Gauteng charities face closure as Dept of Social Development stops funding

The NGO crisis in Gauteng has grabbed a lot of attention from civil society and trade unions alike. Last week, the Congress of South African Trade Unions (Cosatu) expressed deep concern about the NGO budget cuts that are crippling many organisations in Gauteng.

“The Gauteng Department of Social Development changed the procedure through which it approves funding to NPOs. Unfortunately, this new process saw it redirect R15-million previously budgeted for the supply of dignity packs to newly formed adjudication panels,” Cosatu said in a statement. The federation has also urged the department to reconsider its decision and consult thoroughly with the concerned NPOs. Cosatu provincial secretary for Gauteng, Louisah Modikwe, told Elitsha that austerity measures is one of the reasons the department cut its budget. “The teasury’s instruction on budget cuts remains a challenge for catering to most of the needs of the citizens. The non-compliance of NGOs also contributes to the challenge as the department or government cannot sign a blank cheque or use a one-size-fits-all mechanism,” said Modikwe.

According to Modikwe, the working class is worst affected because the rate of unemployment is high. “Should these NGOs resort to closure, it will increase unemployment and poverty. Those who need to be cared for will be in a difficult situation as some solely depend on these services,” she added. Cosatu says, to address problems, the department should implement a monitoring and management system to hold those responsible to account. To summarily halt funding to organisations that are in many cases charities only compounds social problems and austerity measures need to be avoided so as to release pressure on all stakeholders. “The communication system between departments should be improved and the NPOs need to be taken on board,” Modikwe said.

CEO of the Bethany House Trust (BHT), Gert Jonker, says the Gauteng Department of Social Development (DSD) has serious capacity issues and cannot effectively render the services currently offered by NGOs. BHT operates three children’s homes, a shelter for homeless men, and victim empowerment and statutory welfare offices. “In the case of Bethany House Trust, 49% of total income comes from DSD; if the department fails to fund us, technically the organisation shuts down. It leads to job losses and loss of services to our beneficiaries. We serve 140,000 beneficiaries annually,” he told Elitsha. Speaking of the sector broadly, Jonker said, “NGOs render 60% of all welfare services nationally in partnership with DSD. As such, DSD is the primary funder of most NGOs.” The Gauteng premier and the MEC for social development are well aware of this dependence on the department as they repeated the same, in April last year when the welfare sector last had a funding crisis.

BHT submitted business plans in November 2023 and did not hear anything from the department, Jonker said. “Only on 13 May 2024 in the new financial year, after intense pressure from the welfare sector, did the premier and MEC meet with the sector. Most if not all NPOs who submitted business plans to DSD did not get feedback until late in May after the Gauteng Care Crisis Committee (GCCC) took DSD to court,” said Jonker.

Organisations started to get funding in the last few days of May only because of a court order issued by the Gauteng High Court on 22 May compelling DSD to pay BHT and other NGOs by close of business on 31 May. “The department only paid it on 7 June and incorrectly so. The last payment will only be paid on 13 June. DSD was technically in breach of the court order for 12 days. Bethany House till today received no correspondence from DSD regarding the seven business plans we submitted. Many other NGOs are in the same position,” he said.

The acute funding crisis

Chairperson of the Gauteng Care Crisis Committee (GCCC), Lisa Vetten said there were two reasons why NGOs were unpaid for so long. “The first reason is the budget cuts and the second one is that the DSD completely altered the procedure for approving and paying funding. Previously, regional managers of the department would adjudicate business plans, and make recommendations for funding which the province would sign-off on and enable payment to be made. This year, the DSD centralised all decisions in the provincial office and cut the regional offices out completely. They called for funding plans late, and appointed an external panel, which didn’t have experience in the social care sector,” said Vetten.

She said the radical change in the process and procedure needs an investigation. “They justified the changes and said it was because of a recommendation by the auditor general, who had stated that there were numerous problems to the approach in NPO funding in the province and it needed to be changed. This is problematic, because the AG’s office has categorically denied ever making such recommendations to the Gauteng Department of Social Development. This leaves a massive question mark over this process, because in changing the process, enormous chaos has ensued,” Vetten told Elitsha.

Vetten said, the province has no experience in issuing service level agreements. She added that the external panel that was appointed did not understand NPO funding at all. “You cannot run an NGO that offers frail care at 10% of the budget you did the previous year. This process introduced significant chaos. The NPO budget was cut to a greater degree than the DSD budget. DSD is not able to fill certain posts, because they have high salary costs.”

She said the recent court order helped with moving things forward. “Some NGOs have started getting paid, those who didn’t receive decisions on whether they will be funded are getting them now. Things are still moving pretty slowly. We have fought, but there are still a lot of problems. Payments that are happening are only for the first six months of this year,” Vetten added.

A response to questions sent to the Gauteng Department of Social Development will update this article when received.