As the world coffers appear to gradually dry up at a time when most non-governmental organisations are donor driven, it is about time these so-called non-profit making groups embrace the concept of social enterprise to sustain their projects.
According to an analysis by Tonderayi Matonho, these organisations also need to build positive relations with the people and communities they have assisted for the many years they have been in existence.
Matonho is of the view that the social enterprise concept integrates into programme activities an income generation and business model, creating complete transformation and sustainable processes.
To read the article titled, “Donor-driven NGOs, should enterprise or they die,” click here.Source:All Africa
The FW De Klerk Foundation is footing the hefty legal bill of senior prosecutor, Glynnis Breytenbach, partly by way of multimillion-rand donations from billionaire businessman, Nathan Kirsh.
The Foundation’s executive director, Dave Steward, admits that Kirsh, “…a major donor, also to our litigation fund, which has paid the legal fees of Glynnis Breytenbach.”
Steward explains that from this donations, the organisation also funds other projects, adding that the main project is Breytenbech’s litigation.
To read article titled, “De Klerk funds Breytenbach,” click here.Source:IOL News
2012 has been a tough year for civil society. Those funding cuts that we’d been warned of since the crash in 2008, were keenly felt. The President's Emergency Plan For AIDS Relief (PEPFAR) wrapped up its second five year programme, the Europeans curtailed their investments, the United Kingdom Department of International Development (DIFID) restructured. The retraction in international funding was exacerbated by instability in local funding as the National Lottery in trying to get its house in order, struggled to deliver on its grant mandate. Government too continued to frustrate rather than support, being slow to pay and with large underspends on its welfare budgets. Business plodded along, on hold as it waited for the new BBBEE Draft Codes to be published.
The result is that the country may not be in recession, but it feels as if the non-profit sector is. The reality of this picture was brought to life by a recent survey by consultancy Greater Good, which interviewed over 600-plus organisations. Eighty percent of those surveyed have lost significant funding this past year, 20 percent have enough money to last another month, 17 percent have no operating cash at all. Published late last year, the report confirms my instincts - that the tough times are real, and life for civil society isn’t going to improve in the near future.
But I’ve had a forced rethink, after attending the ‘Looking Back, Looking Forward’ forum at GIBS, which hosted visionaries whose crystal balls are a whole lot more informed than mine, strategist, Clem Sunter, constitutional expert, Roelf Meyer, City Press editor, Ferial Haffajee, civil society’s Neville Gabrielle, economist, Adrian Saville and Rand Merchant Bank Chair, Sizwe Nxasana.
Hosted at the business school - the home of sharp suits, expensive cars and lengthy debates on profit and loss, the forum took an a-typical turn when the panel from their various areas of expertise agreed that the area of positive growth for 2013 wasn’t financial services, or mining, or media.
But civil society.
This is exciting, as it means that the work being done in social development is finally integrating into mainstream thinking. The commentary was fascinating: that civil society’s cross cultural mobilisation of citizenry is connecting people more than anything (think of anti-toll group, OUTA). That the nonprofit sector is where real change lies - for employment, skills development, entrepreneurship and of course, social development. That government and business have to engage if they want to move forward and civil society is the key to that action.
To hear development debates making their way onto business school panels marks a significant change in thinking. It is an opportunity we cannot miss.
Although I believe that 2013 will be tougher than 2012, I am heartened by the way the work of nonprofits and activists is being viewed. Jim Collins writes about the importance of gaining momentum to achieve change. I like to think that the years of consistent and persistent pushing are starting to gain traction. We don’t have momentum yet, but we’re starting to see the extra spin. And that’s heartening.
So rather than predictions for 2013, I have written instead a few survival tips to ensure that your organisation comes out fitter, stronger and more focused by 2014.
These six steps to surviving 2013 create a well-connected approach that will strengthen your relevance and contribution to social development, creating a solid foundation for the more stable years that sit tantalisingly close on the 2014 horizon.
1. Look beyond the of jobs jobs jobs mantra
Jobs. Jobs. Jobs. It was the mantra of 2012 which resulted in a flurry of activity because it came with access to sizeable sums of money, and is a neatly measurable indicator.
I hope that we have learnt from the HIV-years, when everyone ended up with an HIV project regardless of whether it was relevant to their work or not. And in chasing the easy funding, non-profits neglected the local options which is part of why we’re facing financial difficulties today.
My advice for 2013 is then let’s not focus on jobs, but rather on the more sustainable approach of building business. It’s the entrepreneurs who will create work for those in their communities. We have to move away from the thinking that institutions will create more work. They won’t – the financial pressure that we are already under means that many of us are cutting not creating employment. So it is common sense to think away from the traditional institutional framework. We need to broaden the base of people in employment. We need to focus on improving the systems they work in. And we need to make instill a strong sense of social focus in our entrepreneurship, so that they are a contact point of positive development.
For more on this, refer to www.ngopulse.org/article/milking-profits-tale-cows-kenya.
2. Accountability – getting our house in order
With 80 percent of nonprofits not submitting their annual financial statements and narrative reports to the Department of Social Development, we have no foundation for criticising the other sectors of democracy, business and government.
2013 must be a year where nonprofits commit to Codes of Good Practice and then follow them.
Only with an accountable, robust civil society can we attain the moral high ground and hold others to account.
Business and government are making concerted efforts to improve their accountability as evidenced in King III, and the work of the Public Protector, Auditor-General and legislative framework of the Public Finance Management Act.
We cannot afford to cruise along with a misplaced arrogance that because we do good, we are good.
If anyone is to survive 2013, accountability and transparency has to be central to their ethos.
For more on this, refer to www.ngopulse.org/article/herculean-task-good-governance.
3.Monitoring and Evaluation
If you don’t have monitoring and evaluation in place, 2013 is your year to get it going.
If you fail to get basic measurement in place, chances are your organisation will be obsolete by 2015.
Not only is measurement an important part of being more accountable, but it enables nonprofit leaders can challenge their assumptions of what works and what doesn’t.
I believe that as we all focus on monitoring and evaluation, partnerships will become easier to manage leading to a natural consolidation in the sector. When you realise your areas of expertise you begin to share knowledge and so begins a positive cycle that leads to improved more professional services.
For more on this, refer to www.ngopulse.org/article/completing-circle-some-thoughts-why-measurement....
4. From Programmes to Activism
There is a growing voice that is calling for a move away from programme funding to donor support of activism and rights-based movements. The argument is that civil society’s role is not to provide services that government should be delivering (e.g. like HIV care), but rather to hold government to account to provide these services.
It’s a good argument, and even better because it is rattling our rather traditional approach to development. I think that 2013 will see more money being available in building accountability and growing the rights-driven voice of civil society. The success of SECTION27, the Right2Know Campaign, even the Opposition To Urban Tolling Alliance (OUTA) in Gauteng, adds credence to this movement. This is moving the flywheel significantly and I like it. Watch out for more activism in 2013 and even more for 2014.
5. Rise of the CBO
We can’t keep ignoring community-based organisations (CBO). Just because they don’t have the institutional structures that our funding models demand, doesn’t mean that they are irrelevant. We cannot continue channeling funding for communities via national organisations just because they comply structurally to the needs of the donor.
I would like to see a concerted effort by the larger nonprofits to bring in CBOs, and to help them build up their institutional structures, securing accreditation, developing financial statements and creating annual narratives.
I think that national organisations will find that the role they can play as mentor and guide is part of their survival strategy as it is through the CBOs that they will maintain their relevance.
6. Making Profits out of Nonprofits
A key survival strategy for 2013 is to grow the profit base of your nonprofit. Usually a sacrilegious word in social organisations it is important that we start to professionalise the work that we do by increasing the surplus of funding. And this doesn’t mean going out to raise more grant funding, but rather taking a longer term view on what type of funding you need to survive. Research by the Stanford Innovation Review shows that America’s top nonprofits have funding stability as their common denominator. This is difficult in South Africa where government and donor funding is erratic. But what must happen is a focus on building a surplus into the organisation, by doing what you do well. Whether that funding stream is grant, or entrepreneurial it must be a surplus and it must provide the type of funds that you need to grow.
- There are many risks that confront nonprofit organisations today and some arise where an organisation has a phase of rapid growth in resources. We have noted this, particularly in relation to new ‘social movements’, with activism at their core, which have been achieving significant success in raising public awareness and in raising funds.
Charles Tilly defines social movements as ‘a series of contentious performances, displays and campaigns by which ordinary people make collective claims on others.’
A number of such movements have received substantial initial funding leading to rapid growth, others are still growing or are poised to grow.
With growth comes both increased numbers of paid staff (employees), who are often deployed over a wide geographical area, and increased levels of activities. Together, these areas of growth result in an increased need for effective financial management systems and controls and for an organisational infrastructure that few can afford, or are prepared to pay for.
As budgets get bigger (due to increased monthly financial commitments), the need for good financial management increases but the associated costs become more difficult to finance, especially if the initial funders later withdraw or reduce their support. We are now seeing large, previously well-funded and effective organisations using up their hard-earned reserves (built up over many years) in order to meet their on-going obligations to pay staff and other running costs. What is happening?
With some exceptions, we are seeing funding shift away from established organisations, some of the funding is then switched to emerging social movements and related organisations which are seen to offer a new dynamism, mobility, profile and exposure at a lower cost than the more established organisations with a longer track record. Whatever your views are on whether this is a wise move on the part of funders / donors and on whether such funding will be for the longer-term, our experience tells us that, if you do not invest in the very necessary costs of systems, controls and infrastructure or the lack of them will come back to bite you!
Lack of effective financial management systems, controls and infrastructure may result in one or more of the following:
- Inability to account for, and report back to funders and supporters on, funds received;
- Disgruntled staff, funders and other stakeholders;
- Waste and/or misappropriation of resources (including, but not limited to, cash);
- Damaged reputation;
- An inability to carry out necessary financial planning and strategic financial thinking;
- Cash flow crises.
Financial management expertise
Failure to set up appropriate financial management systems from the beginning is a big mistake and a patch-up job later, when the gaps and negative consequences are already obvious, may prove to be more expensive than the implementation of good systems from the start would have been. At a later stage, it will also become even more difficult to secure funding to implement / upgrade systems. Every organisation (regardless of size and track record) needs access to financial management expertise. Good finance administrators, bookkeepers, accountants and financial managers are in short supply and are expensive to employ, but all organisations need the skills they offer. This is not an expense to hold back on and it is wise to:
- Employ or contract experienced and well trained finance staff or service providers from the outset; and
- Ensure the finance staff are given adequate support and training in line with their responsibilities.
- This article first appeared on the CDMS Website.
Streets Ahead, a Zimbabwean non-governmental organisation dealing with the rehabilitating of children living on the streets, has closed.
In a newspaper advertisement inserted by board members, the organisation states that it has already approached government to cancel its registration.
The advertisement reads: “The closure is a result of financial problems. We had been struggling for a long time because our sponsors from overseas have withdrawn funding. The donors' withdrawal has meant the suspension of our activities indefinitely.”
To read the article titled, “Local NGO closes, cites financial challenges,” click here.Source:All Africa
Mining magnate Patrice Motsepe tried to convince students at the Tshwane University of Technology, in Pretoria, that being a billionaire is overrated.
Speaking during the latest leg of the Motsepe Foundation’s roadshow to listen to suggestions on development projects, Motsepe pointed out that, “Money is very, very important but having it doesn't mean you'll be happy. So always pursue what you think makes you happy."
He further told the students that when they apply for money from his Foundation, it is a grant, a gift, adding that all he is asking is that, “…when you're done, please try to help where you come from. We don't want you to pay us back.”
To read the article titled, “Being a billionaire is overrated: Motsepe,” click here.Source:Sowetan Live
There is a certain stigma around nonprofit organisations (NPOs). In the minds of many, charities are associated with poorly developed brand using amateur attempts at social media to ask for more money. Yet these NPOs are doing excellent and vital work across the globe and rely on public funding to do so. The problem comes in with communication. Too many organisations take good communication for granted and therefore fail to communicate their vision, needs and successes. In order to support your vision, potential (and current) donors need to understand what it is you do, why they should care and how they can help.
Charity: Water is one organisation that has taken communication seriously. Instead of just getting on with the work (which they are very effective at doing), they put ordinary people at the centre of everything. They place a simple call to action on citizens of the world and receive overwhelming support in response. So much so that since it was established in 2006, Charity: Water has raised over US$40 million, ensuring that 3 400 000 people can access clean water in developing countries.
As a case study, Charity: Water has done plenty right. Two key aspects are their transparency and their storytelling techniques. Using quality videos and digital media, they engage with ordinary people where they are. They have a clear message and they communicate it in a way that makes people want to click on the next two-minute snippet to learn more about the work they do. Their videos show the remote places they work at and quantify the exact impact that providing clean water makes on communities and individuals in developing countries. They are at an advantage in that their running costs are sponsored by corporates. This assures donors that every cent raised is sent directly to the region it was raised for. Through good communication, Charity: Water has made the work they do real to people thousands of miles away, and has created a positive association with their brand. In other words, they have made their brand loveable.
By doing so, they have put the onus of fundraising on everyone. Those who view their promos and engage with them online are left with a clear understanding of their work, and no excuse for not getting involved. Charity: Water provides people with a clear and simple call to action while also inspiring them to make a difference.
By setting a standard of excellence, both with their transparency and their communications, Charity: Water is developing a new model of engaging people that other organisations could learn from. Their transparency clearly shows what the power of proof can do for an organisation, their simple messaging and dedicated storytelling makes Charity: Water as personal and relevant as possible. Here are five ways your charity can follow suit:
Clearly communicate where the money goes. Being able to say that it takes X amount of money to fund Y motivates people to raise at least X (if not 2X or 3X). Put another way, honest and quantifiable targets give people something solid to aspire to when it comes to raising money for your organisation.
If they are to reach new audiences, non-governmental organisations (NGOs) desperately need to stop relying on the same old communication techniques. Sustainable funding requires a growing donor base and today’s potential donor looks very different from that of a decade ago. E-mail newsletters, wordy websites and annual reports no longer cut it. While existing donors may appreciate these, potential donors need to be enticed and such enticement needs to be short and snappy. Social media and online video sharing, when done right, ticks all the boxes with the added advantage of giving a human face to your organisation with the potential of viral sharing.
Have a clear ask
Depending on the complexity of your organisation, you may have various asks, but make sure that for every piece of communication, there is at least one that clearly comes to the fore, so that people always know what it is they can do to help you. One way of getting this right is by targeting specific communications to specific audiences (along with the audience-appropriate ask), rather than trying to make each message cover all angles, audiences and asks.
Invite everyone’s involvement
Once a person contributes to a cause (even if that contribution is a small one and even if it is not a financial contribution) they are invested. Give people ways to get involved. I know of a charity that has a wall which they literally set aside for when donor corporates want to bring their staff along to contribute. The same wall gets painted every time. Ridiculous perhaps, but they are applying the principle that if there is nothing that needs doing, create something because once you have contributed, you are personally invested.
Tell your success stories and keep it personal. People do not want facts and figures, they want faces and families. They want the real life stories. They also want personalised thank yous - technology has left us with no excuse in this regard. Use your new communications to complement your old ones and harness both to champion your champions (everyone loves a story about little Susie who raised R100 through her lemonade stand to save the rhino).
The bottom line is: clear, engaging, compelling communications requires an investment of time and resources, but done right, it will launch your charity to a new level where your donors are your greatest advocates.
- Carolyn Cramer heads up ‘Coz it Counts’, a boutique PR agency focused on telling the stories of South Africa’s NGOs. coz it counts clients include Afrika Tikkun, World Wildlife Fund, and Relate Bracelets. Visit www.cozitcounts.co.za for more.
- A recent survey conducted by British newspaper The Daily Telegraph (5 August 2013) has caused an uproar in the nonprofit sector in the United Kingdom (UK). It revealed that nonprofit sector executives from well-known global nonprofits funded by the British aid agency are pocketing up to £184 000 (approximately R2.7 million) per annum in salaries. In some cases, according to the ‘charity rich list’, nine of those charities paid about £300 000 pounds (R3.5 million) each to some of their employees in 2012. This has raised a public relations nightmare in the midst of aid budget reviews. Interestingly, this revelation has not been denied by the organisations in question but been defended vehemently.
As would be expected, this disclosure has got everyone about the ‘excesses’ of the nonprofit sector. The ‘Progressives’, as I would call them, have emerged in defence of the amounts paid, while the so called ‘Mother Theresa types’ have drawn up the ethical card in condemnation.
The Progressives argue that talent does not come cheap and that people must be rewarded for the value they bring to the nonprofit. They have put forward efficiency as a justification, that is, the calibre of executives in question has directly contributed to the efficient functioning of the nonprofit, therefore a reward for such is appropriate. The common and the little understood assertion that nonprofit organisations (NPOs) are no longer small voluntary organisations but big businesses that require a business corporate approach, has also crisscrossed the debate lines. There is almost an aura of arrogance in the position taken, namely that the executives deserve it and their exorbitant salaries must therefore be accepted, in line with the common expression: ‘you pay peanuts and you get monkeys’.
On the other hand, the countering voices are cautioning that the biggest charities risk bringing the wider charitable world into disrepute by taking large pay rises while donations are falling. The big question being asked, once again, is whether charity work is a career or a vocation. This suggests, on their part, that if it is a career then the excesses are justified, but if it is a vocation then personal (financial) sacrifices must be demonstrated in an attempt to make all of humanity better. This sounds more like a true shepherd must or is expected to smell like the sheep he is herding. In our modern sophistication of nonprofit enthusiasm, is this possible? It is a valid argument that finds legitimacy in the reality of our economic circumstances as nonprofits.
Perhaps we need to bring the debate closer to home, and sooner, before a British type of public outcry erupts and finds us unprepared in practice and conduct. South Africa’s economic disparities are well pontificated and documented. In the daily work place, we are well-informed through research of the salary gaps between women and men with the same responsibilities. The recent expose of the mining sector as relates to executive salaries and bonuses in light of the Marikana massacre is one other classical example. I struggle to lay hold of any similar credible survey for the nonprofit sector in South Africa. Much of what I found states ‘market-related’ remuneration. That alone needs to be unpacked in context.
However, it is a known fact that the nonprofit sector has achieved much through unpaid labour, that is, the sacrifices made by field workers or volunteers. These form the backbone of charity work and its achievements. Yet they receive ‘Mother Theresa rewards’ in exchange for their efforts, as well as make up a significant constituency of the impoverished in South Africa. Could this currently dormant nonprofit sector erupt into a Marikana-scale indignation?
The sad part about the British nonprofit case is that salaries for executives soared during the recession, an act which has rightly outraged the public (donors), who are incensed at the insensitivity so arrogantly displayed. This happened when everyone around the world was feeling the pinch, when presidential calls were being made to commit to austerity, when some for-profit executives were cutting and turning down salary increases in solidarity. It seems the UK nonprofit sector miraculously flourished to the extent of being generous to their executives. Another question arises, could this be the dominant culture in the nonprofit sector? Maybe we need to measure performance of nonprofit executives by the extent to which they have achieved social impact, and not by operational efficiency alone.
If we do not learn from the current fiasco in Britain, we are bound to negate the good work that most of us are sacrificially involved in. Our authority to speak and act against social material divisions and injustices in our communities will be compromised.
If a similar survey was to be conducted in South Africa, what will it tell us? How will we react to it? The British government, having taken stock of the gravity of the issue, has, this month, set up a commission to review executive pay for charities. It will be interesting to follow this development and review the actions they choose to take.
- Thami Sonile writes in his personal capacity. Among many of his involvements, he is completing a Social Entrepreneurship Certificate Programme at the Gordon Institute of Business Science. He can be contacted via email: email@example.com.
The National Lotteries Bill, which is the subject of public hearings before the portfolio committee on trade and industry tomorrow and Friday, has the potential to fundamentally change the structure of civil society in South Africa.
According to representatives of civil society organisations, the potential for fundamental change stems from the controversial proposal that the minister be allowed to appoint an ‘organ of state’ to conduct the National Lottery.
Shelagh Gastrow, the executive director of Inyathelo: The South Africa Institute of Advancement, which is a member of the Funding Practice Alliance, is quoted as saying that the primary concern was that the bill opened the door for a state-run lottery rather than one run by an independent entity with an independent board.
To read the article titled, “Lotteries bill gives minister wider powers,” click here.Source:IOL News
- Youth-driven and inspired ‘Hillbrow Entrepreneurship Initiative’ (HEI) has decided to walk the talk, and are taking their own spat in the innovative entrepreneurial space they advocate.
The nonprofit organisation, which is focused on encouraging and supporting the entrepreneurial spirit in the 21st Century African socio-economic climate, has taken the plunge itself and opened the ‘HEI Partnership Café (HPC).
Situated in a tucked away crevice of Braamfontein, the HPC is at the heart of the five-year old on-going regeneration project taking over the neighbourhood. A strong relationship with the property owners and South Point managers has seen HPC benefit from the reclamation and refurbishment of the alley-way parallel between Jorisson and De Korte Street, and between Melle and Reserve Street, in the heart of the neighbourhood.
The reclamation of such public space is crucial to the nonprofit and the city at large if headway is to be made in encouraging refreshed views of the City, and the role all stakeholders play in local economic development through collaboration and entrepreneurship.
The HPC was born when the members realised a need to change their operating strategy. Instead of constantly seeking grants to meet the monthly costs of running the organisation and supporting their six entrepreneurs, the team saw an opportunity in running a café and creating strong symbiotic relationships.
The importance of partnerships is of paramount importance in creating this paradigm shift of how stakeholders can collaborate for a greater cause. There are four classifications of partners the café has identified and are found to be interlinked of the success of the café.
- Corporate / strategic partners;
- Pro-poor entrepreneurial partners;
- Artistic partners; and
- Patron partners.
The café’s library service is supported by a special partnership with Hospice Wits. The wide selection on display in the café is hand-picked from their overflowing depot. The café then serves not only as a library service but a Hospice sales point as well.
This relationship is also responsible for the furnishing charm of the space. The fine and totally unique pieces in the café space and boardroom, have been hand selected from the Hospice vintage store. This relationship has created a space that is not homogeneous but rather eclectic in charm, as monthly auctions see the highest bidder get their favourite piece, and an inflow of new furniture.
The private boardroom in the café is the ideal space to host medium-sized meetings of up to eight people. The cafés strong relationship and close proximity to the Branson Centre and French Institute is leveraged on creating semi-public space for entrepreneurial energy to thrive.
In terms of selection of artworks displayed in the café, great thought was taken, and the results have been portraits of great leaders insync with the menu theme. Pieces of canvas made by prophetic but greatly under marketed and under-valued street artists are displayed side-by-side by up-coming young artists in the young neighbourhood.
The crepe menu theme is ‘great leaders’ therefore be no surprise to see a contrast black and white painting of Che Guevara or Nelson Mandela.
One of the mandates of the café is to improve the skills of members belonging to the organisations as much as possible. A partnership with Caffe Minuchi who have provided HPC with their coffee machine have also conducted training for the team in being barista’s.
‘Coffee for a Cause,’ a partnership between Caffe Minnuchi and HPC has resulted in three coffee products; a corporate product, a retail product, and an organic coffee product. The partnership has seen design students from various art and design schools battle it out in designing logo designs.
With this intense mix of partners and activity, it seems HPC intends to change things from the inside.
- Theko Moteane is marketing manager at Hillbrow Entrepreneurship Initiative.