From the MDs Desk

Government, the Private Sector, and NPOs – Finding the Delicate Balance of Co-operation for Impactful Social Good

Doing the same thing over and over again, and expecting different results is, according to Einstein, the definition of insanity. Yet, government, the private sector, and the non-profit sector alike fall into this trap over and over again.

National, provincial, and local government departments collectively manage billions of Rands directed at social assistance, but do not really understand the social needs in local communities – and are therefore inadequately and inequitably allocating funds to address poverty and food insecurity. Government also can’t seem to get over the hurdle of habitually using public funds for party political ends, instead of social good. There is also far too much duplication within government departments, where financial and human resources can be pooled in order to make our tax Rands go further.

Sadly, government also fails to see the value of forming social partnerships within the NPO sector. There are many credible NPOs who are well positioned to address the economic and social needs within poor communities; they can work with limited resources; they know their communities; and many are using innovative means to address social problems. With funding from government, these NPOs could do so much more.

According to Trialogue, R9,7 billion was spent on Corporate Social Investment (CSI) in 2018, of which mining, financial, and retail accounted for 60% of this spend. With all this money being poured into social projects, why are we not seeing the tangible benefits of this huge investment? Trialogue notes that the top 100 companies account for a significant chunk (70%) of this budget. If they are not investing this money strategically, this is a lost opportunity of note. Another reason could be that most companies do not have a CSI strategy. CSI funds should focus principally on ensuring outcomes / results that bring about palpable social change. Corporates should also consider multi-year agreements with NPOs that are making an impact. In this way, NPOs know how to plan over the medium to long term, can secure the necessary resources needed to make an impact, and can really start to make a difference in vulnerable communities over time.

Millions of vulnerable people will not survive without the good work and social interventions that thousands of people working in non-profit organisations do every day, with limited resources, often taking funds from their personal savings or making loans to stay afloat. I have great respect and admiration for people who day in and day out open their doors to feed people, empower people, and have a passion for making a difference. But many NPOs traditionally think like charities, and sadly, many are closing their doors because of a lack of skills and expertise, poor administration, and a lack of funding.

NPOs need to think and operate like businesses. While they must continue to passionately execute the heart of their mission, they must do so with a business practice mind-set. This means that NPOs need to think strategically about their mission; they need to attract the right people to bring about the desired change; they must remain relevant; they must consciously work to grow sustainably; they must apply proper governance principles; they need to be transparent about how funds are spent; they need to show good returns on investment; and they need to diversify their income sources, so as not to remain dependent (vulnerable) on any one financial donor.

Growing inequality, left unchecked, will result in social upheaval, which undermines the efforts to eradicate poverty, and could lead to the resultant collapse of a country’s economy. Collectively, we have the resources to effect tangible social change.

Government, the private sector, and NPOs must navigate the delicate balance of strategically governing how we operate and co-operate today, in order to find lasting solutions that benefit our country’s future. We must strive to be creative and innovative around solutions to address poverty, food security, skills development and the like. We have an amazing opportunity to be pioneers that turn the tide and put South Africa on a new and inclusive growth path.