How the Segal Family Foundation became a top funder in Africa

In many ways, the Segal Family Foundation is an anomaly within the world of philanthropy. For one thing, it’s one of the few U.S.-based funders to give the bulk of its grants internationally rather than domestically. And unlike major international funders such as the Ford Foundation, which focus on a broad range of regions, the Segal Family Foundation’s grantmaking is narrowly concentrated on sub-Saharan Africa, where it has become a top funder. Though its grants are relatively small, Segal focuses on volume. It trails only the Bill & Melinda Gates Foundation in terms of the number of grants given to sub-Saharan Africa. That’s especially notable considering that Segal employs only about 20 people compared to nearly 2,000 at Gates. And all Segal’s program officers are African. In that sense it’s an example of how recognizing the role of local organizations and investing in them — also known as localization — can be practically applied to philanthropy. Perhaps most appealing to grantees, Segal shuns the idea of restricting how its grants can be spent or asking grantees for lengthy reports about where the money went — practices that remain uncommon among funders, despite being popular among advocates of trust-based philanthropy. Trust-based giving is an approach that flips the traditional donor-grantee relationship in which the donor, by virtue of holding the purse strings, ultimately is in charge of determining who receives grants and how the money is spent. For years there’s been a movement within philanthropy to reimagine that relationship so that nonprofits get a bigger say. Segal is among the donors supporting this approach. It believes its grantees are best positioned to know how money should be spent, said Executive Director Andy Bryant. “Unrestricted is unrestricted. People can use it to throw lavish holiday parties, for all I care,” he told Devex, noting that such events are good for boosting morale. “Our diligence is thorough, and we triangulate it with our robust communities of other partners and other funders in the country,” he said. “So we feel really that if an organization is doing what they say and saying what they do, then it's for us to try to keep it as low touch as possible.” This hands-off approach has made the New Jersey-based foundation popular with African nonprofit leaders, who feel they have fostered a relationship with the foundation that goes beyond just monetary support. That often isn’t the case for grantees with major international funders. “I feel like there is a lot of respect. And it feels like you are talking to a partner,” said Peter Kwame, co-founder and director of Hatua Network. The Kenyan nonprofit provides scholarships to impoverished children and has been receiving grant funding from the Segal Family Foundation since 2013. “The level of respect they have is something that I admire,” he said. Where the money goes BradCo Supply roofing company founder Barry Segal started the foundation nearly two decades ago. His foundation has been able to establish itself as a leading funder in East Africa by diligently building partnerships with locally led groups. The foundation came in second behind the Gates Foundation in terms of the number of grants given in sub-Saharan Africa between 2016-2019, according to data from the Council on Foundations, a group representing the U.S. philanthropy sector. Sub-Saharan Africa refers to regions and areas south of the Sahara and includes countries such as Benin, Cameroon, Ghana, Kenya, Malawi, Nigeria, and Senegal. The Segal Family Foundation provided 636 grants to organizations in that region between 2016-2019, besting the Ford Foundation, which came in third on the list and provided 624 grants during that same period, according to COF data. It’s a major feat for a relatively small foundation whose roughly $133 million endowment pales in comparison to Gates’ $67.3 billion purse and Ford’s $16 billion. The list of top funders by the number of grants shows which organizations are the most active in a region, Natalie Ross, COF’s vice president for membership, development and finance, told Devex. Most of Segal’s annual funding goes out as small grants directly to local organizations rather than a large lump sum to be redistributed through intermediaries, Ross said. The foundation’s average grant size for 2016-2019 was about $51,500, which is relatively small compared to other funders in the region, she said. Yet Segal gives out “a really high volume” of grants, given their size, Ross added. “They have just a long history and a very clear focus on what they do,” she said. “So, they remain a leader among U.S. funders thinking about giving to Africa.” An evolution The focus on international grantmaking is somewhat unusual for a small U.S.-based family foundation and seemed to have happened somewhat by accident. It was only after Segal attended his first Clinton Global Initiative meeting in 2006 — where he was “fortuitously placed at a table with someone working in Rwanda and someone in Tanzania” — that he began exploring the possibility of making rural African communities the focus of his philanthropic efforts, Bryant said. Former President Bill Clinton also “encouraged Barry to narrow his focus in order to be most effective and influential with his funding,” according to Segal’s website. Within a year of that fateful first CGI, Segal went to Tanzania and Rwanda to visit the people he’d met and “saw a lot of small organizations doing a lot of amazing work,” Bryant said. He also “saw them to be somewhat disconnected from one another,” according to Bryant, who met Segal in Tanzania when Bryant was working for the Tanzanian Children’s Fund. Bryant has headed the foundation since 2010. Initially, Segal had a continent-wide portfolio of grantees, including huge INGOs such as Planned Parenthood Global, Bryant said. Most were expat-led organizations because, like many funders, Segal was giving to “folks we met in New York at cocktail parties or CGI,” he said. But gradually the foundation shifted away from that approach, largely because it started hiring staff members local to the communities it wanted to support, he said. Aside from Bryant and some core operations staff, all of the people who help Segal make grantmaking decisions are based in Kenya, Malawi, Rwanda, Tanzania, and Uganda. That’s a big difference from hiring program officers that will parachute into places and visit organizations so that they can come away with a snapshot of “their work and their worth,” which they then “try to translate to the board,” Bryant said. “The whole thing feels kind of irresponsible, right?” he said. Having local people on the ground representing Segal makes it very easy for grantees to interact with the organization,” Kwame said. “They understand the context of where we’re coming from,” he said. He credits the initial $15,000 grant that Segal gave his organization in 2013 for setting things into motion for Hatua Network, which grew out of a 2006 research project he conducted with Hatua co-founder and director Gabrielle Fondiller on the impact of government policies on street vendors. Street vendors would tell the pair how they wanted to send their children to school to avoid being “trapped” into poverty, Kwame said. So, Kwame and Fondiller began raising money for that cause “without any background knowledge on how to run an organization,” he said. “Segal came in at the right time because just before that, we were trying to put our house in order,” he said. Hatua had 140 students in its program when it received the first Segal grant in 2013. It now has more than 800, Kwame said. Looking ahead Having so many local staff also means that Segal is able to connect more easily with other funders in the regions where it works, such as USAID, Bryant said. And because Segal builds those relationships, its staff can identify where there’s “a pocket of funding” and help Segal grantees get their “foot in the door” with these other funders, Bryant said. Segal sees that kind of “non-monetary” support as also valuable, he said. And as part of an effort to provide more of that kind of assistance, Segal launched the African Visionary Fellowship in 2017 to provide mentorship and exposure for African leaders in global development who were “not the focus of many donors’ funding.” Fellows do not generally receive additional funding for participating in the program. However, “special stipends” may be provided to some for travel to conferences, according to Segal spokesperson Sarah Gioe. Ultimately, Segal’s goal is to help the world of international philanthropy undergo the same transformation that it went through, “which is going from 0% funding to locally-led organizations to now 85% of our partners are folks that we would ‘code’ local,” Bryant said, referring to how Segal determines if an organization can be considered locally led. “If we could help international philanthropy reorient its direct destination from INGOs or intermediaries, that would be tremendous,” he said. Intermediary organizations connect donors to nonprofits delivering charitable services. They are usually better connected to the groups working on the ground and are tasked with regranting funder dollars to those groups, essentially identifying grantees for the donor. And while there are “benevolent” intermediaries out there, some of whom bill themselves as local actors, “they’re not really local,” Bryant said.