/ 17 May 2012

Welfare groups fight for survival

The Nkanyezi Stimulation Centre in Soweto waited for four months for its funding from the Gauteng department of health and social development.
The Nkanyezi Stimulation Centre in Soweto waited for four months for its funding from the Gauteng department of health and social development.

Government funding is failing non-profit organisations serving children, the elderly, disabled and vulnerable people living in poverty.

The organisations deliver services, including social workers, to children’s homes and homes for the disabled and elderly, as well as provide treatment facilities for substance abusers and support services for people living with HIV. The government is constitutionally bound to deliver these services, but the non-profit organisations carry out most of the work.

The Nkanyezi Stimulation Centre in Soweto is one example. Forty severely disabled children between the ages of three and 17 are cared for there every day. The centre teaches them basic skills such as eating, using the toilet, personal hygiene, counting and singing. The centre needs about R50000 a month to operate, but for four months it has been without funding. The Gauteng department of health and social development finally paid – last Thursday, blaming late payment on “technical problems”.

Centre founder and manager Thembekile Tshabalala said she would have closed the centre had the department not paid the monthly running costs of R34800. She said that her staff, who earn about R1 500 each a month, had gone without salaries since January. They also had to collect donations for the children’s three daily meals and Woolworths had donated most of the food.

“There was no subsidy since January. It was not easy; we had to ask from parents and the community. The phone was disconnected. We couldn’t pay staff, the children were hungry,” said Tshabalala, who donated her monthly pension to the centre to help it to stay open. 

But it is not only smaller organisations that are struggling. Child Welfare South Africa has 161 branches nationwide, which last year helped about 194000 children who were abused or neglected. The department of social development subsidised the organisation with R10-million, which covered about a third of its operations.

Heidi Coetzee, the national manager of organisational development and capacity building, said late funding meant that salaries could not be paid, children went without food and social workers could not afford to travel to investigate cases in which child abuse or neglect were suspected.

Two associations that are nationally representative of the non-profit organisations have repeatedly called for the department to improve the cash flow to welfare organisations. But they say these appeals have either fallen on deaf ears or have been vehemently opposed by the government.

The National Coalition for Social Services represents more than 3000 welfare organisations in South Africa. It says these organisations render at least 70% of the services that are the responsibility of the state. Its chairperson, Shanie Boshoff, said the coalition had been asking for a fair financing policy for social services for years, but despite their efforts the department’s funding still fell far short of the actual cost of services.

State subsidy
For example, some children’s homes were run by non-governmental organisations (NGOs), whereas  others were run and funded by the state. An NGO home would normally rely on a state subsidy and its own fundraising. The monthly state subsidy for a child in an NGO children’s home ranged from about R1 600 to R1 800, although the state had admitted that the actual cost of keeping a child was closer to R6 000.

Boshoff said state subsidies for older persons in NGO-run homes were similarly inadequate – the means test for subsidies had remained unchanged for at least 20 years and funding increases to absorb salary increases and inflation rarely occurred. 

Delayed funding threatens social services in several provinces. By the start of the new financial year on April 1, the coalition’s members rendering social work services in Gauteng, KwaZulu-Natal, Mpumalanga and Limpopo had not yet received their subsidies. North West is particularly hard hit – none of the coalition’s members operating social work services, old-age homes, early childhood development centres and community programmes have been funded since the start of the 2012-2013 financial year.

The National Association of Welfare Organisations and Non-Governmental Organisations has taken the Free State department of social development to court, claiming that welfare subsidies were either too small, paid late or allocated in an ad hoc manner.
The association represents 876 welfare organisations nationwide.

Willem Botha, its chairperson, said that a court victory for the organisation against the Free State department would set a precedent for all other provinces.

In August 2010 the Bloemfontein High Court ruled in favour of the association. It found that the Free State’s policy on financial awards to non-profit organisations in the social development sector was inconsistent with the department’s constitutional obligations. The judgment stipulated that the department’s new policy had to acknowledge that non-profit organisations were delivering services that the department itself was constitutionally and legally compelled to deliver. The new policy also had to contain fair procedures to determine what portion of the organisation’s funding should come from the department.

The department has appealed the decision and litigation continues. The Free State department of social development said it took the action because the case had a national impact and it was therefore “necessary to invest sufficient funds in the matter to ensure that the outcome thereof serves the constitutional interests of all beneficiaries and NGOs in an equitable and fair manner within available resources of government”.

The spokesperson for the national department of social development, Thapelo Sakoana, said the department recognised the importance of NGO services to vulnerable people. He said the department was reviewing its funding criteria and that a new funding model for NGOs would be finalised this year. Costing models for welfare organisations would also be revisited to “ensure their responsiveness to the inflation”, he said.

Non-profits overworked and underfunded
The National Coalition for Social Services, which represents 3000 welfare organisations, said although non-profit organisations delivered at least 70% of the welfare services for which the department of social development was legally responsible, the state allocated less than 10% of the welfare budget to them.

Last year, the national department of social development had a budget of R95.9-billion. Of this, R95.2-billion went towards social security grants for children, the elderly and disabled people. A total of R341-million went to policy development, review and implementation support for welfare services – the part of the budget from which non-profit social welfare organisations must be funded.

A total of R194-million went to community development programmes.

Of the remainder, R181-million went towards administration costs and R71-million was spent on departmental strategy and governance.

The department underspent by about R1.9-billion as a result of underspending on social security grants.

Who needs the help of non-profit organisations?

  • Number of children in foster care receiving grants: 479 058
  • Number of older people receiving a grant: 2.65-million
  • Number of disabled people receiving a grant: 1.2-million
  • Number of severely disabled children who are cared for at home on a full-time basis: 116 039.

Heidi Swart

Heidi Swart is the Eugene Saldanha Fellow in social justice reporting, sponsored by the Charities Aid Foundation, Southern Africa.