/ 10 April 2014

20 Years on: The role of non-profits

Members of Rock Girl
Members of Rock Girl

Non-profit organisations (NPOs) have played a critical part in trying to resolve the challenges and inequalities prevalent in South African society, but they are facing a future with increasingly limited funding and support within a fragile economy.

In a survey conducted by Greater­Good South Africa in October last year, 467 NPOs reported cuts from all their funding sources, with the National Lotteries Board and corporate social investment (CSI) departments topping the list.

NPOs reported an average of R4-million in cuts per organisation, forcing 38% of them to cut services to beneficiaries as a result. Can the NPO survive this trend and does it still have a place in the South African democratic future?

On a basic level, the NPO identifies and meets broad community needs. It does so within a bureaucratic system where its responses to issues can be faster and more creative than those by government. “Our work closes a gap that the state and private sectors do not,” said Caroline Rose, director of the Thusanani Children’s Foundation.

“We are a part of and work closely with communities, and can offer unique responses that establish a social contract with vulnerable communities. “Our role at present is more operational than campaigning. We need to grow from only providing small-scale projects to becoming a vehicle for advocacy on behalf of our beneficiaries.”

Lorenzo Davids, chief executive of Community Chest, believes that the NPO is critical to the South African economy, but it is struggling to find a new identity. “During the apartheid era we had a strong lobbying and advocacy role, and post-1994 we found ourselves in an implementing role.

“We have aligned ourselves to become the executors of new policies and the danger is that we are losing the advocacy element, where we are the guardians of the values of our society and hold the government to account.”

After the advent of democracy, NPOs worked hand-in-hand with the government to create new programmes, implement legislation and build the infrastructure of a new democracy, said India Baird, founder of Rock Girl, a grassroots movement that aims to invest in girl-initiated and girl-focused projects in the private and public sectors.

“Twenty years later we must do more to challenge government when they fail to meet their constitutional and legislative mandates,” she said. “NPOs must act as watchdogs and ensure that the institutions they helped to build continue to serve all South Africans.”

Unco-ordinated industry

The NPO has taken on a position where it often supports weak or failing government services, and this makes it an essential tool for the continued growth of the country socially and economically. However, it is an unregulated and unco-ordinated sector that needs clearer methods for quantifying success.

“Many people with good hearts and ideas want to start an NPO and the industry was, in my opinion, becoming a hiding place for well-intended mediocrity,” said Mari Lee, owner and founder of Development Communication Solutions.

“The industry shifts a lot of money into social development, but the clear lack of measurement results in duplication and in us not always understanding the true impact of the NPO.

“Sustainability is only possible if the model is set up to alleviate a social ill while implementing solid business principles, and few NPOs succeed in this. The misunderstanding of what the cost of development actually is and what the cost of business or social impact is, complicates the matter tremendously.”

Financial transparency

Devan Moonsamy, training and development director at ICanHelp Africa, said some poorly administered NPOs have given legitimate organisations a bad reputation, undermining confidence in the sector.

“Some funds have been dispersed to projects that have reaped little reward and few people, except board members, have benefited,” Moonsamy said. Several organisations emphasised that corruption within government and the NPO sector is a major challenge that must be overcome for these organisations to step up and deliver the solutions that the country so badly needs.

“NPOs need to be more proactive and more open about their finances and how their money is spent,” said Jarryd Smith, founder of The Second Chance Trust. “There have been issues where NPOs were given funding and the money wasn’t used correctly, and this has caused problems for other organisations.”

Business approach

Through the minefields of political and economic challenges, there are ways in which the NPO can thrive moving forward. Perhaps this evolution is needed to ensure NPOs can deliver more value over the longer term. “NPOs historically worked to address inequalities in service provision, and in the past 20 years this work has remained crucial because we have continued to address the development needs of the population,” said Rose.

“However, in response to the changing landscape in this sector both locally and internationally, we have to change, to shift away from the charity mentality and towards a business-like approach. Sustainability, not dependency on one or two large funders, has become important.”

Sustainability and a corporate mentality are two qualities that stand out across responses from all NPOs the M&G approached as they look toward the next 20 years in South Africa. Their role remains vital, but the way in which they take it forward to ensure its success is demanding more vigilance and collaboration.

Ellie Hagopian, deputy chair of the Wireless Access Providers’ Association, said there should be more collaboration between NPOs, the government and the private sector. “The government should take on the role of encouraging active collaboration, as NPOs will often squabble with each other, competing for the same funds.”

In addition to collaboration, there needs to be greater vigilance and leadership. NPOs have to stay aware of how they operate within the political, social and economic systems and, if necessary, reinvent themselves and their services to survive and to remain relevant.

“Zachie Achmat and the leaders of the ANC pre-1994 stand out as individuals who understood what was at stake and made their visions and strategies clear. That is powerful NPO personified: we have a mission, we do it, we measure it and we tackle the next challenge. Perhaps our picture of NPOs needs to be redefined,” said Lee.

Kerryn Krige, programme manager of the Gordon Institute for Business School Network for Social Entrepreneurs, said several NPOs were managing to thrive, with no cuts in service, staff or funding. “You need to ask what makes these organisations weather the storms so well,” she said.

“We need more research to understand why the good ones work and why the others fail. If we can understand this, then we can support non-profits in becoming even more effective.”

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