The role of nonprofit organisations (NPOs) in society in a developmental country like SA should not be at the mercy of government funding in fulfilling their responsibilities.
NPOs are established because a tangible need is identified in society. They are filling a gap which ordinarily should be filled by a government service. The government does not have justification to hold back funding for the fulfilment of a state function.
In 2024, the Gauteng department of social development centralised the approval of funding application to the office of the head of department. This was meant to cut out approvals at regional office level, but the change led to the collapse of the system.
The change in the system removed social workers from the assessment process. This moved to be fulfilled by external adjudicators. It was not clear what the department had hoped to achieve with this change.
The collapse of the system led to hundreds of NPOs not receiving funding for months, resulting in the closure of some NPOs and the scaling down of others. Last year, the Johannesburg high court ruled three times against the Gauteng department of social development to resolve the funding challenges for NPOs.
This nonpayment of NPOs by the government does not only disadvantage the beneficiaries of the services offered by the organisations, but the employees who lost their livelihoods as well. The ripple effect of the loss of the livelihoods of NPO employees is the increase in dependence on the social relief of distress grant that is paid to SA citizens or permanent residents who are unable to meet their or their families’ basic needs.
The National Shelter Movement of SA, an organisation that speaks on sheltering for women and children affected by gender-based violence (GBV) in SA, said that the national department of social development returned R554m in unspent funds to Treasury in 2024.
The Gauteng Care Crisis Committee, a voluntary association representing nonprofit organisations, highlighted that NPO funding is not keeping pace with inflation and appears to be on the decline, most notably in Gauteng – R223m decline in 2024/25. These are funds that could be channelled to resource shelters and other NPOs.
Shelters offer safe accommodation and provide women with opportunities for healing and rebuilding their self-worth. This work was put in abeyance unnecessarily, and as well as other services that NPOs offer.
Rendering shelter services requires specialised expertise, care, and resources. Yet, people rendering services in shelters are often undervalued and face precarious challenges, such as burnout.
The numbers of GBV cases in SA continue to increase. President Cyril Ramaphosa likened the soaring numbers of GBV and femicide to a pandemic.
It is critical that we have well-resourced shelters that can offer relief to victims. Currently, GBV victims are forced to continue living in their homes and endure the violence because of a lack of shelters that can accommodate them while funding for this purpose is being held back.
NPOs also offer invaluable services for the rehabilitation of substance abuse, services to children, services to older persons and services to persons with disabilities.
While it is important to ensure there is adequate funding for NPOs, it is equally important to ensure NPOs adhere to the norms and standards that are stipulated in the NPO Act. The government made significant budget cuts across the public service and the department of social development’s budget was reduced by R1.8bn. In addition to receiving government funding, NPOs should find innovative ways of sourcing more funding from private donors and partner with others who offer a similar service to minimise the impact of insufficient funding.
The fact that the size of the subsidy offered to an NPO is at the discretion of the province, rather than standardised through national policy, which results in considerable variation in the amounts paid to organisations both within the same province, as well as in different provinces, is an aspect that needs to be looked at. The portfolio committee on social development plans to engage with the department on how this discretion could be applied without disadvantaging NPOs.
In November, the committee met with Gauteng's MEC of social development on the state of NPOs and funding policy.
The national sector policy advocates for fair, equitable, mutual respect, constitutional obligation and partnership however it has noted reports that the service level agreements (SLAs) were drafted without consultation and NPOs were coerced to sign them by being threatened that their services will be taken over by the department if they do not sign the SLAs.
The coercion resulted in a breakdown of trust between the NPO sector and the department of social development. To monitor the situation on the ground we will conduct an oversight visit to various NPOs in the province.
In light of funding challenges, the committee will explore the lack of adequate NPOs in rural communities.
Masango is chairperson of the portfolio committee on social development
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