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WATCH: Africa Day - Freeing Africa from donor dependency

Africa has relied on foreign aid for several decades, with assistance going towards a range of interventions including food security, healthcare and disaster relief, says the Trialogue Business in Society. Photo/ANA

Africa has relied on foreign aid for several decades, with assistance going towards a range of interventions including food security, healthcare and disaster relief, says the Trialogue Business in Society. Photo/ANA

Published May 24, 2022

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Cape Town - Despite the successes of many of these interventions, some experts argue that the provision of foreign aid has contributed to a culture of dependency in Africa.

At the 2022 Trialogue Business in Society conference, civil and private sector leaders discussed how Africa could liberate itself from international donor dependency.

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Panellists included Bheki Moyo, director of the Centre on African Philanthropy and Social Investment (CAPSI), Sello Hatang, chief executive of the Nelson Mandela Foundation, and Takalani Netshitenzhe, Chief Officer of Corporate Affairs for Vodacom Group and Chairperson of the Vodacom Foundation.

Finding local funding sources

Moyo, co-author of the 2021 research report Barriers to African Civil Society: Building the Sector’s Capacity and Potential to Scale Up funded by the Vodafone Foundation, says that while 90% of civil society organisations are dependent on international donor funding, we have begun to see a decrease in the inflows of donor funding.

The decrease is attributed, in part, to Covid-19 forcing countries to look inwards and prioritise their domestic needs over international aid.

Moyo argued that Africans should heed the decrease in funding inflows as a warning, and focus on domestic resource mobilisation strategies. He also highlighted social entrepreneurship as an opportunity through which organisations can pivot to new ways of generating income.

This was echoed by Hatang, who used the Nelson Mandela Foundation as an example of how non-profits can successfully raise funding at home.

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According to Hatang, prior to the Covid-19 pandemic, the Nelson Mandela Foundation received 80% of its funding from international donors.

This has changed dramatically in the aftermath of Covid-19, with international funders now contributing only 40% of the foundation’s budget. “We should free ourselves from donor dependency, and we can.

The 2020 pandemic proved that we can. We had to look at home for funding and our corporate partners came on board, mostly with no strings attached,” says Hatang.

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Hatang further highlighted the importance of the agile non-profit sector in facilitating impact on the ground. “If funding is given to local NPOs, you see the impact.

If it’s given to government, I’m not so sure. When we launched the sanitation project for schools with Vodacom, it became even clearer that it’s easier when money goes to local NPOs or community-based organisations that know what is happening on the ground.

When it goes to the government, not only does the money go through processes that don’t make sense, in most instances, it doesn’t get to where it needs to,” says Hatang.

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Power relations between donors and non-profit organisations

The relationship between donors and recipients of donor funding can be fraught with power imbalances. The more funds there are to disperse, the greater the need to ensure transparency and accountability. This can sometimes lead to unnecessary red tape, negatively impacting on the work of civil society.

The report findings show that while there is value in philanthropy given its ability be flexible and facilitate risk taking in ways the government and other big institutions might not be able to, many smaller organisations do not have the governance, processes and language that they need to access donor funding.

Netshitenzhe acknowledges the negative impact power imbalances and bureaucracy can have on the work of civil society, explaining how Vodacom is reducing these as a donor.

“Our group CEO bemoans the bureaucracy, especially when there is a humanitarian crisis. We have now started simplifying our processing by onboarding as many non-profit organisations as we can in our system, so we’re able to quickly disperse funds to previously approved NPOs quickly.”

Netshitenzhe also underscores the value of understanding what each donor and non-profit organisation brings to the relationship, and the importance of honesty and integrity from both parties.

“We are redefining the relationship with our partner NPOs to create symbiotic relationships. As Vodacom, we are not created to deal with social issues and humanitarian crises, we need delivery partners.

The organisations we support know societal challenges because they are on the ground. They are our ears and eyes and they also hold us accountable on promises that we make of creating a better future through sustainable partnerships,” she says.

Overcoming barriers to effective implementation

Just 5.2% of US foundation funding for Africa currently goes to African-led non-profit organisations (NPOs), according to the report. Many international NPOs receive generous funding that may or may not trickle down to local implementing partners, which are usually viewed as foot soldiers rather than leaders.

This ties in with the notion that power imbalances persist between large international funders and grassroots organisations across the continent.

“Our research found that international donors tend to support international organisations, with a lot of the money that is allocated for interventions in Africa usually ending up in the headquarters of international organisations in the north,” says Moyo.

“This practice is common among northern-based donors, who prefer to support international organisations with reach and influence, but not necessarily an intimate knowledge of community needs.

Processes are so rigorous and limiting, and while larger institutions can access funding, they are not as embedded in the community. This creates a mismatch that hampers development.”

Moyo says companies and donors should think innovatively and not behave like traditional donors, which tends to constrain NPOs. He cites a project he is working on in Nairobi on decolonising philanthropy.

“A funder was giving an NPO $45 million with all kinds of conditions. Then, there was a donor who came with $5 million and few conditions, which proved to be so much more useful, as they could set up what they needed and build value.

In Africa, the private sector is slowly coming to look at NPOs as partners, but there is work to be done – the relationship is still top-down and dictated by the private sector.

However, companies and NPOs can collaborate across several areas, particularly corporate social investment, facilitating joint programming that really delivers impact. NPOs can function as a bridge between companies and communities.”

Moyo says in the ecosystem there are groups holding the government and civil society accountable, grassroots groups that are survivalist, and groups that are more research-orientated should all work together for impact. “We need to understand and help these groups to create linkages and collaborate to reach sustainability.”

While South Africa may have a progressive Companies Act when it comes to corporate social responsibility, Moyo says that when it comes to practice, there is still a lot to be done in order for the government to facilitate a transformative and an effective way in which organisations need to implement programmes on the ground.

“It is about a trialogue – government, non-profit and private sector working together. We have seen successes in education and health, and we need more examples.”

Speaking at the event, Thuli Madonsela shared her reflections on the topic, highlighting that while Africa must find its own resources, it is important to acknowledge how Africa’s resources have been pillaged, and how the continent continues to lose money through illicit financial outflows.

“I don’t think we should buy into the conversation that says we shouldn’t get some of that money back. I think we should get it back as part of restitution. But on our terms, and in a purpose-driven way,” she concluded.

Trialogue Business in Society

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