BUSINESS LIVE / 04 APRIL 2018 - 05:58 / WILLIAM GUMEDE
SA’s civil society organisations, which have been at the heart of the fightback against public corruption, mismanagement and patronage and delivering public services where the state fails, are facing a funding crisis, which may herald the collapse of many of these valiant organisations.
Many South African civil society organisations depend heavily on industrialised country international development aid organisations and industrialised country philanthropic foundations for funding.
Underlying crisis: Civil society activists speak out against the Protection of Information Bill in Cape Town. Funding for social justice organisations has plunged and these groups are feeling the pinch. Picture: DAVISON MUDZINGWA
However, funding from the developed world has plunged.
The EU and the US — the largest development aid contributors — have increasingly repositioned their development policy to favour free trade, shifting their emphasis from development aid to trade support.
The EU has also focused more on channeling its development funding to Eastern Europe.
Following the 2007-08 global and eurozone financial crises, many traditional foreign donors reduced their funding or cut it even more.
More recently, many industrial countries have cut development aid to SA specifically, arguing that it is a middle-income country that has made significant advances in development over the past few years.
There has also been a backlash in western countries against foreign aid to African and developing countries in general, the argument being that such funding is needed at home and is abused by developing country governing elites.
The rise of populist and conservative governments in many industrial countries and the accompanying opposition from their electorates to their governments providing development assistance to developing countries mean that these governments have less enthusiasm to maintain previous levels of funding to developing countries.
The general backlash in western countries against foreign aid to African and developing countries has meant that many industrial countries have reduced their contributions to UN agencies and other multilateral donors. This means those organisations have less funding for developing country civil society organisations.
Donald Trump’s election as US president raises the spectre that official development assistance to SA under his presidency may be dramatically slashed.
The US also funds a number of UN agencies and multilateral organisations that fund South African civil society organisations. The US has threatened to cut funding to such international organisations. In 2017, the state department announced its intention to withdraw from Unesco, the UN’s cultural, scientific and educational organisation, claiming "continuing anti-Israel bias".
Given the decline in international development funding, SA will have to secure funding for civil society organisations from within the country.
There is no shortage of private sector money in SA. However, individual and corporate South African philanthropists, foundations and corporates have often not funded social justice issues and programmes strengthening democracy and good governance for fear of being seen to oppose the government.
Corporate SA has mostly focused on black economic empowerment (BEE) and corporate social responsibility programmes. Most of the BEE since 1996 has been on the basis of white business giving shareholding to prominent ANC politicians turned businessmen, dubbed "political capitalists", rather than to genuine black business, black employees or community groups.
Corporate social responsibility is overwhelmingly seen by many South African civil society groups as ineffective as it often focuses on projects giving companies good public relations and on sports and on celebrity- driven initiatives.
Black political capitalists, many of whom made money through political connections in the ANC and the state, through BEE and affirmative action programmes and through getting state and private sector contracts because they are black rarely give generously.
While many white middle-class South Africans do give to causes, often specifically to environmental-related ones such as saving the rhino, the black middle class is under strain, having to pay a "black tax" — paying for the upkeep of poorer family members.
Many balk at providing more "philanthropy" to those unrelated to them. Young black professionals are not yet giving in sustainable ways.
The government set up the National Development Agency (NDA) in 1998 to fund civil society by boosting capacity and improving government-civil society consultation and partnership. The national lottery was set up in 2000 and as part of its licensing obligations it must give a portion of its income to charities, nongovernmental organisations and civil society groups.
Most of the civil society organisations that the government funds are delivering public services. But corruption, mismanagement and inefficiencies in the government have caused many of them to cut their operations or even close down.
In both the cases of the NDA and the lottery, civil society groups complain that they are bypassed when applying for funding. State institutions appear to be shying away from funding social justice, human rights and democracy-building civil society organisations.
South African state-owned entities (SOEs) rarely give to social justice civil society organisations. Most of the SOEs have foundations, which supposedly contribute to corporate social responsibility, but the SOEs are generally not funding programmes that strengthen democracy or social justice initiatives for fear of raising the ire of the ANC and the government.
What should be done, given these challenges? The organisations themselves must more actively engage existing government-civil society funding initiatives – whether the NDA or the lottery — to fund civil society organisations more transparently, fairly and efficiently.
They should also ensure more competent people are appointed to these public agencies and monitor their activities and funding distribution.
Civil society organisations must get more engaged, play a stronger oversight role and hold the Department of Social Development accountable for how it distributes funding to charities to ensure scarce public resources are not wasted.
Civil society organisations must insist that SOEs provide funding and support to social justice and human rights civil society organisations and charities, and not political patronage to faction-based and corrupt "civil society" organisations.
BEE is a potential new revenue stream for civil society. It is increasingly rejected by black South Africans because it empowers a black and white elite. A new kind of BEE should make civil society organisations partners in BEE transactions.
Social corporate responsibility should focus more on funding social justice, democracy building and governance initiatives. The government must make it easier for the wealthy, the middle classes and young professionals to support civil society organisations.
A dedicated tax for civil society organisations, allowing taxpayers to assign a percentage of their annual personal income tax to such causes, may help.
A similar mechanism could allow corporates to designate a percentage of their corporate taxes to nonprofit organisations. Municipalities could introduce a system for citizens to give a percentage of their municipal tax to local civil society organisations.
The proceeds of civil society-specific tax designations 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 social justice civil society organisations.
• Gumede is chairman of the Democracy Works Foundation and author of SA in Brics.
LINK : https://www.businesslive.co.za/bd/opinion/2018-04-04-local-civil-society-organisations-face-funding-vacuum-on-all-fronts/
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER