10October

Strengthening civil society organisation resilience, Policy Brief, October 2017

Civil society, community organisations and social movements will have to become more resilient during these increasingly complex, uncertain and troubling times. This will demand new organisational agility, imaginative leadership and synergistic partnerships. This policy brief explores alternatives towards creating a more sustainable and effective civil society space in South Africa. 

By William Gumede

Strengthening civil society organisation resilience, Policy Brief, October 2017

Introduction

As state failure rises, the challenges of shrinking foreign funding and citizens increasingly ditching formal political organisations, South African civil society will have to become more impactful, efficient and relevant.

Civil society organisations play an oversight role over democratic institutions and elected representatives, defend the democratic rights of ordinary citizens, and in many cases provide public and social services. As demands increase on civil society organisations to provide alternative ‘public’ services, protect vulnerable citizens and communities and hold public and elected representatives accountable, they must prepare themselves to be resilient to endure the breakdown of many public institutions, poor public services and funding constraints.

 

Decline of traditional civil society funding

With South Africa being assigned junk status by two global credit rating agencies, traditional sources of funding for civil society, including non-governmental organisations (NGOs), community-based organisations (CBOs) and social movements, are likely to decline.

The likely drop in income follows on the back of falls already in foreign (industrial country) funding following the aftermath of the 2007/2008 global financial and Eurozone financial crises. More recently, the rise of populist and conservative governments in many industrial countries and the accompanying opposition among their electorates to their governments’ providing development assistance to developing countries, have meant that these governments have, and continue to have less enthusiasm towards previous levels of funding to developing countries.

Donald Trump’s election as US President last year further raises the spectre that official development assistance to Africa under his presidency may be dramatically slashed. The US, through government, private sector and philanthropy is the biggest source of funding for development assistance, including civil society, to Africa and South Africa.

International development agencies which get most of their funding from industrial countries are also likely to see a decrease in their income as industrial country governments cut their development assistance budgets. This, in turn, will reduce the funding sources of civil society organisations, whether NGOs, CBOs and social movements.

Traditional donors are increasingly also giving funding with severe restrictions. They often give funding only for programmes and not for core functions – which ironically, undermines civil society organisations’ ability to effectively implement the programmes they are getting funding for.

Andrea Ovans (2015) writes in the Harvard Business Review that organisational resilience is the “ability to recover from setbacks, adapt well to change, and keep going in the face of adversity”.

Most resilient organisations have a strong set of internal values – and they live their values. South African civil society organisations must have a strong internal values system that’s informed by democratic constitutional values. There is often an incongruity within civil society organisations between the values they espouse externally, and the internal organisational values they implement. Communication within civil organisations must improve; so too external communications to their stakeholders, funders and the public.

Civil society organisations must get better at stretching available resources however little. They must become more inventive and innovative along with management giving employees the space to do the same. This means that, if faced with a unique problem, without a ready solution, employees must be able to come up with their own answers.  But the leadership of civil society organisations must also try to establish their organisations as learning organisations, participatory and friendly spaces.

All of this means that, if they want to thrive, South African civil society groups must restructure themselves organisationally. They will have to streamline their internal operations, strengthen their internal governance, accountability systems and improve transparency. Good corporate governance, accountable, transparent and honest management, and effective delivery gives a civil society organisation public legitimacy and credibility.

The leadership quality of civil society organisations has now become a premium in itself. Boards of civil society organisations should be appointed on the basis of particular skills they can bring to add value to the organisation. Many South African civil society organisations have traditionally appointed board members purely because of their civil society involvement. However, in these times of stress, civil society should be looking for individuals who bring particularly, technical, professional and financial skills, which organisations have need of but are lacking in.

 

Boosting civil society impact

Furthermore, they will also have to prioritise programmes and ensure that they are relevant and impactful.  The missions of civil organisations must be very clear-many civil society organisations are failing because their focus is ambiguous. Monitoring and evaluation of programs for effectiveness must become the norm with the adept use of technology to bring new efficiencies, mobilise resources and optimally profile and market their work.

Civil society organisations will have to collaborate more effectively with each other, pool resources and integrate their programmes creatively. For example, similar organisations could cluster together, and as a group share personnel, services and fundraise as a group. They will also have to partner more effectively, individually and collaboratively, with communities around the issues that directly affect them.

But civil society organisations must also better use existing public resources in communities such as schools, churches, government delivery sites and human capital. They will have to bring in volunteer skills – young people, retired professionals and those with spare time and who want to make a meaningful contribution to society. This will help aid boost capacity within civil society organisations.

Civil society will have to explore building their own social enterprises in partnerships so as to get vulnerable communities to provide their own food, products and ‘public’ services, ultimately to sell the surpluses of these. These social enterprises could be in areas where public services are not working, for example, community-driven water sanitation, renewable energy and education provisions, or agricultural production.

Civil society organisations can then push for the products and services of these social enterprises to be inserted into the supply chains of big business, whether state, local, private or foreign ones.

 

Finding alternative revenue streams

South African civil society will likewise have to explore alternative, diverse and unrestricted new income streams. As funding from abroad shrinks, civil society will have to start to tap more into local sources of funding.  A number of potential sources of funding have been underdeveloped and untapped in South Africa. These include funding from the middle classes, including the new emerging black middle class and young professionals. Civil society organisations could explore establishing ‘friends’ or ‘members’ forums of professionals who could as individuals, regularly give small amounts whether in the form of monthly or yearly subscriptions or debit orders. Additionally, new technology platforms to raise funds, such as crowdfunding could be explored.

Corporates in South Africa have generally not provided funding for social justice initiatives, with corporate social responsibility programmes often ultimately having had very limited impact. Yet, social justice programmes are desperately necessary to strengthen democracy and social cohesion. Many corporates have mostly focused on Black Economic Empowerment (BEE) as a form of redistribution or social justice (Gumede 2017). However, BEE deals have in many cases enriched politically connected individuals, the so-called “political capitalists”, who are already well-off, rather than poor communities. BEE is a potential new revenue stream for civil society, who should insist that all BEE transactions must involve a civil society organisation involvement.

 

Holding government more stringently to account

South African civil society must also more actively engage current government civil society funding initiatives – whether the National Development Agency (NDA) or the lottery to fund civil society more transparently, fairly and effectively.

For example, a report by the Funding Practice Alliance (2011) found that NDA “failing” in its mandate of distributing funds to deserving civil society groups. It found that funding from the Lottery has not been effectively distributed to charities either, often going to government agencies, well-connected ‘civil society’ organisations, and sports bodies which could generate their own money in many cases.

Civil society organisations should get more involved in how Lottery money is spent and allocated to civil society organisations, and to ensure its application processes are transparent, simple and quick (Section27 2012).

For example, Mark Heywood (Daily Maverick 2014), the director of Section27 has lamented the lack of transparency in the distribution of funds to civil society, NGOs and community organisations by the Lottery. “It is very hard to find out how much money it has and where that money is going and it’s very hard to understand its decision-making processes”.

South African civil society groups must collectively put pressure upon government and civil society funding organisations to encourage them to become more accountable, distribute funds more fairly and meaningfully. Civil society should be involved in ensuring that there are competent people appointed to these public agencies, to monitor their activities and funding distribution and ensure it goes to deserving communities and groups.

Likewise, civil society must also become more engaged, play a stronger oversight role and hold the Department of Social Development accountable over how social development resources are distributed to charities, to safeguard against wastage of scarce public resources.

But South African civil society organisations must insist that State-Owned Enterprises (SOEs) provides funding and support to deserving social justice and human rights civil society organisations and charities, and not political patronage, faction-based and corrupt ‘civil society’ organisations (Grootes 2017).

 

Setting up a dedicated tax for civil society income

State funding for civil society through a dedicated tax for civil society organisations is another unexplored option (Hadzi-Miceva 2007; Strečanský and Marianna Török 2016). In Italy, the otto per mille system was introduced to allow Italian taxpayers to assign a percentage of their annual personal income tax intended for social services to one of the country’s religious organisations or to the state (Allen 2007). Now, Italians are using the same model that can designate a percentage of their personal tax income to not-for-profit organisations.

In Portugal, citizens can allocate a share of their income tax to public benefit organisations. Similarly, in Spain, citizens can allocate 7% of their income tax to the Church or to social welfare organisations.

Hungary also introduced a mechanism to provide every citizen the right to designate a percentage of paid income tax to a non-profit or public benefit organization (Bullain 2007). Slovakia has introduced a mechanism whereby corporates can designate a percentage of their corporate taxes to non-profit organisations (Strečanský and Marianna Török 2016).

In the city of Ichikawa in Japan, the municipality has introduced a system whereby citizens can give a percentage of their municipal tax to public benefit organisations and causes (Strečanský and Marianna Török 2016).

The idea there was to financially support civil society, prevent the politicisation of funding and encourage a culture of giving to social justice causes. In the South African case, the proceeds of such a tax designation could be put into a Civil Society Fund, which would be managed by civil society. Alongside such a mechanism could also be more generous tax incentives to companies for giving to civil society.

 

Conclusion

Civil society, community organisations and social movements will have to become more resilient during these increasingly complex, uncertain and troubling times. This will demand new organisational agility, imaginative leadership and synergistic partnerships. But civil society must also hold government more accountable to distribute resources earmarked for social justice organisations, more fairly, honestly and efficiently.

Corporates in South Africa must go beyond the staid traditional “social responsibility” programs and narrow BEE programs to support social justice initiatives, organisations and causes – this will be the best bulwark to strengthen South Africa’s democracy, institutions and build resilient communities and citizens.

 

Selected Bibliography

John Allen Jr. (2007) All the Pope’s Men. New York, Crown Publishing Group

Nilda Bullain (2007) Learning points from the National Civil Fund in Hungary. NENO, Infoleht nr. 3-4

(http://www.ecnl.org/dindocuments/212_Learning%20points%20from%20the%20NCF%20Hungary.pdf)

Funding Practice Alliance (2011) Meeting their mandates? The Research Report on the National Lottery Distribution Trust Fund (NLDTF) and the National Development Agency (NDA), Cape Town, March.

(http://vansa.co.za/research/meeting-their-mandates-the-research-report-on-the-nldtf-and-the-nda.pdf)

Daily Maverick (2014) GroundUp: Good causes left to die waiting for Lotto millions. August 7

Stephen Grootes (2017) Eskom, Transnet Sponsored Manyi’s PPF, Minister reveals. EWN, 28 February 2017

(http://ewn.co.za/2017/02/28/eskom-transnet-sponsored-manyi-s-ppf-minister-reveals)

William Gumede (2017) “Failure to Pursue Economic Reparations has, and Will Continue to Undermine Racial Reconciliation” (pages 59-93), in Mia Swart & Karin van Marle (Editors) The Limits of Transition: The South African Truth and Reconciliation Commission 20 Years on. Brill Publishers, Leiden

Katerina Hadzi-Miceva (2007) Legal and Institutional Mechanisms for NGO-Government Cooperation in Croatia, Estonia and Hungary”. Paper presented at the conference on October 25-26 in Warsaw, ECNL and Institute for Public Affairs (IPA), Poland

National Development Agency (2013) Funding Constraints and Challenges Faced by Civil Society in South Africa, NDA, Government Printer, Pretoria

Andrea Ovans (2015) What Resilience Means and Why it Matters. Harvard Business Review. January 5

(https://hbr.org/2015/01/what-resilience-means-and-why-it-matters?referral=03758&cm_vc=rr_item_page.top_right)

Section27 (2012) Submission to the National Lottery Distribution Trust Fund. May 22, Johannesburg

Boris Strečanský and Marianna Török (2016) (Eds.) Assessment of the Impact of the Percentage Tax Designations: Past, Present, Future. ERSTE Stiftung Studies & Centrum Pre Filantropu, Bratislava