Fundraisers in southern Africa facing tougher times

Published by Sarah Scarth on January 26, 2017January 26, 2017

A new year and, for most of us new, often bigger fundraising targets to achieve. Whilst mostly rewarding, the job of finding new donors and keeping current ones loyal is always challenging and made that much harder when the outlook on economic growth is predicted to be slow, and political uncertainty abounds.

In developing countries like South Africa, where social impact (or non-profit) organisations make a substantial contribution to advancing the well-being of communities, protecting their rights and filling service delivery gaps, the pressure on local organisations to survive these challenging economic and political times is even harder.

With the majority of organisations being poorly capacitated in their fundraising, resulting in the responsibility to “keep the ship afloat” most often falling to the director and programme staff, it’s understandable why most continue to struggle to build successful local fundraising programmes and reduce their dependency on grant funding from government, corporates and foundations (for more details see the Resource Alliance’s Southern Africa Scoping Report).

Fundraising consultant and blogger Jill Ritchie shares the concern that more local charitable and developmental organisations will need to focus on broadening their income bases or they will struggle to survive what is clearly going to be a tough year. She explains why:

“Corporate giving in South Africa in 2015/16 was R8.6 billion. This is a small increase of 6% on the year before but, in real terms when adjusted for inflation, there is no increase. After year-on-year increases for over two decades, CSI giving in SA is levelling off. Companies are also spending their money differently. Some are more strategic (the days of cheque book charity are gone forever) in their giving, often selecting fewer organisations to support, giving larger amounts and becoming more integrally involved in their chosen few. Many have become non-negotiable about beneficiary organisations being able to clearly demonstrate impact. Also, companies are giving away less cash these days with many offering staff secondments, volunteer time, and free or discounted services or products to organisations. There is also a greater and greater blurring of the lines between CSI and marketing. There is more, “What’s in it for us via branding and other marketing opportunities?” than ever before. Staff members are influencing companies too. More local giving is happening (as in areas where staff members’ families live, even if funds are spent via local councils to improve community facilities).

Today there are a mere handful of foreign missions still giving directly to non-profits in South Africa. This was a lucrative source of funding prior to 1994, but post the first democratic elections much foreign funding was changed to bilateral aid – going directly to government. The few that do give remain a good source of support, but their monitoring and evaluation requirements have become onerous — and rightly so.

Trusts and foundations that exist for the purpose of supporting good causes remain constant but elusive, and there is no definitive list of such funding. A few make calls via the media and social media, but most remain largely hidden.

Many local organisations rely on lottery funding; however, this also has its challenges. The South African National Lottery Commission recently announced an open call for funding. But its grant-making criteria have been narrowed and caps have been put on amounts given to any one organisation. Sadly, the Lottery’s Arts, Culture and National Heritage budget is no longer supporting state-funded museums, which means that they too will be looking for CSI money and competing with other non-profits in the country.”

So, what about individual giving as a way to diversify income for local organisations? Despite the inequalities, South Africans do give (see CAF Southern Africa recent report on Individual Giving in the Gauteng Province). And just like in the developed north, philanthropy is not the exclusive activity of the wealthy – those with less give more proportionally in South Africa. This is evidenced by those groups who’ve consistently invested in their individual giving programmes – they’ve weathered the economic downturns far better than those who haven’t. Whilst the South African post office may not be as good as Royal Mail, it functions well enough to enable dozens of local groups to raise millions each year through direct mail and nurture relationships with donors to develop lifetime giving.

Online giving is also growing and given the penetration of smart phones, the growth of mobile giving is also likely to be on an upward rise, so long as more ordinary people become confident about transacting through their phones.

However, says my colleague Wendy McLeod of Downes Murray International, whilst there’s been an upturn in the number of local organisations who’ve invested in their databases and are using a good CRM programme to manage it, too few aren’t using data to strategically inform when and how they are communicating with their donors.  In these tough times, she says, it’s those who really know their donors and treat them as personal friends, who will keep growing.    She adds that another potential growth area is in major gift prospecting, although this requires lots of sleuthing, as unlike in the some other countries, personal tax returns are not made public in South Africa.

And what of F2F? Melanie Jackson from Words that Count, says that if we are to be guided by the successes in other developing countries like Brazil, South Africa has a bright future in F2F. However, as it’s a capped market, she thinks early adopters have the best chance of success despite the limitations, such as being confined to shopping malls, businesses and special events, along with infrastructure set-up costs.

So a long, tough year ahead for many and it will be interesting to see who survives it best – I suspect it is likely to be those that stick to good fundraising principles; use the opportunity to try out new, creative ways of attracting support; and invest in and invigorate those responsible for their fundraising.  Easier said than done but not impossible.

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In response to the hunger for new ideas and inspiration, for the first time ever the Resource Alliance is bringing the IFC to South Africa for three, one-day pop-up events in Johannesburg, Cape Town and Durban, in February and March this year. Go to http://www.resource-alliance.org/south-africa for more information and to register. There are early-bird discounts, too. Use one of these codes when registering: EARLYJOBURG, EARLYCAPETOWN or EARLYDURBAN.