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One of the things that became quite clear at the FLC was the fact that the current economic crisis is affecting the charity sector in quite a big way. We knew that it would; when ‘purse strings’ are tight a lot of the time charitable giving is the first to take the hit. It hasn’t just affected Project HOPE, but is affecting most charities big and small. Here in South Africa we are seeing many smaller NGOs simply close down because funding has dried up, others are barely functioning. This economic crisis is also affecting charities in the sense that government charitable giving is also taking a hit. We know for example that PEPFAR II when it comes out will most likely be a smaller pot of money. There are a few NGOs here in South Africa that get their money directly from the South African government and they haven’t received it for a few months. What does this all mean?
Well I think there are both positive and negative impacts. On the positive side (my opinion!), the crisis is forcing the charity sector to re-evaluate itself. We spent a lot of time at FLC discussing who we want to be known for – our branding in Africa, highlighting our technical capacities in certain areas. This is a good thing. It’s also forcing charities to be more creative, open and transparent about how they obtain and use funds. Knowing that the potential pot of money is smaller, makes competition fiercer between charities to win grants. This can be positive too. It means that charities will have to put in more effort to design quality programs that have real impacts. It will also force partnerships between charities with specialised capacities which is good. It also means that what in the past might have been a safe bet in terms of winning a specific grant is no longer the case, forcing charities to rethink and design new and innovative approaches to targeting poverty reduction and health issues in the third world.
As for the negative impacts – there are now 1 billion people that go hungry each day, up from 800 million. Government expenditure is being cut across the world, in vital sectors such as health and education. Who does this usually affect the most – the poor and underprivileged. A smaller pot of money for the charity sector ultimately might mean reducing the number of beneficiaries that we reach.
Here in South Africa we are busy moving forward implementing our new strategic direction. Our VSF program is teaching us many things about reaching people in slums, we are busy making contacts with other NGOs, and are currently in the process of writing a couple of grant applications targeting OVC in the slums. If you have any comments please feel free to contact me. Until the next time!
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