How remittances and philanthropy meet development challenges in Africa

Brighton Takawira uses the Mukuru remittance app which enables him to send money and groceries home to family in Zimbabwe from his home in Pinetown, South Africa, October 21, 2020. Picture taken October 21, 2020. REUTERS/Rogan Ward

In this episode of Foresight Africa podcast, Una Osili, associate dean for research and international programs and Efroymson Chair in Philanthropy at Indiana University’s Lilly Family School of Philanthropy, explains the role that remittances and philanthropy play in meeting development challenges in sub-Saharan Africa. The African continent, she says, has “a rich history of philanthropy,” and new tools and technology are expanding new ways of giving.



ORDU: I’m Aloysius Uche Ordu, director of the Africa Growth Initiative at the Brookings Institution. And this is Foresight Africa podcast.

Since 2011, the Africa Growth Initiative at Brookings has published a high-profile report on the key events and trends likely to shape affairs in Africa in the year ahead. Entitled Foresight Africa, the goal of the publication is to bring attention to these burning issues and to support policy actions to address them.

This is season two of the Foresight Africa podcast in which I engage with the report authors, as well as policymakers, industry leaders, Africa’s youths, and other key figures. Learn more on our website, Brookings dot edu slash Foresight Africa podcast.

My guest today is Professor Una Osili. Una is associate dean for research and international programs, she is also the Efroymson Chair of Philanthropy and Dean’s Fellow, Mays Family Institute in Diverse Philanthropy at Indiana University’s Lilly Family School of Philanthropy. Una wrote a brilliant piece titled “Philanthropy Plays a vital Role in Meeting Development Challenges and Mitigating Crises in sub-Saharan Africa,” which we published in Foresight Africa 2022. This is the subject of our podcast conversation today. Sister Una, a warm welcome to our show.

OSILI: Thank you for having me. I’m delighted and honored to join you today.

ORDU: Let’s start then, for the benefit of our listeners across the continent and elsewhere. If you could tell us a bit more about your journey. How did a young lady from Enugu in Nigeria end up as the chair of philanthropy at the world’s School of Philanthropy in Indiana University?

OSILI: Well, I’m so glad you asked, because it is a very interesting story, at least when I think back. I grew up in Nigeria. I grew up in Nigeria during the 1970s, in the oil boom in Enugu. And at the time there were a lot of questions about economics, about policy, about the role that everyone could play in economic development. So, that got me interested in economics as a subject, and that’s what I went to graduate school for.

My parents were also very involved in their communities, helping others, involved in causes, setting up institutions. So, I observed at a very young age how all of us can make a difference in uplifting our communities.

Fast forward the tape to graduate school. I ended up studying a topic that at the time no one else was looking at, which were at the time titled “remittances.” Remittances are funds that immigrants send back to their home communities. Many of us know them. They play a big role in our communities all over sub-Saharan Africa and also in Nigeria. But in my dissertation, I saw that many immigrants in the United States, but also around the world, were involved in supporting families, but also investing in their communities. And so, that sparked my interest in philanthropy.

What is philanthropy? It is private action for the public good. That is when ordinary citizens give money, volunteer their time, their talent, and often their testimony, their voices to help uplift their communities.

So, that is how I ended up pursuing a career in economics and also in philanthropy. And fortunately, I have had the wonderful blessing and opportunity to find an academic home here at the Lilly Family School of Philanthropy at Indiana University. It’s the world’s first school where we get to study philanthropy but also do path-breaking research. And at the school, I’m also very involved in projects that have a focus on sub-Saharan Africa, but also focus on development.

ORDU: That’s quite a fascinating journey indeed, Una. Thank you for sharing that. I mean, studying remittances, as you said, at a time when such a subject was not entirely very popular. That’s great. I see that you currently lead the research and publication of the Global Philanthropy Environment Index and also the Global Philanthropy Tracker. What can we learn from these publications and what are the challenges to philanthropic giving in sub-Saharan Africa?

OSILI: Also very good questions. And I’m so glad you asked.

At the school here at Indiana University we have two projects that focus specifically on global philanthropy and cross-border giving. So, let me start with the Global Philanthropy Tracker, because we will be launching the 2023 edition just in a few weeks here in April. So, stay tuned for that. That looks at how much money flows across borders for philanthropic purposes. And we compare those resources to official development assistance and also to remittances and to foreign direct investment.

What we’ve learned is powerful, and I’ll just highlight a few of the insights. First, remittances and private philanthropy tend to be counter-cyclical. In other words, when economic conditions are deteriorating, that’s when we see remittances and private philanthropy increase. In times of crisis in response to economic shocks, we see that donors tend to increase their sending to the parts of the world where there are needs, and also remittances tend to be counter-cyclical.

In contrast, when we look at ODA, for example, that tends to decline when economic conditions worsen. So, that’s one insight.

The other big picture view is that at a time when we’re seeing ODA flows, that’s official development assistance, actually tend to taper off or actually decline in some parts of the world, we’ve seen remittances show a lot of resiliency even during these tough economic times. And I would say that has also tended to be the case for private philanthropy.

So, the Global Philanthropy Tracker has really put on the map the role of other capital flows that we don’t necessarily pay as much attention to: remittances and alongside our private philanthropy. So, I’m really quite excited about those findings.

Another big picture finding is we can see where the funds are going to and where they’re not going to. So, some good news there. Education and health are the top destinations for cross-border philanthropy, which is really good news for development professionals and for those who are passionate about development on the continent.

At the same time, we don’t see as much funding going to new areas—for example, climate, gender equity, also research on the continent, both basic scientific research, but also research that’s focused on some of the other challenges that we face. So, those are areas where I think we need more attention to.

And finally, at a time when we’re learning about the role of communities in uplifting our continent, it’s also important that grassroots organizations who have historically played a role in development are not necessarily the ones that receive those large grants, but we’re seeing some change there.

So, those are three findings from the Global Philanthropy Tracker that are quite relevant for the African continent.

And I’ll just mention very quickly that the Global Philanthropy Environment Index has also been a very useful tool for policymakers who want to see how can we improve our regional and national environment around attracting those philanthropic flows, but also making it easier for even our domestic philanthropists to donate. And here we’ve seen that governments can play a role in providing incentives, whether those are tax incentives, other incentives, and removing barriers, obstacles so that we make it easy for everyday citizens, high net worth donors, international foundations and corporations to make those donations.

One of the very great stories from the Global Philanthropy Environment Index, and I’ll make this very short, is during the World Cup a few years back, Kylian Mbappé wanted to donate some money to some countries in Africa, and there were all kinds of obstacles to doing that. We need to make it easier for our diaspora communities, our folks at home, our families, high net worth families, but everyday citizens to actually make those donations. And right now, within many African countries, it’s quite difficult and cumbersome to make those kinds of donations. So, that’s, I think, a very important set of insights coming out of the Global Philanthropy Environment Index or the GPEI.

ORDU: Great insights indeed. And I think the point you made is a very, very important one and not lost on that. The idea of remittances playing a counter-cyclical role. That’s a very, very important observation. You also mentioned the channels mostly to education and health, and some people might wonder why real estate and housing didn’t show up, because most of us in diaspora, one of the first things we tend to, you know, invest in back home is housing. How does real estate on the housing stack up with the other sectors?

OSILI: Yes. So, I was focusing on the philanthropic flows, that the number one destination is education, health. When it comes to remittances, family is actually the number one destination. But also when it comes to investment, we see that real estate is often the first place that migrants start, but they may also invest in small businesses.

And as I mentioned, what is also very, I think, exciting and inspiring on the continent is that we’re seeing communities come together to make investments. That might be a water project, that might be a climate project, that may also be building schools and hospitals. In southeastern Nigeria, where I come from, there have been so many documented examples of immigrants in the diaspora really collaborating to lift up their communities, and that’s a story that I think we need to tell more often, because often unless you’re in that community you may not know about this, but migrants are working together individually, of course, but collectively. And we know that the very famous African proverb is that there is strength in numbers. And when migrant communities, diaspora communities join forces, they can actually start to move the needle in areas like education and health, but also in many other new areas. I lifted up a climate, gender equity, and many other new areas in our development landscape.

ORDU: Una, you’re also the founder of Generosity for Life, a digital platform that provides new data tools on philanthropy and social impact. What challenges did you face in launching this platform?

OSILI: Well, you just raised a very good question. And there is a through line in a lot of the work that I’ve done. I’m very passionate about research and data and bringing those data insights to life. And that project came about because we saw that there were so many websites about how to be generous, how to learn about philanthropy, but very few of them had data associated with them. So, we had to basically close that gap, but we felt a need to close that gap.

The big challenge is like any other project, I think, is finding the funding to start the project. But once we identified funding sources, the next set of challenges were finding the tech partners that would work alongside us to bring this vision to life. And I’m very excited to say that that project has continued, it’s being sustained. And through that platform, many folks of all different backgrounds—educators, parents, children, adults, policymakers—are able to drill down and get real-time data about philanthropy in the U.S. And we hope to expand that platform to even other countries that at some point, of course.

ORDU: And not so long ago, you testified here in Washington before the Joint Economic Committee of the United States Congress on supporting charitable giving during the COVID crisis. And also, you testified before the subcommittee of the U.S. Senate Committee on Foreign Relations. What were your key messages to the congressional leaders?

OSILI: Yes, in both of those testimonies, and then even recently with the U.S. Senate Finance Committee last year in 2022, I think one theme in the opportunities I’ve had to testify in Congress is to make the point that generosity is a part of human societies, whether it’s here in the United States, in sub-Saharan Africa, in urban, rural communities around the world, we see that people are generous. They give of their money, they give up their time and their talents.

During COVID, we’ve seen an expansion in generosity. We’ve also seen that people are using technology to give, whether that’s online, whether that’s using texts to give campaigns, whether that’s crowdfunding, GoFundMe.

So, the basic message was we need to reduce those barriers, make it easier for households to give and provide incentives. So, in many parts of the world, including the United States, there are some tax incentives that some households who give can benefit from. And I think that has been the message. How do you keep the accessibility of giving, make it easier for everyday citizens to give? But also, how do you reduce barriers at the same time? So, that has been a big message.

In those opportunities to testify one of the key points is also to provide data and information, because so often we find that policymakers want to support many of these big picture principles. It doesn’t matter whether you’re to the right or to the left, you do have an understanding of the importance of involving people of all different backgrounds in creating change, but they may not fully understand what those data points are.

So, I’m quite encouraged that prior to the testimony, we did have to prepare some written remarks. And what was quite interesting is that many of the lawmakers read the written remarks and were just learning the data and were quite excited about what was taking place.

ORDU: For three years in a row, Una, 2019, 2020, and 2021 the Nonprofit Times named you on their list of 50 most influential people in the nonprofit sector. How has this recognition affected the way you approach your work today?

OSILI: Well, I’m very honored that the Nonprofit Times selected me to be one of their top 50. I think it comes with a lot of responsibility, especially in the area of data and knowledge insight. So, what I realize is that the work we do matters. The research, the opportunities to testify, all of those things come with a lot of responsibility.

I think even as someone who grew up on the continent, I realize that we also have a lot of responsibility to make sure that we use whatever platform we have to make our lives better, to make life better for everyone, especially people who have been historically left behind or marginalized.

So, I take that responsibility quite seriously. I do understand that as a person of color, as someone who historically we may not have had those opportunities, I also want to make sure that I open the door for others. So, that I may be the first one to occupy this position, but I want to make sure that others are able to come along. So I take a lot of time to mentor and support other young people who have an interest in economics, have an interest in research, and who also want to be part of making our world better. I have a passion for certainly supporting young people.

ORDU: Opening the door for others is indeed a very noble thing to do and really, really appreciate all you do in that area. Let’s turn to the brilliant essay you wrote for us for the 2022 edition of Foresight Africa. In that is you noted that not only have private donors increased their giving, donations from Africans have also increased. How is the philanthropic giving by Africans different from those of the rich countries like the United States and Europe?

OSILI: Well, for those people who are joining us, this will come as no surprise. The African continent has a rich history of philanthropy. We may not call it philanthropy, but regardless of whether you are Nigeria, South Africa, Kenya, Rwanda, even in North Africa, there is a strong tradition of people of limited means and also people of high net worth resources contributing to support others and uplift others.

During COVID, we saw many new trends. So, first of all, we know that many donors stepped up their giving, but they also expanded the tools that they used. On the African continent, I think what is also interesting is that we’re seeing an expansion in new ways of giving. So, specifically more collaboration—donors are working together—but also they’re using new tools. Impact investing is one of them. Crowdfunding is another.

You could also say that what distinguishes African philanthropists at all different levels is that many of them are working along a number of margins. They are giving maybe gifts to institutions, high net worth households especially may be supporting schools, they may be supporting hospitals, but they’re also supporting families. They’re supporting their extended family members. Some of them are educating their relatives or people that they have in their sphere.

So, one way to think about it is that if you add the informal ways that African givers and donors are giving and include some of the formal ways that they’re participating, you will see that a very different picture emerges from what you might see in Europe or in North America, where many donors are giving more through formal channels.

And so if you look at that big picture, it suggests that as a continent, we also have to work quite, I think, intentionally to make sure that all of these ways that people give are recognized. So, when you’re supporting your family members, people in your hometown, people that may be in your social network, that you are also thinking more strategically about aligning or collaborating with institutions.

And I’ll give you a very simple example. You may provide a scholarship for a relative—a cousin, a nephew, a niece—but you could also look at how you tap into maybe some networking opportunities for those young people, collaborating with, like, junior achievements, Africa, for example, that places young people into internships.

So, I think what we need to do is continue to build linkages between the informal giving and the formal giving so that we’re preparing our young people, especially, for global opportunities. And today I’m actually quite encouraged to see that there’s a growth in many of those, I’d say, nonprofit organizations and structures. But we also need to work harder to connect that informal giving with the formal giving sectors.

ORDU: In that piece also, you talked about the role of religion, the role of tradition, the role of culture, the role they play in philanthropic giving. Could you expand a little bit more on that, please?

OSILI: Certainly. When we think about giving, many donors are motivated by a complex set of reasons. But often when we look at why people give, it comes back to their values, why is it important to give. All of our major religious traditions, Christianity, Islam, and even some of the other faith traditions, emphasize the importance of giving. So, whether it’s the Biblical 10% that we have to give to our congregations, or in Islam the 2.5% that you should give to the poor, all of our major world religions, Judaism included, but also Buddhism and many others, emphasize the role of faith and giving.

So, when we look at the African continent, this is also a pattern where for many people, giving is informed by their faith, and that might include supporting their religious congregations, their churches, or their mosques, but also those in need around them.

What I think we have also a lot of work to do once again is how to make it easier for nonprofit organizations to raise money, for example. And also churches, mosques, other religious traditions can collaborate with organizations as well. And here I just also want to say taking another step, religion is going to continue to play a role as we think about the continent, because we see some of the fastest growing congregations around the African continent. And it is encouraging because many people learn about giving from their faith leaders.

So, going forward, I think there’s also a role for faith communities to play in bringing some of these issues that we’ve raised—climate, education, health—and working alongside NGOs, non-governmental organizations, and other institutions to help spur development at a community level and also at a national level.

ORDU: So, what are the opportunities and challenges that you see posed by technology in philanthropic giving?

OSILI: Well, I tend to be a techno optimist, so I’ll just start by saying that technology, as we know it, has both advantages and disadvantages. But what we’ve seen in the most recent decade, especially on the African continent, is that technology is making it easier for people to participate. From crowdfunding campaigns, text to give campaigns, or even online through banking, where you can raise people’s awareness about a particular cause and allow people to donate through various platforms.

Technology is also making it easier, everything from cryptocurrency giving, impact investing, and I’ll even give a very personal example. My high school in Nigeria, Federal Enugu, many of us are able to connect as alumni around the world to support our high school, and that is technology that has made it possible to even build this global alumni community and connect us back to our high school so that we can contribute to lifting the students, the staff, the faculty, but also the infrastructure at the school. So, that’s a very positive role for technology.

I also want to stress that there are a lot of techno pessimists out there, people who’ve argued that technology also can lead to some disadvantages. Building trust, for example, is much easier if you can see people face to face. And trust is a vital part of philanthropy. At the same time, there’s also fraud online, and sometimes there are unscrupulous leaders that might put up a campaign that doesn’t necessarily have a root in a community.

What is also encouraging about some of the trends we’re seeing online is that platforms are starting to make commitments that they will monitor those campaigns. And if there’s fraud involved, if there’s a fraudulent campaign, they will refund money back to the donors. GoFundMe is one example here.

So, I do think overall, especially on the continent, technology is removing some of those barriers, making it easier for people around the world, not just on the continent, but even within the diaspora, to engage with their causes at home and also be part of helping solve problems.

ORDU: I couldn’t agree more. Technology is indeed a great connector. As you just were speaking, I’m reminded that after four decades away from Port Harcourt, I’m now even more connected, more connected than ever before with my schoolmates in Port Harcourt, which is quite a testament to the phenomenal role that technology plays in our life. And of course, there are opportunities to contribute to make sure that we help each other and also ensure that we make contributions to our old school. These are all made possible because of technology, so it’s fantastic indeed. Thank you for sharing that.

I wanted to turn to the fact that the diaspora plays a key role in philanthropic giving as you documented and indicated in this conversation. But today, though, many of us are facing challenges of our own because of the high inflation here in Europe and the United States, the high interest rates, many in the diaspora are losing their jobs. And of course, the ravages, the ravages of COVID-19 pandemic—we’re not completely out of the woods yet. So, how are these factors impacting both remittances and philanthropic giving from the evidence you have?

OSILI: Yes, both great questions. This has been a time of unprecedented challenges. You mentioned COVID-19, but we’ve also had adverse economic shocks around the world and even the racial and social justice movement with the killing of George Floyd and so many other factors here in the United States and truly around the world. What that has meant is that there is greater awareness of need. So, we have also seen many donors step up, that’s both at the family level through remittances but also through philanthropy.

At the same time, though, we do know that individuals give when they have a sense of financial and economic security. In other words, in order to donate, you have to have the resources to give and you also have to have a sense of financial security. There’s a great deal of uncertainty right now for a lot of members of the diaspora, whether they live in North America, in Europe or elsewhere.

However, what I’ve also seen during this time is because of COVID-19 and the cascading shocks that have accompanied that, there has been, I’d say, many donors really stepping up. And for that to continue, I think economic conditions also play a role.

So, as we look ahead, what is an encouraging sign is that even in this time where we’ve had all these shocks, there are some households that are better off. There are some households that have actually been largely unaffected. They were able to work from home. They are working in sectors that are continuing to do quite well, even in a downturn. There are households that are actually doing well. So, for the most part, that has helped in terms of looking at the aggregate flows.

And we’ve also seen, especially for private philanthropy, I’ll just highlight that many funders tend to work on 2- to 3-year rolling averages, which means that what happened this year is not so much a factor, but what’s happened in a cumulative sense. And during this last, I’d say, few years, even though we’ve had all these economic shocks, financial markets have actually performed quite well. So, the stock market in the U.S. has done quite well. And so, that means that many funders have been in a more favorable position to make large commitments.

And then finally, I’ll just mention that another bright spot has been high net worth donors like MacKenzie Scott of former Amazon. She in just in 2020 made a record $6 billion commitment. And many organizations in sub-Saharan Africa have benefited from her generosity. What’s also amazing about her way of giving is that they’re completely unrestricted, meaning she has given gifts without strings attached. The founder of Twitter, Jack Dorsey, contributed a quarter of his net worth in Twitter stock to help address equity issues around the world.

So, despite the economic challenges, there’s also been for many households who are in a position to give a very significant once in a lifetime opportunity to make a difference. So, when you look at the challenges the world is facing in climate, in equity, around economic opportunity, many donors realize that making these gifts now can move the needle on an issue they care about.

So, I think despite the economic challenges, the generosity has continued in a way that we haven’t seen, actually, and generosity that is focused on equity and solving problems that the world is facing. So, I think there’s still good news even in this time of great uncertainty.

ORDU: Those are, MacKenzie Scott and others, the Gates Foundation and many, many others, I think it’s just remarkable the times we’re in how much people are contributing in terms of giving of their lives, work, and savings for the benefit of fellow human beings who are less privileged. I think there’s a lot to be said for that.

So, as we wrap up, Una, in his interview at the Center for Global Development in the lead up to the spring meeting 2023, the World Bank nominee for president, Mr. Ajay Banga, emphasized the need to work together with philanthropic entities to solve today’s problems. So, if you were advising Ajay Banga as somebody in this space with a wealth of experience and impressive qualifications in philanthropy, what advice would you give him on how to achieve his objective of working together with you guys?

OSILI: Absolutely. Well, I’ll just start with one thing, which is something most people don’t realize. Philanthropy means love of humanity. And so, that’s what it translates to. And what we’ve also seen is that no single sector can solve the scale of the world’s problems. COVID-19 has actually demonstrated that, that we need government, the private sector, and also multilateral institutions to work with private donors to achieve these big goals and to solve seemingly intractable problems.

So, what I would say to him is start with listening to understand those private donors, to understand the areas that they are doing work in, and also learn the data in the landscape. Because I just mentioned a few of the key data points that we have been able to collect—in other words, through the Global Philanthropy Tracker and the Global Environment Index.

And then the last point I’ll see is we can also learn a lot from private philanthropists. The Gates Foundation is a very good example in terms of their role in addressing HIV/AIDS crisis, and polio, and so many other challenges. But really using data to help solve problems has been a big part of their success.

But I think it’s also building authentic partnerships with communities. We live in a time where we are learning that we need to work with people who are proximate to the problem. And private philanthropy is both at the domestic level and also at the international level. And diaspora communities have a track record, have a history of working in a way that’s proximate to communities to solving problems.

So, I think we need that collaboration and bringing the data, which I think the World Bank has done historically. But I would add data on all of the actors. So, too often we focused on just the government and multilateral agencies. But how can we bring in a more comprehensive picture of all the various entities that are working in the development landscape.

It’s a very different world from 50 years ago, where governments were mostly actors in the development space. Today we have a varied ecosystem. We have, of course, the multilaterals and government, but we also have private philanthropists, domestic private philanthropists, foundations. We have NGOs that are working on the ground to solve these problems. And I think increasingly we need to lean on the strengths of all of those actors. When it comes to the private philanthropy space, many of them are catalysts. They are quite agile and entrepreneurial and have advantages that perhaps governments do not. And so, working, I think, more collaboratively and using data to inform those solutions and approaches would be my advice.

But I’m sure that there is a lot that can be said about how to work in this environment. But the key insight is that it is a different development landscape. There are many more actors learning those specific actors and then learning how to work with them is going to be part of a success equation.

ORDU: That’s really great. And finally, in that landscape, you articulated what would be your top one or two advice to African governments themselves to avail of these opportunities that private and philanthropic giving are able to make so that we can benefit the children, the women, and men of our continent?

OSILI: Number one, I would say, is remove barriers, make it easier for people to give. And when we see people to give, it includes large foundations, but also small-scale donors, African diaspora entities, make it easier for them to collaborate.

And then secondly, provide incentives. When we look at other parts of the world, whether it’s Mexico, Israel, or even India, they have many incentives for diaspora communities to work collaboratively with local and national governments. I think on the African continent we need to think about how we can scale up some of these initiatives, whether those are matching funds or other ways that we can incentivize.

And finally, not just donating money, but also volunteering time. There are many countries have programs to allow diaspora professionals to volunteer their time and their talents. We need a lot more of that. We look at our African diaspora, there’s so much talent in health care, in technology, and in so many spaces, and we have not even started to tap into that collective, I’d say, asset.

And then finally, I think governments also need to listen. They have a lot to learn from the diaspora communities. And similarly, diaspora communities can do a lot of listening across so that we can build collaborations that are authentic and that are impactful on the continent.

ORDU: Those are very, very important. And what you’ve just been saying reminds me, I used to live in The Philippines for about five years in Manila, and it’s one of the remarkable things there is that the government of The Philippines actually has is a department that is devoted to diaspora and remittances and philanthropic giving. So, I think there is definitely a lot of models out there for countries on our continent to emulate some of the good practices.

Sister Una, this has been a pleasure speaking with you this morning. Thank you very, very much for making the time.

OSILI: It has been my pleasure and thank you for having me. I’m delighted to join you today.


ORDU: I’m Aloysius Uche Ordu, and this has been Foresight Africa. To learn more about what you just heard today, you can find this episode online at Brookings dot edu slash Foresight Africa podcast. The Foresight Africa podcast is brought to you by the Brookings Podcast Network. Send your feedback and questions Podcasts at Brookings dot edu.

My special thanks to the production team, including Fred Dews, producer; Nicole Ntungire and Sakina Djantchiemo, associate producers; and Gastón Reboredo, audio engineer. The show’s art was designed by Shavanthi Mendis based on a concept by the creative firm Blossom.

Additional support for this podcast comes from my colleagues in Brookings Global and the Office of Communications at Brookings.