NPOs are needed now more than ever, so show them the money
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The staggering human impact of the Covid-19 pandemic has seen a groundswell of awareness and discussion over the long-term sustainability of the country’s not-for-profit organisations (NPOs) — the sector most directly involved in relief efforts to SA’s most vulnerable communities.
Right now, many NPOs are struggling. The pandemic has created an unprecedented demand for their services, while their funding has slowed dramatically. In a recent survey of more than 700 NPOs carried out by Nation Builder, 71.8% of participants said they had seen an increase in demand for their services, and 72.2% indicated there had been a decrease in financial support from funders.
NPOs are being inundated with people who need help with food, shelter and support, and there are simply not enough resources to go around. In all, more than 60% of NPOs have seen an increase in overheads and project expenses during the Covid-19 period, with limited ability to access funding and decreasing donor support due to our country's economic realities. Their organisations are under pressure, and the survival of the critical services they provide hangs in the balance.
Government and private funds have implemented different mechanisms to help small, medium and micro-enterprises, and industry sectors, survive the impact of the pandemic. The Solidarity Fund is spending billions on prevention, detection and relief support. However, the NPO sector is unable to access many of these mechanisms at a time when they require support beyond the relief funds they have received.
The challenge is that, as part of the sector’s perceived need for sustainability, NPOs have been expected to generate their own income. Before the pandemic, the best performing NPOs in terms of fundraising would typically self-generate between 40% and 80% of their funds. Right now some can’t generate a cent.
Most of their income is gone, with little hope of accessing any relief. Well-established NPOs might have financial reserves, but these can usually only support the organisation for a few months before being depleted.
This raises the question whether self-sustainability is the holy grail we thought it to be. The very thing we’ve been pushing for with NPOs all these years is proving to be their downfall. Maybe it is time for us to return to the definition of sustainability that speaks to a well-diversified portfolio of income: a combination of self-generated, philanthropic, corporate social investment, government, individual and foreign funding.
An important point to make is that ...
Right now, many NPOs are struggling. The pandemic has created an unprecedented demand for their services, while their funding has slowed dramatically. In a recent survey of more than 700 NPOs carried out by Nation Builder, 71.8% of participants said they had seen an increase in demand for their services, and 72.2% indicated there had been a decrease in financial support from funders.
NPOs are being inundated with people who need help with food, shelter and support, and there are simply not enough resources to go around. In all, more than 60% of NPOs have seen an increase in overheads and project expenses during the Covid-19 period, with limited ability to access funding and decreasing donor support due to our country's economic realities. Their organisations are under pressure, and the survival of the critical services they provide hangs in the balance.
Government and private funds have implemented different mechanisms to help small, medium and micro-enterprises, and industry sectors, survive the impact of the pandemic. The Solidarity Fund is spending billions on prevention, detection and relief support. However, the NPO sector is unable to access many of these mechanisms at a time when they require support beyond the relief funds they have received.
The challenge is that, as part of the sector’s perceived need for sustainability, NPOs have been expected to generate their own income. Before the pandemic, the best performing NPOs in terms of fundraising would typically self-generate between 40% and 80% of their funds. Right now some can’t generate a cent.
Most of their income is gone, with little hope of accessing any relief. Well-established NPOs might have financial reserves, but these can usually only support the organisation for a few months before being depleted.
This raises the question whether self-sustainability is the holy grail we thought it to be. The very thing we’ve been pushing for with NPOs all these years is proving to be their downfall. Maybe it is time for us to return to the definition of sustainability that speaks to a well-diversified portfolio of income: a combination of self-generated, philanthropic, corporate social investment, government, individual and foreign funding.
An important point to make is that ...
