The Appelbaums and Gordons
Hylton Appelbaum serves as Executive Trustee of the Liberty Foundation and the Donald Gordon Foundation, and is a trustee or director of many nonprofit organizations in South Africa and elsewhere. "I wear two different caps, which is fascinating," says Appelbaum of his leadership of the corporate and family foundations. But each foundation operates independently and has a different focus.
Donald Gordon, founder of the financial services companies Liberty Group in South Africa and Liberty International in the United Kingdom, established the Donald Gordon Foundation in August 1971. It's South Africa's largest private foundation and one of the oldest. Hylton Appelbaum is the only Executive Trustee, and although the governance structure includes other trustees, the most active one besides Mr. Appelbaum is Wendy Appelbaum, Donald Gordon's daughter and Hylton's wife. Mrs. Appelbaum is active in a range of organizations herself, including groups that support women's empowerment. She is a founding director of WIP -- Women's Investment Portfolio -- which supports businesses owned by black women, and has been very profitable.
Although a number of families in South Africa have become known for their philanthropic initiatives, Mr. Appelbaum cites two reasons why he feels individual philanthropy in South Africa is "an endangered species." First, there are no tax incentives such as in the US to support a financial environment friendly to families wanting to create private foundations and endowments. Second, South African culture, with its legacy of apartheid, doesn't encourage broad-based giving. "Our society is racially, linguistically, culturally, and politically divided. The positive side of these divides is the 'rainbow nation' with our vigor, diversity and energy," Mr. Appelbaum observes. But the "negatives include strife, insularity and suspicion. Many people focus only on their own communities."
A third challenge is one that the Appelbaums and Gordons have faced head-on, but that scares away many donors: separating the pure "charitable" impulse -- which can be seen as patronizing -- from the need to use financial resources to support genuine development. The latter can be more labor-intensive for the donor -- but, practiced effectively, yields greater rewards in the long run, and this is where the Donald Gordon Foundation has excelled.
For many years, the Donald Gordon Foundation maintained a low profile, supporting children's issues, initiatives for disabled people, and welfare within South Africa's Jewish community, with a focus on elderly Jews impacted by the departure of wealthy younger people.
But in recent years the Foundation has embarked on two high-impact, groundbreaking initiatives: the Gordon Institute of Business Science (GIBS) in Johannesburg and the Donald Gordon Medical Centre. In each case, the family philanthropy supported the creation of a new world-class institution that addresses the need for modern, competitive facilities within South Africa. Critical goals include stemming a brain drain of potential business and medical leaders, and providing top-notch training to talented South Africans who lack the resources to pursue such training.
The idea for GIBS began when the University of Pretoria announced plans to establish a top-flight business school in Johannesburg with close access to the major headquarters of corporate South Africa, where mentoring programs could be set up. The University partnered with the Donald Gordon Foundation and GIBS opened in January 2000.
Within three years of its founding -- and with just one graduating class -- GIBS earned a high ranking from leading executives in South Africa, and competes for students with its neighbor, the business school at the University of the Witwatersrand.
The Donald Gordon Foundation's next big -- indeed, huge -- initiative was the Gordon Medical Centre, a partnership with the medical school at the University of the Witwatersrand (the alma mater of Donald Gordon and Mr. and Mrs. Appelbaum). This enormous undertaking, which involved purchasing and upgrading a hospital located near the university campus, aims to address vast imbalances in health care delivery in South Africa, particularly the training of specialists in tertiary health care. As the government turned its focus towards primary health care delivery for all people, it has had no resources to train practitioners and researchers in medical specialties.
One example of how conditions have changed in South Africa -- where the world's first heart transplant took place in 1967 -- is that its teaching hospitals have no modern imaging equipment. The disparities between public and private health delivery systems have only widened since the first democratic elections in 1994, and nowadays many new young physicians leave South Africa soon after finishing medical school because opportunities to practice sophisticated specialties are now so limited.
In funding the Centre, the Gordon Foundation is affirming its belief that "Africa needs the tools to help solve its own problems," says Mr. Appelbaum. This means developing well-trained, qualified physicians "who can not only cure illnesses and teach the next generation of medical practitioners, but make a contribution to research on vaccines for AIDS, malaria, tuberculosis and other diseases debilitating our continent."
Mr. Appelbaum admits that Donald Gordon is reluctant to promote himself and that many foundation-funded projects are not widely publicized. But attaching Mr. Gordon's name to major projects "is important for a whole range of reasons including setting an example of personal or family philanthropy and, hopefully, encouraging others to follow," says Mr. Appelbaum. Moreover, associating a name with good works has particular meaning in South Africa, observes Mr. Appelbaum, and "highlighting personal philanthropy in an environment where capitalists are still seen as exploiters also signals our commitment."
Keep it simple and honest
For philanthropists to get started, Mr. Appelbaum says it's not necessary to be an expert, but, rather, one should identify areas of interest to the family, and then, if necessary, consult experts. "It was probably business acumen that made the family fortune originally -- rely on it," he advises. "Commonsense is fundamentally important. Don't fall into the trap of being swamped by legions of consultants. Focus on those fields that are meaningful to your family. If there is personal interest there will be more involvement and the cycle rolls from there. Avoid a cause that has no resonance for you."
In 1967, Raymond Ackerman left an established retailing firm in Cape Town and started a retail corporation with the purchase of four small shops called Pick 'n Pay. Under his leadership, the company grew rapidly and in the 1970s branched into "hypermarkets" that offered South Africans one-stop shopping. Through acquisitions and diversification, Pick 'n Pay (www.pnp.co.za) is now one of South Africa's pre-eminent retailers, with operations in the food, clothing, pharmacy and general merchandise sectors as well as financial services. The company operates throughout South Africa and in Australia.
By the 1970s, the Ackermans -- Raymond, his wife Wendy Ackerman, and their four children -- established their first philanthropy, the Ackerman Family Educational Trust, by donating two per cent of their personal shares to the foundation. Dividends from those shares were then allocated to fund various educational causes. Recipients of the Ackerman Family Educational Trust include roughly 60 students each year, who receive scholarships for tertiary education, and educational organizations such as the READ Educational Trust and institutions for mentally and physically handicapped people.
Mrs. Ackerman and her assistant, Juliet Taljaard, run the Trust themselves. Mrs. Ackerman interviews the scholarship applicants, and those selected are required to provide semi-yearly reports; if they earn good grades, they are entitled to more support. "If not, I might say repeat the year and then get back to me. We're very flexible," Mrs. Ackerman says. At graduation she requests that scholarship recipients send her a photo, and she now has a bulletin board covered with pictures of graduating scholarship recipients. Quite a number of Trust alumni have entered government service and academia, she notes.
The second philanthropic endeavor is the Raymond and Wendy Ackerman Pick 'n Pay Foundation. In 1997, in honor of the 30th anniversary of Pick 'n Pay, the company donated R30 million (about $4 million in 1997 US dollars) to create the foundation, whose board includes three members of top Pick 'n Pay management and three members of the Ackerman family. (The Ackermans' four children are all involved with the business.)
A key theme in the Ackerman philanthropies is to teach by example. The "consumer sovereignty" which Raymond Ackerman declares is a key business goal also governs the types of philanthropies the family supports, which seek to empower and inform grantees rather than provide charity. Using this approach, "The more you give, the more you get back," says Wendy Ackerman.
For the Ackermans, business and philanthropy are intertwined. For example, the new Ackerman philanthropy is featured on the Pick 'n Pay website, and, like a good business, it has a mission statement and clear objectives. The company's own social responsibility programs are mostly aimed towards promoting employee welfare. Over the years, Mrs. Ackerman, who became a Pick 'n Pay director in 1981, has been involved in many employee projects targeting education and housing. She is also involved with many nonprofits on her own.
Considering Raymond Ackerman's success as a self-starter, it is fitting that the Foundation's objectives include self-reliance, entrepreneurship, and life-skills enhancement. Wendy Ackerman notes the Foundation will support indigenous arts and crafts businesses that have the sales potential to enable communities to become self-sustaining. Funded projects also include endeavors to encourage self-sufficiency, such as an organization run by quadriplegics to develop wheelchairs that work on rough, rural terrains, and community-based nonprofit organizations that focus on awareness and prevention of AIDS, which has devastated communities in South Africa. One such group is LoveLife, which Mrs. Ackerman calls "an excellent organization that targets children from eight upwards and draws on the principle that Aids is preventable." The LoveLife program offers many life skills.
A changing environment
"We as a family and a company have tended to work in isolation," notes Mrs. Ackerman, in large part because of the lack of philanthropy networks and resources in South Africa. Along with daughter Kathy, she recently attended a grantmakers conference in Cape Town, which she calls eye-opening. However, most attendees were academics rather than donors, highlighting the challenge of engaging local philanthropists.
Giving can be complicated in a country of such deep need. The Ackermans used to give cash grants to organizations that sought help, only to learn that some of these were used for other purposes -- sometimes mishandled for lack of experience, other times stolen outright. In lieu of cash, when possible, the Ackermans provide goods or services. In addition, the family has retained an accountancy firm to audit donations, and informs applicants of this policy. The grant selection process has become easier, because only NGOs prepared to cooperate are apt to apply.
These days Mrs. Ackerman finds that South African philanthropy practice is changing. It's more organized and training programs are being introduced. But what isn't changing is the demand for help. "I get thousands of calls weekly," she says. So the opportunity to network with philanthropists from around the world who have coped similar problems has been invaluable.
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