foundation has long worked in South Africa. The Helmsley Charitable Trust is among the relative newcomers to Africa, as we've reported. 

Related:Behind This Mega Funder's Give in Ethiopia is a New Push to Help Africa's Most Vulnerable Children

Meanwhile, the Rockefeller Foundation continues its historic commitment to Africa, which has taken different forms over time. Right now, Rockefeller focuses its funding in African health, agriculture, employment and gender equity. In the health area, Rockefeller doesn’t necessarily seek to prevent, treat or eradicate disease like malaria or polio. Instead, it aims to “incentivize individuals, communities and governments to address the breadth of variables that contribute to healthy societies.” The foundation’s agricultural work supports projects to increase farmer wealth, crop yields and boost nutritional value.  

RelatedNow the Good News on Coca-Cola’s Giving: Millions for Water, Women, and Well-Being

Rockefeller also places a good deal of emphasis on helping African young people find work, mainly through impact sourcing. Over the years, the foundation has invested millions of dollars into its Digital Jobs Africa program, focusing on the intersection of Africa’s youth population and information communication technology (ICT). Basically, Digital Jobs Africa seeks to grow the jobs available to young workers by tapping into the sourcing needs of global companies, which have an ever-increasing demand for workers with the skills to handle scut work like data management, content editing and low-end transcription. 

RelatedHow Rockefeller Aims to Harness Globalization to Lift Young Workers in Africa

Of course, it's no secret that any number of name-brand foundations are investing in Africa. Perhaps more intriguing are the other funders we've been tracking that give big but are less well known.

For example, we've written a lot about what the Howard Buffett Foundation is doing in Africa. It was the fifth-largest U.S. funder on the continent in 2012, with giving of $24 million. Recent years have seen an even bigger flow of funding as the value of Berkshire Hathaway shares, which power the foundation, have risen. The foundation's ambitious projects include a half-billion dollar commitment to improve agriculture in Rwanda and the building of hydro-electric plants in the Great Lakes region, with Howard Buffett seeing electricity and the economic growth it brings as a key to stabilizing that region. 

Related: Which Big Funder is Coming to Congo’s Rescue?

Then there is the Coca-Cola Foundation, which gives extensively in Africa. It channels some funding to diseases such as HIV/AIDS, but it’s more interested in projects that have to do with water, women’s empowerment, education, and youth development. Last year, the foundation reported that it had awarded over $26 million in grants toward these efforts, with around $9 million funding water-related projects; $12 million toward youth development and education ventures; and $2.3 million toward women’s empowerment causes.

Another big funder doing some heavy lifting in Africa, as we report often, is The MasterCard Foundation. This funder has been working in Africa for some time now, but it’s been noticeably upping its funding game in recent years. Not long ago, the foundation introduced its $50 million Fund for Rural Prosperity, which seeks to end the poverty cycle for more than 1 million of Africa’s rural poor by improving their access to financial products and services.

Related: The MasterCard Foundation Continues to Up its Funding Game in Africa

The foundation’s Scholars Program, which provides access to quality secondary and university educations for smart but poor young people, is another major funding point. The $500 million education initiative launched in 2012 focuses its funding attentions on Africa, but does operate in other developing countries as well.

In addition to education access and economic security, The MasterCard Foundation also has a hand in increasing access to financial services, particularly for people living in rural Africa.

There are plenty of other funders that are paying attention to Africa in some form or fashion. For example, the Citi and MetLife foundations are dedicated to financial inclusion. A great many smaller foundations and major donors back work on the continent. Too many to name. 

And just as a reality check, Africa still has a long, long way to go.

Take Angola, for example. According to Legatum’s Prosperity Report, the country’s economy ranks 18thacross the entire continent, yet the gap between the country's actual prosperity and expected prosperity based on its wealth sits at -35.7 percent. It’s much of the same story for Chad, which ranks 6th economically and -26.9 when it comes to prosperity.

What’s more, a report by New World Health indicated that the number of Africa’s high-net-worth individuals has been on the uptick, but the number of people living in abject poverty is also on the rise. World Bank data shows that from 2010 to 2011 the number of people living on less than a $1.25 increased from 411 million to nearly 416 million.

Despite Africa’s widespread growth over the past 10 to 15 years, many regions remain mired in conflict and deeply entrenched global health and development challenges like high burdens of disease, generational poverty, government corruption, and rampant human rights violations.

Still, the continent is rising, and philanthropy is playing a key role.