Greater Good South Africa

The last few weeks have been all about NPOs in crisis and calls on the government to sort out the Lottery and the Department of Social Development. We’ve known for some time that the non profit sector is in the grip of the most serious and protracted funding crisis since before the end of apartheid. At the same time, the latest World Giving Report ranks South Africa at a lowly 108^th for individual giving, way below our peers in Africa. While government must now take urgent action to prevent the near-collapse of the welfare sector, they must also find ways to help us give regularly and responsibly.

Although its methodology has been questioned, CAF’s World Giving Index ranks South Africa 108^th, five places below its ranking in 2010 and way below a country like Liberia, for example, which was ranked 14^th. But what was most telling about the report was that there doesn’t appear to be any link between wealth and giving. Only five of the World Bank's top 20 countries by GDP feature in the CAF World Giving Index top 20. This is backed up by other studies which show that there is no correlation between wealth and people’s inclination to give (Giving and Solidarity, 2007).

Living standards increasing
At the same time, SAIRR research found that South Africans’ standard of living is on the increase, with the proportion of adults with the lowest living standards decreasing by 77% over the last ten years.

So if the will to give is there and the means to give is growing – why are non profit organisations struggling to survive? In an insightful article in the Daily Maverick, Noah’s Ark’s Katie Andrews says: “Corporate social responsibility budgets are getting smaller and smaller and they’re closing the gap on what they fund. At the same time, they’re the ones that get most NGOs in South Africa through, and Noah itself has survived mainly on corporate funding. Very little individual funding. I would say less than 5% of our budget is made up of individuals.”

This is a common theme for many of the organisations we work with – a very small percentage of their funding comes from regular individual giving.

Each one, give 10
Of course something must be done – and quickly – about inefficient and irregular funding from the Lottery and the Department of Social Development, but if every employed South African gave just R10 a month to their favourite cause, the funding crisis would be over. And organisations would have the stability and independence to provide their excellent and needed services in communities.

What’s stopping us?
A study by New Philanthropy Capital (Ten ways to boost giving, 2011) on how to increase the scale and impact of giving revealed some interesting barriers to giving:

• It’s too complicated
• I can’t afford it
• I find it hard to connect with a cause
• I think charities are inefficient
• I don’t think about giving

In South Africa people often feel defeated by the scale of the need. How can my R10 make any difference when the challenges are so great? It is a problem of choice – not so much whether to give, but who to give to, what to give and how. Many worry about whether their support will go to those who really need it. And if it will actually make a difference.

Our pointers for Pravin
There are real, practical things that governments can do to make these choices easier and more transparent for the giving public. We agree with many of the recommendations in the World Giving Report and have added some of our own. We’d like to extend the following pointers for Finance Minister, Pravin Gordhan when he draws up his budget:

• The World Giving Report recommends improving the impact and trustworthiness of NPOs by ensuring that minimum standards of governance and oversight are in place, through the appointment of an independent regulator. In South Africa, the NPO Directorate does not fulfil this function and has no teeth to enforce compliance.
• Actively promote a culture of giving by, for example, getting government ministers to publically pledge a percentage of their income to charitable causes. How about a Cabinet Cause Pledge?
• We say it every year and we’ll say it again: increase the tax incentives on individual and payroll giving. Consider a Gift Aid scheme for South Africa.
• Encourage South African tax payers to give a portion of their tax rebate to a good cause. And let us know more about the tax incentives that are already in place for legacy giving, for example. SARS reaches every South African taxpayer at least once a year – what better channel is there for promoting giving?
• An excellent suggestion from Pippa Shaper at Home From Home: "Consider a tax incentive for those working for NPOs. As we can't afford corporate salaries, lower taxes would mean we could attract and retain skilled people. It would reward those who are doing a service for the country and would help equalize, for example, the difference between what an NPO can afford to pay a social worker, and what a DSD social worker takes home with all their allowances."
• "Promote and incentivise alternative sources of finance for charities and social enterprises, such as social investment, venture philanthropy and microfinance,” says the World Giving Report. We say: hear, hear!
• “Work with banks and financial advisors to support charitable giving– by encouraging them to offer advice and establish services such as charitable bank accounts and cash machines that allow donations.”
• Support and encourage organisations that help build the capacity of the non profit sector. Fundraising is about building long-term, meaningful relationships with givers but many organisations lack the specialist skills, tools and experience to do this.

> Got any pointers to share? Email