At a time of renewed geopolitical interest in Africa, and an increasing questioning of traditional development finance models, Harvard Business School today released a case study examining the role and impact of the Tony Elumelu Foundation (TEF), and its unique approach to catalysing entrepreneurship in Africa.

The Foundation, Africa’s leading funder of young entrepreneurs, has pioneered an innovative approach to seeding, capacitising and networking young entrepreneurs across Africa.  Drawing directly from Tony Elumelu’s entrepreneurial journey, his acknowledgement that luck and chance played an important role in his success, the Foundation democratises luck, spreads opportunity, in a sector agnostic approach, and has developed a bespoke infrastructure that reaches every country in Africa. The Foundation is a direct expression of Elumelu’s philosophy of Africapitalism, that the private sector must play a pivotal role in Africa’s development, and that investment must seek social, as well as economic returns.

The case study, the first of its kind focused on African philanthropy, was launched today, Thursday, February 29, 2024, before a class of graduate students at Harvard Business School and explored the Foundation’s unique approaches and transformative initiatives, showcasing how the strategic philanthropy offered by TEF, is driving positive change and elevating countries and communities.

The case study recognises challenges the Foundation faces, and its responses, as it developed its mission, since founding in 2010.  The track record is impressive, with over 20,000 entrepreneurs funded, over a million connected digitally and the development of an impact assessment capacity.  TEF has disbursed over USD$100 million, reaching every African country.  The Foundation is increasingly developing a partnership-based approach, working with institutions such as the EU, US agencies, the UNDP, the ICRC, the Ikea Foundation, and others to develop bespoke programmes focused on fragile states, female entrepreneurs and sustainability initiatives.

Tony Elumelu, who spoke at Harvard said, “TEF is creating economic hope and opportunity for African entrepreneurs.  We know that entrepreneurship is the solution to youth unemployment and insecurity.  Through the intervention of the Foundation, we are transforming our young people, giving them hope.  Collectively, all of us can resolve the challenges that we have on the continent.

It is wonderful to have had the opportunity to work with HBS, to spotlight our successes, acknowledge the challenges that we have at times faced, and provide the opportunity to spread our experience, for the benefit of others.”

The Harvard Business School session provided an opportunity to engage in a meaningful discussion on the role of philanthropy in shaping sustainable and inclusive economies.  As the world grapples with complex challenges around demographics, climate and sustainability, the Tony Elumelu Foundation model offers a fascinating model of how strategic philanthropy can be a driving force for positive change.

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About The Tony Elumelu Foundation

The Tony Elumelu Foundation is the leading philanthropy empowering a new generation of African entrepreneurs, driving poverty eradication, catalysing job creation across all 54 African countries, and ensuring inclusive economic empowerment. Since the launch of the TEF Entrepreneurship Programme in 2015, the Foundation has trained over 1.5 million young Africans on its digital hub, TEFConnect, and disbursed nearly USD$100 million in direct funding to 18,000 African women and men, who have collectively created over 400,000 direct and indirect jobs. The Foundation’s mission is rooted in Africapitalism, which positions the private sector, and most importantly entrepreneurs, as the catalyst for the social and economic development of the African continent.

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The Tony Elumelu Foundation (TEF) was established in 2010 by Mr Tony O. Elumelu, CFR, leading African investor, philanthropist, Africapitalist and former Chief Executive Officer of the United Bank for Africa which he now chairs. It has become the leading philanthropic organisation dedicated to empowering entrepreneurs and enhancing entrepreneurship in Africa, with the objectives of driving poverty eradication, ensuring job creation across the continent, and improving women’s economic empowerment.

The Foundation believes in the critical role of the private sector in Africa’s development and has dedicated all efforts toward its landmark Entrepreneurship Programme since 2015. The Programme was launched with USD 100 million of Mr Elumelu’s personal wealth, to train, mentor, and fund 10,000 African entrepreneurs in 10 years. This USD 100 million fund has been used to provide financial support to more than 18,000 aspiring entrepreneurs across all 54 African countries, in addition to providing mentorship and key business skills training to hundreds of thousands more.

What was the challenge?

Mr Elumelu envisioned creating a philanthropic entity that catalyses pan-African economic prosperity. His philosophy of ‘Africapitalism’ is grounded in the belief that a vibrant private sector holds the key to the continent’s economic and social prosperity, and that the development of a strong, sustainable small and medium enterprise (SME) sector will support the solutions to major challenges – including rising youth unemployment, mass migration and systemic poverty.

To achieve this vision, after lengthy discussions on potential funding and programmatic models at Board and senior stakeholder level, in 2015 the Foundation moved away from a traditional model of supporting individual scholarships and incubators and became solely focused on empowering young African entrepreneurs with seed capital and extended business development support. After a successful start from 2015-2016, the programme saw even more tremendous growth in demand from 2017 onward. Yet, resource constraints limited the Foundation’s ability to support the number of applicants they received, with growing concern at senior levels of the organisation about whether their new model could actually serve the vast needs of African entrepreneurs. By 2021, the programme was receiving over 400,000 applicants each year for USD 5,000 seed funding grants. It became abundantly clear to Tony Elumelu himself, and to the wider leadership team, that they must do something differently to meet this demand and achieve an even more scaled impact.

What was the response?

Seeking to create a larger, more holistic structure to support African entrepreneurs, the Foundation asked themselves a series of questions before taking steps forward: 

• How could the Foundation drive more funding toward the initiative while maintaining the commitment to exclusively supporting aspiring entrepreneurs? 
• What types of non-financial support could and should TEF offer their entrepreneur cohorts?
• To what extent could the programme be turned from a funding accelerator into a more comprehensive ‘mini-MBA’ style offering that leverages all of the expertise available within the TEF networks? 

The insights they gained from considering these questions were then used as the basis for a range of actions:

1. Developing multi-stakeholder partnerships with local and international organisations – including INGOs like the International Red Cross, governmental bodies, private companies, and multilateral organisations like the African Development Bank and the European Union – to expand the pool of funding available for African entrepreneurs. Under the TEF Entrepreneurship Programme, aspiring entrepreneurs can apply for USD 5,000 seed capital grants to help move their businesses from ideation to readiness for raising commercial capital.
   
2. Creating a free, large-scale technological platform to support not only the entrepreneurs who successfully win TEF seed funding but also the many more who do not advance to the final programme stages. The TEFConnect platform is the TEF Programme’s digital hub, encompassing business development, 1-to-1 mentoring, networking, and pitching. Leveraging technology and automation enabled TEF to broaden its reach.
   
3. Expanding support for entrepreneurs beyond just funding. Through the TEFConnect platform, TEF offers training and mentoring to a far greater number of entrepreneurs than just those who received funding. For instance, in 2021 while 5,000 people received funding, 200,000 participants benefited from valuable business management training. The Foundation is also harnessing its alumni network to expand its growing base of coaches even further.
    
4. Harnessing the expertise of Board members and senior stakeholders, giving them the opportunity to provide hands-on support and involvement in the mentoring, teaching, and curriculum development aspects of TEF’s programmes. Board members and TEF advisors work closely with Foundation staff, contributing their expertise and networks to ensure the successful delivery of the Programme’s initiatives. Expectations about the level of commitment required are set by TEF’s team from the start when engaging stakeholders in the programme. Generally, Board members and senior stakeholders are very supportive of TEF’s commitment to the programme.

What have they learned?

1. Be willing to learn and adapt by listening to your communities and stakeholders. Don’t simply carry on with legacy programmes that limit the impact. For instance, the TEF model for training and coaching for more participants (beyond only seed funding recipients) emerged from the Founder’s commitment to democratise luck and institutionalise access to opportunities for even more young Africans on the programme.
2. Seek ways to maximise scalability when programmes are successful, instead of simply accepting limitations. Do this by leveraging external partnerships to scale up and seeking out partners that have strong impact track records. Identify partners with aligned goals and equally good governance.
3. Ensure rigorous monitoring, learning and evaluation (MEL) mechanisms to continuously assess the impact of your work. Where resources permit, leverage knowledge in this area from Board members, seek specialist advice, or hire dedicated staff onto your team. Avoid seeing MEL as a tack-on exercise.
4. Think big! While TEF is headquartered in Nigeria, they view broader African prosperity as critical to the Foundation’s mission and consistently seek ways to reach entrepreneurs across the continent. They leverage their pan-African resources and collaborations to create an inclusive experience for those from different linguistic or cultural backgrounds.
5. Agility: With its proximity to the entrepreneurial ecosystem and its daily realities, TEF gains unique insight into emerging needs in Africa and the innovative ways that young people address them. TEF uses this knowledge to support growing numbers of entrepreneurs in providing solutions to Africa’s challenges and harnessing digital technologies to reach their customers. TEF also makes a conscious effort to address demographic imbalances, striving to increase the inclusion of more young women in its cohorts.

We are intentional about creating a completely inclusive programme and accommodating socio-cultural diversities across Africa. Without this, we cannot have success.

Monitoring and Evaluation Manager, Tony Elumelu Foundation

Key outcomes and impact indicators

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