Significant changes have occurred in the South African non-profit sector over the last 14 years. The years following 1994 saw an exodus of NGO talent to government: in fact the acronym NGO was laughingly explained as “Next Government Official”.
While the desire for a stable source of income after years of tenuous existence - a desire which influenced the move for many - this unfortunately resulted in a wealth of knowledge and institutional memory leaving the non-profit sector.
This loss was accompanied by many prominent NGOs closing down, which were replaced with a plethora of community-based organisations (CBOs).
After 1994 the Department of Social Development expanded its focus to include development issues and initiated many community income-generating projects and organisations. Despite initial funding, the majority of these organisations failed to survive due to lack of internal organisational sustainability and business skills.
Other CBOs were formed in response to significant social problems, eg home based care organisations. While these organisations attract many volunteers, often the reason underpinning volunteering has proven to be the stipends which support the function. Once stipends are no longer guaranteed, many of the volunteers understandably leave to pursue other options.
Change has also occurred in the funding arena. Unlike prior to 1994, where money was often given without due consideration to the impact of the donation, funders are now entering into contracts with recipients in which deliverables are clearly articulated and reporting requirements stipulated. There is also a growing awareness that money or support needs to produce measurable results. The reality of the immensity of the problems that are facing this country is beginning to hit home and the need for quantifiable measurement regarding progress is becoming imperative for funders.
We are also beginning to see a change in funding criteria. In the past, most funders would clearly state that they would not fund salaries. This was a source of great frustration to people working in the non-profit sector, because it was difficult to render services to the intended beneficiaries without staff.
Today there is a greater appreciation that people cannot volunteer forever. If the non-profit sector continues to rely on well-meaning volunteers who are prepared to work for nothing or for less than R1 000 per month, then the sector will continue to heamorrhage experienced staff. As a result, corporate funders are now more willing to consider funding salaries.
A non-profit sector that produces tangible results requires qualified and experienced people. There is also a growing realisation that large NPOs which manage millions of rands, which need to be managed by chief executives who have the same skills as CEOs of corporate companies. Such CEOs need to be rewarded accordingly otherwise they will take their skills elsewhere.
Funding for salaries has to be sourced from major funders or agencies or the organisation has to “earn” income from object related activities. Unfortunately, only a few NPOs have been able to generate their own income. Funders are also realising that if they want the organisations they are supporting to produce tangible results there is a need for the organisations to be strengthened so that they can operate on sound governance and business principles.
Many CBOs are either not registered with the NPO Directorate or if registered, do not realise that registration status comes with conditions. As a result annual reports are not submitted. It is a positive step that the Department of Social Development has employed more staff and strengthened its NPO Directorate. It is also positive that many provincial departments are establishing monitoring and evaluation departments to check on the progress of funded CBOs.
At Siyakhula Trust, our work with CBOs has revealed that although many of the organisations are doing excellent work, that there is a lack of good governance applicability, HR skills, an inability to think strategically, to prepare business plans and budgets and to report effectively.
We believe that training cannot be conducted in isolation. It has to be supported by coaching and mentoring and this often requires an involvement of anywhere from 12–18 months.
In terms of our development focus, we conduct a range of training and organisational development interventions and then guide the application of skills until the NPO feels confident to function independently from external support.
Our approach has resulted in many NPOs being able to develop business plans, operational and project budgets and to submit funding applications which yield positive results. These organisations have been placed on a sound foundation with policies and procedures in place. They have been able to structure the work that has to be done and can manage their staff effectively.
Sustainability is not just about money; it is about an organisation being able to operate efficiently and effectively. Sustainability implies an organisation being able to continue operating after the original “social entrepreneur” leaves the organisation.
If we want a healthy non profit sector then we need to invest in its development.