NGO FUNDING IN SOUTH AFRICA:
THE LOOMING CRISIS

The work of Non-Governmental Organisations (NGOs) – which contribute 30% of the civil services in South Africa - are critical to meeting the development needs of civil society in the country. NGOs are a key presence in arenas ranging from public health to education and in ensuring governmental transparency. The impact made by NGOs is widely felt, especially in the field of advocacy (such as the impact that the Treatment Action Campaign has had in the fight against HIV and on the availability of ARVs) and in the work done in poor communities with regard to access to education and human rights.

However, funding from the developed world into South Africa has been steadily diminishing over the last few years. This emerging funding crisis is caused by both internal and external factors, that have resulted in the closure of many NGOs across the country.

Externally, the fact that South Africa is increasingly viewed as a middle income country has made an impact upon the decision of donors to invest. This, along with the inadequate funding by the South African government, has put serious pressure on the ability of NGOs to meet the needs of the communities which they serve. The rising trend of international donor agencies referring civil society organisations to the government for funding is putting the future of many of these organisations at risk.

Another key factor in the funding crisis is the effects that the economic recession has had on donors. In 2009, The Southern African NGO Networks’ executive director, David Barnard, said: "Funders are not able to assist the organisations anymore because they themselves aren't coping. It is going to have a major impact on welfare organisations - either they will close down or their staff will be forced to leave the NGO sector." This was in the same year that Child Welfare SA had to restrict its support to thousands of children, and TAC were forced to retrench part of their workforce. The fact that such well established NGOs were so affected raises the question as to how small NGOs have handled the difficult funding climate. In 2010, NGO’s had R3 billion less to spend because of the recession.

One of the biggest funding vehicles in South Africa, the Lottery, has caused further uncertainty for NGOs dependant on its disbursements. “The six members of the National Lottery Board each earned at least R1.2 million during the past year, while available funding was not disbursed.

In the 2008/9 financial year, only R948 million of an available R3.3 billion was disbursed, in the 2007/8 financial year only R634 million of R2.9 billion was disbursed. At the same, more than 500 000 needy South Africans, many of them women and children, could be plunged into further desperation as many South African NGOs face a funding crisis”.

Internally, rising operational costs, the increasingly onerous specifications that need to be adhered to on behalf of the donors and in terms of the business plan ( delete these words in blues) have greatly reduced the amount of flexibility that NGOs have. Unrestricted funding is difficult to come by, and unexpected developments during the project cycle put projects at greater risk than before.

These developments are troubling in view of the need for an active civil society in South Africa. The ability for NGOs to lobby for effective governance is a critical function within the political context of South Africa today. Similarly, the shortages of capacity in the arena of health care and education is greatly alleviated by the work of various NGOs within these fields. The perception that South Africa is a ‘middle income’ country needs to be tempered with the vast differences in quality of life between the rich and the poor in this country.

http://www.ngopulse.org/article/emerging-funding-crisis-south-african-civil-society http://www.iol.co.za/news/south-africa/ngos-feel-the-pinch-of-recession-1.437963 http://www.sangonet.org.za/taxonomy/term/12