31 July 2002

South Africa: NGO Funding Problems Likely to Be Eradicated

Johannesburg — The introduction of a citizen-based initiative by Ashoka, which promotes nongovernmental organisations (NGOs) and encourages them to find innovative ways of self sustainability other than relying on government or donor handouts, could be a way of resolving NGO funding problems.

NGOs are continuously faced with problems funding their activities which are aimed at uplifting communities. Their contribution to the sustainable development of the country is usually underestimated, says Anusanthee Pillay, Ashoka southern Africa's regional director .

Ashoka is an international nonprofit organisation that promotes creative and innovative ways for the NGO sector to become self sustaining.

With the upcoming World Summit for Sustainable Development in Johannesburg, the crucial role played by civil society including NGOs, nonprofit organisations and community based organisations in alleviating poverty and promoting education and training will have to be acknowledged.

During the summit a civil society conference will run concurrently at the Expo Centre in Nasrec, south of Johannesburg. Many international civil society organisations are expected to attend.

The latest statistics on the state of the NGO sector in SA, compiled by the Graduate School of Public and Development Management at Wits University and co-ordinated by the Centre for Civil Society Studies at Johns Hopkins University, shows that the NGO sector is represented by 98920 NGOs across all sectors of the economy.

The sector contributes 1,2% to the country's Gross Domestic Product. It employs 645317 fulltime staff, 10,2% of the formal non agricultural workforce, which is 1% higher than the mining industry.

It also employs a higher number of workers than public servants in national departments.

Pillay says NGOs play an important role in the growth and development of SA.

She says while the private sector has many sources of capital (including investment banks, debt-equity sales, credit unions, and venture capital firms), NGOs have a limited capital market to sustain their work.

International aid agencies, governments, and foundations are typically the only sources of capital, she says.

Sean Jacobs of Idasa, an organisation which promotes democracy, says in its newsletter, EpoliticsSA, that NGOs now compete directly with private and commercial firms to secure government contracts.

"Sometimes NGOs do not have the technical know-how to compete with the more experienced private firms or consultants," he says.

Pillay says SA's NGO sector, rich in funding during the antiapartheid days, has had mixed fortunes since. After the elections in 1994, many agencies redirected their funding to the government and to other countries still in turmoil and conflict.

"The SA government still maintains a high level of funding but many NGOs are unable to access it via the National Development Agency in the Department of Social Development."

Pillay says NGOs have to be able to sustain their projects and their organisations.

"They must do this while remaining accountable to their constituencies," she says.

Pillay says Ashoka develops social entrepreneurship. Social entrepreneurs are people who originate innovative and creative ideas of how an NGO can be self sustainable, without relying heavily on government and donor funds.

The only difference between social entrepreneurs and business entrepreneurs is that the social entrepreneur applies the ability on creativity and innovative thinking for social change, while the creativity of the business entrepreneur is aimed at profit.

Non-Profit Partnership director Eugene Saldanha says with alternative means of self sustainability, the funding problems of NGOs is at times exaggerated.

Saldanha says while funding is important for NGOs, the problems do not end there.

"The lack of skilled, or insufficient, management capacity to oversee and ensure the successful implementation of projects and delivery of services is another contributing factor to the problems faced by NGOs," he says.

Saldanha says for sustainable development to occur in the country, the NGO sector will need the support of both the private and public sectors and this means providing NGOs with nonfinancial services to help them deliver their services more effectively and timeously.

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