What has been most impressive about President Cyril Ramaphosa’s response to the Covid 19 crisis is not only the speed with which he outlined government’s approach, but the attention to the economic and social impact on the country’s poor and most vulnerable. Unlike other world leaders responding to the pandemic, President Ramaphosa has focused with admirable precision on providing life-saving financial support for small and medium enterprises, strengthening social support mechanisms for poor and vulnerable people, and catalysing philanthropy at scale to address this crisis.
Within a short space of time, the President has secured pledges of more than R2.2 billion from the country’s leading philanthropists for the new Solidarity Fund in South Africa. And his capacity as chairperson of the African Union, the President has replicated the public-private funding model at a continental level by establishing the AU Covid 19 Response Fund, which so far has secured pledges of $12.5 million to date from South Africa, Egypt, Kenya, Mali and the Democratic Republic of Congo as well as private banks.
The President should be commended for quickly tapping into South Africa’s deep well of philanthropy and channelling the generosity of Africa’s leading donors towards the Covid 19 humanitarian response. It was a smart, fast decision to leverage public and private resources at both national and continental levels at an early stage of this crisis.
But while we applaud the pledges of philanthropy rapidly emerging during this crisis, we also recognise with humility that as a nation we have very little practical experience in dealing with humanitarian crises of this scale and scope. Our country is not familiar with the mobilisation and distribution of cash, food, and non-food items at scale in a rapidly changing humanitarian context. There is a danger that the initial speed, efficiency and generosity with which the Solidarity Fund and other initiatives have been established may not necessarily translate into effective humanitarian action that delivers what’s required for poor and vulnerable people during this crisis.
We understand this is a steep learning curve for everyone – effectively designing the airplane while flying it at the same time. There is little margin for error in a humanitarian crisis where even small mistakes can lead to an unnecessary increase in the loss of life and suffering. After all, the cardinal rule of the international humanitarian movement is ‘do no harm’.
As a contribution to the national effort and with great respect for those shouldering the burden of managing relief efforts, we offer five suggestions for improving the use of public and private resources to the Solidarity Fund .:
The President made a smart choice in appointing capable business leaders to lead the Solidarity Fund. Gloria Serobe, chairperson of the fund, is a leading South African business entrepreneur who co-founded Wiphold Investments and is well connected in local business circles. Adrian Enthoven, deputy chairperson of the fund, is the chair of the board of Hollard Insurance and one of the country’s leading supporters of social justice philanthropy. Both are excellent choices to lead the Solidarity Fund.
Other board members include two cabinet ministers, two bankers, an accountant, a lawyer, a trade unionist and a youth commissioner. While they undoubtedly bring deep, rich and diverse experience in fund management, business and to a certain extent philanthropy, none of the board members have demonstrable experience in managing humanitarian crisis response funds or programmes at scale. This is a significant oversight in the composition of the board – because humanitarian response is very different from long-term development programming and philanthropy, sectors where the current mix of Solidarity Fund board members have comparatively more experience.
While the board is stacked in favour of commercial business leaders and politicians, there are currently a paucity of representatives on the board from non-profit civil society organisations . This is particularly worrying when civil society organisations are playing such an important role in reducing the impact of the national shut-down and supporting the government’s efforts to reduce the rate of infections at community level.
There is not a single representative from non-profit health, social welfare, faith-based, or humanitarian organisations who excel at this work.
There is no representative from organisations specialising in the provision of water, sanitation and hygiene promotion – a sector whose leadership is critical in preventing the spread of coronavirus in poor and densely populated communities.
There is no representative from organisations that specialise in dealing with food security or gender-based violence to guide the board - in spite of the fact that both food security and gender-based violence are immediate priorities of the Solidarity Fund.
To complement the skills and expertise of the private and public sectors represented on the board of the Solidarity Fund, we believe it is imperative that representatives from the third sector are added –non-governmental stakeholders who can support the state as enablers and provide contribute commitment, goodwill, technical knowledge, experience and resources .
In a publication shared internally with local business forums, Solidarity Fund outlined its preliminary strategy: (1) health response to augment the government’s efforts to prepare the health system for the increased burden on our health services that will results from the pandemic and ensure equipment and emergency supplies are available ; (2) a Solidarity Campaign ’to inspire and mobilise South Africans to act individually and collectively to flatten the curve and support those affected’; and (3) humanitarian effort initially targeted at food security relief and interventions around gender-based violence.
To observers, the three strategic objectives appear ambiguous, overlapping, and fail to recognise the importance, for example, of the provision of water, sanitation, and hygiene in preventing the spread of the virus at community level.
To be effective in this crisis, the Solidarity Fund needs a rigorous, well-defined strategic approach developed by the board in consultation with technical experts and based on available needs assessments.
Without a robust strategy in place, the Solidarity Fund has already made the decision to earmark R120 million towards ‘food relief and resilience to support 300,000 vulnerable households in response to the economic and social impact of the lock down.’ That’s about R400 per family. But how did the Fund determine that this was the most immediate priority? Did it make this decision based on baseline studies by government, academic, or civil society experts? How does this effort relate to other initiatives already underway in the country by government departments at national and provincial level and by private sector food companies? Which partners will the Fund collaborate with in order to achieve this ambitious objective? Is the Fund aware of risk mitigation measures that need to be put in place at the outset of any food distribution programme to prevent corruption, fraud, and diversion of resources? Is the Solidarity Fund onsulting the local office of the world’s indisputable leader in humanitarian food distribution, the UN World Food Programme, which can offer invaluable technical expertise before embarking on such a wide-spread food distribution programme?
There is merit to responding quickly in a crisis. But moving forward without a coherent strategy, technical expertise, and risk management can easily lead to big difficulties further down the road.
A well thought-through but flexible intervention strategy will serve as a lodestar to guide the Solidarity Fund will expedite emergency decision-making – about choice of sectors to prioritise; about criteria for the selection of fund recipients; about reporting and accountability on the use of resources; and about risk mitigation strategies based on best practice in the humanitarian sector.
Apart from the initial announcement by the President, and a hastily constructed website providing information on where to make donations, there have been no clear and regular communications from the Solidarity Fund about its strategy, its method of operation, and application procedures. This information is particularly important to civil society and relief organisations looking to the Solidarity Fund to answer key questions.
To date, most of the information related to the Fund since its establishment has circulated among business groupings – such as Business Unity South Africa and Business Leadership South Africa, for example – but not the wider civil society or media. A copy of the ‘Overview of the Solidarity Fund’ document was obtained by the press and reported by Business Day on 9 April.
In times of humanitarian crisis, there is a need for pro-active, transparent, and regular public communications to all stakeholders affected by and responding to this crisis – and not limited to an elite group of business and government leaders. The Fund needs to hold regular briefings and appoint a communications lead in order to champion more transparent, regular, and informative communications to the public.
Clear reliable information is critical in order to ensure proper governance and accountability – not only to the donors and businesses who have contributed enormous sums to the Fund, but accountability to the organisations on the ground looking for resources to deliver fast, effective humanitarian programming, and accountability to the communities and beneficiaries targeted for intervention.
While the Solidarity Fund is rightly investing time in developing robust internal procedures, committees, and systems to provide the requisite oversight and governance, it needs to pay greater attention to its public communications. There needs to be much greater transparency on the operations, strategies, and disbursements of the Fund in the coming days in order to be a more effective vehicle for humanitarian response.
When the creation of the Solidarity Fund was first announced on 24 March, President Ramaphosa pledged that the Government would provide ‘seed capital’ of R150 million and he applauded ‘the commitment by the Rupert and Oppenheimer families of R1 billion each to assist small businesses and their employers affected by the coronavirus pandemic’. The implication of this announcement was that these funds were being pooled into one single charitable entity, the Solidarity Fund.
It subsequently emerged, however, that these billionaires’ donations would be managed in two separate vehicles, not the Solidarity Fund itself.
The Oppenheimers registered a new charitable trust, called the SA Future Trust, to support local banks in providing interest-free loans to small and medium enterprises, allowing businesses facing cash-flow pressures to continue operations and employing their staff. These are not grants. They are loans that need to be paid back over a five year term. The capital will remain the SA Future Trust.
The Rupert family and Remgro Ltd also pledged R1 billion in financial aid to small and medium enterprises, but this will be managed by a separate administrator, Business Partners Limited. According to a press release, the Sukuma Relief Programme is offering ‘distinct and separate financial aid to formal sole proprietors, and close corporations, companies and trusts.’ Again, what initially appeared to be a charitable donation to the Solidarity Fund has turned out to be a loan facility.
Other billionaire philanthropists and businesses have subsequently come to the table with generous pledges of support – including Mary Oppenheimer Slack and her daughters (R1 billion), Patrice Motsepe (R1 billion), and global technology giant Naspers (R500 million).
While this philanthropy is generous and exemplary - and hopefully will catalyse more South Africans to contribute - we need to strike a note of caution. Are these all major gift donations to the Solidarity Fund or separately managed initiatives? Are these donations ‘grants’ (with no expectation of return) or are they in fact ‘loan facilities’? Are these promises of funds to be transferred to charitable entities - or have the promised billions actually been transferred into these new charitable trusts? This is an important point because there have been cases in our recent history where pledges have not been met with the promised cash, as civil society organisations know only too well.
And how do these pledges (estimated at more than R4.5 billion, according to press reports) tally with President Ramaphosa’s announcement of R2.2 billion pledged to the Solidarity Fund? Because the numbers don’t really seem to add up.
The solution to clear up all this confusion is for the Solidarity Fund is to make full and regular disclosure of all donations immediately on its website and at a later stage through audited financial reports. This would include disclosure of the total amount pledged and total amount of cash received from donors; disclosure of the names of all donors who make contributions to the Solidarity Fund to avoid secrecy and ensure proper accountability; and a commitment to a full disclosure of all disbursements to recipient organisations.
The Solidarity Fund has been careful to disclose in-kind contributions from businesses to this national relief effort – including pro bono contributions from EY and ENSafrica towards the creation of a governance framework; from Old Mutual for the independent administration of the fund; and from Hunt Lascaris/TBWA towards a mobilisation campaign. The Solidarity Fund noted that Tskikululu Social Investments will also have a hand in disbursements of funding ‘to ensure transparency, monitoring, and impact measurement’ but exceptionally does not state whether this is being done on a pro bono or fee basis. (If Tshikululu is providing a commercial service to Solidarity Fund, was there any kind of competitive tendering process involved in their appointment?)
A humanitarian crisis is no excuse for failing to disclose information about charitable donations and procurement in a transparent and timely manner. In South Africa, we have a long history of misuse of donated funds in both the non-profit sector and political party funding. The Solidarity Fund has an opportunity to set a new benchmark for transparency in the use of public and private philanthropy in South Africa.
In the early days of this crisis, there have been duplicated efforts, competing initiatives, and a lack of coordination among a variety of actors trying to do the right thing. Just look at the different initiatives to provide food relief undertaken by a multiplicity of government departments and private sector companies at national, provincial and local levels. It’s bewildering if you try to track it. It’s even more confusing if you want to access food parcels and other social welfare assistance from an array of uncoordinated humanitarian actors.
In a humanitarian crisis, proper coordination is essential to ensure that the right resources are reaching the right people at the right time. In countries that regularly deal with humanitarian crises – such as South Sudan and Yemen - there are periodic ‘cluster’ meetings organised by sector (water, nutrition, health, etc) and managed under the auspices of the United Nations that facilitate coordination between national and local government authorities, private sector companies, donor agencies, and humanitarian relief organisations. The model works relatively well in bringing diverse stakeholders together to share situation reports, data, operational plans, beneficiary groups, and resource requirements.
No such coordination structures exist in South Africa because our country does not regularly experience humanitarian crisis. But the social compact model is one espoused by the President and ideally suited to responding to the coronavirus pandemic. The model should be adapted to this context and crisis without delay.
While pledging to ‘mobilise and coordinate the resources of business, civil society and communities to respond to the humanitarian challenges we face’, the Solidarity Fund needs to adapt its approach quickly and draw on best practice in order to establish humanitarian coordination structures that are proven to work effectively.
The Solidarity Fund can contribute to improved coordination of humanitarian response in this crisis by convening clusters of key stakeholders working in different sectors of intervention. This will prevent duplication of effort, ensure equitable distribution of scarce resources, and encourage the effective use of data to identify local needs in this crisis.
As Inyathelo, we remain convinced that non-profit civil society organisations can strengthen the quality and effectiveness of humanitarian relief efforts already underway in the country. While we are impressed with the speed and scale of philanthropy unleashed within a relatively short space of time, we recognise that a coherent, effective humanitarian response requires more than just business and government leadership. It requires the active participation, expertise, and leadership of South Africa’s non-profit civil society organisations who specialise in addressing the needs of poor and vulnerable communities.
Matching scale of need with capacity to respond
The Sukuma Relief Programme was set up in the wake of the President’s call to action with a contribution of R1 billion from philanthropist Anton Rupert to support small and medium enterprises affected by the Covid 19 crisis. The application portal was closed within one week of opening after being inundated with more than 10,000 applications from across the country with requests exceeding R2.8 billion – nearly three times the value of the seed capital provided by Rupert.
‘We realised when engaging with our clients that the situation is dire, but we have been surprised by the sheer number of SMEs that are in desperate need of assistance,’ according to Ben Bierman, Managing Director of Business Partners, who were appointed as the administrators of the Sukuma Relief fund.
Overwhelmed with applications, Business Partners shut down the portal within 7 days of its launch and is now appealing to big businesses for additional donations to support local SMEs. Their appeals are in direct competition with the Solidarity Fund and other initiatives hastily established to respond to the crisis.
However well-intentioned and generous, the Sukuma Relief Fund illustrates the potential pitfalls of a rapid onset emergency response without clear baseline beneficiary needs assessments, a well-defined strategic approach, understanding potential duplication with other relief initiatives, and undertaking a proper risk mitigation strategy.
Important lessons need to be learned quickly so that the Sukuma Relief Fund can achieve the purpose for which it was established two weeks ago – namely, saving small and medium enterprises and saving jobs – before they disappear altogether as a result of the current pandemic.
Nazeema Mohamed is the Executive Director of Inyathelo, the South African Institute for Advancement. Thomas Winslow is a board member of Inyathelo and a management consultant in the non-profit sector based in Johannesburg who previously worked with international humanitarian agencies like Oxfam and Save the Children.
© Inyathelo | The South African Institute for Advancement. All rights reserved.
Inyathelo subscribes to The Independent Code of Governance for Non-Profit Organisations in South Africa.