After the most recent global financial crises, non-profit organisations are being forced to shut their doors, leaving the needy without any relief.
36 000 of South Africa’s 122 000 NGOs deregistered
Kowthar Solomons from the Weekend Argus reported that an estimated 36 000 of South Africa’s 122 000 NGOs and NPOs were closed due to financial constraints. Reasons for the lack of funding was attributed to mismanagement of funds, rising legal requirements and compliance as well as enormous pressure on fundraising. While the majority of funds driving NGOs are raised through the companies themselves, NGOs are dependent on the funding that it receives from government organisations and Funds.
International financial crises
With the world still feeling the after effects of the most recent global financial crises, NGOs depending on international support have been feeling the lack of international donors and funding. The degree to which foreign businesses donate is influenced and restricted by their profitability and the current recession has made a big impact on the amount donors are able to spend. Not to be forgotten are the communities who are dependent on the assistance of these NGOs and who are now feeling the double impact of the recession and the loss of some NGOs who have been forced to close.
Rotten apple spoils the barrel
The taint of corruption and mismanagement has been hovering around non-profit organisations even though only a small minority were actually corrupt. The tarnish on the reputation of South African NGOs make it difficult for donors to trust the organisations, resulting in overseas donors investing elsewhere.
“There are individuals that enter the sector to mismanage donor funds while communities remain trapped in abject poverty.” Butjwana Seoko, spokesperson for South African NGO Network (Sangonet)
Decrease in NGOs and its effect on the community
While the loss of approximately 30% of South African NGOs are felt by the business sector and NGO Networks, those who feel its impact most are the communities who relied on the support of non-profit organisations for trauma counselling and food support. While the current economic state further pushes them into a life of poverty and crime, the community’s access to socio-economic support is becoming fewer and fewer, further cementing an impoverished and crime invested lifestyle.