NPOs in crisis as financial crisis hits funders and government excludes them from Covid-19 financial relief
One of South Africa’s largest but least-acknowledged sectors stands to be hard hit in the wake of the Covid-19 pandemic and impact of the protracted lockdown.
The estimated 230,000 registered not-for-profit organisations (NPOs) that provide a wide range of services to marginalised communities and employ about 800,000 people are expecting, and are in some cases already experiencing, cutbacks in donations and other sources of income such as fees for implementing government programmes and corporate social investment (CSI) projects.
“We are in serious danger of losing many NPOs and the immense value of the support they provide to our poorest communities,” says veteran social activist Shelagh Gastrow who provides advisory services to NPOs and philanthropic foundations that donate funding to many of them.
NPOs now face serious challenges on all their funding fronts. These include:
The UK government has announced that the charity sector in that country will receive a £750-million bailout to ensure that they can continue to operate during the Covid-19 pandemic. Of that, £360-million will be allocated to organisations that provide “key services”, including victims’ services, citizens’ advisory offices and hospices, while the balance will support smaller organisations, including funds from their lotteries. In addition, the UK government will match donations from the public towards the independent National Emergencies Trust that is fundraising and distributing funds to charities during this crisis.
As COVID-19 rapidly spreads through the world, it has created in its wake a pressing need from almost every segment of society. The world of philanthropy has made donations both large and small to fight coronavirus and its effects. But facing the possibility that the current situation is one that will last for months – perhaps up to two years – some foundations are asking themselves how they can offer sustainable support.
Mary Oppenheimer, the daughter of the late Harry Oppenheimer, and her two daughters have donated R1-billion to the Solidarity Fund, set up to support the battle against Covid-19, the disease caused by the coronavirus.
Their initiative follows contributions from technology firm Naspers for R1.5-billion, the Motsepe Foundation, along with associated companies Sanlam, African Rainbow Capital and African Rainbow Minerals for R1-billion, as well as the Rupert (in association with Remgro) and Oppenheimer families who each pledged R1-billion ahead of the lockdown.
The big questions facing the philanthropy sector is how to respond to the Covid-19 crisis. Do they assist only those organisations with whom they have relationships, are there opportunities to collaborate in a more systemic way, including with government and the corporate sector?
In the last week alone, three of the world’s wealthiest individuals have pledged funds to battle climate change. In a letter commemorating the 20th anniversary of the Gates Foundation, Bill and Melinda Gates noted that fighting climate change would be one of the key priorities of their grant making moving forward. Jeff Bezos announced the formation of a staggering $10 billion-endowed Bezos Earth Fund.