Community philanthropy in South Africa: a case study of grant distribution in the Western Cape

Abstract

How funding is distributed is an important question in philanthropy. But limited work has asked this question about philanthropy originating on the continent of Africa. This article explores the effective distribution of grants by a community-based South African non-profit organisation through the lens of transaction cost economics. Instead of needs-based indicators, this study finds that internet access is the main indicator of funding, with areas with lower internet access receiving fewer funds than those with higher internet access. This indicates that funding by community-based non-profits may not always be reaching the areas with the highest amount of need, but areas with lower search costs. Overall, community-based organisations may deal with issues similar to international organisations in reaching local non-profit organisations and disenfranchised communities. Targeted outreach, specifically to areas with lower access to the internet, can help to ameliorate these differences.