By Soraya Joonas, Finance Director, Inyathelo.
Originally published in the 2018 Inyathelo Annual Report.
In advisory sessions over the years, nonprofi ts (NPOs) have approached Inyathelo for guidance and support, as they have faced growing challenges in covering core costs. This, coupled with the reality of an economic downturn and a change in donor funding focus, means many NPOs are operating under greater financial constraints.
In current times we know there is a dire need for good governance and accountability against fraud and corruption. NPOs play a crucial role in maintaining such standards, and also for some, advocating social justice causes. The work of NPOs is more relevant now than ever before. The fact that these NPOs are surviving and are indeed resilient in integrating and implementing financial strategies is commendable.
A common theme around non-profit financial management practitioners is the method of integrating the core of the organisation into budgeting practice and making sure that each programme pays its way. This budgeting approach has been entrenched within Inyathelo since inception and is something we advocate. However, this has become increasingly difficult and NPOs find that they are having to contribute their own reserves to ‘pay their way’.
We need a common language so that NPOs understand how to communicate true costs and, accordingly, align funding to support what is truly needed. This is illustrated graphically in an Inyathelo blog feature which was based on an article by nonprofit expert Curtis Klotz, entitled A Graphic Re-visioning of Nonprofit Overhead. She presents an old view of an organisation versus a new, integrated and re-envisioned view that pinpoints the organisation’s mission as its nucleus in harnessing a comprehensive, financially sustainable approach, with funding partners.
Another challenge we find NPOs struggling with is needing to bridge the gap when funding doesn’t come through as committed. While donors are attracted to the financial sustainability of an organisation, too often these NPOs find themselves having to bridge cash flow gaps when funding tranches are delayed, due to no fault of their own. The irony is not lost on us – Inyathelo is no different from the NPO clients it serves and faces some of the same challenges experienced in the sector. During these times of austerity we are needing to find creative and transparent ways to make our Rands stretch further in carrying out our mission and respecting our commitments. As such, with our strong belief in what we do, we have also championed and invested in our own services when there have been gaps in funding. We are only able to do this because of our strong historical financial sustainability strategy and our traditional four pillar approach: Income generation, focusing on a diversifi ed donor base, building a reserve and investing wisely and prudently.
We are committed to meeting our fi nancial sustainability goals by continuing to put away any savings towards generating passive income, to give Inyathelo financial freedom to pursue new projects and to focus our energies on implementation, thereby delivering on our mission. We and other NPOs must always be cognisant that we have been entrusted with a mission to deliver on the needs of civil society; thus our resources, both financial and others, belong to civil society. We strive to build financial systems that guide planning, fundraising and implementation to deliver both efficiently and effectively, but also with value and care.
We will continue to motivate and support our peers in the sector, while focusing on building the financial structures and Advancement practices of Inyathelo, to deliver the core mission. The financial statements will once again show Inyathelo’s resilience through income generation and growth in reserves.