South Africa’s non-profit sector is worth R14-billion a year and employs more than 600000 people but is having too little impact in relieving poverty.
This emerges from the first comprehensive study of South Africa’s non-profit organisations (NPOs), which covers NGOs, community-based organisations (CBOs) and trade unions.
The study also highlights the failures of government policy in the non-profit sector, due to lack of reliable information.
The study’s coordinator, Professor Mark Swilling, says that very little has been known about how many NPOs there are, how many people they employ, how many volunteers they mobilise, where they get their money and how much they spend.
Swilling is the academic director of the Spier Institute at the University of Stellenbosch’s School of Public Management and Planning.
The study bristles with statistics the researchers call ”startling”. The non-profit sector’s workforce is larger than sectors such as mining, national government, transport, financial services, insurance and real estate. NPOs have more black women in managerial positions than any other sector. And the sector is as large as that in all but a handful of industrialised countries.
The Size and Scope of the Non-Profit Sector in South Africa is the fruit of research conducted from 1998 to 2000.
It finds that in 1999 there were 98920 NPOs, the majority in culture and recreation, social services and development and housing. Other sectors included advocacy and politics, environment and education.
In 1998 the sector was worth nearly R14-billion. Of this R4,6-billion was self-generated, R5,8-billion from the government, and R3,5-billion from the private sector.
In the same year operating expenditures totalled R9,3-billion — 1,2% of that year’s gross domestic product.
”The most significant indication is that NPOs must take the South African private sector more seriously,” Swilling says. ”They have focused too much on international donors — which provided R1-billion in the same period — and the state. Yet private sector contribution in South Africa is one of the highest of 28 countries where similar studies have been conducted.”
He believes the sustainability of the non-profit sector will depend on corporate commitments to development and philanthropy, and that such funding will grow.
The study finds that the NPO sector is a major employer, with the equivalent of 645316 full-time workers in 1998 — 7,6% of all formal and informal sector workers.
A massive proportion of work is contributed by volunteers, whose labour in 1999 was found to be worth R5,1-billion. This was the equivalent of 316991 full-time jobs and accounted for nearly half the non-profit workforce — well above the international average.
The study raises disturbing questions about the extent to which the country’s poor benefit from NPOs.
In 1998 the bulk of government funds went to the social services (R2,1-billion), health (R1,7-billion) and development and housing (R1,1-billion) sectors. Particularly in health and social services, well-developed, formal NPOs more active in established, urban, middle-class and working-class communities than in the poorer ones received most of the government’s funding in 1998.
Yet 53% of NPOs are community-based and not formally structured as Section 21 non-profit companies, trusts, religious institutions, trade unions or cooperatives.
Working in disadvantaged and marginalised communities, these ”lack the capacity and the required legal identity to benefit from state social spending”.
”This is not to say that health and social services NPOs do not meet the needs of the poor,” Swilling says, ”but rather to suggest a possible trend that may raise concerns about who benefits from government health and social service funding.”
CBOs have an important contribution to make to poverty alleviation ”because of their ability to respond to immediate problems at a community level far more quickly than more formal structures, particularly the government, can.
”With the spread of HIV/Aids and the ongoing unemployment crisis, the response of community-based, survivalist NPOs is critical in providing support and care to the poorest of the poor, who have few other channels of assistance.”
NPOs in development and housing are, however, concentrated at the poorer levels of society. ”There is a good chance that government funding of this sector is reaching the kind of poor people that government policy has in mind,” says Swilling.
Women and black people play leading roles in the NPO sector, the study shows. This contrasts with the gender profile of the public sector, and with the race and gender profile of the private sector. Of the NPO managers surveyed, 59% were female and 73% black. Among full-time staff, 60% were women and 81% black.
”The high proportion of black women in managerial positions … hints at an exciting and potentially important source of future leaders,” the study says.
Overall, the survey recommends that institutions such as Statistics South Africa and the Reserve Bank have a responsibility to capture the kind of data it presents to reflect ”the contribution that the non-profit sector makes to employment, economic development and social capital. There is no longer any excuse for why this cannot happen.”
Swilling says the study is also a ”clarion call” for more knowledge about the community-based NPOs. ”There are huge numbers of such organisations, dependent almost entirely on volunteers, receiving little state funding, and operating in the poorest communities.”
”The Size and Scope of the Non-Profit Sector in South Africa” will be launched in Johannesburg on July 5