The main challenge that has been associated with the civil society organisations (CSO) sector in South Africa over the years has been the lack of financial security, despite the funding that the government is spending on CSOs, the politics of funding continues to dominate the CSO sector in South Africa. Most of the national and provincial government departments on their budgets have the allocations for the Non-profit institutions so as to try and support the CSOs in carrying their mandates as per the provision made by the NPO Act of 1997. However, what remains remarkably unclear is how much money government spends on CSOs. Since funding is still regarded as a major obstacle that CSOs in South Africa face.
As Sibanda (2009) puts it, when looking at government funding the sector is visible to be lacking access to financial support and to an extent general support as well as public contributions. NPO legislative frameworks One of the major actions that the government of South African as taken in creating an enabling, an enabling environment for the South African Civil Society Organisations was the enactment of the NPO Act No. 71 of 1997.
Chapter 2 of the NPO Act asserts that it is the State’s responsibility to nonprofit organisations that “within the limits prescribed by law, every organ of state must determine and co-ordinate the implementation of its policies and measures in a manner designed to promote, support and enhance the capacity of non-profit organisations to perform their functions”. In addition the state promulgated the National Development Act in 1998.
The Act states that the primary mandate of the National Development Agency is providing grant funding to CSOs for purposes of implementing projects and programmes that meet developmental needs of poor communities and strengthening of institutional capacities CSOs that provide direct services to poor communities.
The rationale for conducting the research was to test the hypothesis that government departments are allocating funding for not for profit organisations in their annual planning. While there are no current and reliable statistics on value of funding to the CSO sector, most organizations according to the Coalition on Civil Society Resource Mobilisation (2012) rely on a combination of diminishing international funding, corporate social investment, donations from individuals and a degree of incomegeneration, often via government contracts.
The completion of this research assist in determining the value of how much government budget and spends on funding the CSOs. This Research aimed to gather information on the value of government allocation and expenditure to fund work implemented by the CSOs sector between 2012/13 and 2013/14. Methodology A method of data collection used in this study was a review of secondary data from national and provincial departments’ annual reports which were published on the departments’ websites.
The study covered two financial years, 2012/13 – 2013/14, the periods selected were based on convenience and assuming that all government departments will have complete data in their annual reports. The approach used in this study was reviewing appropriation statement on all national and provincial departments in the financial information of the 2012/13 – 2013/14 annual audited reports.
Data was collected from the “appropriation per economic classification” table of the financial statement. Financial data on “final appropriation” and “actual expenditure” variables on transfers and subsidies for “non-profit institutions” was captured in a spreadsheet for the two financial years. The difference between the final appropriation and actual expenditure was also calculated to assess expenditure levels against this economic classification line for all departments.
Results of the study
The study found that of 40 national departments, 24 had allocated funding for not for profit organisations. The NPOs funding allocation by national departments vary significantly, for example, in 2013/14 the Department of Telecommunications allocated about R399 thousand for NPOs whilst the Department of Science and Technology allocated about R533.5million.
The departments of health, social development, sports and recreation as well as arts and culture combined they allocated about R600.2 million in 2013/14 and about R507.9 million the previous financial year. Interestingly, the department of public works increased its allocation for NPOs from R282.7 million in 2012/13 to R438.3 in 2013/14, whilst departments such as basic education, agriculture and forestry, and rural development have increased their funding levels between the two financial years but are funding at a very low base compared to the other departments.
The department of Science and Technology, for the two years contributed about one third of the total national NPOs allocation, however on both years the departments has spent far below their allocation. In 2013/14, the department spent about R84.7 million of the total allocation of about R533.5 million, whilst in the previous year it had budgeted about R718.8 million and only spent about R63.3 million. The study has found that the combined national departments budget allocation for NPOs R1.8 billion in 2013/14 and R1.7 billion in 2012/13.
The expenditure was R1.4 billion in 2013/14 and in 2012/13 the expenditure was about R1 billion. The study found that there were 113 provincial departments combined in the 9 (nine) provinces excluding the provincial legislatures. Of these, only 58 provincial departments had budgeted and reported on NPOs expenditure during the periods we reviewed. The total allocation for NPOs from different provincial departments reviewed was reported to be about R20.1 billion in the 2012/13 financial year, the allocation declined to R14.1billion in 2013/14.
Interestingly, a province such as Gauteng, with only a few departments reviewed for this study topped the list with about R2, 94 billion allocations, followed by Eastern Cape with about R2.65billion. Northern Cape and Mpumalanga had the least NPOs allocation of about R776.3 million and R835.2 million respectively in 2013/14.
Though the results of this study does not paint the full picture of governments’ contribution to the support of the CSOs, but what it does is to show that a number of government departments do play a role in creating an enabling environment for CSOs. From table 13 it can be concluded that all the provinces are playing a role in supporting CSOs as per the requisite of the NPO Act No. 71 of 1997. From the data collected and analysed for this report, we can make the following broad conclusions: ; The results of this study, looking at only two financial years, has found that the government has allocated over R37.7 billion to NPOs over that period. This figure we know is an under estimation of the total value due the methodology used in the study, but is accurate figure for all the departments that were reviewed in this study.
The study has also found that the departments funding NPOs at significant levels, such as health, social development, public works, rural development, and agriculture are responsible for developing communities in their various portfolios. Existing literature on funding of NGOs suggest that the level of funding from various sources is significant as compared to government funding. However, one can say that from this study results, government remain the major funder of NPOs. The study has found that in 2012/13 government allocated over R20 billion to NPOs and in 2013/14, the funding was over R15 billion.
The government funding to NPOs seem to be embedded in a government planning, policy and processes. In the majority of these departments, the expenditure is over 90% against the budget suggesting that the allocated money is disbursed to NPOs funded by the departments. This may suggest that the planning, budgeting and implementation process at this level is functional and efficient. The money allocated to NPOs does go to the intended recipients.
The under expenditure, as much as it can be defined as not significant in proportional terms to the budget, but in real money terms it is significant, especially if the NPO sector perceive that the state is not putting much resources to it.