Hugh McLean of the Liberty Life Foundation, and treasurer of the Southern African Grantmakers’ Association writes on the funding crisis in NGOs.
It was Mark Twain who said: “October. This is one of the peculiarly dangerous months to speculate stocks in. The others are July, January, September, April, November, May, March, June, December, August and February.”
Something similar might be said about this January, last April and South African non-profit NGOs if the prevailing attitude among donors, particularly corporate donors, is to set in.
The early 1990s saw a real rapprochement between significant sections of the South African business community and a wide range of NGOs, community groupings, and “democratic structures” now loosely tumbled into what has become known as the development sector.
Most of these organisations were then tied into recently unbanned political organisations, unused to courting from a sector they had mistrusted.
A real space opened up in business in the first part of the 1990s. The change in business attitude was reflected in its discourse: words such as accountability, grassroots, capacity building, empowerment, development partnerships, and social involvement, rolled as easily off the corporate tongue as they did off the tongue of any township youth.
This space was marked by a growing sensitivity to social reconstruction which called for the forging of relationships and partnerships between sections of society which had been bitterly opposed for so long.
There were varied reasons for this toenadering: some companies wanted marketing advantage in a changing environment, others wanted to establish relationships with the status quo elect.
Enlightened corporate thinkers understood that a stable and prosperous society requires a healthy democracy, and this is best built through facilitating vibrant, varied, and autonomous civil sector initiatives.
In a country with a highly monopolised business sector, the legacy of a strongly centralised state, and a tendency to regional and national one-partyism, there would be much to fear from the withering of independent civil vitality.
The flowering of civil activity, in the form of NGOs, community-based organisations, and the rapid growth of small and medium enterprises in the 1990s has been a social development of vital importance. It represents a maturing of the political resistance phase of the 1980s and it underpins the new social order.
The uncertainties around the election period understandably resulted in a “holding back” by corporate donors in the first half of 1994. Nervousness about a stringent tax regime held off funding for the second half of 1994.
However, the successful elections and the essentially favourable fiscal policy (along with repeated reassurances by the ANC to business) has not lead to business redoubling their financial commitment to development and civil society.
A few too many companies have displayed an indecent haste in taking advantage of the conciliatory new order to enrich only themselves.
Other companies are genuinely confused as to exactly where and how they are expected to make a contribution, as the government has been slow in coming forward with clear guidelines and incentives.
The business stand-off casts a shadow on business’s perceived commitment to development; raises questions about its reliability as a development partner; and is damaging to the working relationships that have been established with community groups and NGOs.
The current development discourse is to be noted for its increasingly strident and often illogical criticism of NGOs — much of which, quite paradoxically, originates from some of the many brains that drained from NGOs into government, and which has subsequently been taken up enthusiastically by funders of development.
Of course there are many valid criticisms of NGOs. They readily admit these themselves. Unwarranted criticisms range from misconceptions that sustainability must somehow come to mean commercial viability, to the belief that NGOs are the only organisations to have demonstrated confusion, ineptness and corruption.
The Boesak debacle has certainly dealt another severe blow to confidence in the development sector and NGOs. However, corruption is appallingly widespread, and there is not a sector without a mess of bones in a filing cabinet somewhere.
While ready excuses are made for the incompetent bumbling of the state for several decades and key corporations which have posted smaller and smaller real returns annually, NGOs are bashed unceremoniously and sanctimoniously from all sides.
The truth is, NGOs have contributed more to developing leadership for the new order than any other sector; have tackled the daunting tasks that everybody else ignored; were responsible for considerable inflows of foreign exchange throughout the sanctions era; and have implemented inventive and worthwhile ideas in development and education. In short, they have changed the way we think about civil society.
The hesitance to fund NGOs and civil society in South Africa, is in fact incongruous given trends elsewhere in the developing world, and is out-of-kilter even with World Bank funding. There is surely no sense in enabling organisations to collapse now, just to have to rebuild them later.
The corporate world can demonstrate its forward thinking and long-term vision, as well as its commitment to the goals of the RDP, by ensuring that the many worthwhile NGOs survive, and that their ability to innovate and to develop critical leadership is improved.