SA’s NPOs need better survival skills, says philanthropy specialist

Surviving the South African economy is not easy. How much more this must be for Non-Profit Organisations (NPO)?

But NPOs have a major role to play in society. They help to bridge the ever-widening socio-economic gaps found across South Africa.

With the rising cost of living and a challenging economic landscape, NPOs are dealing with more difficulties than ever as they try to provide their services.

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Many are in a tough situation, trying to make a real difference while dealing with South Africa’s unpredictable conditions. Additionally, corporate budgets are getting tighter, focusing more on specific social investments. This makes it crucial for NPOs to focus on being strategically resilient.

CSI investment by South African companies

The findings from recent research by Trialogue Academy for its 2023 Business in Society Handbook reveal while overall Corporate Social Investment (CSI) by South African companies increased from R10.9bn in 2022 to R11.8bn in 2023, this represents just 1% real growth (allowing for inflation). And while companies channelled most of their CSI spend into supporting NPOs, the proportion of companies doing so declined from 94% to 84% year-on-year.

The research also revealed a growing need for deeper intervention and support by NPOs, particularly in the wake of the global economic crisis and the impending threat of climate change.

Nedbank Private Wealth and Trialogue Academy recently introduced a NPO Resilience Course. The programme was developed after insights that highlighted the areas where NPOs most frequently faltered in securing their resilience.

These include strategic planning, financial management, and operational agility. Their research showed NPOs were battling to adapt to changing circumstances and often failed to excel in these crucial areas.

Strategic planning

Strategic planning involves business leaders outlining their vision for the organisation’s expansion and outlining the path to achieve it. These plans guide the decisions, growth, and goals of the organisation.

There are several steps for doing this. These steps typically include conducting a thorough analysis of internal and external factors, setting clear objectives, allocating resources effectively, and regularly evaluating and adjusting the strategic plan to adapt to changing circumstances.

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Financial management

Financial management is challenging for NPOs due to limited resources, dependence on donors, diverse revenue streams, a mission-driven focus that prioritises social goals over financial returns, compliance and regulation complexities, a volunteer-based workforce with potential lack of financial expertise, the need for outcome measurement to secure funding, concerns about long-term sustainability, and the necessity to balance financial decisions with mission fulfillment.

To address these challenges, non-profits must invest in financial literacy, adopt efficient management systems, diversify revenue sources, cultivate transparency, and develop strong relationships with donors while navigating the complexities of financial management.

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Operational agility

Operational agility refers to an organisation’s ability to adapt and respond quickly to changes in its environment, whether they be internal or external. It involves being flexible, efficient, and responsive to emerging challenges and opportunities. Operational agility is crucial for staying competitive, managing uncertainty, and ensuring sustainable growth.

Operational agility, becomes challenging for NPOs due to limited resources, regulatory constraints, cultural resistance to change, and a lack of technological adoption.

Vulnerabilities

Clara Kwizera, Philanthropy Specialist at Nedbank Private Wealth, says that NPOs need to address these vulnerabilities and equip themselves with not just the knowledge they need, but also the practical skills to enhance their resilience.

She said that the NPO Resilience Course is designed to align with these industry shifts to foster a proactive culture of resilience.