Those of us who work with non-profit organisations or NPOs on a daily basis, know that the sector is facing, perhaps, its most serious funding challenge since the end of apartheid – some are even calling it a crisis.
To get a better understanding of the scale of the challenges, GreaterGood SA initiated a rapid assessment survey together with the Western Cape branch of the Southern Africa Institute of Fundraising and the GivenGain Foundation.
The findings were extremely worrying: 80% of local non-profit organisations experienced significant funding cuts over the past year and more than 64% had to cut services.
The findings also showed that 43% of organisations had to retrench staff and volunteers and the sector reported a 17% contraction in their workforce as a result of the cuts.
Most concerning, however, was that 17.2% said they had no operating cash at all and 29% reported that they had enough to cover just one month of service-related expenses.
Anxiety and pessimism
With new proposals by the department of trade and industry (dti) to significantly alter the socio-economic development element of the Broad-Based Black Economic Empowerment Codes, it came as no surprise that there was a high level of anxiety and pessimism on the state and future of the sector.
However, an NPO Collaboration Dialogue held in Cape Town in November and related networking and joint advocacy proved to be a powerful and positive experience.
The main outcome was a collective sense of purpose around advocating for the sustainability and independence of civil society. And practical examples of organisations thriving in a tough climate provided renewed hope.
Silver lining
Some organisations are doing fine and remain largely unaffected by the funding cuts. What are the common factors which are helping these organisations weather the storm? This question needs more investigation.
The funding cuts have compelled organisations to collaborate at a much deeper level and have promoted a certain amount of rationalisation and greater cohesion in the sector.
Not all organisations are as efficient and effective as they could be – the funding crisis has helped some of these organisations to take a more proactive and strategic approach towards their sustainability.
Victory
The dti has withdrawn the controversial revisions to the SED codes before the comments window closed. The sector spoke together and they listened – a victory for collaborative pressure.
It appears as if there is a growing recognition of the importance of the work done by an independent civil society in South Africa. The dti’s ‘draft lotteries policy document’ was a thoroughly researched, fair and well-articulated document. The majority of the proposals in the document will make for welcome changes to the way National Lottery funds are administered and disbursed.
Slowly but surely, the government and the public are starting to understand that NPOs and social enterprises play a vital and unsung part in South Africa’s economy.
The latest labour market trends show that the community, social and personal services sector employs the most people of any industry in South Africa – three million people or 22.4% of total employment.
It is also a sector that provides employment to those who have traditionally found it hardest to enter the labour market: young people, working mothers, older people and people with disabilities.
Hopes
No-one can predict the vagaries of the global and local economy and how it will impact NPOs. What we hope will happen is:
The collaboration and dialogue within the sector will grow and NPOs will find their collective voice.
Individuals will realise their power to influence change and support those on the margins of society by donating to NPOs on a regular and long-term basis through debit order and payroll giving, as well as legacies and fundraising. Companies will realise substantial partnerships with professional and accountable organisations that are delivering interventions that are proven to work in the communities they serve.
The relationship between the government and civil society will continue to improve – with the government recognising the vital role of organisations as employers and independent service providers.
The development sector making a more practical commitment to transformation and accountability.
The proposed changes to the Lotteries Act and improvements in the speed and ease of fund disbursement are fast-tracked.
In the interests of transparency and good governance, the Income Tax Act is amended to make it possible for the South African Revenue Service’s ‘tax exemption unit’ to make publicise the financial and compliance information about public benefit organisations.
The social development sector continues to develop its own skills and professionalism by focusing on good governance, sustainability, communications and measuring impact.
The NPO, public and private sectors work together to reduce inequality in the country.
