Allan Gray Limited is empowering people through education and financing for entrepreneurs. Gray is backing it up with R1.1bn of his own money.
Gray says his guiding principle was the need to create jobs.
Starting from a philosophical point that jobs are created by entrepreneurs, Gray wants to encourage entrepreneurship and, hence, empower individuals.
It works like this.
A trust called E^2 (E squared) has purchased 18.9% of Allan Gray Limited for R1.1bn through a loan provided by Standard Bank and guaranteed by Allan Gray Limited.
Once the trust has repaid the loan out of dividends from Allan Gray, the future cashflow will provide financing for business and "social" entrepreneurs.
Sidestepped the usual suspects
These entrepreneurs will come from the Allan Gray Fellowship Programme.
This programme will be funded by a donation of 7% of the after tax profits of the Allan Gray Group of Companies in perpetuity, as well as start-up capital of R1.1bn donated by Gray in his personal capacity.
Each fellowship is a fully funded scholarship at university covering tuition, board, lodging and subsistence particularly in the areas of commerce, engineering and science. Once they graduate, the foundation expects that the fellows will work for several years to gain experience.
It is also within the mandate of the foundation to fund the postgraduate studies of those fellows that excel.
Thereafter, if, as expected, they develop a viable idea for a business, the E^2 Trust will provide the start-up capital for this.
Because the beneficiaries of the E^2 Trust will be 90% black, the Trust falls within the DTI codes as a black empowerment entity.
And so its is that Allan Gray has completely sidestepped the usual suspects and avoided the often heard criticism of empowerment in SA that it is merely enriching a few well-connected black business people.
full story from Fin24 here