The South African Nonprofit Sector: Struggling to Survive, Needing to Thrive
At present, South Africa (SA) has an extensive and lively non-governmental sector which boasts roughly 100 000 registered nonprofit organisations (NPOs) and an estimated 50 000 unregistered ones.(2) SA’s large nonprofit sector is the product of a diverse society including a variety of ethnic groups and a history that has informed the way in which South African society operates as a whole, as well as the way in which the nonprofit sector conducts its operations.
The prevalence of NPOs in SA can be explained by the postulation that, “Nonprofit provision of collective goods will be large in societies with high levels of inequality in individuals’ effective demand for collective goods or high degrees of religious or ethnic heterogeneity.”(3) SA is, indeed, very ethnically diverse, and the inequality in the effectiveness of individuals’ demand for goods is a common feature of present South African society, brought about, in part, by years of racial segregation and oppression. This was exemplified by a bifurcated welfare system in which the majority of government welfare spending went to a small, white minority.(4) This left vast sections of the population without adequate government support.
Presently, the South African NPO sector is characterised by two types of organisations, the first being service driven, and the second being organisations that focus on human rights, advocacy and monitoring. The former fulfils the role of providing much needed social services to underprivileged communities, and the latter performs the role of social ‘watchdog’. It is widely held that a stable and active civil society aids in poverty alleviation and civil society capacity building, enhancing public debate and participation and the promotion of democracy.(5) Therefore, the need for a healthy and active civil society in SA cannot be overemphasised.
The rise in civil society organisations, not only in South Africa, but around the world, appears to have been influenced by the need for organisations that respond to citizens’ needs at a human level and which can represent them in the face of states of ever-increasing size and a market economy grown so “virtual, large and hyper-real” that it actively alienates most in the general population.(6) Simultaneously, the state continues to perform less of the functions it should, and civil society organisations (CSOs) arise to ‘fill the democratic vacuum’.(7) The state is especially withdrawing from many areas of social support,(8) leaving CSOs to fill the gap. Indeed, it has been argued that the economic imperatives of the neoliberal agenda dictate that “(a) the state, particularly in Third World countries, should withdraw from the social sector; (b) the market should be freed from all constraints; and (c) people in civil society should organise their own social and economic reproduction instead of depending on the state.”(9) Following the end of apartheid, the South African government adopted a neoliberal economic model, marked by the implementation of the Growth, Employment and Redistribution (GEAR) macroeconomic strategy that prioritised the “for-profit sector in economic growth and service delivery.”(10)
The current NPO sector can be characterised by what is known as new-generation NGOs. Organisationally they are configured to have strong partnerships with the public and corporate sectors, and have innovative funding models and a variety of resource mobilisation strategies. The partnerships with the state have had the effect of introducing public sector concepts and tools, such as the log frame, targets and results-based management, into the NGO sector.(11) Equally, other NGOs have closer relations with corporations, leading them to swing towards increased ‘managerialism’ within their organisations.(12) These factors have led to the “promotion of more streamlined managerial structures and a higher degree of professionalism within the NPO”(13) as, over an extended period, basic strategic planning, monitoring, evaluation and general management skills have entered the sector.(14)
Furthermore, in light of increasing partnerships with the public and corporate sectors, and the need to develop more innovative ways of raising funds, the need for appropriate levels of accountability and transparency, particularly in the context of widespread corruption, has become more pressing than it was in the past. Particularly, recent growth in the NGO sector has led to calls from the corporate, state and civil sectors, for increased accountability of NGOs.(15) NGOs are increasingly required to adhere to monitoring and evaluation standards applied in the public and corporate sectors, forcing many NGOs to ‘corporatise’.(16)
Current issues facing the South African NGO sector
Various factors constrain NGOs in SA in their efforts to fulfil their role of promoting environmental and/or social goals by providing services and performing humanitarian functions, bringing citizens’ concerns to governments, monitoring policies and encouraging political participation.
While the demand for increased accountability and the consequent corporatisation of NGOs are not altogether negative developments, some have argued that they have led to the commercialisation of the NPO sector. NGOs which successfully professionalise stand a better chance of receiving funds from donors, compared to NGOs that follow a more classic donor-beneficiary model.(17) This increased professionalism affects the organisational culture of NGOs, leading many to adopt expertise that is stipulated by donors. In addition, the emergence of a ‘report culture’ has developed, which places more emphasis on measuring and counting ‘activities completed’, ‘performance indicators met’ and ‘outputs achieved,’” than on asking what difference the programme or intervention makes.(18) As such “demands for rigorous standards of accountability, transparency and financial self-sufficiency imposed by donors” on the NPO sector “have the unintended effect of distancing these organisations from the very poor and marginalised communities that they are meant to serve.”(19)
Funding is also a major obstacle that NGOs in SA face. As a result of the global economic crisis, from which SA was not spared, the country’s NGOs are experiencing funding problems, as donations, particularly from individual and private donors, have diminished substantially.(20) The recession has also seen Corporate Social Investment (CSI) budgets reduced.(21) As a result of reduced private and corporate donor funding, many NGOs have sought more funding from government to keep afloat, ultimately creating increased competition among NGOs for government funds. The danger in this is that it is questionable whether, under such monetary dependency, especially on government, NGOs can continue to enjoy relative impartiality,(22) due to the expectation that NGOs should be accountable to, and should mirror, funding agencies in their operations. NGOs will inevitably develop a very close relationship with the state, and may, at times, even be difficult to distinguish from the state.(23) Often NGOs become more like the bodies from which they acquire funding, than the societies they intend to represent.(24) NGOs are arguably being transformed into “development sub-contractors whose primary concerns are to fulfil the multiple objectives and accountability procedures of their diverse funders.”(25) This notion speaks to concerns “that relying on government funding would detract from creating the active citizenry needed to utilise post-apartheid, democratic tools of social change, and that it is possible that diminishing funding has eroded the advocacy function of the NPO sector.”(26)
It is not just ideological or structural issues that constrain South African NGOs. The Nonprofit Organisations Act of 1997, which was drafted to clarify the NPO sector’s role in the new democratic SA, in practice, proves to be problematic. The Act maintains that government is obliged to create an enabling environment for the nonprofit sector: “every organ of state must determine and coordinate the implementation of its policies and measures in a manner designed to promote, support and enhance the capacity of NPOs to perform their functions.”(27) However, many NPOs have difficulty accessing government support, forming partnerships, obtaining funding and building capacity (28) that will allow them to fulfil their mandates.
This is because much government support is geared toward social security, which is characterised by “government’s provision of social grants (which are direct cash transfers) and is strongly remedial and maintenance orientated.”(29) This is in contrast to the developmental social service delivery model that government and the NGO sector have attempted to implement post-1994. Developmental social service delivery is an approach that couples skills development projects with social services such as promotion and prevention services, rehabilitation services, protection services, continuing care services and mental health and addiction services.(30) It is argued that a developmental approach will be more effective in ensuring that those utilising social security eventually reduce their dependency on social grants and services, and become independent and self-sufficient members of society. However, government has not even been able to keep up with the increasing demands of the poor for basic social services,(31) and developmental social services, while viewed as being more sustainable in the long run, do not allow NGOs to meet the immediate and vast demands of the masses living below the poverty line.
The issue of qualifying for funding made headline news in South Africa in January 2013 when the Department of Social Development deregistered 36488 of just over 100000 NGOs.(32) This created widespread fear in the sector that fundraising efforts would be thwarted, because, in order to qualify for funding from the government as well the National Lottery Fund, NGOs are required to have a registration number. The department listed the deregistered NGOs as non-compliant because they had not submitted annual and financial reports.(33) This move was controversial, as some NGOs claimed that their documentation was in order and that the Department of Social Development had deregistered these NGOs merely to compensate for the fact that money had previously been given to NGOs without any monitoring and evaluation standards being in place. Therefore, some NGOs labelled the mass deregistration as an attempt by the department to ‘cover-up’ their past inefficiencies.(34)
Government’s lack of support for NGOs is further evidenced by the fact that many NGOs do not receive government funding because the lack of transparent or standardised criteria for the financing of social services has led to major discrepancies in the allocation of funds to NGOs.(35) The Department for Social Development’s Policy on Financial Awards to Service Providers, for example, includedguidelines for the implementation of the policy, which, although intended to provide broad direction, were nevertheless criticised for being too vague, leaving many NGOs unclear on “norms, service standards and key performance indicators,”(36) which ultimately inhibits NGOs’ ability to procure funding and ensure optimum function. It is not unreasonable for government to expect NGOs to meet certain funding criteria, but the onus is on government to ensure that criteria are clearly outlined and explained, particularly before they deregister so-called non-compliant NGOs.
Another issue plaguing South African civil society is the increase in government criticism of NGOs and the work they perform. The Mail & Guardian newspaper, for example, described how the South African Democratic Teachers’ Union (SADTU), accused education NGOs of pushing neoliberal agendas through their use of foreign funding.(37) SADTU, general secretary Mugwena Maluleke, further accused NGOs of ‘working with other political parties’, and stated that, “they are driving an agenda that education is a national crisis [and] using education to destroy the confidence of the public [in the government].”(38) By accusing NGOs of working with other political parties, Maluleke is implying that the NPO sector is ‘anti-government’. However, simply working with political parties other than the ruling party is not evidence that the NGO sector is anti-government.
It could be argued that Maluleke’s accusations are simply a reaction to NGOs’ exposure of government shortcomings. Many NGOs are independently-funded through foreign and private sources, and, as result, enjoy autonomy, which allows them to lobby and criticise the government. Furthermore, in the case of the textbook crisis that plagued the Limpopo Province, where several schools in the area did not receive the prescribed textbooks that were the responsibility of the Department of Basic Education to provide, NGOs were instrumental in bringing legal action against the government for not meeting its legal and constitutional obligations. Indeed, the basic education department has faced a wave of litigation in 2012, as civil society organisations found themselves ‘forced’ to take legal recourse due to the government's inaction in the face of the crisis in education.(39) Mark Heywood, the director of SECTION27, the organisation that took the basic education department to court twice in 2012 over the non-delivery of textbooks in Limpopo, has alleged that the accusations by SADTU echo those of senior political leaders, South African Communist Party General Secretary, Blade Nzimande, in particular.(40)
The inherent contradiction in the criticisms lodged by SADTU is that, while some government departments view NGOs as a threat mainly because they are independently funded, the government makes it so difficult for NGOs to qualify for funding from government itself.
In light of the global recession, increased corporatisation and competition, reduced government funding, intangible government funding criteria, and a general lack of government support, the nonprofit sector in SA currently faces many challenges. This is true particularly in the broader social welfare context, in that the South African Government has appeared to follow neoliberal socio-economic policies, which, by definition, require social spending rollbacks. It can also be asserted that “the politics of the day substantially influences funding policies”(41) which now seems to be making its way into the current government’s approach to welfare, with the bulk of government spending going to social security as opposed to social service delivery and social development. After all, it is much easier, if short sighted, to keep voters happy with direct cash transfers in the form of grants, than by implementing developmental projects that do not necessarily see immediate results.
Government’s requirements for registration as an NPO are justified and compliance with criteria for registration is necessary. However, regulation and support must act in tandem, because focusing solely on compliance and regulation without providing the necessary support would result in the alienation of a large part SA’s nonprofit sector, particularly smaller NGOs.(42) Furthermore, an unintended consequence of the reorientation of accountability away from the grassroots is that it leads to NGOs and their funders becoming complicit in “perpetuating the syndrome of disadvantage by turning accountability away from the beneficiaries towards the funders.”(43)
The South African nonprofit sector plays a vital part in assisting the government to fulfil its constitutional mandate. The socio-economic rights enshrined in the constitution would be out of reach for most South Africans if not for the presence of a vibrant and active nonprofit sector.(44) Despite this, a disturbing trend of civil society criticism by government factions is creeping into public discourse. Under apartheid, independent civil society was the voice of resistance, and a result was criticised and discriminated against by the government. Arguably, this trend is being revitalised. Should the civil sector suffer such criticism, and, more importantly, can government afford to alienate the sector considering that it is picking up much of government’s slack?
Lauren Stuart, Consultancy Africa’s Intelligence (CAI) Africa Watch Unit (email@example.com). This CAI paper was developed with the assistance of Claire Furphy and was edited by Nicky Berg.
This edition of the CAI Africa Unit Watch Issues Newsletter is republished here with permission from Consultancy Africa Intelligence (CAI), a South African-based research and strategy firm with a focus on social, health, political and economic trends and developments in Africa. For more information, see www.consultancyafrica.com or www.ngopulse.org/press-release/consultancy-africa-intelligence. Alternatively, click here to take advantage of CAI’s free, no obligation, 1-month trial to the company’s Standard Report Series.
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(2) Jankelowitz, L., 2007. Managing South African nonprofit organisations for sustainability.Unpublished Master’s Thesis. University of the Witwatersrand, Johannesburg; The South African Department of Social Development refers to non-governmental organisations (NGOs) and community based organisations (CBOs) collectively as nonprofit organisations.
(3) Weisbrod, B.A., 1986. “Toward a theory of the voluntary non-profit sector in a three sector economy”, in Rose-Ackerman, S. (ed.). The economics of nonprofit institutions.Studies in structure and policy. Oxford University Press: New York.
(4) Patel, L., 2005. Social welfare and social development. Oxford University Press: Cape Town.
(6) Pratt, B. and Myhrman, T., ‘Improving aid effectiveness: A review of recent initiatives for civil society organisations’, International NCO Training and Resource Centre, May 2009, http://www.intrac.org.
(10) ‘Critical perspectives on sustainability of the South African civil society sector’, Charities Aid Foundation Southern Africa, 2012, http://www.ngopulse.org.
(11) Pratt, B. and Myhrman, T., ‘Improving aid effectiveness: A review of recent initiatives for civil society organisations’, International NCO Training and Resource Centre, May 2009, http://www.intrac.org.
(12) Dhunpath, R., 2003. It's all businesslike now: The corporatisation and professionalisation of NGO in South Africa. International Journal of Knowledge, Culture and Change Management, 3, pp. 1109-1124.
(13) Mueller–Hirth, N., 2010. “South African NGOs and the public sphere: Between popular movements and partners for development”, in Fowler, A. and Malunga, C. (eds.). NGO management: The Earthscan companion. Earthscan: London.
(14) Pratt, B. and Myhrman, T., ‘Improving aid effectiveness: A review of recent initiatives for civil society organisations’, International NCO Training and Resource Centre, May 2009, http://www.intrac.org.
(15) Gray, R., Bebbington, J. and Collison, D., 2006. NGOs, civil society and accountability: Making the people accountable to capital. Accounting, Auditing & Accountability Journal, 19(3), pp. 319-348.
(16) Pratt, B. and Myhrman, T., ‘Improving aid effectiveness: A review of recent initiatives for civil society organisations’, International NCO Training and Resource Centre, May 2009, http://www.intrac.org.
(19) ‘Critical perspectives on sustainability of the South African civil society sector’, Charities Aid Foundation Southern Africa, 2012, http://www.ngopulse.org.
(20) Davis, R., ‘The great NGO crisis part II’, The Daily Maverick, 23 October 2012, http://www.dailymaverick.co.za.
(21) ‘Critical perspectives on sustainability of the South African civil society sector’, Charities Aid Foundation Southern Africa, 2012, http://www.ngopulse.org.
(22) Habib, A. and Taylor, R., 1999. South Africa: Anti- apartheid NGO’s in transition. Voluntas: International Journal of Voluntary and Nonprofit Organisations, 10 (1), pp. 73-82
(23) Pratt, B. and Myhrman, T., ‘Improving aid effectiveness: A review of recent initiatives for civil society organisations’, International NCO Training and Resource Centre, May 2009, http://www.intrac.org.
(25) Dhunpath, R., 2003. It's all businesslike now: The corporatisation and professionalisation of NGO in South Africa. International Journal of Knowledge, Culture and Change Management, 3, pp. 1109-1124.
(26) ‘Critical perspectives on sustainability of the South African civil society sector’, Charities Aid Foundation Southern Africa, 2012, http://www.ngopulse.org.
(28) Habib, A. and Taylor, R., 1999. South Africa: Anti- apartheid NGO’s in transition. Voluntas: International Journal of Voluntary and Nonprofit Organisations, 10 (1), pp. 73-82.
(29) Lombard, A., 2008. The impact of social transformation on the non-government welfare sector and the social work profession. International Journal of Social Welfare, 17(2), pp. 124-131.
(30) Social development paper
(32) Child, K., ‘Big back track on NGOs’, Times Live, 28 January 2013, http://www.timeslive.co.za.
(35) Lombard, A., 2008. The impact of social transformation on the non-government welfare sector and the social work profession. International Journal of Social Welfare, 17(2), pp. 124-131
(37) John, V, ‘SADTU warns it will go after NGOs’, Mail & Guardian, 2 November 2012, http://mg.co.za.
(41) Lombard, A., 2008. The impact of social transformation on the non-government welfare sector and the social work profession. International Journal of Social Welfare, 17(2), pp. 124-131.
(42) Wyngaard, R., ‘The South African NPO crisis - time to join hands’, SANGO Pulse, 12 March 2013, http://www.ngopulse.org.
(43) Dhunpath, R., 2003. It's all businesslike now: The corporatisation and professionalisation of NGO in South Africa. International Journal of Knowledge, Culture and Change Management, 3, pp. 1109-1124.
(44) Wyngaard, R., ‘The South African NPO crisis - time to join hands’, SANGO Pulse, 12 March 2013, http://www.ngopulse.org.