A shift in donor thinking on sustainability for NPOs

The staggering human impact of the COVID-19 pandemic on our society has seen a groundswell of awareness and discussion about the long-term sustainability of the country’s non-profit organisations (NPOs) – perhaps the sector that is the most directly involved in relief efforts to South Africa’s most vulnerable communities.

There are a couple of reasons for this. Firstly, there’s been an unprecedented demand for the services that NPOs deliver at a time when their funding has slowed dramatically. In many areas, they are literally inundated with people who need help with food and shelter, and there are simply not enough resources to go around.

Secondly, there’s a growing realisation that the pandemic is not a short-lived phenomenon that’s going to go away as quickly as it arrived. By all indications, we are going to live with the virus and its effects for years. This means we can’t just focus on the immediate need for relief: we are going to have to start planning for a longer-term recovery phase – and one of the most important sectors in getting our society back on its feet is our NPO sector. When business and the economy aren’t doing well, this is the sector that carries people.

But while government and various private funds are spending billions to try and help SMMEs and various industry sectors survive the impact of the pandemic, the reality is that very little is being done for the NPO sector, which is at the core of the recovery efforts in our country. The Solidarity Fund is spending billions on prevention, detection and relief support. The Department of Social Development is focused on relief work. Nobody is focused on the sustainability of not-for-profit organisations.

The result? People think that NPOs are being supported, but they’re not. It is extremely difficult for NPOs to access funding for relief efforts, and next to impossible for them to access funding for their own sustainability. And so, they fall between the cracks at a time when they – and the people they serve – need support more than ever.

Part of the problem is that the holy grail of sustainability for NPOs has always been that they should be able to generate their own income. In fact, the more, the better. The reality is that for most NPOs, much effort has been put into self-generating a substantial portion of their income, with those excelling at ‘sustainability’ self-generating between 40 and 80% of their funds. Right now, some can’t generate a cent. In effect, most of their income is gone, with little hope of accessing any relief.

This raises the question: Is self-sustainability the ‘holy grail’ we thought it to be? Perhaps the very thing we’ve been pushing for with NPOs all these years is actually proving to be their downfall, if their income streams are not diversified enough. Perhaps we should return to the definition of sustainability that speaks to a well-diversified portfolio of income: a combination of self-generated, philanthropic, CSI, government, individual and foreign funding?

If NPOs were an integral part of our society before, they’re even more critical now. Before COVID-19 struck, children in disadvantaged areas had NPOs offering after-school facilities, food and a social safety net. NPOs were helping resolve family conflict and develop micro-enterprises. They were providing healthcare support and skills development. They were addressing societal issues and producing outcomes that the government and the private sector could not achieve on their own.

Who’s going to be there in 9 to 12 months’ time to support the unemployed, assist with the increase in homeless people, and help children to cram 18 months’ work into a year? While everybody’s major focus right now is relief, we can’t be shortsighted, or ignore the problem. It’s time to get government, business and broader society involved in building the sustainability of NPOs. By doing this, we will bridge the gap for our NPO sector, to ensure a stronger foundation on which to build going forward. 

One such initiative is the Mergon Group’s Gap Fund – an emergency fund set up to support NPOs who have lost significant funding, or need additional funding during this time of increased need. Anyone can donate funds today through the Nation Builder Back-a-Buddy campaign or the Nation Builder Trust account.

Keri-Leigh Paschal, Executive Trustee at Nation Builder