COVID-19 and NPOs in South Africa: Fundraising and Sustainability in Uncertain Times

(This article was first published on the Tara Transform website)

The COVID-19 pandemic, national lockdown and resulting economic slowdown have disrupted every aspect of South African society. This situation also has far-reaching implications for the role that nonprofit organisations (NPOs) play in the lives of millions of South Africans.

The more than 220 000 NPOs registered with the Department of Social Development, as well as many community-based organisations, perform crucial development, humanitarian and advocacy functions, and are an integral part of the fabric of our society.

As already witnessed throughout the country, there can’t be any effective response to the pandemic without the involvement of NPOs. However, at a time when the contributions of NPOs are more critical than ever before, they are confronted with the negative impact of the pandemic on their current operations and long-term sustainability.

Most NPOs rely on grant funding and individual donations to support their operations. As local and international funders are also affected by economic downturns, less funding will be available to assist NPOs. As a result, many NPOs are already experiencing a decrease in funding or fear funding cuts in the future. Furthermore, NPOs have been excluded from the financial relief packages that the government is providing to the business community, including small businesses.

Although many traditional funders are reviewing the impact of COVID-19 on their grantees, and offer additional support where possible or allow programme funding to be used for general purposes, this might not be sufficient to sustain grantees’ operations beyond the next few months. This situation makes NPOs, both big and small, extremely vulnerable, and will result in the down-scaling of operations and staff losses. It is also inevitable that a significant number of NPOs will close down.

Looking ahead, there are no easy solutions for the funding and related challenges confronting many NPOs in South Africa. NPOs that survive this challenging period will have to seriously review the relevance of their services and the nature of their operations, and implement the necessary changes that will address current shortcomings and contribute to their long-term sustainability.

Fortunately, several initiatives have emerged to support NPOs under these trying circumstances.

CAF Southern Africa (CAFSA) has launched an emergency fund to support NPOs that provide essential services to the most marginalised communities in the country. Similarly, the Mergon Group has created an emergency Gap Fund to support NPOs that have lost significant funding in recent weeks, or that are experiencing an increase in demand for their services. Both initiatives are actively seeking public support to meet their funding objectives. CAFSA also manages emergency funding by the Oppenheimer Generations Foundation that is available on a once-off basis to small NPOs (budget of less than R5 million per annum) that deliver food to vulnerable groups. The National Lotteries Commission (NLC) has released R150 million as a relief measure to NPOs struggling to stay afloat.

The Solidarity Fund, which was announced by President Cyril Ramaphosa on 23 March 2020, provides a vehicle for individuals and organisations to support measures to slow the spread of COVID-19 and assist in the economic recovery. Although not aimed at helping NPOs specifically, some of the funding will hopefully reach NPOs that are implementing services aligned with the fund’s objectives.

Despite the negative impact of COVID-19 on the NPO sector, many organisations are operating during the lockdown, providing essential services, food and medical supplies to vulnerable communities across the country. These interventions complement those of government and other stakeholders and form an integral part of a collective national response to the pandemic. However, given the impact of the pandemic and the extended lockdown period, these NPOs are also in urgent need of financial and in-kind donations to continue providing or expanding their interventions.

Click here for a comprehensive list of NPOs that are implementing specific fundraising efforts in support of their COVID-19 activities.

An important characteristic of these fundraising efforts is the role played by the many crowdfunding platforms available in the country. NPOs are using these platforms to appeal for donations from a broader, and potentially more engaged audience than ever before. Similarly, many South Africans are turning to these platforms not only to make donations, but also to implement fundraising campaigns in support of NPOs. Hopefully, these engagements will also contribute to a deeper understanding and increased public interest and support for NPOs beyond the pandemic.

Although the fundraising efforts of most NPOs aim to support their specific interventions, many examples of NPOs partnering with one another, community groups, or government initiatives are also emerging, thus increasing the impact of their efforts. Increased collaboration, partnerships and even organisational mergers will probably play a key role in the operational models and sustainability strategies of NPOs in the future.

NPOs’ increasing use of crowdfunding platforms and social media should also form part of a broader investment in their digital infrastructure. The lockdown forced NPOs to close their offices and staff to work from home. Many NPOs probably lacked the necessary infrastructure and related organisational policies and procedures to make this transition at short notice.

The COVID-19 pandemic should, therefore, be the wake-up call for NPOs still in doubt about the need for adopting digital strategies that will connect their staff, processes and technology to serve their constituencies better and realise their missions. Furthermore, as funders seek greater transparency and insights into operational efficiencies before committing funds, NPOs must generate meaningful data around performance, costs and impact. The opportunity costs of this digital transformation will be worth it.

COVID-19 is not an event with a defined beginning or end, and it is likely to remain an ongoing threat for the foreseeable future. It is testing the resolve of most South Africans, including that of many NPOs.

This is not the time for complacency, and NPOs require innovative leadership and creative fundraising efforts to overcome their current challenges and prepare for an uncertain future. Hopefully, more South Africans will recognise the critical role that NPOs are playing under difficult circumstances, or the uncertain future many are facing, and continue to support their work.