The future of South Africa hinges on the successful partnership between government, the private sector as well as the social sectors.
Government alone does not have the human resources and grassroots level expertise to actualise the plans and policies desperately needed to launch South Africa forward.
The social sector is rich with human capacity and talent that is motivated by a desire to simply do good and make a better South Africa not just a possibility but a reality for all.
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The challenge is that the present funding landscape and the inability of fledgling charities (start-ups) to effectively fundraise for their causes is crippling initiatives which could lead to solutions in overhauling education, fighting crime, reducing severe poverty and increasing the life expectancy and quality of life for South Africans.
Pro-active BB-BEE policies as well as Section 18A tax deductions have created an environment where on the one hand, funds are flowing to the social sector but on the other hand a great deal of irregularity and perhaps even irrationality has creeped into the funding environment.
Non-profits find themselves in a situation where funding is “here today and gone tomorrow” as the private sector directs funds to flavour of the month (perhaps the financial year) charities.
While there are many well run CSI campaigns, there are also many CSI teams that are concerned primarily with scorecard points or tax-deductions, this kind of psychology of giving does not help the social sector.
What are non-profits to do in today’s funding environment?
1. Scale down in order to scale up
Our biggest social issues can only be solved by taking creative and innovative solutions and scaling them up.
In order to scale-up it is necessary to have a model that can be replicated and one that is robust enough to be adapted to the diverse contexts unique to South Africa.
Non-profits should aim to trim down on services or projects which are not suited to their skill sets or that are not part of their core aims, doing this will assist in creating well-crafted models that are scaleable.
2. Create social impact value for donors
We all hope for an environment where giving is in abundance, the reality though, is that there are several charities competing for parts of the same funding pie (145 945 registered charities according to www.npo.gov.za).
In order to stand out non-profits should focus on delivering measurable social impact value. The only way to do this is to become data-driven, design key performance indicators and to monitor and evaluate these on a regular basis.
In the case of the non-profit sector KPIs may be: Attendance figures, literacy results, number of crimes reported etc. Donors want to know that there money is buying some kind of social impact.
3. Build relationships not bank accounts
Too much of the way in which charities relate to donors are transactional and based on the next donation. Non-profits need to shift this kind of thinking and begin to see themselves engaged in a partner relationship.
They need to talk about what is working and what is not working with potential donors, be honest about lessons learned and be bold enough to admit when funds need to be redirected or reallocated in a way which will create greater social impact.
Developing this kind of relationship with supporters lays the foundation for long term investment rather than once-off donations.
Inherent in the idea of the start-up business is the element of risk. Investors are taking a chance on an idea that they hope will generate financial returns and eventually be able to be taken to scale.
We should not treat the social sector much differently from this, new non-profit start-ups are a very necessary part of a healthy country, and it represents the continuous application of new knowledge in designing and experimenting with innovative solutions to social problems.
The charity like the business holds some kind of inherent risk in that it might not produce just the social impact we hope for, on the other hand it also holds the potential to generate tangible social returns and to be scaled in a way that can radically change South Africa.