Inyathelo in the Headlines

The challenge of doing good - 01 Dec 2012 - UBUNTU

The challenge of doing good Those of us who work with non-profits know that the sector is facing perhaps its most serious funding challenge to date — some may even call it a crisis.

Much of this is anecdotal and there appears to be no concrete data on the scale of sector job losses, or how many organisations have had to close or cut services to beneficiaries.

We also do not know the source of the funding cuts and the impact of the cuts on non-profit organisations' operations and sustainability. GreaterGood South Africa and others in the sector received a correspondence in September from the National Coalition of Social Services (NACOSS). This clearly stated that National Treasury was researching the non-governmental organisation funding crisis and asking for any information, specifically around job cuts.

Using this as impetus, GreaterGood SA initiated a rapid assessment of the situation together with the Western Cape branch of the Southern Africa Institute of Fundraising (SAIF) and our collaborative partners, GivenGain. After receiving an email stating that National Treasury was investigating job losses in the non-profit sector, GreaterGood SA with SAIF and the GivenGain Foundation developed an online survey to measure the extent of funding and service cuts as well as job losses.

The online survey aligned the questions to the National Treasury request as well as another key survey about welfare organisations and service cuts being conducted by the National Welfare Forum on SANGONet. The findings from this survey are not yet available. The survey was sent out to GreaterGood SA's 5 261 cause contacts as well as to the database of SAIF, GivenGain and through other non-profit networks facilitated by Tshikululu, Inyathelo and the Charities Aid Foundation Southern Africa, among others. Offline versions of the survey were supplied to those who requested them and given out at GivenGain training events. There is no reliable data on the size of the non-profit sector in South Africa now, but it is estimated that there are anywhere between 50 000 and 150 000 non-profit, public benefit and community based organisations in the country.

Six hundred and ninety five organisations took the 'non-profit job losses and service cuts survey'. The speed of response and numbers that responded reflects, we believe, the very real and urgent challenges organisations face. Six hundred and ninety-five respondents took the survey, the vast majority (85%) described themselves as non-profit or public benefit organisations. Most are active in the Western Cape and Gauteng but responses were spread across the country.

The majority of the organisations are involved in community development and education, providing welfare services primarily to vulnerable children, youth and in communities. Of those identified, 80% have experienced significant funding cuts in the past year. Almost half have had up to 50% of their funding cut. Funding cuts have come from all major funding sources with the National Lotteries Board topping the list (44%), followed by the corporate sector (39%) and individual donors (37%). Over 64% of respondents reported that they have cut their services.

More than 43% of the organisations sampled said they had retrenched 7 612 permanent, contract, part-time and volunteer employees. Organisations reported a 17% overall contraction of the workforce as a direct result of the cuts. The financial position was slightly more encouraging: 35.9% indicated that they had enough operating cash to cover six months of service-related expenses and 17.8% said they had enough for more than six months. However, 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. To address funding shortfalls, organisations report that they are fundraising aggressively, exploring income generation activities, cutting back, restructuring and streamlining their operations.

While there are positives to be drawn from this survey (some organisations are doing fine and remain viable), urgent action is needed to ensure that many experienced and high-impact organisations survive and continue to provide services where they are needed in communities.

Sophie Hobbs