The impact of Covid-19 on the non-profit sector

Friday, 2 October, 2020 - 12:00

There are more than 220 000 non-profit organisations (NPOs) registered with the Department of Social Development, and many are at the coalface of the Covid-19 response as they provide relief services, including food, water and medical supplies, to millions of vulnerable citizens. With these NPOs dependent on funding and donations to bolster their operations, a significant challenge lies ahead, particularly amidst a struggling economy. Many NPOs are experiencing or anticipating funding cuts, even as demand for their assistance increases.
 
Although much has been said about the impact of the COVID-19 pandemic and the lockdown on the corporate sector, some believe very little attention has been given to non-profit organisations.  The increasing need for aid has become evident as the lockdown drags on.  However, with businesses and households now experiencing tremendous hardship, very little funding and support is being made towards organisations which rely primarily on donations.
 
During the ongoing pandemic, civil society is facing several constraints on its ability to carry out its work, as a result of lockdown, distancing, and quarantine measures. Despite these challenges, bottom-up accountability approaches are crucial to ensuring funds for the pandemic reach their intended destination. NGOs, donors, and multilaterals can support such approaches by drawing on several examples of online civic engagement.
 
During times of crisis it can be very difficult to gain momentum and participants for a cause, as media and public orientation are focused on the emergency. Methods for reaching out have also moved online, which may reduce the potential for broader engagement.
 
Donations and funding are the lifeblood of non-profits. But as the economy suffers, so do they. Liv Lanseria, which provides food, education and support to thousands of children in impoverished communities, has had to limit its services due to a lack of resources as donor fatigue sets in.  The organisation’s Jay Strydom said support had declined since the early days of the lockdown.
“The cash injections have diminished. We have some loyal people who continue to give but with the uncertainty, many cannot.”
Strydom stresses now more than ever, South Africans must continue to support NPOs.

“I think people around us need to come together to help each other. We will feel the effects of COVID-19 in the years to come.”
 
With job sheds announced across all sectors in the country, NPOs haven’t been spared. Many of these organisations are now facing the threat of downsizing staff or closing. The scourge of food insecurity in South Africa will likely persist long after lockdown has been lifted, with retrenchments and growing unemployment exacerbating the problem.
 
There has been a shift corporate funders have become sensitised to the fact that food security is a key component of sectors like education, and they see the long-term value of the multiplier effect of food security.

 

Three main challenges to non-profits during this time:

  • Traditional funding rhythms have been disrupted,
  • Modes of response need to shift in the face of obstructions to programme delivery, and
  • Funder systems are not always positioned to absorb innovation readily.

With organisations forced to operate in a new landscape a low-touch economy reliant upon digital innovation it is important to build and communicate new business cases that can translate into funding. Funders don’t owe us anything and we have to reposition so that our solutions share value with them. We cannot just rearticulate a need; we must create platforms that showcase innovation, enabling funders and organisations to move towards each other.
 
Civil society is innovative by nature a requirement when working with communities on the ground but funders do not necessarily have access to types of funding innovation vehicles. Funders should support platforms that showcase innovative solutions emanating from the non-profit sector.
 
With operational funding an urgent need, NPOs should be brave and humble enough to reach out to funders and each other, to help manage the crisis. Funders are open to having conversations, contrary to what we may believe. Having “genuine, human” engagements with funders presents an opportunity for conversations about social justice. Our convening power is so much greater now that we can come together online.
 
Looking at repositioning its pool of funds, coming together with other NPOs to de-risk propositions and crowd in additional funding through innovative financing models. There are tools and research on how to attract more investment and support, but this can only be fuelled by partnerships.

How to emerge stronger from the crisis

Non-profits will be faced with unprecedented challenges in the months and years ahead and have thus far not received any funding relief from government, although advocacy in this regard may bear fruit.
 
Trialogue offers the following advice for NPOs that wish to emerge stronger from the crisis:

  • Understand needs on the ground through ongoing consultations with beneficiaries.
  • Keep new interventions aligned with your organisations’ current focus areas and/or geographies.
  • Communicate with donors, transparently and repeatedly.
  • Approach existing donors for financial and non-financial support with a COVID-19-specific response.
  • Build on existing, or develop new, digital fundraising channels.
  • Leverage existing partnerships and consider new ones – collaboration is key.
  • Advocate for new forms of support and policy shifts within your focus areas.
  • Consider participation in multi-stakeholder responses.
  • Plan for the medium and long term, considering how you can contribute in your focus area once the pandemic has eased.

The current situation provides opportunities to engage with other types of civil society organisations beyond NGOs, such as churches, Scouting groups, professional associations (eg nurses unions), and other membership-based organisations.
 
SOURCES:
Andy du Plessis, Managing Director: FoodForward SA
Craig Kensley, Head of Business Development:  Community Chest of the Western Cape
Tumelo Mabitsela, CEO of Kutlwanong Centre for Maths, Science & Technology,
Veronica Mokhoali, EyeWitnessNews
Saul Mullard and Per Aarvik: CMI

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