Snapshot on philanthropy in Ethiopia

By Kidist Yasin
Second-year doctoral student, Lilly Family School of Philanthropy

Born and raised in Addis Ababa, Ethiopia, I have firsthand experience on what philanthropy can do in an African country that is poor, yet has a strong culture of interdependence. Giving food and money to beggars who stay near people’s houses or sit around churches and on the streets of Addis Ababa is the smallest act of generosity that a typical family would do.

During my childhood, I also remember my family feeding children of widows and giving money and time to neighbors who experienced bereavement, or we would organize various celebrations. There was also a period when my family faced hardship to the extent that not enough food was at the table in our home. We survived tough times through the generosity of people in our neighborhood.

When I was a grade 11 student, my family was no longer able to pay for my private school tuition. At that time, the director at my school came out to save my education, paying all of the tuition and buying me all of my school supplies. In fact, I am forever grateful to him for his mentoring and financial support that continued until I completed my undergraduate degree program.

Without my high school director’s intervention, I would have probably been a high school dropout or a high school graduate from a mediocre public school like many of the girls who grow up in the slums of Addis Ababa.

Unlike the dominance of the wealthy donors in giving overall donations in developed countries, Ethiopian philanthropy, like in many other African countries, is mainly characterized by horizontal giving. In Ethiopia, idir is a grassroots social network and a leading traditional institution through which people help each other. It is a widespread institutional form in the country in which members make a regular monetary contribution and provide labor service at the time of need. Although the main purpose of idir is often limited to covering funeral expenses and comforting families at the time of a loss of loved ones, some idirs are flexible and help people while they are alive.

Iqub is another traditional institution in which people pool their funds regularly to rotate loans among themselves. Being a voluntary association, iqub benefits its members by offering a large loan without requiring collateral physical assets.

In addition to these informal institutions, telethons are used to raise fund for victims of regional conflicts and natural disasters, and for supporting national and regional development projects. An example is the effort of Ethiopians to build the Great Ethiopian Renaissance Dam, the largest dam in Africa being built along the Nile River. This $4 billion worth of project is mainly financed by individuals’ contributions.

In Ethiopia, giving to formal non-governmental organizations (NGOs) is limited. The formal giving is mainly practiced within religious organizations, such as through tithes, offerings, and zakat. Although most of these contributions are used for covering religious expenses, a number of religious nonprofit organizations transfer part of the contributions to humanitarian and developmental aid projects.

In June 2019, I conducted interviews with NGO leaders and social work scholars. All of the interviewees agreed on the existence of a strong culture and tradition of helping in Ethiopia.

Nevertheless, the formal nonprofit organizations that focus on building democratic society obtain the large proportion of their donations from international sources. The interviewees pointed out three main constraints of the development of the formal nonprofit sector in the country, including a low level of awareness among the local people about the potential of NGOs in helping the needy, coverage of only awful and corrupt acts of NGOs by the media, and little fiscal and legal infrastructure for the formal philanthropy sector to flourish.

The fact that formal philanthropy is a recent phenomenon in the country is one possible reason for a low level of awareness among the community regarding the potential of NGOs. Establishment of many of the formal NGOs began in the 1980s when the country received large amounts of humanitarian aid to alleviate the worst famine it experienced in its recent history. The philanthropic involvement of the time was highly criticized as a large chunk of donations was hijacked by guerilla fighters of the time who eventually took power to rule the country in 1991.

Between 1991-2005, the conducive legal environment enabled indigenous NGOs to take shape, gain institutional stability and attract large-scale funding from western NGO donors to implement programs on different democratic issues. Following the controversial election in 2005, however, the government began to severely restrict and closely monitor the activities of NGOs.

A new registration and regulation of Charities and Societies (CS) was implemented in 2009. This proclamation completely banned foreign NGOs and domestic ones that financed more than 10 percent of their expenses through external donors from operating in any human right and advocacy activities. The proclamation also made NGO registration very cumbersome.

Despite these constraining NGO laws, however, the formal nonprofit sector did not completely shut down. The persistence of NGOs and civil society is largely because of strong traditions of community projects and local cooperation that give Ethiopians cultural knowledge of governance skills necessary for democracy. During this period, Ethiopian diaspora also played a role by supporting grassroots civil society organizations through remittances and a transfer of knowledge.

Since March 2018, a new hope has started to shine on the sector. Following the election of the new Prime Minster, Abiy Ahmed, a new enabling civil society law was issued. This law lifts the ban on the source of funds for local NGOs, and grants freedom to establish NGOs for any positive causes including human right and advocacy issues. It also provides fiscal incentives such as tax deductions. The enabling environment provided under this law is expected to help the sector flourish in the years to come.