By Fazila Farouk
Mail and GuardianMay 3, 2002
NGOs around the world are asking the same question: how can we survive without international donor funding- Ashoka, an NGO that promotes the profession of social entrepreneurship, sought to provide some answers to this tough question by placing the problem of NGO financial sustainability under the spotlight at the recent international Mobiliza conference in Brazil with contributions from diversely different countries.
The objective of the conference was to promote sustainable models of local resource mobilisation in an effort to mainstream social causes by encouraging NGOs to innovatively garner support from local allies, such as the media, private companies, private individuals and the public in general. This was motivated by the need to steer Southern NGOs away from a detrimental dependence on international donors that are driven by Northern agendas. The Mobiliza conference, which attracted 470 Brazilian civil society delegates, was hosted under the auspices of Ashoka's "Citizen Base Initiative", a programme that promotes local resource mobilisation.
A key theme that set the tone for discussions at the conference was the issue of ethics in resource mobilisation. Sergio Haddad, president of the Brazilian Association of NGOs, argued that NGOs have lost their critical edge in the pursuit of limited international donor funding.
He says Northern support for Southern development problems has limitations in that it is largely focused at the humanitarian level. This, he argued, prohibited engaging with issues of poverty and under-development at a fundamental level. The problem, according to Haddad, "is that Northern partners view Southern social problems as charity issues".
Haddad, who called on the NGO sector to generate principles to influence public policy, criticised national governments in the developing world for demonstrating poor form by engaging in "clientilistic" relationships with local NGOs.
Building on this key theme, several countries provided a synopsis of their own socio-economic and NGO funding environment and presented best practices in local resource mobilisation.
Paula Cardenau of Ashoka Argentina reported that 42% of the country's total population of 35-million people live below the poverty line. Moreover, the average annual income of Argentina is rapidly eroding in the current economic recession that started in 1998. In 1997 the average annual income per person was $8950 and today it stands at a mere $2493. One outcome of the deepening economic and political crisis is the closure of many local firms and industries spurring unemployment to a rate of 23% adding to the number of people joining the ranks of the poor.
In this context, Argentina's 80000 NGOs need to manage growing social problems while coping with a suspension of state financing that has been re-allocated to two emergency streams: subsidies for household heads and "alimentary help" through which the state is distributing food in day care centres.
Only a small portion of Argentinean NGOs manage to secure international donor funds. "The key challenge facing NGOs is how to build sustainable partnerships with the corporate sector as they represent one of the few remaining sources of local funding," Cardenau says.
The Argentinean NGO sector boasts a million volunteers. As a result, they survive mainly due to local resource mobilisation strategies. For example, Ashoka rewarded the Ninquihué Foundation that works with street children for its unique strategy in raising the plight of street children through a week of sensitising activities that culminated in an hour of voluntary work at the end of the week.
During this hour celebrities and personalities such as businessmen, journalists, artists, the bishop and the mayor volunteered to perform typical street children tasks at the entrance of major supermarkets - cleaning windshields, selling magazines and begging for money while asking customers for in-kind food contributions. There were many positive outcomes that emerged from this initiative, perhaps the most impressive was that three tons of groceries valued at $7500 were collected - enough to feed the Foundation Shelter for an entire year.
In Thailand, with a 62-million population, unemployment is low at 3,7%. The country's per capita income is quite low at $2010 and the government is servicing a high debt of 62% of GDP. A country with a deeply religious population and Buddhist temples is actively involved in social issues.
Rathi Misra of Ashoka India says the key challenge facing the country and its population of one billion is poverty reduction, large-scale state corruption, unequal wealth distribution and lack of infrastructure to reach out to the poor. Sixty percent of the population is reported to be living below the poverty line.
India's million or so NGOs are concentrated in the health, education and environment sectors and are largely dependent on multilateral and government funding. Misra says NGO funding is governed by the "whims and preferences" of donors. "Funding for rights-based NGOs is limited as donors prefer to steer clear of controversial issues ... Indian NGOs suffer from a lack of awareness with respect to local resource mobilisation and there is a poor ethic of voluntarism", says Misra.
In South Africa the transition to democracy brought with it many challenges for its 98000 NGOs. There is still a strong culture of entitlement in the NGO sector and a perceptible dependence on the international donor community. The key challenge facing local NGOs is that much donor funding is currently redirected to the state, making public funds a major source of income for the NGO sector.
In addition, the state has started playing a strong regulatory role in relation to the expenditure of direct donor funding, forcing distribution into particular streams. As a result, international donors are far more inclined to fund NGOs that support state programmes, with the danger of compromising the credibility of the local NGO sector.
South Africa has a poorly developed voluntary sector and corporate social investment - the second-highest source of NGO income, which is not premised on any real assessment of needs on the ground. Most local companies develop their social responsibility programmes in line with state priorities. Local NGOs also rate poorly at inventing creative resource solutions for their long term sustainability. Only a third of local NGO funding is derived from income-generation strategies.
Fazila Farouk is the director of Ashoka's Citizen Base Initiative in South Africa
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