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Gauteng, KZN non-profits sound future funding alarm after Social Development budget cuts

Gauteng, KZN non-profits sound future funding alarm after Social Development budget cuts
Takudzwa Pongweni and Naledi Sikhakhane
By Takudzwa Pongweni and Naledi Sikhakhane
25 Mar 2024
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Because of fiscal constraints, provincial Social Development departments are cutting support for non-profit organisations. In Gauteng and KwaZulu-Natal, organisations warn that their beneficiaries face a bleak future after funding cuts.

The Gauteng Department of Social Development (GDSD) has cut R223-million from its 2024/25 budget for services to vulnerable persons.  

This is according to the Gauteng Care Crisis Committee (GCCC), a network of more than 50 non-profit organisations (NPOs) in the province. The cuts were discovered by NPOs after the release of the Gauteng budget. The GCCC said NPOs did not know whether they would be funded when the financial year begins on 1 April.

“The cuts reflect a shocking disregard for vulnerable persons’ right to social care services. The way they are being made also demonstrates no ethic of care. 

“Because the GDSD has failed to communicate which NPOs’ services will be reduced or terminated, it has been impossible to plan responsible processes to ensure that children, women who have experienced gender-based violence, older persons and people with disabilities continue to receive services after 1 April. 

“NPO staff live with uncertainty daily, not knowing if they will still be employed when March ends,” read the statement from the GCCC.

Silence from the department


The GCCC has been attempting to obtain information about the future of NPO services since June 2023. Letters seeking clarification on the budget cuts were allegedly repeatedly ignored by the head of the department, Matilda Gasela.

When Daily Maverick sent questions about funding concerns to the department on 20 March, it replied with a media statement about the launch of shower buses for the homeless.

After receiving no reply to letters sent in November and January, the GCCC tried unsuccessfully to contact the social development MEC, Mbali Hlophe, on 6 March.

The uncertainty going into 2024/25 mirrors the crisis of 2023/24 when the GDSD attempted to slash millions from the budget earmarked for social care services, inciting widespread protests from NPOs across the province.

In May 2023, Premier Panyaza Lesufi announced he would reinstate the subsidies that NPOs had received in 2022/2023. However, according to the GCCC, the funding was not restored in full and R172-million was cut from NPO funding in 2023/24. 

“What this means, taking this year’s cuts into account, is that vulnerable persons have lost R395-million worth of services between 2023/24 and 2024/25. Analysis of funding databases submitted by the GDSD to the Portfolio Committee for Social Development substantiates these losses further,” the GCCC said. 

In 2022/23, at least 1,778 NPO services were funded by the GDSD, while in 2023/24, only 1,340 such services were funded. 

“Some of how much they’ve taken away is disguised by the fact that they took so much money away from poverty alleviation. So you don’t see what they took, in particular, from things like drop-in centres for orphans and vulnerable children, luncheon clubs, etc. So they’ve taken away that money,” said Lisa Vetten, a research associate at Wits University’s Southern Centre for Inequality Studies.

‘Nobody knows’


Sue Krawitz, the founder and director of Impilo Child Protection and Adoption Services, explained that in previous years, organisations applied for funding in around October and by March were notified whether they would be funded and sent service level agreements to sign so that payments could commence by 1 April. 

“The situation right now is that the funding applications were submitted in October, and there has been no communication with organisations regarding funding and none of us has been called into panels,” Krawitz said.

“There is no agreement of funding or service level agreements or anything. Organisations would rely on the funding to come in April, at some point, so nobody knows where they’re at with it.”

Krawitz said organisations wrote to the department seeking information about the independent panels to adjudicate applications and the names of panellists, but received no reply. 

“We have still not got a response about who is on the panel and when they will be sitting, and we are talking about a lot of funding applications because there are about 450-odd organisations with different programmes,” she said.

Read more in Daily Maverick: Orphans, vulnerable children hit hard by state funding cuts, says desperate Gauteng NPO

Krawitz said “absolutely nothing” had been communicated by the department about contingency plans for affected beneficiaries and employees. 

Impilo had at least six social work posts and 150 beneficiaries that would be affected, Krawitz said.

“What the organisation themselves are looking at is, how do we start referring all of these clients to the department? There are also labour issues because these organisations would have to retrench staff. So, there hasn’t been any communication other than foster-care work should be handed over to the department, but that is it, nothing else.”   

Court action 


On Friday, 15 March, Johannesburg High Court Judge Stuart Wilson dismissed an urgent application from the provincial department for an interdict against all 455 NGOs registered with the GDSD and “any other non-profit organisation” from protesting, threatening staff or illegally disrupting its business activities.

The application was based on a poster, written by an unknown person on behalf of an unknown organisation or organisations, advertising a three-day “sit-in” at the GDSD’s Marshalltown offices. 

“The poster is not a statement of intent. It is a call to action. Even assuming that the poster is a call to unlawful action, it provides no basis for the reasonable apprehension that each one of the 450 organisations involved in this application are about to embark upon the advertised sit-in,” Wilson’s judgment read.

He wrote, “The Department sought overbroad relief that was plainly invasive of constitutional rights against an ill-defined group of people.  

“The Department claimed an interdict of startling overbreadth. It sought more than the mere restraint of a sit-in. The problem with this relief is that it embraces a wide range of conduct, some of which may be perfectly lawful.”  

Vetten described the poster as “pretty mischievous” and voiced concerns about the department’s response. 

“What was the department trying to do, especially in the attempt to gag the organisations? This unwillingness to be answerable and accountable is extremely concerning and instead of engaging, they attempt to silence organisations,” Vetten said.

The GDSD had argued that it established independent panels to consider funding applications and that an interdict was necessary to protect the department’s employees and members of the public who relied on the department.

Response from the department 


In a statement issued on 20 March, the department labelled the concerns from the NPO sector as a “politically engineered outcry by the NPO sector, rooted in mistruths peddled by the opposition”.

“The MECs [finance MEC Jacob Mamabolo and GDSD’s Hlophe] would like to assure the public and the NPO beneficiaries that the provincial government has no plans to defund NPOs, and that the allocations for 2024/25 will still be processed by the Social Development Department as previously assured.

“As communicated previously, departmental budgets were only announced and confirmed two weeks ago at the Budget Speech by the MEC of Finance, and in this regard, the Department of Social Development is working tirelessly to ensure that by the end of March, the adjudication of applications will be concluded, inline for the allocations anticipated [at the] end of April.”

KwaZulu-Natal


Provincial budgets across SA were reduced in Finance Minister Enoch Godongwana’s 21 February Budget Speech, forcing provinces to make tough decisions on where to cut spending.

NPOs in KZN have also called for clarity on future funding.

On Monday, more than 200 representatives from NPOs in the province gathered at Cedara in Pietermaritzburg to get clarity on budget cuts, service agreements and the new sector funding policy.

Julie Todd, the director of the Child & Family Welfare Society of Pietermaritzburg, received a letter and contract last week stating that the funds that help run her organisation would be cut by just over R600,000 per year.  

She said this would set her organisation back 10 years, as it had received only three increases in the past decade.  

In a letter seeking clarity from Social Development MEC Nonhlanhla Khoza, Todd wrote, “The very nature of the work that we do as an organisation on behalf of Government makes Government responsible for ensuring funding is provided for child protection services and especially so in the case of statutory services.

“This is not an option for the Government. It clearly is a MUST and refers to FUNDING, not even subsidising as is currently the case, which would suggest the Department is in breach of its legal obligation to the children we serve.”  

A social worker, who chose to remain anonymous, said at a DSD briefing, “The budget cuts will have devastating effects on communities.”

The social worker said some social workers’ salaries would be cut.

“This leaves organisations vulnerable. Most are short-staffed already. The quality of service lessens because if [KZN] DSD cuts the number of children you can care for to 35 from 50, you will not chase the 50 away but try to stretch what you have so they eat [and] have transport to school.”

Yvonne van der Galien runs Rehoboth Children’s Village just past Port Shepstone in the Ugu District. It cares for children who are either abandoned or orphaned and affected by HIV/Aids. 

Van der Galien said the lack of communication and consultation about the new service level agreements with adjusted funds was frustrating, but she was more concerned about children now being placed in homes outside of the Ugu District with no financial support.

When asked about how the department decided which organisations would receive funding cuts, KZN DSD district director Nonhlanhla Nala said, “The management of the department decided how the cuts were going to happen without affecting the salaries of the people, so that there wouldn’t be a case of social workers and other workers not having a salary. We were just doing our level best to make that work and raise the money to be able to only cut administration and numbers.”

Nala said NPO directors shouldn’t worry about missing their March payment as it would be paid as part of the previous contracts should the organisations sign their new agreements by 1 April. 

However, the NPO Lifeline Zululand hasn’t been paid for months.

Read more in Daily Maverick: Non-Profit Organisations Network Task Team in KwaZulu-Natal

The department issued an apology on Friday, 22 March, saying it had experienced challenges in processing some payments to NPOs on time, which included Lifeline Zululand, because of cash flow challenges. 

“There have been numerous communications from Lifeline Zululand to the District office, and the District has escalated the matter to Head Office for the fast-tracking of the outstanding tranche payment. The District made a commitment to Lifeline Zululand that payment would reflect in the bank account in the previous week, but when Head Office was processing payments, Lifeline eThekwini was paid (on 19/03/2024) an amount due to them, instead of Lifeline Zululand. 

“The Department apologies for the further delay and regrets any inconvenience that has arisen due to the delayed payment.” DM

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