The impactful work of Non-Profit Organisations in SouthAfrica is widely acknowledged as critical in helping to address our country’s most urgent needs. These include poverty alleviation, early childhood education, health care, youth and women empowerment, and GBV prevention. Often the Non-Profit sector works to fill gaps in Government services by providing localised and direct services to the most vulnerable communities.
Parallel to the importance of its vital services, lies the fact that the Non-Profit sector in South Africa is considerably over-populated.Competition for funding and resources is fierce and those who get it right, succeed and their vulnerable recipients benefit. Those who fail, have people and communities that suffer.
One would hope that organisations meeting the greatest or most pressing needs would attract the most funding, however, it is sometimes organisations that write the best funding proposals (or even hire the best grant writers) that succeed, irrespective of their real community impact.
In today’s world it is sadly not enough for an NPO to be delivering impactful projects in their communities. For a Non-Profit entity to thrive it needs to be well governed and adequately resourced.
The most important requirement for success is a credible, informed and active volunteer Board of Management; each selected for their expertise, skills and governance knowledge, and who have time to further the work of the organisation. Members must display visionary leadership that balances passion with strategic thinking. A diverse board with clearly defined roles and portfolios can be a winning recipe for the organisation.
The Board is key for the following functions:
- ensuring good governance by providing ongoing oversight and strategic direction.
- defining a clearly communicated mission and vision, that accurately encapsulates the challenges that the organisation is working to address.
- designing the organisation’s Strategic Plan -the direction and deliverables.
- ensuring operational efficiency and ethical conduct.
- ensuring that the organisation is properly staffed with competent, talented and well-trained staff and volunteers, working as a cohesive team towards achieving the mission.
- ensuring that the staff is adequately equipped with offices, vehicles, computers and registered software to perform their functions.
Other key factors for success include:
- Effective fundraising is critical for success in today’s environment. Funding must be generated from diversified channels using varied fundraising mechanisms. Excellent donor relations are paramount for organisational service delivery, long term survival and sustainability.
- Monitoring and evaluation processes that measure the impact of the organisation’s work must be effectively in place.
- Compliance is key to Non-Profit organisations and the cost of non-compliance is being excluded from funding opportunities. It is crucial that everything possible is done to build trust.
- Registration with the Department of SocialDevelopment as a Non-Profit Organisation will get you an NPO number. To retain that status annual reports will need to be submitted and accepted as compliant by the NPO Directorate.
- An annual audit with a favourable audit opinion will assist the organisation to create financial transparency and accountability, which builds public trust.
- Registration with SARS as an Income Tax Exempt organisation is critical and that exemption needs to be maintained through the annual submission of Income Tax returns.
- Registration as a Section 18A entity with SARSallows an organisation to issue donors with Tax Deductible receipts, which should encourage more and bigger donations from Corporate and individual donors. To maintain this registration, the complex IT3(D) submission of Section 18A receipts to SARS needs to be mastered and once mastered, submitted twice a year to maintain that registration.
- While B-BBEE accreditation is not mandatory for most Non-Profit organisations, it is a useful tool to access funding from Corporates.
- Marketing and communication are needed to inform potential donors about your work/impact that you have monitored through yourM&E processes. A well-structured, current and concise website supported with an active Facebook page, Instagram page and LinkedIn profile will assist donors when they research your work or undertake their own Due Diligence before donating. Electronic newsletters can give existing supporters more in-depth information about your work and should offer another opportunity to donate.
- An accurate and detailed electronic Donor Management System needs to be in place to record and track donations and issue donors with receipts.
- An accurate management accounting system, with strong internal controls in place, must be continually maintained, providing up to date financial information on income and expenses, and it should compare these to annual budgets and identify variances. Cashflow needs to be closely monitored to ensure enough funding to cover costs.
- Documented policies and procedures need to be in place including a Risk Management strategy.
- A good administration system with meticulous procedures needs to be in place to ensure compliance and that accurate minutes are recorded and maintained, staff records are updated and PAYE, UIF andProvident Fund and medical aid payments are made.
- An appropriate method of recognising and appreciating donor and volunteer contributions should be in place to encourage continuous support, which will influence organisational long-term sustainability.
For a Non-Profit Organisation to succeed and for the sector as a whole to succeed, it is vital that NPOs are well managed and staffed, fully compliant, adequately funded and suitably placed to deliver essential services to vulnerable communities.
The ongoing dilemma is that most Non-Profit Organisations focus most of their funding on service delivery to beneficiaries (and this is what most donors prefer), leaving very little for the organisation to allocate to the costs of being fully compliant and adequately resourced; building a nest egg for long term sustainability becomes a distant consideration.