1 0.0 INTRODUCTION 2001) This Thesis Explores the Impact of Four

0.0 INTRODUCTION A recent study (The South African Non-Profit Sector Study) found that there are about 98920 NGOs working in all sectors across South Africa and many are preoccupied with funding their work by attempting to solicit money from the international community. Experience in the NGO sector demonstrates that a fundraising strategy focused purely on raising money from international donors is risky for the long term sustainability of NGOs. Worldwide, the number of NGOs competing for the decreasing pool of resources is increasing, thus creating a situation where NGOs have to turn to new partners closer to home for existence, develop new ways of mobilising resources and increase professionalism in the sector so that these resources are managed effectively for optimum results (Mail and Guardian, 7 December 2001) This thesis explores the impact of four American Foundations on setting the development agenda for selected non-profit organisations in South Africa. The above article in a leading South African weekly newspaper captured the themes and the discourse that this thesis attempts to explore. Did the non-profit sector in South Africa as in many developing countries depend on foundations and other donor agencies for its sustainability? Given their strong dependence on donor funding, would non-profit organisations exist if donors withdrew their support? This thesis is an attempt to focus on the role and impact that the four American Foundations have on the development, organisational priorities and agendas of selected civil society organisations in South Africa. Although I focused on South Africa, the thesis hopes to contribute to a global discussion of the non-profit sector and dependency. To address the question of dependency, the thesis suggests a shift towards local ownership of the development agenda, however, care should be taken that local elites do not hijack the agendas of civil society organisations (CSOs). Historical and contemporary debates on civil society and the aid industry shape this discussion. I locate the non-profit sector within the broader concept of civil society. Hence I make a distinction in the use of the terms ‘non-profit organisations’ (NPOs), ‘non- governmental organisations’ (NGOs) and ‘community based organisations’ (CBOs). The thesis begins by giving a brief historical meaning of civil society from classical Roman times through Scottish Enlightenment in the eighteenth century to its contemporary 1 understanding. The contemporary perspectives are informed by the birth of the ‘civil society approach’ to development that emerged in the 1980s due to the failure of the modernisation and dependency theories of development. The 1980s were viewed as the ‘Non- Governmental Organization (NGO) decade’ in development aid and in the early part of the twenty first century, there was a revisionist exercise by NGOs on their role and strategic positioning. This followed the mushrooming of NGOs in the 1980s and their proliferation throughout the world, especially in Third World countries, and their emergence as symbols of societal responsibility and global morality (Tvedt, 1998: 2, Cernea, 1988:1). But because these NPOs, particularly those in the South, depended primarily on external funding and very little on domestic sources, a considerable number diverted from their founding priorities and mandates. They became accountable more to their donors than to their constituencies. The context, in which these NPOs found themselves, shaped the choices that they made and the kinds of relations that they developed with their donors. The most significant factor responsible for this dependency syndrome was the fact that a ‘substantial number of Southern NPOs were seldom able to finance their activities from membership fees or generate much income from their own activities’ (Jorgensen, 1996:50). Indeed, some writers have gone so far as to suggest that dependence created an identity crisis for the sector (Tomlinson, 1996: 241). NPOs found themselves caught between a desire for autonomy, yet at the same time responding to donors’ mandates. Sometimes NPOs capitulated to the needs and interests of donors, resulting in their failing to find a niche in the sectors in which they worked. However, the same dependency seems to have enabled the sector to be independent of the state. The sector could perform its monitoring role without fear of being restrained by the state. The thesis limits its scope to the role of four leading U.S Foundations which have provided support for NPOs in South Africa. These are the Ford Foundation, the Mott Foundation, the Kellogg Foundation and the Open Society Foundation. These, along with a selected number of NPOs, most of whom are research, policy, leadership, capacity building, and democracy and human rights organisations formed the unit of analysis for this study. During apartheid, a variety of resources played a crucial role in anti-apartheid politics. As Habib has shown, these took the form of human resources that comprised students, activists and prisoners who not only organised to oppose apartheid but were also instrumental in 2 establishing non-profit organisations that were pivotal in the struggle against apartheid (Habib 2003:231). Habib noted that a number of international foundations, agencies and governments also became interested in empowering civil society organisations and civics especially after the 1976 Soweto uprising. The thesis explores the reasons for the four foundations’ interest in South Africa. One of the main objectives of the foundations was broadly to promote and support that part of civil society that focused on deepening a human rights culture in different ways. One could argue that this had significant ideological implications linked to United States (U.S) imperialism, both in its hegemony and in its support for capitalism. This rather blunt approach would miss the complex nature of the relationship between U.S civil society, of which the foundations are a part, and the U.S State. In the 1970s, the United States of America’s reach was global. The domino theory of political influence was an aspect of policy; to block the fall of single countries and of regions to communism. As a result the U.S supported organisations and movements, sometimes blindly, it thought would counter Communist and Socialist influence. And U.S foundations were not immune to this. They were keen to promote democracy. Indeed, the kinds of organisations that received their support were not random. In South Africa, the four American foundations that are the subject of this study sought to influence the struggle for democracy and thus to shape a future democracy in a liberal rather than a socialist direction. Since 1994, however, the focus was no longer on fighting the unjust laws of the apartheid regime, but had a different, perhaps more liberal and developmental goal: to promote civil society’s capacity to deepen democracy. The thesis explores the effect of donors on the ideas and priorities of their recipients. This is discussed in detail in the case studies where we explore the ideals and interests of the founders, only one of whom was alive in the early twenty-first century, George Soros of the Open Society Foundation. The thesis analyses the extent to which Soros himself was able to shape the daily operations of his Open Society Foundation in South Africa. This is contrasted with how one institution, the Ford Foundation, whose founder was no longer alive, transformed both programmatically and ideologically as a result of the changing priorities of trustees, the availability of resources and different socio-economic and political contexts. The original interests of the founders of the 3 Charles Stewart Mott and Kellogg Foundations did not significantly change over time, except in so far as the reach of their funding activities was concerned. The approach adopted in the study, was to undertake an institutional biography that focused on four aspects of the life cycle of these foundations: the context, leadership, resources and history. The case studies explore what factors played significant roles in the life history of these foundations and the implications these had for those civil society organisations that were funded by them. The research and case studies explore whether civil society organisations that depended primarily on these Foundations mirrored and behaved like their donors, a phenomenon described by Powell and Di Maggio (1991) as ‘isomorphism’. One commentator, Chris Landsberg (2000) somewhat cynically coined the term ‘the cargo cult’ to refer to the way some NGOs related to their donors. He argued that NGOs depended so heavily on donors that they would cease to exist if funding were withdrawn. This process is summarised in Hulme and Edwards (1997) as ‘having one’s hand in another’s pocket’. Hulme and Edwards argued that the power of donors over grantees was stronger than the power of grantees on donors. They described the relative power of donors to shape NGO activity as a process of ‘design and accident’ (Hulme and Edwards 1997:20). Bebbington and Riddell (1997) described such donors as ‘heavy hands, hidden hands and holding hands’. This phenomenon comes out clearly in the case study of the Kellogg Foundation and its grantees. A considerable number of Kellogg grantees regretted having received funding from the Foundation. They complained that Kellogg set the agenda for them and kept changing its support, which resulted in the weakening of these organisations. One of the former directors of the Development Resources Centre (DRC), for instance, argued that his organisation was forced to embark on projects in which it had no expertise as a result of Kellogg Foundation’s funding requirements. The influence of individuals on a foundation’s priorities is best illustrated by the Open Society Foundation’s George Soros. The Mott Foundation captures the positive and negative impact that the four U.S foundations had on selected non-profit organisations. The thesis shows that Mott grantees developed an intimate relationship with the Foundation.

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