2014 - Upholding the legacy of Mandela!

governance politics donors accountability
Thursday, 16 January, 2014 - 09:14

In this article, the author takes a closer look at challenges and opportunities for NPOs in 2014, as well as the contribution that these organisations are making to our democracy 

How will civil society reflect the vision and values of Nelson Mandela? Will we become more accountable, more transparent, more compassionate, more mission-driven, and more sustainable or just lunge from one financial crunch to another, making lame excuses, blaming the economy and tolerating weak leadership?

Strong and active civil society organisations are needed for democracy, particularly in developing countries. This call for action comes from the failure of state controlled or top-down approaches to address poverty in communities. However, emerging societies throughout the world are demonstrating the effectiveness of a bottom-up, or community-driven approach to make a difference.
Nonprofit organisations (NPOs) are important expressions of civil society and must be strengthened so that they can participate effectively in a more democratic approach to development. Drive and passion is needed to survive – do not give up, your country needs you!
2014 will be an interesting year as nonprofits strive to work on sustainability plans -the evolution of social media and marketing will continue and nonprofits need to remain up-to-date on these changes to best serve their communities, even the smallest community-based organisation will harness new media and all it has to offer. However, traditional methods like special events, appeal letters, telephone calls, should not be stopped; innovation is the name of the game but always remember to ask!
Individual Donors – You Do the Math.
Evidence shows that people are prepared to give during economic slow-downs. They are willing, if organisations are willing to do their bit by investing in fundraising techniques and reach out to them. NPOs have to make more effort in building relationships or prepare to perish.
Fundraisers should exploit all possible ideas and the tools available to them but they also need to understand their audience’s preferences in hooking up with a good cause. NPOs that have taken more care and nurtured their individual donors are reaping the benefits - it is more cost effective to look after existing donors than to recruit new donors. Segmenting and profiling donors will become a must this year. South African fundraisers are notoriously weak in analysing their markets and taking time and trouble to really get to grips with generational giving such as the Matures (retirees)  who enjoy regular giving, Baby  Boomers also known as the Silver Surfers that seek and find good causes via the Internet, yet they still respond to mail appeals. Generation X and Y (look it up) are receptive to Peer-to-Peer channels, while those born after 1985, affectionately called the ‘thumb’ generation enjoy using smart phones, MXit (over six million young South African’s) and Crowdfunding. 
F2F and D2D
A few locally based international NGOs (INGOs) have tested the controversial mall and street fundraising technique known as Face2Face with a positive response from the public. Thousands of people have signed debit orders for specific monthly amounts, averaging between R70 and R150 per month. However, the cancellation rate is high due to unknown or unspecified factors but one can speculate that it could be a trust issue that occurs between the donor and the nonprofit or possibly with the bank and unexplained bank fees. A great pity as this approach can be a winner if done properly. Door-to-door fundraising is also another successful approach in other countries but in South Africa it’s often difficult to scale electric fences and ring door bells and get past excitable Rottweilers (both canine and gate keepers). Contradictory to this statement; D2D works for HIV/AIDS campaigns in townships and villages so why not make it work for raising support and funds?
Third Party Platforms
Most donors like the safety and convenience of online giving but it has to be simple with no hidden charges and reassurance that their privacy is protected. Rather than set-up your own online donation gateway you may choose to go with a more cost effective option of using a third-party platform but be prepared to do some homework first before making your mind-up.

A plethora of online donation platforms exist in South Africa but a number of nonprofits seek a litmus test - very few of these platforms are actually based in this country and work in Rands. So check out that there are: No set-up fees, the system allows for customisation design and or link to your website, no registration charges, donations are deposited directly into your bank account (no round tripping), less than five percent for administration fees, preferably one percent and no transaction fee per donation other than standard credit or debit card charges. 

Also go with one that provides Crowdsourcing options for events or sponsored challenges or venture capital for new social enterprises. The service should be able to support pledges and collect on your behalf as well as link to social media and video sharing websites e.g. YouTube. An online platform should integrate with your management systems.

Do some benchmarking with these trusted donation sites;

  • FirstGiving  - UK based
  • Fundercloud  - SA based
  • GivenGain – SA/Switzerland based,
  • Givey a social giving platform founded by David Erasmus a South African dot.com billionaire – UK based
  • JustGiving – UK based
  • PayFast, - SA based
  • PayPal Website Payment Standard which offers a facility ‘donate now button’ that NPOs can self-manage but beware it is a bit traumatic to negotiate – this company was founded by another South African billionaire; Elon Musk, inventor and space explorer.

New Social Currency on the Horizon

As commerce shifts from cash transactions to electronic payments and more exchanges move online, new forms of electronic currency are starting to take hold. The most well-known is Bitcoin, which describes itself as ‘an experimental new digital currency that enables instant payments to anyone, anywhere in the world’. By allowing users to remain anonymous and by operating outside of any government or entity, Bitcoin has the potential to transform banking, international trade, and even illicit trade.

The nonprofit sector needs to explore how Bitcoins and similar products can enhance support for our work. Imagine depositing wealth into Cloud storage or cyber bank!

The POPI Bill Will Become an Act – No More Spray and Pray

The Protection of Personal Information Bill will be signed off by the President sometime soon. POPI will have serious consequences for nonprofit organisations as it secures data privacy, it simply states that organisations will have to receive consent from individual donors or consumers to retain, collect and share their personal details. 

Currently, fundraisers using direct mail, email and short message service (SMS) to promote their cause may retain contact information and communicate with an individual until the individual ‘opts out’ which is an unsubscribe on email, and for SMS communication a reply of STOP or something along those lines and for postal communication probably a scribble on the envelope stating ‘RTS and leave me alone’.

There has never been an OPT-IN requirement, whereby explicit voluntary consent is required prior to marketing directly with an individual. Once the Act is promulgated fundraisers or their marketing agencies or other third party service providers such as mailing list brokers will have to acquire permission from an individual first before they can obtain and retain personal information and communicate with an individual.

Future direct mail, email and SMS communication will require prior approval before a marketing communication takes place. The subscriber will still have the option to ‘opt out’ which the fundraiser will need to honour. Should a prospective donor receive an email or an appeal letter they are entitled to be informed from where such details were acquired? By law you have to provide the source and the source has to prove that permission, ‘opt-in’, has been accepted. Facebook and Twitter are already compliant with the POPI Act with easy functions to ‘de-friend’ or ‘un-follow’ a pursuer, the same applies to LinkedIn where permission to communicate is sought first ‘I’d like to connect with you blah blah…’!

A regulator body known as the Information Regulator will be appointed with powers to enforce the Act and administer punishment to those who do not comply – 10 years imprisonment or a R10 million fine! Organisations have 12 months to comply with the POPI Act. You’ve been warned.

Government – Good or Bad Partner?

2013 started with an explosion and mass de-registration of registered nonprofits for non-compliance with the NPO Act by the NPO Directorate. This was a wake-up call that revealed glitches in the system by both the Directorate and registered nonprofits. The newly-introduced automated de-registration system went mad and flagged every organisation that had not submitted reports since 2007. However, this was in contravention of the NPO Act (1997) leaving the Minister of Social Development, Bathabile Dlamini, little choice other than to extend the deadline for submission of outstanding reports to July 2013. This date has further been amended to March 2014 or until such time as the mandatory Arbitration Panel is appointed. NPOs have a right to appeal if de-registration was unfairly carried out; the same applies if an application to register has been rejected.

Thousands of organisations have uttered (in whispered tones) dissatisfaction with government, mainly at provincial and local levels.  According to vociferous individuals Service Level Agreements are not honoured and payments are received late or short-changed rendering shortfalls in programme budgets and having to use other donor funds to complete government projects - borrowing from Peter to pay Paul and getting into trouble.

The distrust continues even though the Department of Social Development established a Ministerial Task Team (MTT) after the 2012 NPO Summit to strategise and address issues as a collective, yet there’s still doubt around the sincerity of this initiative. 

The Gauteng Department of Social Development recently issued guidelines on the ‘selection of board members for NPOs’.

Perhaps they should be applauded for drafting this document but quite frankly it is the same as any other outline of good governance for nonprofits until you hit recommendations for a Screening Committee which states; “The Screening Committee shall comprise of representatives of the Department of Social Development, local municipality officials, and representatives from other organisations or stakeholders relevant to the sector as agreed by the Department (the religious sector, education, community forums, health sector, welfare organisations, the private sector, the public sector, business sector, development sector), the Member of Parliament/ Member of Provincial Legislature and or Ward Councillor will have an observer status when available.” According to the guidelines nominations for board members of NPOs will be advertised and the screening committee will then finalise a ‘list of shortlisted nominees’. 

Since when did government get the last say over leadership for NGOs?  Oh yeah, now I remember, during the Apartheid era. Is this a glimpse into the future; will only GONGOs (government-owned NGOs) receive funding from Gauteng Province?

The New Age newspaper reported on 8 January 2014 that the Extended Public Works Programme (EPWP) will actively be working with an NPO in order to create more jobs, a R100 million was mentioned in the article to carry out this work but details are still to be verified. Sandra Millar of NPO Development and Training was interviewed by Radio 702’s dashing Xolani Gwala on this announcement; she expressed her concerns to how and to which NPOs would be selected. Currently the EPWP job creation assists youth projects, early childhood development caregivers, home-based care-workers and victim empowerment.

International aid diminishes

After an aid review in 2011 the UKs Department for International Development (DfID) announced their intention to end bilateral aid to India and South Africa by 2015 – this is currently being challenged by the opposition party in the UK after South Africa’s shock-horror response and has become a political hot potato. DfID’s new shift might be in providing venture capital for social enterprise development of NPOs, this has worked in other countries. For South Africa the 2013 amount of £19 million focused on supporting businesses and reducing the maternal mortality rate as per the MDGs which has according to their reports been successful. As a matter of interest the allocation to India for 2012 was £300 million. One wonders if this has anything to do with grouping of emerging economies like BRICS (Brazil, Russia, India, China and South Africa)?

The Obama administration has requested US$442 million (R4.6 billion) in bilateral aid to South Africa for 2014 which is down 10 percent from 2013 levels. The bulk of United States (US) foreign aid to South Africa currently supports HIV and AIDS programming under the US President’s Emergency Plan for AIDS Relief. Both the US and South African governments anticipate that in the coming years, PEPFAR funding for South Africa will gradually decline to US$250 million (R2.6 billion) by 2017, just above half of 2012 levels and the key activity will be Technical Assistance (TA) to government (SAG).

Other international aid agencies are also retracting budgets but the return of the foreign donor (Foundations and individuals) will resurface in 2017/2018.
Corporate Social Investment

No longer is scoring Black Economic Empowerment (BEE) points a whip to shape up corporate social investment (CSI) as the National Development Plan’s Vision 2030 (NDP) will be incorporated into most CSI criterion. Programmes will be aligned with the NDP so that we move in the same direction as a nation.

Impact measurement will be the carrot and not the stick for both corporate donors and their beneficiary organisations to collaborate - ongoing assessment of project strengths and weaknesses will help to improve service delivery. Both corporate and the nonprofits organisations will need to measure results and put their heads together to produce replicable and cost effective models of excellence.

The focus on impact is not new, but the challenging economic context has pulled it into focus as stakeholders are seeking some sizzle and change.

By embedding a culture of impact in our planning a clear direction will help bring programmes to life and impact will naturally sparkle. Collecting the right information and data to illustrate activities and effectively communicating results, even if they aren’t positive, will be worth the effort. Avoid ‘chasing the money’ and counting heads, start telling stories. All good projects start with the end in mind. "No numbers without stories; no stories without numbers."

The most prominent projects attracting funds will be Early Childhood Development, Sexual and Gender Based Violence, Nutrition and Agriculture, HIV/AIDS will remain a priority but with more emphasis on strengthening health systems, infection control with ongoing support for orphans and vulnerable children. Conservation and environment will focus on quality water supplies and climate change. Saving the Rhino has not worked (nearly 1 000 poached in 2013) so this will take a bit of back seat as far as donors are concerned; despondency has set in, noble efforts made by non-profits to fight international organised crime  is like slaying dragons with toothpicks.

Making a good impression is critical to ongoing success so it is important that organisations get more professional about the way they present themselves visually and are able to measure results - this leads to impact. Taking good photographs and sharing good news stories will encourage confidence in your work but analysing and responding quickly to what works and what does not work will bring forth good results.

Fraud Fears

The National Lottery Board (NLB) circulated a news alert stating its commitment to the National Development Plan and obligation to fight fraud and corruption. The NLB has introduced strong verification procedures during the adjudication process that will assure reduced fraudulent activities of NPOs. The NLB is serious and will take action against ‘city slickers’ who portray themselves as representatives of the lottery and can guarantee a grant, consultants who charge a commission for completing forms, submission of fraudulent financial statements or exaggerated project budgets, securing funds for the purchase of assets and then selling off the goods and pocketing the money for personal gain. The list goes on - take note, they mean business - no more Mr Nice Guy. Unfortunately, rigorous adjudication takes time. Will this slow down, the already laboriously slow application process further?

Image and Perceptions of a Brand

Many nonprofits have had to revisit their strategy for recruiting celebrities - you must keep them busy and focussed on your cause, be clear on what you want them to do. Yes, movie-stars, politicians, sports heroes, princes and priests can improve the public image of a good cause and add excitement to events; they can be an asset and a big draw card but before you make the approach take time to way up the pros and cons. They require time to woo and time to manage once they are on board. There are several things you need to consider above helping to raise awareness of your cause or attract funds.

Will the benefits of their support be worth the effort it requires? What do you do if they get negative publicity (regardless of whether they are later found innocent)? What happens when they die? How will it affect your image and brand?

Consider the emotional issues internally should things come adrift. A senior fundraiser at the British Red Cross worked closely with Princess Diana and said he suffered from depression for more than two years after her sudden death.

Consider the cost involved in developing promotional materials - what happens if you have a big name added to a massive Capital Campaign and you have created all marketing visuals around that face and name and the relationships comes to an abrupt end?  Do you have a plan B?

It is incredibly rare that problems occur but from the moment you start thinking about working with a celebrity you need to consider how your brands fit together, what your stakeholders will think and what happens if that celebrity's brand is tarnished, either temporarily or permanently.

So how will civil society uphold the legacy of Nelson Mandela and ask “what would Mandela do or say?”

Will we stand in the sun or sit in the shade?

In a nutshell:

  • Be  value and mission-driven like Nelson Mandela;
  • Do not let the Fox into the Hen house;
  • Clean-up your management systems – check ‘opt-in’;
  • Try new ideas in fundraising but keep the old ones alive;
  • Think twice before seeking patrons, ambassadors, celebrities; and
  • Measure progress. Do not just ask how much but rather how many, how effective is our work. 

Ann Bown of Charisma Consulting.  Ann is a financial sustainability adviser and trainer (9 January 2014)

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