In our view

Helping ourselves - Witness 28 Sep 2011

By Shelagh Gastrow

IN his article titled "Dark side to improved WEF competitiveness report card" (Weekend Witness, September 10), Moneyweb founder Alec Hogg lamented the financial woes of St Joseph's in Sizanani Village. From our experience at Inyathelo: The South African Institute for Advancement, the story of St Joseph's running short of money as international donors focus their funds elsewhere, is sadly being repeated all over South Africa and there are a number of lessons to be learnt from this. Firstly, we have to shift away from the old charitable paradigm.

 

Organisations operating in civil society, whether they are involved in community development, orphanages or high-level policy development and advocacy, are playing a key role in building the social fabric of South Africa and it is an honour, not a favour, for a donor to be involved with them. They are offering the donor an opportunity to participate in social development — something that donors cannot do on their own. This is a shift in thinking for both donors, who are often patronising and demanding, and non-profit organisations, who see themselves as needy and downtrodden. Civil society organisations play a critical role in South Africa, providing services to people whom the government has not reached, providing a voice that represents thousands of people who find avenues of communication blocked, providing innovative solutions to social problems (without insisting on profit) and assisting in the development of policy, as they have a good grip on what is going on. Secondly, it is important for organisations to understand what drives donors. St Joseph's was reliant on European funding. This means that it was receiving grants from international aid agencies or international NGO s. International aid agencies generally give to organisations that fit their own foreign-policy priorities. When these policies change, so does the funding. Organisations that accept this money need to understand this basic issue and keep in mind that this funding is not forever just because they are doing good work. Corporate funding is usually in line with the company's desire to be seen as a good corporate citizen. Companies are not, by nature, altruistic, but they like to be seen in a good light as this improves their reputation and therefore their market potential. Then let's look at the Lottery. This was meant to be the mainstay of charities in South Africa, but has resulted in deep disappointment for the non-profit sector. Besides its problematic administrative processes whereby documents are lost and payments are late, decisions seem to be made on a random basis by distribution agencies that are only accountable to the Minister of Trade and Industry who is not particularly interested. The minister is the person who decides on "focus" and therefore charities that don't fall into his designated focus area that year are dropped like hot cakes. This is appalling grantmaking practice as it ruins organisations, but the money will go where the government wants it to go. Tlais then leaves us the one area I of funding that many organisations forget about — private philanthropy. This falls into the framework of private charitable foundations and individual giving. It is probably the only really altruistic giving that occurs and is actually the largest source of donor money in South Africa. As Hogg stated: "SA is now regarded as a middle-income country" and international funding is being channelled elsewhere. It is therefore critical that individual South Africans begin to support the organisations that form the backbone of our civil society and our welfare system, and that we become more self-reliant. One issue that continues to fester is the enabling environment for philanthropy in South Africa. There is no real incentive for wealthy people to establish private foundations that will continue to sustain our civil society in future. The government will always oppose tax benefits as it believes it knows better what to do with the money. This would be well and good in a society that has a government that actually delivers the services now provided by nonprofit organisations, but this is not the case. What is more, citizens are paying privately for services the government should be providing. A recent study by The Centre for Development and Enterprise showed that thousands of children are attending low-fee private schools. These are the children of police, teachers and nurses, etc. who know that there is no service within public schools. They are therefore double taxed. It is time for the government to open up opportunities for philanthropy to ensure that available funds are invested in organisations that can do the job — like St Joseph's. Shelagh Gastrow is executive director and one of the founders of Inyathelo, The South African Institute for Advancement, which is dedicated to building a sustainable South African civil society.