Dealing With Deficit By Focussing Beyond Organisational Survival
Established in 1984, the Social Change Assistance Trust (SCAT) is a human rights NGO that provides funding and institutional support to rural advice offices – also referred to by SCAT as local development agencies. SCAT works with a total of 58 rural partners in the Eastern Cape, Western Cape, Northern Cape, Free State and North West.
SCAT is headed by Greg Erasmus who joined the organisation in October 2004 as Financial Director and advanced to the position of Executive Director in August 2005. Ironically many years ago, Erasmus drew his first pay cheque ever from SCAT as his professional career started in a SCAT funded advice office where he worked as a resource officer. His resume includes an impressive 5 years at the historically well known and recently non-operational Cape Town NGO, Careers Research Information Centre (CRIC) and a seven year stint in the corporate sector. However, his passion for development and his personal drive to see people achieve their inherent potential in difficult circumstances has drawn him back into the NGO sector.
Supporting the Institutional Development of Civil Society in Rural Communities
SCAT came into being because rural communities were and continue to be marginalised in relation to the distribution of resources. The organisation’s longevity and success is built on the simplicity and endurance of its vision, viz., vibrant and sustainable rural communities. A fundamental principle of SCAT’s strategic approach is to promote social transformation by supporting the institutional development of civil society at the local level.
SCAT originally identified advice offices as critical interfaces for intervention as they represented one of the few community based organisations where people could seek some recourse for social injustices during the apartheid era. Over the years these offices have taken on wider issues such as paralegal advice, dealing with issues related to local government service delivery, accessibility of social security, land tenure and redistribution, income generation and job creation, protection of employment rights, women’s empowerment and the protection of minority groups in rural communities.
SCAT provides both core funding and institutional support to its partner advice offices. The institutional support is targeted at ensuring that the advice offices become robust entities that have the capacity to respond to community needs and function with resourcefulness in the challenging rural environment. This has also translated into a unique model of local economic development that is not so much based on attracting external resources as it is on building strong local partnerships and mobilising local resources.
Early Warning Signals Inform Decisive Sustainability Strategy
The current strong focus on the institutional sustainability of partners has to a certain degree been motivated by internal challenges that SCAT experienced in the past 12 months. At the beginning of 2005, SCAT experienced a shortfall in funding that forced the organisation to take some difficult decisions related to its future sustainability and methods.
SCAT’s financial problems were related to two developments. Firstly, over the years the organisation became caught up in wanting to do more without timeously securing the additional funds to support the increased activities. At the same time, SCAT’s traditional donors advised the organisation that they were planning to scale down funding, thus compounding the organisation’s financial woes.
SCAT’s response to this setback was to develop a strategy that went beyond crisis control. The organisation reduced some of its activities, reviewed funding commitments and as opposed to asking the question: how do we cope? It focused more strongly on the issue: how do we prevent this from happening again in the future? Their multi-pronged response included:
• The consolidation of programmes
• Cost savings
• The regrettable reduction of staff
• An aggressive fundraising strategy
With a leaner staff and programme in place, the organisation’s annual budget was reduced from R15 million to R12,5 million. A strong effort was made to base the organisation’s budget closer to committed income, thus improving its cash flow status.
Commonality of Vision Inspires Diverse Partnerships
Using his corporate experience and drawing on the support of the Scat team, Erasmus was able to increase the engagement with corporate donors. In the past year, SCAT has managed to retain all of its long-term donors and secure funds through six new donor agreements. This includes a mix of corporate and institutional partners.
According to Erasmus, in order to succeed with corporate donors, one needs to engage at the level of vision. He contends that that getting around political and ideological differences will be important in helping us find a unified solution. The challenge is finding the right people with the right ideas. Erasmus argues that business requires a stable socio-political environment and that business leaders are increasingly appreciating the value of sustainable development and the importance of poverty alleviation. This increased awareness is complemented by changes in the broader corporate operating framework. For example, the BEE code is placing pressure on the corporate sector to transform and the soon to be released governance codes also bode well for corporate social responsibility. It is however the current economic booms that will most convince business leaders about the value of transformation. The current upswing in the motor vehicle, retail and building industry, in particular, has been largely attributed to the increase in spending power of black South Africans, many whom have entered the economy as a result of opportunities created by economic and social transformation that has taken place over the last 11 years.
Nevertheless, SCAT has made some sound investments over the years that will also assist the organisation to move to longer-term sustainability while weathering the challenges of the current funding uncertainties. SCAT has capital investments in an empowerment investment company that will pay dividends in 5-6 years. Moreover, the organisation is in the fortunate position of owning the office block in which it occupies two floors. This reduces its own overhead costs as well as provides a regular income from the collection of rental fees from other tenants.
Organisational Sustainability is about Intellectual Capacity
SCAT finds itself at the onset of 2006 in a stronger financial position with a more focused and sustainable programme.
According to Erasmus, the organisation will not dramatically change its focus for the forthcoming year. It will continue to provide core funding, but at a lower level. However, the emphasis for community partners will be on developing the internal robustness of these organisations. This will be complemented by support for developing local partnerships in order to develop local sustainability based on local investments and collaboration.
An important area that SCAT will focus on for 2006 is staff development. A significant point that Erasmus raises is that organisational sustainability is not about money but about intellectual capacity and this requires investment
Erasmus is also keen to develop the organisation’s fundraising strategy to the level that SCAT is available is able to attract a mix of donors that are aligned to the organisation’s values as well support what the organisation believes is important.
Finally, a critical criterion for the future success of SCAT has been identified by Erasmus as its ability to articulate the value of its work from a more empirical and analytical base, rather than just its activities
- Fazila Farouk, Deputy Director/Portal Editor, SANGONeT To read other NGO Profiles, click here.
- Fazila Farouk, Deputy Director/Portal Editor, SANGONeT
To read other NGO Profiles, click here.