Lorenzo Davids
The deep question that confronts us in 2014 is whether noble acts of philanthropy can further evolve into a more directed force and a more meaningful practice to impact the socio-economic challenges confronting the South African landscape.
There is no doubt that the world in which we live could do with a very significant dose of more philanthropically minded citizens. The generosity of both the wealthy and the poor philanthropist is to be lauded. Billions of rand of aid money are donated to worthy causes each year. And many of those causes, despite severe challenges and constraints, are holding the very thin fabric of civil society together – often on shoe-string budgets and the lowest-paid staff.
One of the key questions for those of us who monitor these environments is: how does one shift this giving relationship from often transactional giving – a donor giving money and a beneficiary spending that money on an agreed cause – to a more engaged, transformative and meaningful relationship? Transactional giving has dulled the real intent of philanthropy, which is the infusion of a responsibility to beneficiaries to transform context and currency by means of this exchange.
On the one side of this transactional relationship is the donor. Let me be clear about this: South African donors are an extremely generous community and have sustained, often amid some of the most challenging times, causes and campaigns they have believed in. In many ways, donors have put their money where their hearts and minds are.
From political to social and to humanitarian causes, South African donors have kept pace with many of their international counterparts in making sure that a vibrant and well-funded NGO sector remains a key part of the pre- and post-apartheid South African society. This commitment by donors to civil society organisations is the reason why we have such a vibrant civil society sector in South Africa.
However, on the other side of this relationship are thousands of beneficiaries. And this is what should worry us most: for decades, many sincere acts of philanthropy have not moved from this transactional relationship between donor and recipient, as opposed to a higher set of transformational relationships where both parties hold each to account for the outcomes and impacts agreed to.
The danger of these types of transactional relationships is that they often migrate from good intention to a money conveyer belt. The outcomes requested by these truckloads of donor funds are often poorly defined, have very little long-term impact and serve more to placate need and comply with demand and request than to work at creating visible and measurable changes in the challenges faced.
And thus, when I listen to non-profit organisations and their leadership bemoan the lack of funding and talking of the now well-worn “donor fatigue” topic, I see the very real consequences of transactional giving manifesting itself. In these discussions, they talk about how hard it has become for non-profit agencies, most of which do vital, necessary and excellent work, to survive.
I question, however, the entire notion of donor fatigue. The figures show that donor funding has remained largely consistent: some R8 billion from corporate giving; R8bn from high net worth individuals (HNWIs), as well as a further R5.1bn in goods and services from the same group; some R6bn from the government; and a further R4bn from non-HNWI taxpayers. But can we see real transformative differences in the health, poverty, educational and income-generation sectors across South Africa that match the scale of these investments?
In our analysis at Community Chest, we believe that three things have happened which impact the flow of donor funds. First, the mushrooming of NGOs from 50 000 in 1994 to 115 000 this year, which all take a slice of the donor income and reduce the size of the slice others are able to obtain. Second, the growth of an intelligent donor community that is no longer moved only by compassionate appeals to donate, but is more inclined to give when moved by intelligent solutions.
Last, the lack of accountability to donors by some NGOs has muddied the waters, and has caused donors to allocate the funds on their balance sheets without necessarily distributing it within the allocated year until they consider it safe to make the distribution.
This is why a deep discussion is required in philanthropic circles about how donor funds are applied. We need more accountable relationships, not for the survival of the sector primarily, but so that the end beneficiary – the student, the pregnant mom, the sick child, the school or the social enterprise – can immediately benefit from the impact every donated rand should create.
We encourage donors to see their grants and donations as a business investment, with appropriate returns, accountability and results. When we review our internal funding processes at Community Chest, I often ask the question: “What is the solution we are asked to fund?” Responsible citizenship must compel donors to look beyond the offered intervention for funding and look to what solution this intervention is a part of. As an agency accountable to donors and our community beneficiaries, we must begin this necessary shift from funding interventions to funding solutions, from transactional funding agreements to transformative funding outcomes.
And this is the most difficult part of the philanthropy dialogue: there are so many donors who have this need to do good and feel that if they can just donate some money to a cause or organisation, they will have done something of cosmic significance.
What we need are not more people who wish to do good. We need people – donors, specifically – who will look at the issues they have been funding for years and ask the tough question: “How do we add more value than we are currently adding in order to move this from the realm of intervention to the realm of solution?”
Some types of services will require continuous funding – such as a facility for children with forms of mental or physical disability. But even here we must not shirk from thinking about solutions such as pooling resources for greater efficiency, not just interventions.
Donors everywhere are experiencing the effects of the law of diminishing returns. After many years of funding the many non-profits, they feel less satisfied than they did when they first started out. The satisfaction of giving has diminished as people see less of what they thought they would see: real change for people who really need it.
It’s time for the billions of rand donated annually to effect real change. Change we can all see. But more especially, change the end beneficiary can see and use to build a better life for themselves.
l Davids is chief executive of Community Chest South Africa and the Community Chest of the Western Cape. He leads the national Community Chest and its five regional offices around the country in designing impact strategies to fund education, health and income generation. Community Chest invests more than R50 million annually to more than 600 local non-profit organisations countrywide.