Greater Good South Africa

What’s in store for the social development sector in 2013? Sophie Hobbs, Head of Strategic Communications for GreaterGood SA and GreaterCapital, looks back at developments in 2012 and how they will influence the sector in the year ahead.

Those of us who work with non profits daily know that the sector is facing perhaps its most serious funding challenge since the end of apartheid – some are even calling it a crisis.To get a better understanding of the scale of the challenges, GreaterGood South Africa initiated a rapid assessment survey together with the Western Cape branch of the Southern Africa Institute of Fundraising (SAIF) and the GivenGain Foundation.

The findings were extremely worrying: 80% of non profit organisations in South Africa have experienced significant funding cuts over the last year and over 64% had to cut services to their beneficiaries. The findings also showed that 43% of organisations had to retrench staff and volunteers and the sector reported a 17% contraction in their workforce as a result of the cuts. Most concerning, however, was that 17.2% said they had no operating cash at all and 29% reported that they had enough to cover just one month of service-related expenses.

Anxiety and pessimism
After this – and with new proposals by the Department of Trade and Industry to significantly alter the socio-economic development element of the Broad-Based Black Economic Empowerment Codes – it came as no surprise that there was a high level of anxiety and pessimism on the state and future of the sector.

However, an NPO Collaboration Dialogue held in Cape Town in November and related networking and joint advocacy proved to be a powerful and positive experience. The main outcome was a collective sense of purpose around advocating for the sustainability and independence of civil society in South Africa. And practical examples of organisations thriving in a tough climate provided renewed hope.

There is a silver lining to this cloud:

• Some organisations are doing fine and remain largely unaffected by the funding cuts. What needs more investigation is: what are the common factors that are helping these organisations to weather the storm?
• The funding cuts have compelled organisations to collaborate at a much deeper level and have promoted a certain amount of rationalisation and greater cohesion in the sector.
• Not all organisations are as efficient and effective as they could be – the funding crisis has helped some of these organisations to take a more proactive and strategic approach to their own sustainability.

Victory for collaboration
And then the DTI withdrew the controversial revisions to the SED codes before the comments window closed. The sector spoke together and they listened – a victory for collaborative pressure. It appears as if there is a growing recognition of the importance of the work done by an independent civil society in South Africa. The Department of Trade and Industry’s Draft Lotteries Policy Document – also open for public comment until 3 December – was a thoroughly researched, fair and well-articulated document. The majority of the proposals in the document will make for welcome changes to the way Lottery funds are administered and disbursed.

Slowly, slowly, government and the public are starting to understand that NPOs and social enterprises play a vital and unsung part in South Africa’s economy. The latest labour market trends show that the Community, Social and Personal Services (CSP) sector employs the most people of any industry in South Africa – 3 million people or 22.4% of total employment[1]. It is also a sector that provides employment to those that have traditionally found it hardest to enter the labour market: young people, working mothers, older people and people with disabilities.

Hopes for 2013
So what do we think will happen in 2013? The truth is none of us can predict the vagaries of the global and local economy and how it will impact non profits. But we can say what we hope will happen:

• The collaboration and dialogue within the sector will grow and non profits will find their collective voice.
• Individuals will realise their power to influence change and support those on the margins of society by giving to non profits regularly and over the long-term through debit order and payroll giving, as well as legacies and fundraising.
• Companies will realise that the very best CSI is multi-year, substantial partnerships with professional and accountable organisations that are delivering interventions in communities that are proven to work.
• The relationship between government and civil society will continue to improve – with government at all levels recognizing the vital role of organisations as employers and independent service-deliverers and the development sector making a more practical commitment to transformation and accountability.
• The proposed changes to the Lotteries Act and improvements in the speed and ease of fund disbursement are fast-tracked.
• In the interests of transparency and good governance, the Income Tax Act is amended to make it possible for the South African Revenue Service’s Tax Exemption Unit to make public the financial and compliance information they hold on public benefit organisations.
• The social development sector continues to develop its own skills and professionalism by focusing on good governance, sustainability, communications and measuring impact.
• The non profit, public and private sectors work together to reduce inequality in South Africa so that every child has an equal shot at a better life.