New life in South Africa’s nonprofit sector: a personal story

By Marcus Coetzee, June 2012.

The non-profit sector in South Africa has changed beyond recognition over the past decade. This is as I both hoped and feared. It is as I had hoped because young people, new ideas and a fresh energy have entered this sector. It is as I had feared because a number of established organizations with rich histories have failed to adapt in time and have subsequently suffered severely – some have even been fatally wounded. Overall, it feels that springtime may have arisen after a long winter.

Here is my personal story to help illustrate this change in seasons. I’ve been serving non-profit organizations since 1996 when I left the University of Cape Town with a business degree. Although I started doing articles at an accountancy firm, I soon resigned and joined U Managing Conflict – a pioneering organization in the community safety field. This gave me the opportunity to do community work and help design and implement safety models such as the “community police forum” and the “community safety forum”. At that time I was one of the few business-minded people in the sector, and I consistently preached that organizations could learn from businesses, and apply these insights to both their operations and the causes they served. Predictably, my efforts were met with both success and frustration.

There were a few pioneers who appreciated my thinking and heeded my advice. There were also numerous organizations that caused me immense frustration – organizations that were so set in their mind-sets that they were unable to see the obvious trends. I particularly remember a conversation with the director of a leading non-profit consultancy, who said that my ideas were sacrilegious and should be kept away from organizations.

By 2007, it was clear that South Africa’s non-profit sector was undergoing a massive shift. All around me I noticed organizations struggling, some even closing their doors. I saw stories in the newspapers and heard many more through the grapevine.

It was obvious that the tried and tested methods for growing a non-profit organization were no longer succeeding. Let me present three examples to illustrate this point.

Firstly, it was evident that conventional fundraising methods were bringing in fewer funds. The non-profit sector had reached saturation point, available funds were already allocated and South Africa was becoming a lower priority amongst international donors. Secondly, it was evident that government policy towards non-profits had changed and tenders for social development projects were now being issued – tenders which businesses could also win. Thirdly, it was evident that non-profit organizations could not manage risks or expand their impact without making a profit, yet their entire funding model was based on “cost replacement” or charging only for operational costs.

These are some of the reasons why I felt that non-profit organizations needed to undergo a paradigm shift in order to survive, and that the traditional NGO paradigm was no longer providing the required answers.

For various reasons, I was inspired to a frenzy of writing in order to explain how non-profit organizations could not only survive but also thrive. During 2007 and 2008, I submitted numerous letters and articles to local newspapers, many which were published. I gave talks at business schools, conferences, seminars and AGMs. I covered topics such as “the demise of non-profit organizations”, the “emergence of social enterprises”, “paradigm shifts within the sector” and the “need for social accounting”. I explained how organizations needed to cultivate “social enterprise thinking” in order to have a noticeable impact on poverty and its various aspects. I cited international trends and case studies. I even spent many late nights writing a detailed masters’ thesis on what non-profits needed to do in order to be effective and was awarded summa cum-laude for this work.

I ambitiously tried to establish an association of social enterprises in South Africa and even reserved the internet domain names. Although by now, people were listening to my ideas, they were still considered a bit eccentric. Eventually, frustrated, I took a “sabbatical” and focused my efforts on private companies who were trying to get rich through making a difference in the world.

However, since 2011, I’ve been hearing different sounds emerging from the non-profit sector. This was matched by a steady increase in the number of organizations requesting coffee chats with me. The more I listened the more I realized that a powerful yet subtle change was moving through the non-profit sector. For example, organizations such as the Peninsula School Feeding Association had realized the limitations of the conventional funding model and started exploring self-financing models for school feeding. I was encouraged to start attending networking events once again and noticed that a younger and more enthusiastic energy had begun to emerge – an energy which I had last encountered when I joined the sector in the mid-1990s.

I further discovered that the University of Cape Town had established a centre for social entrepreneurship (the ‘Bertha Centre for Social Innovation and Entrepreneurship’). I was also invited to attend seminars of the new African Social Enterprise Network (ASEN) and discovered hundreds of young people using terms such as “social enterprise”, “social entrepreneurship” and discussing topics such as “social media and social change” and ‘marketing for social enterprises’ and debating the optimal legal structure for non-profit organizations. Although this movement is inexperienced and still in its infancy, there is a contagious enthusiasm.

I hope that it is not premature to say that springtime might be in sight. I feel once again inspired be part of the movement to reduce poverty and create a better South Africa. For the first time since I entered the non-profit sector in 1996, I feel a sense of hope for its future and pray that my faith in these organizations and their leaders will prove justified.

My intention is to use my experience and insight to help these organizations become successful, and think clearly about their paradigm, strategy, and business model.

Marcus Coetzee is a business strategist who helps leaders to think clearly about the future. To find out more about how he can help you, call 0828799131 or visit Marcus Coetzee.co.za.

Cultivating strategic clarity.

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