Donors want nonprofit sector to develop solutions
Nonprofit organisations (NPOs) in SA face a severe leadership crisis. This needs to be tackled urgently because the sector plays a crucial role in our society — seeking to provide a large proportion of the services that the government does not administer.
NPOs are valued at R60bn and have the potential to implement real and lasting solutions to the social problems that many communities face. But they need help and guidance in finding the best pathways to achieve this.
The NPO leadership deficit began growing fast after 1994 as many leaders were absorbed into the government, corporate social investment departments and international donor foundations. At the same time, the NPO sector began a period of rapid growth partly because in this country, unlike in other democracies founded on progressive principles, anyone – regardless of the extent of their skills or knowledge – can start an NPO, register it with the Department of Social Development and raise funds.
In 1994, there were about 14,000 registered NPOs in the country. There are now about 125,000 and another 35,000 are unregistered.
Of the total, 97% have a budget smaller than R1m. Most are small, struggling and unable to realise their potential.
When asked to describe their biggest challenge, NPOs invariably refer to a lack of funds. However, various research publications reveal that the total annual investment in the sector is R60bn. Clearly, plenty of funding is available.
The greatest obstacle that NPOs face is their approach to the social problems they seek to address. They tend to offer interventions rather than solutions for social problems. For example, feeding schemes — rather than sustainable solutions to hunger — are enormously popular.
This interventionist approach in SA reflects an international trend. According to the July 2014 edition of the Stanford Social Innovation Review: “The foundation on which many NPOs are built is flawed and simplistic, focused on a symptom rather than the underlying set of problems … and organised to administer a narrowly tailored programme, rather than generate sustained, significant change.”
This approach cannot endure, because donor dissatisfaction with the intervention model is growing. There is much talk about donor fatigue but, in fact, there is no such thing. Research shows that donors still have the money and the drive for philanthropy. However, there is such a thing as donor intelligence — donors are increasingly refusing to pay for activities that do not solve problems.
As a result, solutions thinking is now a dominant theme in the NPO world — and a cornerstone of activities at Community Chest. In recent years, the organisation has developed a treasure house of information and guidance for NPOs, donors and civil society organisations for developing real solutions.
Due to this new focus, Community Chest will no longer hold the annual carnival in Maynardville Park in Cape Town. While the carnival has been a well-known and muchloved brand, the organisation has become far more focused in our efforts to bring about real change.
There are financial reasons, too. The carnival raised 20%30% of our budget two decades ago. Since then our organisation has expanded considerably and other sources of income have grown far faster. In recent years, the carnival has raised only about 2% of our budget and in 2016, it made a loss.
We are pleased that the Cape Town community will not be bereft of a carnival, because the Wynberg Family Festival takes place on March 24 and 25 and we wish the organisers every success.
The full extent of Community Chest’s work is described in our latest annual report, but it is worth sketching some of our efforts in leadership development. We offer full bursaries for 20 honours students studying social development at the Cornerstone Institute, a course breaking new ground in its focus on NPO leadership.
We also offer a training programme for several hundred people annually in aspects of NPO leadership.
Our focus areas for programmes are education, health, community development and income generation. In the coming year, we will devote much of our energy to exciting new projects in these fields. One of these is a partnership with the Western Cape department of education, in which we will start to offer after-school extracurricular programmes at all low- and no-fee schools in the province.
Partnering with the Bertha Centre for Social Innovation and Entrepreneurship and the Graduate School of Business at the University of Cape Town, we will be equipping 400 entrepreneurs with the skills and resources they need to start successful businesses.
We trust that the public will come to recognise and make increasingly good use of, the core service that Community Chest offers: a precious information space in which people can engage with us about finding and implementing the best possible solutions to social problems.