Wanted: resilient NGOs

By Tshikululu Social Investments on 6 June 2012

Categories: General Interest

Tshikululu Client Relationship Manager Maria Kurian argues that by strengthening NGOs to withstand the funding shocks faced by many organisations in the development sector, we are in fact strengthening their service to South Africa.

This article is an extract of research conducted for the FirstRand Foundation’s FNB Fund, and is used with permission.

The work of Non-Governmental Organisations (NGOs), cited as contributing 30% of civil services in South Africa, are critical to meeting the development needs of the country. In recent years, NGOs nationally have faced dire circumstances due to the reduction of funding by, or the exit of, key funders both local and international, inadequate funding and, in numerous cases, delayed disbursement of funds by the South African government. These funding shocks – financial challenges with deep negative impact – have resulted in many NGOs downsizing staff, services and branches, or closing altogether.

NGOs are encouraged to diversify their funding bases, and are expected to plan for the exit of funders, particularly when timeously informed of their withdrawal from funding or grant reduction. It is not to say that NGOs don’t do this, but many only realise the value of a broad funding base too late and others just do not have the ‘know how’ of where to look and how to access funds.

This is something that government, business and civil society can assist in through effective knowledge management and skills transfer, within their role as a partner in South Africa’s development. The following can be considered:

Resilience
It can be argued that sustainability in the NGO-world is unrealistic. But it can also be argued that it is not only a financial component that builds a strong foundation to withstand shocks of any kind. Good management and governance, innovation and HR knowledge can buffer financial uncertainty and build resilience.

Income generation
CSI funds can be used support NGOs to become self-sufficient rather than dependent. Supporting income-generation activities that may or may not be linked to the core business can assist in supplementing income and longevity of an organisation.

Partnerships
Partnerships amongst businesses and between the private sector, government and civil society can reduce duplication and make limited resources go further.

Incentivising partnerships
NGOs must be incentivised to partner with other organisations so that resources can be used more efficiently.

Economies of scale
NGOs can be provided with the knowledge and tools to look at mergers and partnerships that will optimise funding, HR, equipment and infrastructure resources.

Use business ‘know how’ to professionalise NGOs
Assist in professionalising NGOs. Many development-related organisations have the potential to professionalise their financial and service management that could make the more resilient against ‘funding shocks’, HR turnover and so on. Business is in the position to provide the necessary knowledge, advice and skills.

Unrestricted funding
Some funding provided could be less ring-fenced to buffer or mitigate against funding shocks. Funding that could be itemised as operational costs could provide breathing space for NGOs that do not immediately result in them having to close or downsize on services.

How and where to access funding
Funders could facilitate access to information and skills on how NGOs can better access or apply for new bi-lateral or other funding sources. For example, do all NGOs know about the Jobs Fund and Pepfar’s new five-year Partnership Framework (2012/13–2016/17) to improve the effectiveness, efficiency, and sustainability of the South African national HIV and TB response?

Taking a broader, longer-term view on the role and importance of NGOs, business with government, wider civil society and the international community need to consider the following:

NGOs as job creation hubs
When the country talks about 5 million new jobs, are NGOs being considered as a vehicle for this kind of job creation? Such a view and interventions to promote this will build NGO resilience and entrepreneurship.

NGOs as assets
NGOs are the linked in to communities more strongly than any other sector. They are catalysts for education, messaging, job creation, innovation and access to the youth.

Funding shocks cannot necessarily be avoided, but more resilient NGOs will not compromise their services to their communities. And the private sector cannot close the funding gap by itself, but business in partnership with government, civil society and other donors can strengthen NGOs to be better prepared to mitigate negative internal and external factors.

NGOs are strong links to communities and as such they are valuable assets. They need to be acknowledged and treated as such for the country to fully mine their potential as key education, health and social welfare service delivery partners and job creation hubs.