The bottom line: ANC must improve accountability, good governance and leadership to attract funders

In the past few months, we have seen reports of the ANC being unable to pay its staff, with desperate attempts at raising money, both from major donors and crowdfunding. The lack of resources has largely been blamed on the new Political Party Funding Act that requires all donations over R100,000 to be disclosed, and includes a ceiling of R15-million from any single donor.

The ANC, other political parties and non-profit organisations (NPOs) are largely dependent on donations to survive and thrive. There are also other forms of income generation, such as membership fees and investments, both used by political parties and NPOs.

Yet, the Political Party Funding Act is not totally to blame. 

If we explore what is required in the non-profit sector to raise funds, there are many lessons to be learnt as to what attracts funding. In this respect, the ANC has slipped up badly, merely assuming that its brand, history and patronage would continue to encourage the flow of money. NPOs – which assumed that the large grants they have received from donors in the past would continue merely because they are a prominent organisation – have often burnt their fingers.

First, donors need to understand the purpose of the organisation. In the political and civil society space, this relates to the very basics of why it exists. 

We have seen the old ANC posters promising a “better life for all”, but currently there is absolutely no clarity as to why the party exists. This is an existential question and, in a factionalised organisation with many different views and ideologies, it is no longer clear to supporters what the ANC is about.

There is a list of aims and objectives in its Constitution, but taking into account the divided rhetoric that has emerged from within the party, this list has good intentions – but in many ways it has not been applied and its values are lost in the cacophony of infighting, corruption and increased intolerance.

Nobody really knows what radical economic transformation (RET) is, as there are so many different opinions – and the scapegoat of White Monopoly Capital confirms the concepts created by Bell Pottinger are little more than hot air. They certainly don’t feature in the organisation’s Constitution. 

Now a senior member of the party – a member who has been in the executive as a minister for as long as anyone can remember – has thrown a spanner into the works, absolving herself and the ANC of all blame with respect to her views that black judges in South Africa are mentally colonised and that the Constitution does not serve black people.

When there are so many different views expressed at senior levels of an organisation without any consequence or discipline, it shows that there is no common purpose and no clear vision. If people fund the organisation, what are they funding?

Non-profits also understand the importance of organisational governance. They battle to find dedicated board members who will oversee the organisation for no financial gain. Many have taken great care to ensure board members are inducted, evaluated and have regular training. Some, like the ANC, are membership-based with branches and management committees. Most of these have deep ties to the communities they represent.  

However, the ANC is plagued by dysfunctional governance. 

It is also membership-based, with branches in many communities. Those branches elect branch committees and branches in turn elect provincial structures, and so it goes on through the National Conference to the appointment of a National Executive Committee with an executive generally known as the “top six”. 

Sadly for the ANC, its branch structures ebb and flow with the times (more of them suddenly exist closer to elections), and they are generally highly factionalised.

When money is introduced into the equation and branch members can access resources, the odds increase that there will be disputes and even killings. Worse, the branches frequently no longer serve their communities or represent their community’s best interests. They basically become mini centres of consolidated power with little or no accountability – essentially an end in themselves. This pattern in many ways is repeated up the chain and it is one of the reasons we are seeing massive factionalism at the top. 

It is always important when trying to understand this, to follow the money.

In the NPO sector and in business, governance is separate from management and operations, and usually a director or CEO is appointed by a governing board. However, in political parties such as the ANC, senior paid staff such as the secretary general are also elected and therefore have a conflict of interest as they are involved in both governance and operations – in some ways, answerable to themselves.

This is a serious breach of good governance. A lack of accountability and governance is likely to put off serious donors who want to ensure that their funds are used appropriately.

The state of leadership is another focus for donors – we saw how Cyril Ramaphosa attracted money for the 2019 election. People had huge respect for him and he gathered a following that was confident he would put the country on a new path. However, this has waned considerably as we saw change without change. 

The big questions for donors concern Ramaphosa’s power base in the ANC and the power struggle, even a low-intensity war, between his supporters and the so-called RET faction.

When leadership is uncertain and there are no other options on the ANC horizon – and no obvious successor – donor money is sure to wane. 

People and companies neither want to fund a lame duck, nor do they want to invest in an amoral and crooked alternative. A previous major source of funding was that group of companies and carpetbaggers that fed off the party’s corrupt networks, but under Ramaphosa that access has decreased. And the kickbacks have decreased too.

Other donor requirements include regular monitoring and evaluation of an organisation’s work. This includes thorough reporting on outputs, outcomes and impacts. An example of this would be a health organisation that provides 2,000 vaccines (output); 2,000 people now immune (outcome); 2% contracted the disease (impact) and nobody died (impact).

While various government departments do have monitoring and evaluation systems, government is not the ANC. Yet the ANC deploys people to government, to boards of state-owned enterprises, to the legislature, to Section 9 institutions and other entities. The impact of these is therefore a reflection of what the ANC is trying to achieve, and unfortunately the output, outcomes and impact have been wanting.

NPOs are also required to present clean audits to their donors. They often place them on their websites so that donors can check them before making funding decisions. The ANC’s website does not share its financial statements. Yet, when it comes to ANC representation in government, in 2021 the Auditor-General reported that total fruitless and wasteful expenditure in the country amounted to R488-billion.

In the Western Cape, the total was R9-million and it is therefore no small wonder that the Democratic Alliance (DA), which runs the province and many of the 27 municipalities (out of 257) that had clean audits, have something to crow about. All the rest were in the hands of ANC cadres.

The Office of the Accountant-General in the National Treasury has a guide on how civil servants should deal with and report fruitless and wasteful expenditure, but it has clearly been mostly ignored by the ANC’s deployees. 

This is not lost on donors who do not want to be associated with poor financial management at best, and shocking corruption at worst.

Another attraction to donors is an organisation’s ability to adapt and innovate. This is not the ANC’s strong suit. The fact that it is still married both financially and intellectually to coal and oil is a good example of its inability to envisage a new world and new possibilities for the country.

What is the bottom line when it comes to funding? Trust. Without trust, the funding is simply not coming. This is the basic underlying value for all relationships, especially when companies or individuals make the choice to part with their own money.  

The ANC has a long way to go to reinstate the trust and admiration it had in the 1990s. Until then, it will have to face the fact that the good old days of plenty are gone. DM