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The proliferation of non-profits is an indication of state failure


Shelagh Gastrow provides advisory services to the philanthropy sector, higher education advancement and non-profit sustainability. She works with individuals and families on how to integrate their wealth and their values into meaningful and effective philanthropy. From 2002-2015 she was founder and executive director of Inyathelo and focused her efforts on strengthening civil society and universities through programmes to develop their financial sustainability whilst promoting philanthropy in SA. Her work has gained public recognition locally and internationally.

The literal explosion in the number of non-profit organisations, of people coming together in communities to attend to their own needs, is a by-product of a weak or failing state. But it could become a catalyst to a different way of working in society.

According to the NPO Register in the Department of Social Development, there were 220,116 registered NPOs in South Africa as of 3 October 2019. This is an astonishing number of organisations, all of which are or will be seeking volunteer support, donor funding or other sources of income that fall within the tax legislation for public benefit organisations.

Without much research data, it is difficult to assess what is driving this movement. However, it might be possible to make some obvious assumptions in the current South African context.

Firstly, there is clearly a need for assistance at every level among South Africans. In 2017, Statistics South Africa (Stats SA) reported that 6.8 million citizens experienced hunger, affecting 1.7 million households. In June 2019, the same body produced a quarterly employment survey that showed an estimated 10,172,000 people were unemployed in the non-agricultural sector. So there could be two key drivers including the need for services and the need to create employment.

Secondly, the inability of our government to meet expectations and deliver promised services ranging, inter alia, from crime prevention to sanitation, roads and infrastructure, safe transport, care for the elderly, homes for the homeless, job creation and good schooling at all levels is a key driver for individuals and communities to come together to establish organisations that can deal with these problems. In fact, self-reliance and self-organisation have become the backbone of many communities while government dithers or is frankly paralysed when it comes to rolling out any form of plan.

We, therefore, see a burgeoning of grass roots organisations and more formalised non-profits running creches and early childhood development centres; feeding schemes; neighbourhood clean ups; child welfare programmes; after-school programmes; care for orphans and the elderly; anti-crime organisations; places of safety; social services; sewing classes; youth clubs; sports activities; anti-drug programmes; job readiness programmes; vegetable gardens, mentorship projects and myriad others. Active citizens in many communities run these projects simply because they have to.

On the other hand, people also have the view that non-profits are a way to create employment and there appears to be significant confusion about the purpose of non-profit organisations, their altruistic base and their business models. Some people even believe that they can buy a non-profit organisation and then somehow donor money will fall into their laps. Of concern is how many organisations are actually funded by various government departments, especially the Department of Social Development, to fill in for government failure. Knowledge of this funding is a significant reason for the establishment of organisations in the hope of income from government for services rendered. Whether any kickbacks take place when tenders for services from the non-profit sector are approved has not yet been investigated.

What is of concern is that there are significant levels of duplication of services and very little quality control. Many founders are passionate about what they are doing, but frequently feel that they can do it best. Before starting a new organisation, it would be useful to scan the landscape and assess if the services are already offered. Competition for funding can become a major bone of contention and, instead of co-operation, we find turf battles taking place.

In a perfect scenario in the current South African paradigm, the state and the market are meant to provide all services required by the population and there would, therefore, be no need for the hundreds of thousands of non-profit organisations that try to fix our broken society. However, it may well be time to ask ourselves whether the concept of self-reliance should not serve as a counter to top-down economics, driven by an antiquated concept of the industrial state. People coming together in communities to attend to their own needs is a by-product of a weak or failing state, but in essence, it could become a catalyst to a different way of working in society.

Currently, our political structures are failing. The African National Congress cannot operate or make clear decisions as a result of factionalism, the Democratic Alliance is ineffectual and the Economic Freedom Fighters are divisive and limited in their attraction. That leaves little to influence the socio-political discourse or even encourage people to vote. As far as the market is concerned, current sentiment is so low that there is simply no new investment and skilled people are starting to jump ship, looking for better opportunities elsewhere. Engaging with the corporate sector around developmental issues, job creation etc is like flogging a dead horse or one that bolted long ago. Certainly, the private sector is not going to participate in community affairs – that is not its role and it is almost impossible to monetise or profit from the kind of services required.

So where does this leave civil society and the growing army of non-profit organisations? Basically, South Africans have recognised that government cannot meet its obligations – we are not even sure the lights will be on next month. At the same time, government has the largest access to financial resources, yet this is not being effectively distributed, especially to the communities in dire need of support.

Collaboration between civil society organisations and the large number of grass roots organisations could serve as a catalyst to create spaces for other stakeholders such as religious entities, sports clubs, school committees, youth clubs as well as government and business to work at a micro-level. Local issues such as clean streets, potholes, school security, crime prevention, care of the elderly and creches for the children of working parents could be part of grass roots social compacts in specific communities.

The numbers of non-profit organisations will continue to grow in the current context, but many will also fall by the wayside for lack of financial and community support. For the many individuals who found organisations without such support, their efforts are likely to be short-lived. It would be helpful to know from the Department of Social Development how many organisations are actually functioning and viable, not merely submitting the required reports.

At the same time people should be encouraged to organise themselves to solve their own problems as it clear that in the current context, most communities are on their own. DM


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