Department of History, Archeology and Political Studies PERFORMANCE OF PRIVATE PHILANTHROPIC ORGANISATIONS IN KENYA: THE CASE OF THE PALMHOUSE FOUNDATION COSMA G. GATERE C154/CTY/PT/24548/2011 A research project submitted to the School of Humanities and Social Sciences in partial fulfillment of requirement for the award of the Executive Masters of Public Policy and Administration degree of Kenyatta University MAY 2013 ii DECLARATION This project is my original work and has not been presented for a degree in any other university. Sign……………………………………………….. Date……………………………… Cosma Gatere, MSc C154/CTY/PT/24548/2011 This project has been submitted with our approval as University supervisor Sign……………………………………………….. Date……………………………… Prof. Kisilu Kombo School of Education Kenyatta University iii ABSTRACT A Kenya National Bureau of Statistics survey of 2009 shows that personal wealth of the top 10% of Kenyans increased on average five-fold over the past decade. The Society for International Development noted in its annual report of 2009 that the gap between this group and the bottom 20% of Kenyans is growing. While we have seen an upsurge in corporate social responsibility and there is anecdotal evidence of benevolence to family and friends, the question remains why this vast increase in personal wealth has not been matched by an upsurge in the formation of, and giving through, structured private philanthropic organisations, despite pervasive social needs. This dissertation will examine the factors contributing to the success of the Palmhouse Foundation, a privately-established philanthropic organisation that has swum against the current and succeeded in this niche. The organisation was founded to provide assistance to children from needy families, around Githunguri in Kiambu County, who regularly dropped out of school for lack of school fees and has grown from supporting an initial 6 students in 2002 to 373 beneficiaries in 2013. Up to 140 of this group had completed their secondary education at the time the study was conducted. Another 233 are enrolled in 80 of Kenya’s premier secondary schools. The study specifically aimed at establishing how the nature and profile of sponsors, the reputation of the foundation, and the relationship between the leadership and management affect the performance of the Palmhouse Foundation. The study was significant in that it provides insights that can help Palmhouse Foundation understand what strengths it should build on as well as what weaknesses to address. The study adopted a conceptual framework and followed descriptive research design – specifically the Case Study technique. It targeted all the employees, trustees and management of Palmhouse Foundation and conducted a census. Primary data was obtained by use of a questionnaire while secondary data was obtained by use of libraries, journals, organisational reports as well as the World Wide Web. The study found that the determination of the founders to make lasting social impact underlies the establishment of private philanthropic organisations. Success of the organisations is closely correlated with the quality of leadership, financial accountability and the profile of sponsors. The study makes fiscal and public policy proposals that would spur the development and growth of private philanthropies. iv TABLE OF CONTENTS DECLARATION ...................................................................................................................................................... II ABSTRACT ............................................................................................................................................................ III TABLE OF CONTENTS ............................................................................................. ………………………….IV LIST OF FIGURES ............................................................................................................................................... VI LIST OF TABLES ................................................................................................................................................. V1 CHAPTER ONE: INTRODUCTION ..................................................................................................................... 1 1.1 BACKGROUND TO THE STUDY .................................................................................................................. 2 1.1.1 Palmhouse Foundation ....................................................................................................................... 4 1.2 STATEMENT OF THE PROBLEM .................................................................................................................. 6 1.3 RESEARCH QUESTIONS ............................................................................................................................. 7 1.4 OBJECTIVES OF THE STUDY ...................................................................................................................... 8 1.5 RESEARCH PREMISE ................................................................................................................................. 8 1.6 SIGNIFICANCE OF THE STUDY ................................................................................................................... 8 1.7 SCOPE AND LIMITATIONS OF THE STUDY .................................................................................................. 9 CHAPTER TWO: LITERATURE REVIEW ...................................................................................................... 10 2.1 INTRODUCTION ....................................................................................................................................... 10 2.2 REVIEW OF PAST LITERATURE ............................................................................................................... 10 2.2.1 Performance of Philanthropies ......................................................................................................... 10 2.2.2 Profile and Type of Sponsors ............................................................................................................ 17 2.2.3 Reputation of the Foundation ........................................................................................................... 19 2.2.4 Leadership and Management ............................................................................................................ 20 2.3 THEORETICAL FRAMEWORK ................................................................................................................... 23 2.4 CONCEPTUAL FRAMEWORK .................................................................................................................... 24 CHAPTER THREE: METHODOLOGY ............................................................................................................ 25 3.1 INTRODUCTION ....................................................................................................................................... 25 3.2 RESEARCH DESIGN ................................................................................................................................. 25 v 3.3 TARGET POPULATION ............................................................................................................................. 25 3.4 SITE OF THE STUDY ................................................................................................................................ 26 3.5 RESEARCH INSTRUMENTS ....................................................................................................................... 26 3.6 DATA COLLECTION ................................................................................................................................. 26 3.7 DATA ANALYSIS ..................................................................................................................................... 27 3.8 ETHICAL CONSIDERATIONS .................................................................................................................... 27 CHAPTER FOUR: DATA ANALYSIS ................................................................................................................ 28 4.1 INTRODUCTION ....................................................................................................................................... 28 4.2 DATA ANALYSIS ..................................................................................................................................... 28 4.2.1 Personal Information ........................................................................................................................ 28 4.2.3 Performance ...................................................................................................................................... 29 4.2.4 Profile and type of Sponsors ............................................................................................................. 30 4.2.5 Reputation ......................................................................................................................................... 36 4.2.6 Leadership and Management ............................................................................................................ 38 4.3 QUALITATIVE ANALYSIS ........................................................................................................................ 43 CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS ............... 47 5.1 INTRODUCTION ....................................................................................................................................... 47 5.2 SUMMARY OF FINDINGS ......................................................................................................................... 47 5.3 CONCLUSION .......................................................................................................................................... 49 5.4 RECOMMENDATIONS .............................................................................................................................. 51 5.5 SUGGESTIONS FOR FURTHER RESEARCH ................................................................................................ 54 REFERENCES ........................................................................................................................................................ 55 APPENDICES ......................................................................................................................................................... 60 APPENDIX 1: INTRODUCTION LETTER ................................................................................................................... 60 APPENDIX 2: QUESTIONNAIRE .............................................................................................................................. 61 APPENDIX 3: INTERVIEW SCHEDULE ..................................................................................................................... 68 APPENDIX 4: TIME PLAN ....................................................................................................................................... 71 APPENDIX 5: PROJECT BUDGET ............................................................................................................................ 71 vi LIST OF FIGURES FIGURE 1: CONCEPTUAL FRAMEWORK ................................................................................................... 24 LIST OF TABLES TABLE 1: PERFORMANCE ........................................................................................................................ 30 TABLE 2: SUPPORTIVE AND LOYAL DONORS .......................................................................................... 31 TABLE 3: REPUTATION OF THE FOUNDATION ......................................................................................... 31 TABLE 4: LEADERSHIP STYLE ................................................................................................................. 31 TABLE 5: FOCUS ON EDUCATION ............................................................................................................ 32 TABLE 6: LEGAL AND POLICY ENVIRONMENT ....................................................................................... 32 TABLE 7: CULTURAL CONSIDERATIONS ................................................................................................. 33 TABLE 8: EMPLOYEE SKILLS AND EXPERTISE ......................................................................................... 33 TABLE 9: GENDER STATISTICS ................................................................................................................ 34 TABLE 10: GENDER OF SPONSORS .......................................................................................................... 34 TABLE 11: CATEGORY OF SPONSORS ...................................................................................................... 35 TABLE 12: EFFECT OF TYPE OF SPONSOR ON PERFORMANCE ................................................................ 35 TABLE 13: IMPACT OF REPUTATION ON PERFORMANCE ........................................................................ 36 TABLE 14: FACTORS AFFECTING REPUTATION ...................................................................................... 37 TABLE 15: ELEMENTS OF LEADERSHIP AND MANAGEMENT .................................................................. 38 TABLE 16: ACTIVE PARTICIPATION BY BOARD MEMBERS ..................................................................... 39 TABLE 17: PARTICIPATION IN DECISION MAKING .................................................................................. 39 TABLE 18: ADEQUACY OF TRAINING ...................................................................................................... 40 TABLE 19: EFFECT OF TRAINING OF TRUSTEES ON PERFORMANCE ........................................................ 40 TABLE 20: EFFECT OF ORGANISATIONAL STRUCTURE ON PERFORMANCE ............................................ 41 TABLE 21: IMPACT OF SUCCESSION PLAN ON PERFORMANCE ............................................................... 42 TABLE 22: IMPACT OF EFFECTIVE COMMUNICATION ON PERFORMANCE .............................................. 42 TABLE 23: IMPACT OF SUSTAINABLE FINANCIAL BASE ON PERFORMANCE .......................................... 43 1 CHAPTER ONE INTRODUCTION Despite significant growth in Gross Domestic Product (GDP) over the past decade—from $14bn to $35bn—and a corresponding boom in personal wealth especially by Kenyan in the upper socio-economic strata, there has been a low uptick in the establishment of philanthropic organisations by well-endowed individuals. While some of these individuals may well be supporting relatives and friends out of respect for traditional and familial conventions or contributing at fundraisers, one notices a dearth of formally registered, well-governed, thematically focused and enduring foundations established by people who—one would argue—have the means to do so. The recent Kenyans for Kenya campaign to raise life-saving support for Kenyans affected by severe drought largely in the northern and arid parts of the country produced levels of support for a public initiative unseen in the recent past. In a short span of time the campaign raised Ksh700 million and saw artistes, entrepreneurs, media houses and professionals of different stripes all give of their time and expertise to support the venture. Does this suggest that there is latent potential for significant philanthropy by Kenyans waiting to be tapped? Or might this point to efficiency and higher trust in the organisations and systems (including the proven M-pesa) promote the initiative and the fact that government was largely kept at arm’s length? Regardless of the reasons underlying the success of this campaign, it still doesn’t suggest an upward trend in the establishment of enduring philanthropic organisations by individuals, families or even companies with the financial capacity to do so. Might such enthusiasm for 2 social solidarity indicate, however, that there is latent energy that could be channeled precisely to such ends, given the right organisation and mobilization by trusted entities? 1.1 Background to the Study Among young adults, under 35 in Kenya, there are encouraging signs of social engagement and philanthropic concern through increased volunteerism and choice for making a contribution in the non-profit arena by talented individuals who would otherwise be commanding much better pay in high-flying private sector careers (The Standard, 2012).This is a significant shift in mindset and behavior from the older siblings of this cohort who prioritized securing a personal portfolio ahead of significant philanthropic contribution. While this is not to suggest this older group lacked beneficence as they too were lending a helping hand to relations and friends, and supporting ad hoc harambees, their actions lacked the more overt and better organised expression of some of their younger siblings. In a discussion about the politics of philanthropy and its underlying causes, Eikenberry and Nickel (2007) say that a discussion about the underlying causes that lead to marginality, as well as the social and economic structures that lead to a privileged class need to be part of any discussion about philanthropy. They question the automatic assumption that philanthropy is necessarily beneficial, arguing that philanthropy is “frequently constructed and supported by the very thing that it claims to end – marginality” (p.27). They ask a question worth considering: Can the need for philanthropy be eliminated by re-ordering social and economic structures? 3 Kenya has witnessed an upsurge in philanthropy by large and midsize corporate entities with some of them embarking on ambitious high value programmes in the form of Corporate Social Responsibility (CSR). Kenya Reinsurance Corporation, for example, has partnered with the Association for the Physically Disabled of Kenya to fund a multi-year programme. Some of them are bringing in consultants to ensure more strategic alignment with organisational mission. Today all annual business excellence contests have a corporate social responsibility category and overall winners must score equally high on this area as in other traditional, more hard-nosed dimensions. Chairmen’s comments in annual reports of listed companies now consistently include sections on CSR. The Kenyans for Kenya campaign was driven by corporates as a collective CSR effort and received considerable support from ordinary citizens. While this is a welcome addition to the Kenyan philanthropic landscape, it still does not provide answers to why more wealthy individuals with backgrounds in the corporate world do not take this cue and begin private foundations of their own during retirement. Private foundations and development aid agencies are both committed to improving peoples’ lives and expanding their opportunities and life choices. They face similar challenges in terms of project selection, supervision, and the need to balance the achievement of immediate targets against the need for long-term capacity building. But the fact that private foundations generally do not need or seek official agency funding reduces the contacts between them, especially at the central, policy-setting level. While foundation boards are usually well aware of official development co-operation policy and official and foundation aid workers in the field are often well acquainted, the policy staff in official aid agencies may feel that they could be better informed of private foundations’ development goals and activities. 4 There is also reason to believe that official agencies may have something to learn from private foundations as private philanthropy has financed pioneering work in many development fields. Since foundations are independent from government, they also have greater freedom to take risks, to consider programmes that will only produce benefits in the long term, and to experiment with highly decentralised organisational structures. The results of their experience may suggest useful innovations for the official sector; they may equally provide useful warnings of previously unforeseen consequence 1.1.1 Palmhouse Foundation Palmhouse Foundation started as a family initiative of Mr. Eric Kimani and his wife Margaret to assist children from needy families around Dairies Limited in Githunguri, Kiambu County, who regularly dropped out of school for lack of school fees. They supported six students in 2002. The initial support to the needy families was unstructured and based purely on the desperate cases presented mainly by peasant farmers from the area. The increasing number of appeals for support motivated the founder trustees to formalise their support, leading to the establishment and registration of Palmhouse Foundation in 2002 under the Trust Act CAP of the laws of Kenya and the NGO Coordination Act. In 2003 additional trustees were appointed to join the founder Trustees and they selected 10 students from neighboring villages who were sponsored through their four-year secondary education. In 2004 the Foundation conducted its first nationwide selection and awarded 31 scholarships. Palmhouse has conducted a national and equitably distributed selection of students every year thereafter. Over time, the Foundation has grown steadily and now has 13 trustees and 12 members of the Oversight and Advisory Board, forming a sound structural and 5 organisational operating base. The Foundation now boasts 373 beneficiaries, 140 of whom have completed their secondary education. Many of them are pursuing university education both locally and overseas, while an additional 233 beneficiaries are still in 80 of Kenya’s premier secondary schools (http://www.palmhousefoundation.org viewed on 10th May, 2013). The Foundation has an established programme to raise money for scholarships—an annual gala is the main fundraising event—and also receives contributions from corporate organisations under their social responsibility programmes. Corporate donors are asked to commit to sponsoring a deserving student throughout their four-year high schooling period, to ensure predictability. A plan to raise ksh100 million for an endowment fund that will generate investment returns and reduce reliance on donations is underway with about 30% of the target raised so far. In Kenya there are a few examples of well-managed, growing and reputable, privately established philanthropies that are making a difference in well-defined niches. In the case of the Kianda Foundation education challenges facing girls and young women through high school, technical, and tertiary training in various parts of the country for 50 years have been addressed. It now has an endowment fund, ensuring its perpetuity. The Rattansi Educational Trust founded to fulfill a religious duty of giving back to the society, has provided education scholarships for needy Kenyans for decades. KCDF (Kenya Community Development Foundation) was established with assistance from external well wishers, and has not only established a successful track record of social engagement but has been instrumental in building the capacity of indigenous foundations and community development trusts as well as catalyzing the growth of this sector in Eastern Africa. The Sameer Foundation has been a longtime benefactor of social causes, community centers and community healthcare projects as 6 has the Chandaria Foundation. While these few, visible models have stood the test of time, they raise the larger question about why such initiatives are not more widespread as our society has vastly greater numbers of successful local entrepreneurs who are well aware of the social need. This study therefore looked into the factors affecting the operation of one such successful organisation, the Palmhouse Foundation, which was used as a blueprint to explore the success or failures of such foundation within Kenya and beyond. 1.2 Statement of the Problem About 65% of Nairobi’s 4 million people, (2.65 million) live in insalubrious conditions in what we call informal settlements. This informality refers both to their dwelling structures and the insecure land tenure arrangements they live under. This dominant share of the capital’s population, live on less than 1% of the city’s lad mass (Ahadi Trust, 2012). Today there are approximately 200 slums of various sizes in Nairobi and most residents of these settlements pay rent to absentee landlords. This raises several questions: Is this pervasive social need including absence of resources among children from poor families to pay for education and give them a fighting chance in life invisible to individuals with resources? Why is there such little enthusiasm to solve these pressing problems through structured private initiatives? Are well-endowed individuals unaware of the social benefits of making such structured private contributions or might there be environmental and cultural factors impeding their efforts? The Palmhouse Foundation is one locally established private philanthropic foundation that, in contrast to the prevailing trend, has endured the test of time, established sound structures and 7 notable track record precisely to respond to the pressing issue of social inequality by addressing funding gaps among poor, deserving students in high schools. Palmhouse has created social value by committing to the goal of superior performance, developing a unique area of focus and approach, aligns operations to its strategy, and defines concrete goals in its chosen fields. It has avoided the pitfalls of foundations that have failed to approach philanthropy strategically, resulting in unrealised potential (http://www.isc.hbs.edu/soci-philanthropic.htm). This study sought to study the performance of the Palmhouse Foundation since it was established a decade ago, to understand how it has created value by filling the gap, and draw lessons which can be extrapolated to strengthen the policy environment and stimulate the establishment of similar private initiatives. 1.3 Research Questions The study was guided by the following research questions: 1. How does the profile and type of sponsors affect the performance of the Palmhouse Foundation? 2. To what extent does the Palmhouse Foundation reputation affect the organisation’s performance? 3. What is the relationship between the leadership and management of Palmhouse Foundation and its performance? 8 1.4 Objectives of the Study The study aimed to study the performance of private philanthropic organisations in Kenya, using the case of the Palmhouse Foundation. The study sought specifically to: 1. Establish how the profile and type of sponsors affect the performance of the Palmhouse Foundation. 2. Determine the extent to which the reputation of the Palmhouse Foundation affects its performance. 3. Examine the relationship between the Palmhouse Foundation’s leadership and management and its performance. 1.5 Research Assumptions The study was premised on the following: 1. The profile and type of sponsors affect the performance of the Palmhouse Foundation. 2. The reputation of the Foundation affects the performance of the Palmhouse Foundation. 3. The leadership and management of the Palmhouse Foundation and its performance are related. 1.6 Significance of the Study The study sought to examine the performance of private philanthropic organisations in Kenya using the Palmhouse Foundation as a case study, and to identify principles that could be extrapolated for the benefit of other social sector organisations, private sector benefactors and policy makers. The management and the Board of Trustees of Palmhouse Foundation would benefit by identifying factors that affect the performance of the foundation and which can help 9 them devise ways to mitigate against risks. The employees too benefits by gaining insights to advise management on ways of overcoming the challenges they have faced or are likely to face. Other organisations in the field of philanthropy and the social sector would learn from this study by identifying common challenges and trends as well as possible methods on effective ways of addressing them. Governments and policy makers will also derive key lessons, especially during the policy formulation stage as they seek ways of enhancing socio-economic development outcomes. They could gain insights that could inform policies to improve the operating environment for the social sector and spur a renaissance in the creation of thriving, socially transformative private philanthropies. 1.7 Scope and Limitations of the Study This study was limited to a study of Palmhouse Foundation, its mission; structure, operations and impact but would tangentially refer to other local and international philanthropic organisations for illustrative or comparative purposes and to draw lessons that could inform local experience. Published literature on the organisation was also limited, despite its positive impact; Palmhouse does not yet have the benefit of decades of history or an extensive period as a subject of academic study. Primary sources of information were the promoters, directors, staff and beneficiaries of the programme, as well as media articles. Other documentation and studies citing global good practice and current trends in private philanthropy were referenced for illustrative data and theoretical frameworks. 10 CHAPTER TWO LITERATURE REVIEW 2.1 Introduction This chapter reviewed existing data from both published and unpublished sources about performance of private philanthropic organisations and the main factors generally considered to affect this sub sector. This section provides the theoretical and conceptual framework, and identifies the gap that the study sought to fill. 2.2 Review of Past Literature 2.2.1 Performance of Philanthropies From a global perspective, the philanthropic movement has many faces and is constantly undergoing internal regeneration and renewal as new players, often more demanding of measurable results, enter this social space. The most important contemporary trends and innovations that will shape the future of the sector include the following: Philanthropreneurism. This is the practice of injecting entrepreneurism into philanthropy where people make investments rather than donations in order to bring about social change. Often achieved through venture capital funds targeting low cost, low-tech innovations in areas such as water, microfinance, smallholder agricultural productivity, sanitation, low income housing, and off-grid lighting. These investors seek to do good and do well (make a profit), even if that profit is defined in social, and not monetary, terms. They believe the profit motive and the forces of the marketplace instill discipline, creativity and efficiencies that are equally beneficial for solving development challenges such as climate change and poverty, not just for 11 running a business. Sometimes referred to as “social impact investing” or just “impact investing”, these forms of social innovation encourage the setting up of small-scale businesses to get the poor out of poverty and to develop sustainable funding streams for community-level investment. They assess their social investments with the same rigour as they do their business investments, but are happy to accept a more modest return, which is often defined in social terms such as improvements in living conditions, health outcomes, school completion rates, or reduction in neighbourhood crime. (Strom, 2006). Indeed, with a background in the corporate world, the Palmhouse Foundation pioneers could be regarded as falling in this category. Partnerships and Philanthropy 2.0. Speaking at the 2009 Annual Global Philanthropy Forum on the changing practice of philanthropy, Rockefeller Foundation President Judith Rodin (2009) says philanthropy must adapt its models, adopt new technologies and Venture Philanthropy while using capital more strategically. “Our model assumes that there are many other forms of philanthropic giving; in fact our model depends on that. We have come to realize that our most valuable asset is not only our money, but the networks we have formed on the ground with NGOs of all sorts, with the private sector and with governments” (Global Philanthropy Forum, 2006) Rodin (2009) adds that the next century will be about partnership because no one has all the answers and that is why the focus of Rockefeller Foundation will be on innovation and integration 12 Philanthropic Tourism. In Kenya, as around the world, there is a growing niche market that tags philanthropic activities onto tourist packages. A niche tourism company is offering one-week trips where visitors are embedded with families in Kibera, volunteer-teach at a local school and contribute, should they so wish, towards a community project (www.nicheafricaholidays.com). This innovation is meant to tap into a growing level of social (and environmental) consciousness among modern day travelers, who are looking, in some way to do good, while having a good time, and enrich their travels through connecting with the local community. Giving While Living and Time-Bound Philanthropy. Some causes such as environmental protection and spreading advancement of deserts, combating climate change through adaptation programmes for small island states, or chronic diseases need higher expenditure today as they are time sensitive. Waiting too long will be humanly catastrophic. Many foundations get criticised by adherents to this movement for focusing on preservation rather than mission; on perpetuity rather than purpose; on enjoying a good long organisational, life not on doing good rapidly. Large philanthropists—most notably Charles Feeney of Atlantic Philanthropies—pioneered the Giving while Living approach, which aims at giving away all the income of the benefactor during his or her lifetime. This requires significantly ramping up traditional low-spend donation models in order to achieve the goal of giving away sometimes-significant endowments during a defined period. According to a former Atlantic Philanthropies CEO, the organisation adopted a more aggressive spend-down philosophy out of respect for its founder’s “giving while living” philosophy. 13 According to this former executive, foundations that last for long, “don’t necessarily improve as they get older …… if you spend your money in a short period, concentrated, wisely, you have a better chance of having significant impact on issues you care about” (Ibid.) Large foundations have now begun retooling for spend-down. The Bill & Melinda Gates Foundation recently announced that it will sunset 50 years after the death of the founder who lives longest. (Waleson, 2009).Mega billionaire Warren Buffett, who gave $30 billion—the bulk of his fortune—to humanitarian causes through the Gates Foundation has insisted that whatever is left at his death be spent down within 10 years after the settlement of any debts owed by his estate. (www.nytimes.com, Feb 10, 2011) Researchers have noted that this new trend is increasingly gaining hold; “Today’s corporate titans aren’t content to merely accrue wealth; they now want to have a more meaningful impact in their lifetimes. High-tech leaders and newcomers…..are giving while living.” (Cruthchfield& Grant, op. cit, p.4) These authors further observe that one of the most significant recent changes in the philanthropic sector is; “the new emphasis on ‘giving while living’—with more donors taking an active role in their philanthropy during their lifetimes. Because nonprofits work at the intersection of the market and the state, they increasingly act as intermediaries, channeling private wealth to help solve public problems.” (ibid. p. 3) 14 A movement that aims to ratchet up the minimum allowable giving level among US charities, operating under the name Beyond 5%, is gaining momentum, inspired by the need to do more through philanthropic giving in this generation, rather than in some distant future. Impact Investment and Philanthropic Impact Measurement - Modern social impact investors with corporate backgrounds accustomed to rapid results and rigorous methods of measuring progress in their businesses, are becoming less patient with the slow, unmeasured pace typically associated with philanthropy. Some such as Pierre Omidyan, founder of E-Bay, wound up his traditional philanthropic organisation after 15 years of frustrating impact, and set up a more entrepreneurial network of investors to support social innovators with promising, transformational ideas. His view is that the traditional approach to philanthropy—“Philanthropy 1.0”—hasn’t worked very well and hasn’t produced satisfactory results. The Rockefeller Foundation now emphasises measurement as strongly as it does effective execution. These former corporates entering into the philanthropic arena variously known as or social investors, social entrepreneurs, or impact investors desire to know why the social sector can’t produce the same results or “returns” that they are accustomed to seeing in the private sector. These entrepreneurs regularly assess the impact of their social investments (they dislike the term donation) in order to make them more effective and efficient, and use feedback to inform the design of new programmes that can deliver increasingly higher social returns. Crutchfield and Grant have noted that there is a new game in town when it comes to private philanthropy. Today’s philanthropists are focusing less on inputs and processes and more on outputs and results. They are constantly innovating new ways of solving social problems and are passionate about bringing proven techniques to scale: 15 “ The global philanthropy game is no longer about making money and passing it on to heirs or donating it to traditional charities like an alma mater or local opera company. The new philanthropy is all about leveraging financial resources by investing in the most entrepreneurial agents of change—those that have figured out how to scale their impact exponentially. It’s the end of charity as we know it, and the beginning of high-impact philanthropy” (Crutchfield & Grant, op. cit, p. 4) According to a recent issue of the Business Daily (2012), companies and individuals have been responding to an appeal by Kenyatta National Hospital to build a day-care medical center which has seen a spike in visitors due to improved services, while simultaneously undergoing a cut in public funding. A private philanthropic entity, the Sameer Foundation, donated Ksh100 million, almost a third of the project’s Ksh320 million total cost, earlier this year. A resident of Kajiado County who experienced the pain of dropping out of primary school due to poverty before being rescued by benefactors, who paid for his education overseas, set up a foundation that now provides scholarships for over 160 students and has built a boarding secondary school (Ombuor, 2012).While conducting research for its inaugural list Africa’s 40 Richest Individuals, Forbes magazine simultaneously probed the philanthropic habits of this group and found that “only a small fraction of Africa’s 40 wealthiest people were noteworthy givers” (Forbes Magazine, Africa, February 2013).A review of 50 years’ of literature on philanthropy also found that giving is positively associated with a number of factors including religion, education, income, age, marriage and involvement in volunteerism and philanthropy early in life (Bekkers and Wiepking, 2006). 16 Some have argued whether promoting philanthropy encourages a “substitution effect” under which government is then motivated to redirect tax income from socially beneficial causes to other projects that may not have the same social impact such as white elephants, palaces and military adventurism? In other words; is social justice the duty of charity, or the proper role of a socially-minded government? This argument has been countered by those who assert that social solidarity, being your brother’s keeper, and making some level of personal sacrifice for the benefit of the less advantaged are but regular features of a well-ordered, right-functioning society (Bekkers & Wiepking, op cit.).Founders of private philanthropic organisations could be responding to religious motivations and a sense of higher calling, to civic duty and social responsibility, or a desire to achieve personal satisfaction through positively impacting society. This needs to be viewed against other studies of increasing social marginalization in Kenya which could itself cause social tensions if not addressed by increased state investment in the social sector and safety nets, as well as a greater role for philanthropy and social impact investing both by individuals and companies (SID, 2009). Various proposals have been put forth including allowing corporations and individuals to give towards charities and social causes in lieu of certain portions of their tax obligations (Kimani, 2012). The idea is that in addition to ensuring that deserving social causes—normally outside the scope of government agencies—begin to receive a regular stream of income, these interactions will forge a stronger relationship between corporates and charities, which is beneficial for society as a whole. Developing such close bonds across sectors and economic strata militates against social isolation and widening social disparity. The question remains whether Kenya has developed a national philanthropic culture evidenced, among other 17 indicators, by the presence of reputable, growing and progressive privately-founded philanthropic organisations. 2.2.2 Profile and Type of Sponsors At first glance, involvement in philanthropic endeavours is gender neutral, as suggested by Clinton (2007)“Almost everyone—regardless of income, available time, age and skills—can do something useful for others and, in the process, strengthen the fabric of our shared humanity”. Clinton (p. 17, 2007). There is growing evidence, however, to suggest that men’s and women’s taste for giving are quite different. For example, Eller (1997) found a considerable difference between men and women in contributions from their respective estates, while other studies have found that both price and income have a differentiating effect on the giving propensity of men and women. Researchers from the social and behavioral sciences have long supported the stereotypes that men are more individually oriented, as traditional economic theory would suggest, and thus, less likely to contribute to charitable causes, while women are more socially-oriented and, therefore, more willing to contribute (Eckel and Grossman, 2000). As early as 1965, Rapoport and Chammah examined behavioral differences between the genders in monetary situations and through the years the results have met with mixed reviews. Nowell and Tinkler (1994) found, all other things being equal, that women made higher contributions. Newman (2000) found that women are more likely than men to donate when they see a need – a sense or urgency. A later study by Eckel and Grossman (2000) indicated that “in situations where risk was involved in the monetary situation, there was no significant gender difference; however, when risk was no longer part of the equation, women demonstrated more socially-oriented and less individually-oriented behaviors” (p. 41). 18 Specifically, women tended to be more generous with their giving than men. Similar results were found by Chrenka, Gutter and Jasper (2003) who looked only at unmarried men and women who headed households. On the contrary, based on a series of public goods experiments, Brown-Kruse and Hummels (1993) and Sell et al. (1993) found that women “contributed less to the public good than did men” (p. 74). Specifically, in the Sell et al.’s (1993) study, men were found to have contributed 61.1 percent to the public good as compared to 48.7 percent for women. In addition, a 2000 Harris Interactive Poll found that men were more motivated by tax benefits to give to charities than were women (Chaker, 2001). The results of a study by Radley and Kennedy (1995) indicate that other demographic characteristics might also affect donor behavior. Their study showed that donors, who were older, married, and in higher income brackets were more likely to be influenced by the factor of “previous assistance from charity” in their charitable giving decision-making. Respondents in their study commented that their attitudes to charity had changed over the years as they had matured, married, had children and aging parents, and experienced the sickness of relatives or friends. These life events were all seen as making the person more sensitive to the needs of others and to the plight of people in desperate situations. Some spoke of “getting a better perspective”, and of “being less self-interested” as they got older. Others mentioned having more disposable income to donate, though having less time to spare because of increased commitments. Chrenka et al. (2003) likewise found that individuals with greater than a high school degree were more likely to make charitable donations than those with less education. And, in accordance with Radley and Kennedy (1995, op. cit), Newman (2000) found that older individuals were more likely to contribute than younger individuals primarily because they were in lower income brackets. 19 2.2.3 Reputation of the Foundation Directly related to familiarity are the scope of services and the perceived reputation of a not-for-profit organisation. Some previous research on not-for-profit charitable contributions has indicated that donors are motivated in part by the reputation (Andreoni and Scholz, 1998; Peltier, Schibrowsky, and Schultz, 2002). The performance and success of any philanthropic organisations depends on the support it obtains from various contributors and sponsors. In turn, higher support and donations to an organisation’s cause enhances its performance and contributes positively to its accomplishments. Additionally, research in the advertising area has shown that targeted advertising and communications expenditures are highly correlated with perceived quality and reputation of a brand name (White and Miles, 1996). This suggests that strategies to increase donor communications and the number and quality of services provided by a healthcare organisation could also increase its name awareness, reputation and contributions. Another factor that has been studied in the past is employer recommendations of specific charities. Many employers make specific charity recommendations to their employees based on perceived reputation. For example, United Way campaigns take place annually in companies throughout the US. Employees are asked to give to charities at their place of work. Many fundraisers feel that large "leadership contributions" can be influential in encouraging more and larger contributions by others (Bakal, 1979). Radley and Kennedy (1995) note that “whether people make donations at all, and, if so how much they give, may be affected by social norms”. Individual judgments as to what organisations to support and how much to give are largely based on normative standards for their respective social group (Macaulay, 1970). Thus, if it is the norm to give to a particular not-for-profit, the individual will not break with 20 the norm. Hence, employer recommendations play a significant role in the donation decision-making process. 2.2.4 Leadership and Management The need for measuring and evaluating organisational performance and social impact in third sector organisations (TSOs), with the ultimate goal of improving the degree to which their mission and objectives are achieved, has turned into one of the most popular issues in professional and academic forums during the last decade, together with the subjects of transparency and accountability. Research has suggested a consensus within the third sector about the convenience of evaluating (measuring to improve) for tactical, strategic and ethical reasons. The need for measuring the outcomes of philanthropic organisations started with the model of scientific philanthropy born in the early years of twentieth century (Anheier and Leat, 2006). As the century advanced, focus shifted from measurement to evaluation, from efficiency to effectiveness, and from internal, operating performance measures to external, mission-related impact indicators (Sawhill and Williamson, 2001). There exists today a considerable repertoire of practical experiences and alternative indicators for measuring both performance and impact. However, systematic measurement and evaluation has not yet been implemented in daily operations of most European TSOs; and even in the United States, where it has been more frequently utilised, intensity varies widely (Bertelsmann, 2001; Ostrower, 2004; Martin and Ernst, 2006). Corporate partners and funders now demand a business-like approach to TSOs management; venture philanthropists expect measurable results from their social investment projects (Dees, 1998; Letts et al., 1999). In any case, third sector organisations have continuously imported 21 business management science tools during the twentieth century, including the concepts of strategic planning (Porter and Kramer, 1999), continuous improvement, and quality management approaches and standards; evaluation being an essential piece of these tools. On-going social debate about the need for TSOs to become more transparent and accountable has pushed in the same direction, as evaluation would be the basis for both communication strategies and organisational learning processes. Evaluation would ultimately measure the degree to which non-profit organisations succeed in maximising their value to society, and would therefore substitute external valuation mechanisms based on market forces (Bertelsmann, 2001). Studies show that the quality and sufficiency of organisational structure and systems are central to the wellbeing of social sector organisations. After studying 12 high impact privately established organisations making social change in recent US history, Crutchfield and Grant, in their book Forces for Good (2007) observed that it is possible through persistence, vision and implementing certain sound practices for privately established social-change organisations to achieve significant and systemic change. They note that the organisations they studied; “…seed social movements and help build entire fields. They shape government policy, and change the way companies do business. They engage and mobilize thousands of individuals and, in so doing, help change public attitudes and behaviours. They nurture larger networks of nonprofits and collaborate rather than compete with their peers. They spend as much time managing external relationships and influencing other groups as they do worrying about building their own organisations. These high-impact nonprofits are not focused on themselves but also on the relentless pursuit of results.” (Crutchfield & Grant, p. 21) 22 The study over several years by Crutchfield and Grant found that great philanthropic and social-change organisations exhibited most if not all of 6 distinguishing features. Looking at Palmhouse through this grid, shows they employ at least four of the following six “good practices” for successful philanthropic organisations: 1. Advocate and serve. They start off by providing programmes or services in their chosen niche, but see no conflict in expanding into policy advocacy to bring about systemic change and multiply their impact 2. Tap into the power of markets – “no longer content to rely on traditional notions of philanthropy and charity or to see the private sector as the enemy, great nonprofits find ways to work with markets and help businesses ‘do well while doing good’”. 3. Inspire evangelists – find ways of enthusing volunteers and practice methods of connecting this corps of volunteers to the group’s mission and to become evangelists for their cause. 4. Nurture nonprofit networks. High impact organisations help the competition succeed, build strong networks of allies and spend time building their whole sub-sector. They freely share knowledge, wealth and expertise. 5. Master the art of adaptation, constantly modifying tactics in a changing landscape with one innovation after learning from mistakes and emerging stronger to sustain their impact. 6. Share leadership. Leaders share power and distribute leadership throughout the organisation, building strong teams and engaged boards. 23 The study will seek to establish to what extent Palmhouse Foundation practices these proven strategies. 2.3 Theoretical Framework Human Capital Theory states that other things being equal, personal earning levels and standards of living are directly correlated with the level of investment in human capital, or the amount of education and training undertaken by individuals or groups. The theory assumes that, when aggregated, this investment creates a skilled and competent labour-force, which is a prerequisite for sustained economic growth, resilience against shocks and the ability to rebound from economic crises. The rapid economic reconstruction achieved by the defeated powers of the World War II is attributed to the preservation of human-capital in these nations as infrastructure and economic production took a heavy beating. The study focuses on an organisation in the education sector because of the well-documented returns this area of human development has on society and individuals. There are many positive “spillover benefits” to society from greater investment in education. Overall, women receive higher returns on their schooling investments, though the returns on primary education are much higher for men (20%) than for women (13%). Women experience higher returns on secondary education (18% versus 14%, respectively), [Gale Encyclopedia of Education]. Researchers into social returns of education have concluded that, “The greater good realised by higher learning and education is a gift that cannot be stolen” (Ibid.) 24 2.4 Conceptual Framework Figure 1: Conceptual Framework Source: Researcher (2013) The framework was designed to help explore the correlation between the critical success factors of leadership and management; reputation; and profile of sponsor and the organisation’s overall performance and ongoing success. The questionnaire administered to the diverse range of respondents sought to explore the interplay of these factors and determine their relative contribution to the organisation’s success. Profile and Type of Sponsors Reputation of Foundation Leadership and Management Perfor mance of Ph ilanthr opic Organ isation s Affects 25 CHAPTER THREE METHODOLOGY 3.1 Introduction This chapter outlines the research design used, the target population, the sampling design and the sample size as well as the data collection procedure, instruments and sources of data. The chapter also provides the data analysis technique that the study employed as well as the data presentation and the ethical factors that were considered. 3.2 Research Design Descriptive research design was used to carry out this research. Descriptive research was used to obtain information concerning the current status of the phenomena with respect to variables or conditions in a situation (Mutai, 2000). The method involved a range from the survey which described the status quo, the correlation study which investigates the relationship between variables to developmental studies which seek to determine changes over time (Kothari, 2008). The respondents were expected to describe the factors that affect performance of the Palmhouse Foundation. The method was crucial for this study because the issue at hand required to be described and the phenomenon analysed for conclusions. The design was appropriate as according to Mugenda and Mugenda (2003), descriptive research design enables respondents to give more information on issues of interest to the researcher. 3.3 Target Population The study targeted all the members of the Board of Trustees and the employees of Palmhouse Foundation. A census was conducted which made it easier to draw conclusions since there was no need to make inferences. 26 3.4 Site of the Study The study was limited to Nairobi, where the organisation and all its staff, directors, advisory board members, and trustees are based. 3.5 Research Instruments The researcher used both primary and secondary sources to collect data for this study. The primary data was sought due to its nearness to truth and ease for control over errors (Cooper and Schindler, 2001). The questionnaires were designed to be probing in nature. In this case, the researcher administered questionnaires, with mainly closed ended questions to the sampled respondents, and collected them after one week, which allowed the respondents sufficient time to duly fill the questionnaire. This enhanced the response rate. The researcher enhanced confidentiality by assuring respondents that the information they provide would not be used for purposes outside this academic study. Secondary data was sourced by referring to existing materials such as, departmental reports, journals, other empirical researches in the area and any other relevant document that relates to the philanthropic activities both in Kenya and the world over. 3.6 Data Collection Questionnaires were tested to establish their content validity and reliability. The researcher also sought expert judgment on the content validity of the instruments from the supervisors. Reliability of the instruments was checked by running a pretesting them to determine whether they elicit the quality and type of data anticipated. The approach adopted ensured accuracy and maximum reliability of collected information as well as protection against any bias. 27 The researcher initially obtained authority from the university to introduce him to the respondents through the Chairman of the Board at Palmhouse Foundation. Once the permission was obtained, the questionnaire was distributed to respondents. 3.7 Data Analysis The collected data was thoroughly examined and checked for completeness and comprehensibility. The data was then coded, summarised and tabulated. Descriptive statistics was used to identify and establish patterns, trends and relationships, and to make it easier to understand and interpret implications of the study. Measures of central tendency (mean, mode and median) were used to establish any similarities in the data, while measures of dispersion (standard deviation and variance) were used to establish any variations deviations from the data. Pie charts and bar graphs as well as percentages and frequency tables were used to represent data, which can be easily understood by other users. The Scientific Package for Social Scientists (SPSS) and Microsoft excel was used to aid in the analysis and to obtain correlations among the variables under consideration 3.8 Ethical Considerations An essential element of any research project was ethics and due attention was paid to seeking permission for interviews and assuring respondents about the confidentiality of information provided. Results of the study were stored for some time and shared with the Kenyatta University where the researcher is a student. Reliability in reporting and in computing findings was upheld to ensure the validity and integrity of the study as well as its value to potential users of the research findings. 28 CHAPTER FOUR DATA ANALYSIS 4.1 Introduction The chapter provides an analysis of the data, based on the objectives of the study. An analysis was carried out on personal data of the respondents, the performance of the philanthropy, the effect of profile and type of sponsors on the Foundation’s performance, the effect of reputation on performance as well as the impact of leadership and management styles on performance. The analysis provides the descriptive statistics, mean and standard deviation and also seeks to find the correlation between various variables of the study. 4.2 Data Analysis 4.2.1 Personal Information The study sought to identify the personal details of the respondents. The majority of respondents (11) were female representing 52.4%, while the other 9, 42.9%, were men. One of the respondents did not respond to this question. On age, the respondents returned a mean age of 3.2 (36-45 years) with a standard deviation of 1.36 indicating a minimal deviation in the responses. Indeed the majority of the respondents (38.1%) were aged between 46 and 55 years, 19% were aged between 26 and 35 years and an equal number (percentage) were aged below 25 years and above 55 years (14.3%). The remaining 9.5% were aged between 36 and 45 years. The responses indicated a negative correlation of .401 implying that the data was biased to the left side (ages below the average) though the inclination was minimal. 29 The majority of respondents (11) representing 52.4% said that they were married, while 8 respondents (38.1%) said that they were single. The remainder said they were separated. When respondents were asked about how long they had been involved with the Palmhouse Foundation, the majority indicated that they had been associated with the organisation for between 6 and 10 years, while the other 9 respondents (42.9%) had been involved for less than 5 years. The standard deviation was minimal at 0.507 with minimal skewedness of 0.301 to the left of the data (less than 5 years experience). The study also sought to know the academic qualifications of the respondents. The majority (42.9%) said that they had a bachelor’s degree while another 33.3% said that they had a master’s degree qualification. The remaining 5 respondents (23.8%) said that their highest academic qualification was secondary level. Majority of the respondents, when asked about their position or designation at the Foundation, said that they were members of the Advisory Board (9) representing 42.9% while an equal number (6) representing 28.6% said that they were either a Trustee or a volunteer with the Foundation. 4.2.3 Performance Respondents were asked to rate the performance of the organisation and the majority of them (15) or 71.4% categorised the performance. The four who said performance was good, said that despite not achieving the desired targets, there was room for improving the performance of the Foundation. The study also sought to find out the effect of various factors on the performance of the Foundation. 30 Table 1: Performance Frequency Percent Valid Percent Cumulative Percent Valid Excellent 15 71.4 78.9 78.9 Good 4 19.0 21.1 100.0 Total 19 90.5 100.0 Missing System 2 9.5 Total 21 100.0 4.2.4 Profile and type of Sponsors The study sought to know whether the profile and type of sponsors of the Foundation had an effect on its performance. When asked the extent to which they agreed on whether supportive and loyal sponsors/donors have been key to the foundation’s success, a majority of the respondents (18) representing 52.4% agreed to a great extent; four others (19%) agreed “to some extent”; while only 3 (14.3%) said that they did not know if the profile of sponsors had any effect on the performance of the Foundation. Table 2: Supportive and Loyal Donors Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 11 52.4 61.1 61.1 Some Extent 4 19.0 22.2 83.3 Don't Know 3 14.3 16.7 100.0 Total 18 85.7 100.0 Missing System 3 14.3 Total 21 100.0 31 When asked whether the reputation of the Foundation has enhanced its performance, almost all the respondents (90.5%) said that they agreed “to a great extent”, while the remaining 2 respondents said that they agreed “to some extent”. Table 3: Reputation of the Foundation Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 19 90.5 90.5 90.5 Some Extent 2 9.5 9.5 100.0 Total 21 100.0 100.0 The respondents were also asked whether the leadership style at the Foundation is conducive and enhances the organization’s performance. Fifteen of them said leadership style affected performance “to a great extent”, while another 2 respondents said leadership style only affected the Foundation “to some extent”. The mean response of 1.11 indicates that the respondents were fairly uniform in their response. Table 4: Leadership Style Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 15 71.4 88.2 88.2 Some Extent 2 9.5 11.8 100.0 Total 17 81.0 100.0 Missing System 4 19.0 Total 21 100.0 The respondents were also asked the extent, to which they thought that focusing on education scholarships (rather than other social needs) has contributed to the success of the Foundation. Majority of them (61.9%) responded that it had affected their performance “to a great extent”, 32 while another 5 respondents (23.8%) said the impact was only “to some extent”. Only 3 respondents, representing 14.3%, said that they did not know if there was an effect or relationship between education scholarships and the performance of the Foundation. Table 5: Focus on Education Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 13 61.9 61.9 61.9 Some Extent 5 23.8 23.8 85.7 Don't Know 3 14.3 14.3 100.0 Total 21 100.0 100.0 On whether an enabling legal and policy environment in Kenya (regarding philanthropic giving) has enhanced Palmhouse’s performance and success, seven (7) respondents, representing 33.3%, agreed that it affected the performance “to a great extent”, while another 5, representing 23.8%, agreed that the effect is “to some extent”. However, another 5 respondents (23.8%), said that they did not know whether the philanthropic legal and policy framework had an effect on the Foundation’s performance. Table 6: Legal and Policy Environment Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 7 33.3 41.2 41.2 Little Extent 5 23.8 29.4 70.6 No Effect 5 23.8 29.4 100.0 Total 17 81.0 100.0 Missing System 4 19.0 Total 21 100.0 The study also sought to know from the respondents whether local cultural considerations and beliefs (regarding philanthropic giving) have contributed to the performance and success of the Foundation. Responses were quite varied with 6 respondents, (28.6%), saying that impact was 33 “to a great extent”, while two respondents, representing 9.5%, said that the effect was to “some extent”. Another 2 said that they did not know whether there was an effect or not. Another two (2) also said that there was no effect of local cultural considerations and beliefs regarding philanthropic giving, on the performance of Palmhouse Foundation. Only 3 respondents (3) representing 14.3% said that the effect was only to a little extent. Table 7: Cultural Considerations Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 6 28.6 40.0 40.0 Some Extent 2 9.5 13.3 53.3 Don't Know 2 9.5 13.3 66.7 Little Extent 3 14.3 20.0 86.7 No Effect 2 9.5 13.3 100.0 Total 15 71.4 100.0 Missing System 6 28.6 Total 21 100.0 However, when asked whether the skill and expertise of the employees were central to the performance and success of Palmhouse Foundation, the majority of the respondents (16), representing 76.2%, agreed “to a great extent”, while another 3 said the effect was only “to some extent”. Table 8: Employee Skills and Expertise Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 16 76.2 84.2 84.2 Some Extent 3 14.3 15.8 100.0 Total 19 90.5 100.0 Missing System 2 9.5 Total 21 100.0 34 The respondents were also about the gender of the Foundation’s main sponsors. Nearly all the respondents (16) representing 76.2% said that the sponsors were mainly male, with only one of the respondents who responded to this question said that the sponsors were female. Table 9: Statistics Sex Category Type N Valid 17 19 21 Missing 4 2 0 Mean 1.0588 1.2105 1.6667 Median 1.0000 1.0000 1.0000 Std. Deviation .24254 .53530 .85635 Skewedness 4.123 2.658 .743 Std. Error of Skewedness .550 .524 .501 Table 10: Gender of Sponsors Frequency Percent Valid Percent Cumulative Percent Valid Male 16 76.2 94.1 94.1 Female 1 4.8 5.9 100.0 Total 17 81.0 100.0 Missing System 4 19.0 Total 21 100.0 The respondents were also asked the nature or type of the sponsors that the Foundation has. Majority of them (16), representing 76.2%, said that the sponsors were local and corporate 35 while two respondents (9.5%) said that the sponsors were local and individual. Only 1 respondent said that the sponsors were mainly international and individual which leads one to conclude that the majority of the sponsors and organizations are from within Kenya. Table 11: Category of Sponsors Frequency Percent Valid Percent Cumulative Percent Valid Local and Corporate 16 76.2 84.2 84.2 Local and Individual 2 9.5 10.5 94.7 International and Corporate 1 4.8 5.3 100.0 Total 19 90.5 100.0 Missing System 2 9.5 Total 21 100.0 The study also sought to know the extent to which the type of sponsor (indicated above) affects the overall performance of the Foundation to which the majority responded that the effect was “to a great extent” (57.1%), while another 19% said that the effect was “to some extent”. Another 5 respondents, representing 23.8%, responded that they did not know whether the type of sponsors affected performance of the Foundation. Table 12: Effect of Type of Sponsor on Performance Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 12 57.1 57.1 57.1 Some Extent 4 19.0 19.0 76.2 Don't Know 5 23.8 23.8 100.0 Total 21 100.0 100.0 36 4.2.5 Reputation The study scrutinised the impact that the reputation of the Foundation has on its performance. When asked about how they rated the Foundation’s overall reputation, the majority (52.4%) rated it excellent, while the remaining 42.9% said the overall reputation was good. Table 13: Impact of Reputation on Performance Frequency Percent Valid Percent Cumulative Percent Valid Excellent 11 52.4 55.0 55.0 Good 9 42.9 45.0 100.0 Total 20 95.2 100.0 Missing System 1 4.8 Total 21 100.0 When the respondents were asked to assess whether the reputation of the founders impacted the performance of the Foundation, in the main, they strongly agreed (1.05) that it greatly affected organisation’s standing and the standard deviation of 0.22 indicated that the respondents were rather uniform in their responses. Indeed 19 of the respondents said that the reputation of the founders greatly affected the reputation of the Foundation. On whether the reputation of the trustees and board of advisors impacted the reputation of the Foundation, the respondents on average strongly agreed that it affected “to a great extent” (18) while the other 2 respondents said that the effect was to “some extent”. However when asked whether the transparency of the selection/scholarship award process impacts the reputation of the Foundation, all respondents (100%) said that this process affected reputation “to a great extent”. The mean response also attested to these responses. On whether the profile of the 37 sponsors the Foundation has managed to attract impacts its reputation, the respondents on average said that it affects reputation “to a great extent”. Eighteen (18) respondents said the effect was “to a great extent”, while the remaining three (3) said the effect was “to some extent”. All the respondents (100%) said that the transparency and accountability of management processes and financial reporting impacts the reputation of the Foundation “to a great extent”. On the impact of testimonials and feedback from beneficiaries on the reputation of the Foundation, all respondents (21) agreed the impact was “to a great extent”. The efficiency and effectiveness of the Foundation’s staff impacts the reputation of the Foundation “to a great extent” according to 76.2% of the respondents, while according to the remaining 23.8%, the impact is “to some extent”. Table 14: Factors Affecting Reputation Founders Trustees Transparency Profile Management Feedback Efficiency N Valid 20 20 21 21 21 21 21 Missing 1 1 0 0 0 0 0 Mean 1.0500 1.1000 1.0000 1.1429 1.0000 1.0000 1.2381 Median 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Std. Deviation .22361 .30779 .00000 .35857 .00000 .00000 .43644 Skewedness 4.472 2.888 2.202 1.327 Std. Error of Skewedness .512 .512 .501 .501 .501 .501 .501 38 4.2.6 Leadership and Management The study also sought to find out the impact of leadership and management styles on the performance of the Foundation. Table 15: Elements of Leadership and Management Current Actively Decision Adequate Training Structures Succession Communication Sustainable N Valid 21 18 13 11 15 18 18 19 18 Missing 0 3 8 10 6 3 3 2 3 Mean 1.3333 1.9444 1.9231 2.9091 2.6000 3.0556 3.2778 3.1053 3.6667 Median 1.0000 2.0000 2.0000 3.0000 3.0000 3.0000 3.0000 3.0000 4.0000 Std. Deviation .48305 .99836 1.11516 1.13618 .91026 .80237 .82644 .93659 1.08465 Skewedness .763 .920 1.878 .211 -.341 -.875 -1.297 -.227 -1.106 Std. Error of Skewedness .501 .536 .616 .661 .580 .536 .536 .524 .536 On whether the current leadership style enhances performance, 66.7% of the respondents said that leadership style enhances performance “to a great extent”, while the remaining 33.3% said that the impact was “to some extent”. However, on the extent to which the advisory board members and trustees actively participate in key decisions which enhances performance of the Foundation, 33.3% said that the impact was “to a great extent”, 33.3% said the impact was to “some extent”, while 9.5% said they did not know if there was an impact or not. Another 9.5% said that there was no effect on the performance of the Foundation. 39 Table 16: Active Participation by Board Members Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 7 33.3 38.9 38.9 Some Extent 7 33.3 38.9 77.8 Don't Know 2 9.5 11.1 88.9 Little Extent 2 9.5 11.1 100.0 Total 18 85.7 100.0 Missing System 3 14.3 Total 21 100.0 On whether employees actively participating in decision making enhancing performance of the Foundation, 23.8% said the impact was “to a great extent”, 28.6% said it was “to some extent”, while 4.8% said that there was “no effect”. An equal percentage said they did not know if there was any impact or not. A total of 8 respondents, or 38.1%, did not respond to this question. Table 17: Participation in Decision Making Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 5 23.8 38.5 38.5 Some Extent 6 28.6 46.2 84.6 Don't Know 1 4.8 7.7 92.3 No Effect 1 4.8 7.7 100.0 Total 13 61.9 100.0 Missing System 8 38.1 Total 21 100.0 The study also sought to know whether training and capacity building for staff and volunteers impacted organisational performance. The responses were quite varied with only 1 respondent saying training of staff impacted performance of the Foundation “to a great extent”, 3 said it 40 was “to some extent”, 2 said there was “no impact” while another 4 said they did not know if capacity building for staff and volunteers had any impact on performance. Table 18: Adequacy of Training and Effect on Performance Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 1 4.8 9.1 9.1 Some Extent 3 14.3 27.3 36.4 Don't Know 4 19.0 36.4 72.7 Little Extent 2 9.5 18.2 90.9 No Effect 1 4.8 9.1 100.0 Total 11 52.4 100.0 Missing System 10 47.6 Total 21 100.0 On the impact of adequate training and capacity building for trustees and board members on the performance of the Foundation, the responses too were varied with 9.5% of them saying the effect was “to a great extent”, while 19% said the impact was “to some extent”. Another 33.3% said they did not know if there was any impact, while 9.5% said the impact was only “to a little extent”. Another 28.6% of the respondents did not respond to the question. Table 19: Effect of Training of Trustees on Performance Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 2 9.5 13.3 13.3 Some Extent 4 19.0 26.7 40.0 Don't Know 7 33.3 46.7 86.7 Little Extent 2 9.5 13.3 100.0 Total 15 71.4 100.0 Missing System 6 28.6 Total 21 100.0 41 The researcher inquired about whether the Foundation’s organizational structures and systems were adequate to meet the current challenges to which the majority of the respondents, (47.6%), responded “do not know”, 23.8% said “to a little extent”. 9.5% of the respondents agreed “to some extent”, while only one respondent representing 4.8% said he agreed “to a great extent”. Table 20: Effect of Organizational Structures on Performance Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 1 4.8 5.6 5.6 Some Extent 2 9.5 11.1 16.7 Don't Know 10 47.6 55.6 72.2 Little Extent 5 23.8 27.8 100.0 Total 18 85.7 100.0 Missing System 3 14.3 Total 21 100.0 The study also sought to find out if the Foundation has an adequate succession plan in place in order to ensure its long-term sustainability. The majority of respondents (38.1%) said they did not know what impact a suitable succession plan had on the organisation’s performance. An equal number (38.1%) said the impact was “to a little extent”. Only 4.8% said that the impact was “to a great extent”, while 1 respondent said the impact was “to some extent”. 42 Table 21: Impact of Succession Plan on Performance Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 1 4.8 5.6 5.6 Some Extent 1 4.8 5.6 11.1 Don't Know 8 38.1 44.4 55.6 Little Extent 8 38.1 44.4 100.0 Total 18 85.7 100.0 Missing System 3 14.3 Total 21 100.0 The study also asked about the impact on performance of effective internal and external communication to which the majority, (42.9%), said that they did not know; 23.8% said that there was an impact but to a “little extent”, while 14.3 said the impact was “to some extent”. Only 1 respondent (4.8%) said that the impact was “to a great extent” Table 22: Impact of Effective Communication on Performance Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 1 4.8 5.3 5.3 Some Extent 3 14.3 15.8 21.1 Don't Know 9 42.9 47.4 68.4 Little Extent 5 23.8 26.3 94.7 No Effect 1 4.8 5.3 100.0 Total 19 90.5 100.0 Missing System 2 9.5 Total 21 100.0 Regarding whether the foundation was on a sustainable financial footing and the impact that this has on the performance of the Foundation, the majority of the respondents, (47.6%), said 43 the impact was only “to a little extent”, while 3 others said that there was no effect. Only 2 respondents said that they did not know the impact, while another 2 said that the impact was “to some extent”. Another 1 respondent said the impact was “to a great extent”. Table 23: Impact of Sustainable Financial Base Frequency Percent Valid Percent Cumulative Percent Valid Great Extent 1 4.8 5.6 5.6 Some Extent 2 9.5 11.1 16.7 Don't Know 2 9.5 11.1 27.8 Little Extent 10 47.6 55.6 83.3 No Effect 3 14.3 16.7 100.0 Total 18 85.7 100.0 Missing System 3 14.3 Total 21 100.0  4.3   Qualitative  Analysis  Information for this section was obtained from the interview that was conducted with the founder of the Foundation Eric Kimani. He attested that the Foundation was established in 2002 and employs an administrator but has 12 trustees, and 12 other oversight board members. According to him, the mission of the Foundation is to finance the secondary education for deserving students and mentor them through life. This also translates to the impact on the society at large in the long run. The vision of the foundation is to enable deserving students transform their lives, their families and ultimately the entire society. When asked about the staffing and growth policy, the Chairman reiterated that the Foundation aimed at a “near zero-administration organization” and on the capacity development of volunteers, he stated that the Foundation trained mentors once a year. On the capitalization and fundraising, the Foundation reaches out to personal contacts of the founders as well as contacts 44 of the advisory board members and accepts donations from any sponsor. As the pool of donors expands, the Foundation plans to develop a policy on what kind of donations they will not accept as a way of managing its reputation. He stated that the current percentage of contributions is nearly 100% local. As regards the current contribution structure, the founder said that it is currently split 70:30 in favour of corporate donors. The chairman said that Kenyans are not a generous people because of the “donor mentality” inculcated by donor aid over the years and the “scarcity mentality” that makes giving myopic – directed only to “my people”. He went on to corroborate this with the fact the Foundation does not receive any significant contributions from locally incorporated private philanthropies. When asked about the underlying legal, cultural, historical, or economic reasons for this low level of giving, he said that the locally incorporated philanthropic institutions are often created to serve the individual interests of their founders and some even use them to promote their businesses. However the Chairman said that the Government has granted them tax-exempt status which helps their cause and that both mentors and the board serve voluntarily. In explaining the process of scholarship allocation, he said that each year, soon after KCPE results are announced, the Foundation advertises country-wide for qualified candidates to attend interviews at the 9 national interview centres, based largely in the old provincial headquarters of Kenya. The decision to award scholarships is purely founded on need and performance but backed by hard evidence from the school, the administration and religious leaders in the community the student comes from. To guard against potential accusations of bias or uneven scholarship distribution, the Foundation announces the names of those selected publicly on the day and place of the interview. 45 On the conditions attached to continued scholarship support, the Foundation demands attendance at mentoring events to help build character for the scholars as well as well as keeping a certain grade average. Thus far the Foundation has not had reason to discontinue anyone. To monitor progress for the beneficiaries, the Foundation receives all report forms and meets all students as a group and individually once a term. Regarding the logistical challenges the Foundation faces in annual student selection and systems that are in place to address them, the chairman said that travel costs for the beneficiaries are met by the trustees and parents or guardians of applicants. He noted however that distances to the interview centres could be very long for some high potential candidates and some have been unable to meet the costs of travel. The chairman was also asked to outline the communication strategy of the Foundation. He noted that the Foundation deals with schools and most of Kenya’s good schools know about the Foundation. “Most primary and secondary schools will direct potential awardees to us” he said. However to appreciate and reach out to sponsors, the Foundation holds golf tournaments; a recognition and thanksgiving dinner and uses press releases to profile key initiatives. To enhance our reputation among the sponsors, the Foundation sends annual audited accounts and termly report/mentoring reports to them. The founders were also asked about their motivations for starting the Foundation to which they said this social investment has realized many more returns that any business venture they’ve invested in due to the influence and access it has given them, as well as the joy of seeing the lives of so many students being transformed through educational opportunity. However as to the reason for focusing on education scholarships rather than something else, he said he believed in teaching people how to fish and tackling the vicious cycle of poverty at the base, 46 which is best achieved, in his view, through quality education. The study also sought to know how the founders would assess the impact that the Foundation has had on this country’s education sector. They said they believed that they were the pace setters of the now crowded high school scholarship field and that they had gained respect from bigger players in the field like Equity Bank, Cooperative Bank, Kenya Commercial Bank, the Nation Media Group and many others. Many of these large corporate worked with the Foundation and learnt from it. About where they got the initial capital for the foundation, the founders indicated that the seed capital of Ksh 500,000 was obtained from a family business – Palmhouse Dairies Limited. The founder confirms that none of their commercial investment had paid back anything near as much as the Foundation: “the satisfaction it gives and the circle of influence it has opened to us is beyond description”, said the chairman. “Through this we have an infinite insurance against death that will likely live longer than our physical years”. On management and organizational structure, the Foundation has two founder trustees who are the vision carriers and a board of trustees who meet regularly to oversee strategy. The Board of Advisors plays a consultative role and meets once a year to provide an accountability framework. The founders confirm that they have plans for leadership transition beyond themselves and already have a modest endowment fund of just over Ksh 20 million. The plan is to grow this in the near to mid-term to Ksh 100 million. 47 CHAPTER FIVE SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS 5.1 Introduction The chapter summarizes the findings, concludes the findings and recommends the necessary steps identified during the course of the study. It also suggests areas in which further research can be conducted to complete some of the areas not covered in this study. 5.2 Summary of the Study The study found out that the majority of respondents (11) were female representing 52.4% while the other 9, representing a 42.9% of the respondents, were men. Majority of the respondents (38.1%) were aged between 46 and 55 years, 19% were aged between 26 and 35 years. On marital status, the majority of respondents (11) or 52.4% were married while 8 respondents (38.1%) were single. The majority of the respondents had worked for between 6 and 10 years, the period over which the Foundation has been in existence. On the academic qualifications of the respondents, the majority of them (42.9%) said that they had a bachelor’s degree while the majority of the respondents, when asked on their position or designation at the Foundation, said that they were members of the Advisory Board (9) representing 42.9% . A 71.4% of the respondents said that the performance was excellent while 19% said the performance was just good. However when asked whether supportive, loyal sponsors/donors have been key to the success of the Foundation, majority of the them (18) or 52.4% agreed to it to a great extent and another (4) or 19% agreed but to some extent. However, 90.5% of the respondents agreed that the reputation of the Foundation has enhanced performance “to a great 48 extent”. Respondents seemed agreed that the factors that have most positively affected performance include past performance and success of the Foundation (76.2%), sound leadership (71.4%), a focus on education scholarships – a sector that is well understood and whose link to development is clear (61.9%), and transparency of the selection process (65%). Other important factors identified by respondents include the [good] reputation of the founders, skill and expertise of the employees, the corporate reputation of the major sponsors the foundation has managed to attract, as well as feedback and testimonials from beneficiaries. However, only a few respondents (33%) felt that the legal and policy environment in Kenya fostered the growth of a private philanthropic movement. Likewise, very few (28.6%) felt that local cultural considerations and beliefs promoted the growth and performance of private philanthropies. Nearly all the respondents (16) or 76.2% said that the sponsors are primarily local, corporate and male. A majority (52.4%) rated overall reputation of the Foundation as excellent. Majority of the respondents affirmed that reputation of the trustees and board of advisors, transparency of the selection/scholarship award process, profile of the sponsors the Foundation has managed to attract, the transparency and accountability of management processes and financial reporting and the testimonials and feedback from beneficiaries affected the performance of the Foundation Majority of respondents (66.7%) said that the current leadership style enhanced performance. Respondents gave lower scores to questions about whether Advisory board members and trustees actively participate in key decisions (33.3%). Scores were lower on i; and capacity building for trustees and board members, sufficiency of organizational structures and systems, 49 adequate succession plan in place in order to ensure its long term sustainability, the effectiveness of both the internal and external communication at the Foundation and on whether the Foundation was in a sustainable financial footing, the respondents affirmed that leadership and management style was critical on the performance of the Foundation. 5.3 Conclusion The context in which today’s philanthropists operate is complex, multifaceted and vastly beyond the scope of anyone organization or government to solve. It seems today’s philanthropists such as the Palmhouse Foundation founders and social impact investors have gone beyond sterile debate about whether philanthropy could replace the proper role of government. Rather such philanthropic organisations seem to be responding to a deep human need to make an impact, to have significance and to leave a mark on the lives of individuals and communities. This analysis shows that Palmhouse appears to be continually asking, “philanthropy for what purpose?” and endeavours to keep laser-focused on the public good it seeks to accomplish and avoid becoming too inwardly focused. If this need exists in all of us, how do we explain the dearth of similar organizations and low general levels of giving? This study shows that whatever personal motivations inspired the founding of Palmhouse clear leadership principles that are generic to organisational success in the social sector—have been at play. The organisation also appears to be far more willing to develop networks and forge partner with like-minded organisations, individuals, governments and corporations so they can build scale, bring in new skills and resources and improve chances of success. This has also been shown to be in line with best practice: 50 “There is no universal equation for the bet relationship between the marketplace, government and nonprofit providers—the challenge is making the mix work. As the balance of players—commercial, nonprofit, and public—shifts, the public benefits sector presents a whole new environment for philanthropic action.” Bernholz p 37 The Foundation also appears to have ably navigated the interplay between society’s three key sectors: government, private sector and the non-profit sector as shown through its operations, networks and intentionally-forged partnerships. This is also in keeping with global good practice: “Philanthropy exists as part of civic life, as part of communities, and as part of all cultural traditions. It can neither survive nor thrive on its own, separated from the public and private sectors; nor can those partners accomplish their purposes without philanthropy and community action. The three-way tango of sectors defines, shapes and directs philanthropy, just as changes in philanthropy influence expectations for public investment or corporate responsibility.” Bernholz p 5 This case study demonstrates the power of a compelling vision and what can be achieved with focused determination in an area of pressing social need. The research brought up the importance of transparency, of demonstrating impact through feedback on life transformation, as well as the value of integrity and leadership to organisational success. Palmhouse Foundation has managed to attract a high profile and reputable advisory board. Though they only meet once a year to give counsel, add a lot of value through their endorsement and willingness to be associated with the organisation, because of the credibility and high level of trust this communicates to potential new donors. Also worth note that this 51 brand name advisory board is very large with well-established reputations and long experience in Kenya’s corporate sector. This increases the likelihood that decision makers at the major corporations seeking to get involved with the Foundation will personally know at least one of this group and can easily call them should they have any queries about the foundation. 5.4 Recommendations for Policy The study also shows that Palmhouse’s practices and organizational culture internalized over its decade of operation align well with the six “good practices” of successful philanthropic organisations identified by Crutchfield and Grant including developing partnerships and networks, inspiring a team of evangelists and volunteers, adopting a shared leadership model, and combining the roles of advocacy with providing social services. A concern today, as in the earlier years of philanthropy in the 19th century, is that large private foundations have the ability to exercise disproportionate amount of leverage on agenda setting, through funding public campaigns, engaging lobbyists to influence policy makers, and media campaigns; yet their causes are not always benign or even socially beneficial. This elitist approach to public policy agenda setting in effect, strips the voiceless and poor of their role in influencing the main policy decisions of the day. The development of networks, both business and social, that foster giving by high net-worth individuals should be nurtured through specific policy incentives. These networks will help reform cultural practices and beliefs that stand in the way of generous philanthropic giving. Policy reform and engagement with industry associations could require private and public companies to set aside a day a year for social engagement by staff. This does not have to be all about street clean ups. Rather, touch points for engagement should be intentionally kept as 52 wide and diverse as possible to multiply options and opportunities for impact and forging long term relationships. Incentives should include technical assistance offered to charities in areas such as bookkeeping, statutory compliance, branding and fundraising techniques, volunteer development, financial management, partner development, research, communication with stakeholders, legal assistance, advocacy, advisory work as a member of a sitting committee or board, and so on. Assistance to these specific areas need not only be in kind but can also be in cash. This can help underscore the point proved through the actions of Chuck Feeney, a founder of the World Duty Free airport franchise and a leading light among modern day philanthropists, that “wealth is not duty-free”. “I believe that people of substantial wealth potentially create problems for future generations unless they themselves accept responsibility to use their wealth during their lifetime to help worthwhile causes”. (Chuck Feeney, in the Billionaire Who Wasn’t.) An important way of creating awareness and developing a culture for philanthropic involvement would be to introduce this topic early in the school years as part of a general education programme on civic responsibility. Young students ought to learn the importance of social engagement early in life, given exposure to appropriate role models, and be required to engage in some hours of community service. Students seeking admission into universities should be ranked on their level of community and civic engagement as well as their scholastic and sporting prowess (Bernholz p.132). It is noteworthy that Palmhouse embeds mentoring and character building of the young scholars they sponsor into their overall programme. Many of them intend to give back to the community they came from and improve lives in the, often, poor neighborhoods they come from. 53 Legal as well as fiscal and monetary incentives that encourage a philanthropic culture have proven to be successful in many countries. According to some experts, “A system of laws that encourages philanthropic activity—at all levels—is an inarguable public benefit” (Bernholz p. 132). The founder of Palmhouse also noted in a newspaper opinion piece that reforms that would make contributions to philanthropic causes tax deductible (as is the practice in many advanced economies) would give a considerable boost to the sector. As frequently recommended by American philanthropist and CNN founder, Ted Turner, an annual list that ranks and celebrates the most generous social contributors would incentivize those with the resources to do so to give, rather than hoard, their money. Incentives should also be put in place to spur the development of a market for philanthropic innovation in order to stimulate independent research and innovation. The breadth of choices for charitable giving should remain “as great as possible—from direct provision of help to an individual, to global policy research, analysis, and advocacy” (Bernholz p.128). The Kenya Community Development Foundation, for example, helps build capacity of community-based philanthropic initiatives and is also seeking to raise funding in order to more effectively leverage capital markets. Bernholz has noted that partnerships as well as sharing information and research among different players in the sector is conducive to growth and development of knowledge-sharing systems such as common databases or portals can help strengthen the industry.. The interview with Palmhouse’s founder pointed out that the organisation has indeed partnered with—and even helped develop—some of the corporate organisations now actively involved in the area of high school scholarships. According to the Palmhouse administrator showed that the major players in the high school scholarship sector regularly share information about their selection process and their list of winners in order to avoid duplication and unnecessary competition. 54 Cooperation avoids fragmentation and dissipation of efforts. It helps build scale and increases the chances of achieving the common objective of maximizing the number of scholarships awarded to deserving, needy students. This cooperation helps build “the industry of giving” (Bernholz) and to introduce commonly understood standards of quality as well as acceptable standards of monitoring and evaluation. “Philanthropy is a unique industry in that it—alone among financial services industries—stands to achieve its stated goals only if the individual firms within the sector share information, collude on strategy, pool financial resources, jointly invest in human capital, and build systems for efficiently aligning their individual actions. The whole aim is to develop a more evolved philanthropic industry and supporting infrastructure.” (Bernholz, p. 223, 2004) 5.5 Suggestions for Further Research The scope of this study did not allow for in depth investigation of dimensions of private philanthropic giving in Kenya that would enrich discussion and illuminate further research of the subject. These areas would include more detailed analysis of the cultural beliefs and values that constrain private philanthropic values, some of which are perhaps being transmitted from one generation to another unawares. The socio economic impact of the absence or dearth of policies intentionally designed to promote private, large scale philanthropic giving is another dimension worthy of further study. There is much room for improving the policy environment in this regard and there are many global good practice examples to learn from. A related area of study would be to assess the economic contribution of the philanthropic center to the national economyis sector to the government in terms of opportunity cost 55 REFERENCES Andreoni, J. and Scholz, J. K. (1998). An Economic Analysis of Charitable Giving with Interdependent Preferences. Economic Inquiry, Vol. 36, 3, pp. 410-19. Anheier, H. and Leat, D (2006), Creative Philanthropy. 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Social Psychology Quarterly, Vol. 56, pp. 211-222 Survey of Informal Settlements in Nairobi, Ahadi Trust, 2009 Tayart D. L. (2005), Foundations: Creating Impact in a Globalised World Ukombozi wa Kweli; Concept Note on Kenya’s Jubilee. Ahadi Trust, 2012 Waleson, H. Beyond Five Percent: The New Foundation Payout 59 Strom, S. What’s Wrong with Profit, November 2006, The New York Times White, J., and Miles, M. (1996). The Financial Implications of Advertising as an Investment. Journal of Advertising Research, Vol. 36, pp. 43-53. 60 APPENDICES Appendix 1: Introduction Letter COSMA GATERE P.O. BOX 63071 – 00200 NAIROBI Dear Sir/Madam, RE: ACADEMIC RESEARCH PROJECT ON THE PALMHOUSE FOUNDATION I am a postgraduate student at Kenyatta University pursuing an Executive Master of Public Policy and Administration (EMPPA). I am currently carrying out a study towards my dissertation on The performance of private philanthropic organisations in Kenya: the case of the Palmhouse Foundation. The success of this research depends substantial on your cooperation and I this is to request you to respond to the attached questionnaire as fully as possible and to the best of your knowledge. There are no correct or wrong answers and the questionnaire should only take about 15 minutes of your time to complete. Information provided will solely be used for the purposes of this study and all responses are anonymous. Thanking you in advance for your cooperation. Sincerely, Cosma Gatere (cgatere@gmail.com) 61 Appendix 2: Questionnaire Instructions: Kindly take a few minutes and fill the questionnaire with a tick where it best describes your response There is no correct or wrong answer SECTION A: BIO DATA 1. What is your gender? Male [ ] Female [ ] 2. Within which age bracket do you fall? Age (Years) 25 and below 26 – 35 36 – 45 46 - 55 Above 55 Response 3. What is your marital status? Marital Status Married Single Widowed Separated Response 4. For how long have you been involved with the Palmhouse Foundation? Length (Years) Less than 5 6-10 11-15 Over 16 Response 62 5. What is your highest level of educational attainment? Academic Level Secondary Form Six Bachelors Masters Others (Specify) Response 6. What is your current role / designation at Palmhouse? Designation Trustee Advisory Board Employee Volunteer Other (Specify) Response SECTION B: PERFORMANCE 7. How would you rate the overall performance of Palmhouse Foundation thus far? Rate Excellent Good Fair Poor Don’t Know Response 8. Using the scale provided below, indicate to what extent you agree with the following statements regarding the performance of Palmhouse Foundation? Factors 5 4 3 2 1 Supportive, loyal sponsors/donors have been key to success The Foundation’s reputation has enhanced its performance The leadership style at the Foundation is conducive and enhances the organization’s performance 63 Focusing on education scholarships (rather than other social needs) has contributed to the success of the Foundation An enabling legal and policy environment in Kenya (regarding philanthropic giving) has enhanced Palmhouse’s performance and success Local cultural considerations and beliefs (regarding philanthropic giving) have contributed to the performance and success of the Foundation The skill and expertise of the employees are key to the Palmhouse’s performance and success Where 5 – Great extent, 4 – Some Extent, 3 – Don’t Know, 2 – Little extent, and 1 – No Effect 9. What, in your view, are the major challenges that the Foundation faces? i. ……………………………………………………………………………………… ii. ……………………………………………………………………………………… iii. ……………………………………………………………………………………… iv. ……………………………………………………………………………………… v. ……………………………………………………………………………………… SECTION C: PROFILE AND TYPE OF SPONSORS 10. What is the gender of the majority of your sponsors? Male [] Female [] 64 11. From what category of sponsors do you receive most of your support? Sponsor Response Local and Corporate Local and Individual International and Corporate International and Individual Other (Specify) 12. In your opinion, to what extent does the type of sponsor (indicated above) affect the overall performance of the Foundation? Extent Great Extent Some Extent Don’t Know Little Extent No Effect Response Explain your response above………………………………………………………… ………………………………………………………………………………………… ………………………………………………………………………………………… SECTION D: REPUTATION 13. How would you rate the corporate reputation of the Foundation? Excellent [] Good [] Fair [] Poor [] 14. Using the scale provided below, indicate to what extent you agree with the following statements regarding the reputation of the Foundation Factors 5 4 3 2 1 The reputation of the founders impacts the reputation of the Foundation 65 The reputation of the trustees and board of advisors impacts the reputation of the Foundation The transparency of the selection/scholarship award process impacts the reputation of the Foundation The profile of the sponsors the Foundation has managed to attract impact its reputation The transparency and accountability of management processes and financial reporting impacts the reputation of the Foundation The testimonials and feedback from beneficiaries impacts the reputation of the Foundation The efficiency and effectiveness of the Foundation’s staff impacts the reputation of the Foundation Where 5 – Strongly Agree, 4 – Agree, 3 – Don’t Know, 2 – Disagree and 1 – Strongly Disagree 15. What other major factors affect the reputation of the Foundation? i. …………………………………………………………………………………… ii. …………………………………………………………………………………… iii. …………………………………………………………………………………… SECTION E; LEADERSHIP AND MANAGEMENT 16. How would you rate the overall leadership of the Foundation? Excellent [] Good [] Fair [] Poor [] 66 17. Using the scale provided below, indicate to what extent you agree with the following statements regarding the leadership and management of the Foundation and their effect on its performance Factors 5 4 3 2 1 The current leadership style enhances performance Advisory board members and trustees actively participate in key decisions which enhances performance of the Foundation Employees actively participate in decision making which enhances performance of the Foundation There is adequate training and capacity building for staff and volunteers of the Foundation There is adequate training and capacity building for trustees and board members The Foundation’s organisational structures and systems are adequate to meet the current challenges The Foundation has an adequate succession plan in place in order to ensure its long term sustainability Internal and external communication is effective and enhances the Foundation’s performance The foundation is on a sustainable financial footing Where 5 – Strongly Agree, 4 – Agree, 3 – Don’t Know, 2 – Disagree and 1 – Strongly Disagree 67 18. What improvements in structures and systems do you thin would enhance the performance of the Foundation? ................................................................................................................. ……………………................................................................................................................. 19. What does the Foundation need to put in place to ensure its long-term viability? ................................................................................................................................................ ……………………………………………………………………………………………………………………………………………………………………………………………… 20. What else do you consider helpful for this study that is not covered in the questionnaire? ……………………………………………………………………………………………… ……………………………………………………………………………………………………………………………………………………………………………………………… ……………………………………………………………………………………………… End of the Questionnaire. Thank you for your responses 68 Appendix 3: Interview Schedule INTERVIEW: FOUNDER / DIRECTOR ROLE/OPPORTUNITIES & CHALLENGES 1. What do you do and what is your professional background? 2. What motivated you to found Palmhouse? 3. What is your current role in the organisation? 4. What, in your view, are the biggest opportunities for Palmhouse over the next 5-10 years? 5. What are the main risks and challenges? 6. How is the organisation planning to mitigate these risks? HIGH SCHOOL SCHOLARSHIPS FIELD 7. The high school scholarships field has recently seen many new entrants including large corporate and churches. What is your view about this development? 8. What criteria do you use for selections? Do you see these criteria changing with new entrants into the scholarship field? 9. How does this affect your existing (or potential) funding base? 10. How is Palmhouse planning to adapt to these and other significant changes in the marketplace? 11. What would be Palmhouse’s options should the government someday offer free secondary education in Kenya? 69 KENYA’S PHILANTHROPIC ENVIRONMENT 12. How would you assess the level of financial support you receive from individual Kenyans? 13. How about from Kenyan organisations? 14. Why do you think local support for worthy philanthropic organisations such as Palmhouse is at its current (low/high) level? 15. In your view are the bottlenecks to greater financial support from local sources mainly regulatory (e.g. no tax breaks), historical (not many precedents), cultural, lack of information…? Explain? 16. Do you think Kenya has a conducive policy environment for private philanthropic organisations such as Palmhouse? a. How do you think it can be improved? 17. Taking one or two other major constraints from the areas mentioned in question 14 above; what do you think can be done to create a more hospitable environment for private philanthropic organisations in Kenya? MANAGEMENT & LEADERSHIP STRUCTURE 18. Does the board regularly evaluate the organisation’s effectiveness? If yes, how often? a. What methods do you use? 19. What are the plans to ensure Palmhouse’s long-term viability? 20. What are your thoughts about leadership succession in Palmhouse? 70 21. What public policy reforms or incentives would you suggest to enhance Palmhouse’s effectiveness and future success? 22. In your view, what are some of the changes and organisational adaptations Palmhouse needs to make to meet future challenges and ensure continued success? END OF INTERVIEW THANK YOU FOR YOUR RESPONSE 71 Appendix 4: Time Plan Activities 2013 Mar Apr May Jun Jul Proposal Writing Revised Proposal Presentation Data Collection Data Analysis Report Writing and Submission Appendix 5: Project Budget LINE ITEM KES Photocopying and spiral binding 4,500 Stationery and Sundries 2,000 Transport and Communication 8,500 Miscellaneous expenses 2,500 Total 17,500