According to a recent report, Rapid assessment on the financial status of non-profit organisations providing social care services, prepared by Lisa Vetten (Care Work Campaign) and Margaret Grobbelaar (National Coalition of Social Services), almost 2.9 million job losses were recorded in South Africa between February 2020 and April 2020.
“Near-overnight unemployment on this scale has already produced a series of social shocks whose effects are likely to reverberate for some time to come. Under these conditions, the need for social care and other helping services is very likely to increase. But it comes at a time when NPO social care services have themselves been made fragile, the lockdown having exacerbated pre-existing financial weaknesses.
“NPOs and the Department of Social Development (DSD) both provide social care services in an arrangement that dates back to 1938. Because these NPO services fulfil the mandate of the state they are subsidised by DSD, on the expectation that NPOs will raise the balance of their costs elsewhere. However, should organisations prove unable to obtain the balance, then the DSD ought to fully cover the cost of the service according to the 2014 decision National Association of Welfare Organisations and Non-Governmental Organisations and Others v MEC of Social Development, Free State and Others.
“Three-and-a-half months into the financial year, some provinces have yet to receive any payments from the DSD. In addition to delaying payments, the department also took the unilateral decision to reduce certain subsidies paid towards services for older persons and people with disabilities, as well the running of early childhood development (ECD) centres. Despite inflation, in some provinces the DSD has not increased the subsidy for social workers since 2013.”
It all paints an alarming picture of a system under severe financial pressure. At a time when NPOs are already struggling to meet the additional costs associated with Covid-19 (such as providing PPE), having to put fundraising events and activities on hold, and losing support from individuals and companies that are themselves struggling, we are in for a challenging few months.