How NGOs in South Africa can present themselves better to investors
By Leigh-Anne Acquisto, Founder Liquorish Ink
South Africa has a vibrant civil society landscape that is distinguished by passionate people, innovative projects and widespread collaboration. According to the Department of Social Development, there are over 126 000 Non-Governmental Organisations (NGOs) registered in South Africa, with another 1 600 applications in process. This means there are many NGOs that are competing for funding, a reality which is further complicated by the significant changes in funding streams for social development work over the past few years.
The United States Government’s African HIV/Aids Relief Fund, the President’s Emergency Plan for AIDS Relief (PEPFAR), which was a large financial contributor to South African civil society, particularly health-based organisations, has been reducing its funding availability each year. This, along with South Africa’s improvement on PEPFAR’s rating scale, has resulted in it being allocated less funding from PEPFAR, meaning an overall decrease of hundreds of millions of rands coming in.
So how can NGO’s better equip themselves for this new reality?
Hope is not a strategy: Having a clear vision and business strategy is critical. NGOs need to think about innovative delivery models, diversification of revenue streams and funding sources, using technology to implement projects and communications, and their ability to differentiate themselves from the many other organisations in the sector.
If your business is not a brand it’s a commodity: An overlooked avenue for NGOs to engage with and retain potential social investors is good branding. Branding allows them to offer potential funders a good sense of who they are, what they do, and an assurance of their ability to steward received funds with integrity and effectiveness in order to attract and retain funding.
Another important aspect of good branding for NGOs is to assess and update their appearance, as going to market in a professional manner can establish them as a trustworthy partner of choice. In addition, having a strong public voice that assures potential donors of their proactive and visible nature can help boost an NGO’s reputation and funding potential. The role of branding and brand reputation is becoming increasingly important when it comes to procuring funds. NGOs need to be more strategic in the development, management and communication of their brands because, as in any other sector of business, reputation can either be an organisation’s greatest asset or quickest route to failure.
Storytelling is one of the most a powerful tools NGOs have: NGOs often have extremely positive and encouraging stories to tell. As part of their communications approach, NGOs need to create a platform where they can tell those stories. The digital environment offers an excellent opportunity for them to do this. Not only does it allow for varied content formats, but it also opens up an opportunity to engage and potentially crowd source funding.
Start thinking like a commercial business: Global economic challenges have caused a decrease in the general amount of foreign financial aid coming into South Africa to support NGOs. In short, this has reduced the funding pool for social development organisations and has forced them to adopt a diversified funding approach like acquiring multiple donors, or creating sustainable commercial ventures in order to survive.
Be responsible for your actions and accountable for your results: Because of the philanthropic nature of the sector, organisations have relied on word of mouth and an inherent assumption of support for their good work to secure their funding. However NGOs have a significant opportunity to assure corporate and government funders that they take their roles and responsibilities seriously, that they operate professionally and with a standard of excellence, and that they have longevity.
Detailed accounting for funds needs to be a priority. Longevity is established through good monitoring and evaluation systems that enable accurate and specific reporting about how funding has been spent. Previously, civil society organisations tended to give generalized reports of progress and work done, but funders need detailed information about how their funding has been used.
Collaboration divides the task and multiplies the success: Where NGOs operate in smaller, grassroots contexts, collaboration under a single brand can allow them to gain the benefits of good branding, specifically increased presence and trustworthiness, without themselves having to become complex organisations. Partnerships with larger, advocacy-based NGOs that have established brands can assist with attracting funding for their projects.
As the demand for funds increases, the South African Government has decreased its propensity to support international NGOs, preferring local organisations. In light of this, South African NGOs have a significant opportunity to establish their brands with local flavour and a South African emphasis. NGOs should focus their attention on rethinking their brand strategy and carefully consider their positioning, competitiveness and ability to differentiate from others.
The good work done by NGOs has a significant, critical impact on the quality and future of South African society, but ineffective or non-existent branding strategies can hinder their ability to remain sustainable. Funding is an inextricable element of being a social investment organisation, and improving branding, communications and reporting can help NGOs remain distinctive, and attract and retain funding.